“I disagree with your contention that the “economic recovery is in an initial stage.” We can’t have a recovery because the debt destruction has not occurred. In other words, the normal functioning of the economy was interrupted by the greatest coordinated intervention ever undertaken in human history.
“I’m not saying that allowing asset prices to plummet to market levels would have been pretty. I’m just saying that we have a bifurcated situation now that is very similar to “stagflation.” It’s really more like just good old stagnation. But as someone said earlier, if something can’t be sustained, it won’t be sustained. We’re not in a recovery because the downturn has been frozen, kicked down the road, whatever you want to call it.
“In other words, the downturn isn’t finished. All Wall Street knows is that when demand falls, interest rates go down. When interest rates are at zero, the central banks monetize bank and sovereign debt. Stocks rise or fall on interest rate prospects, so in a perverse way, all the debt augurs more monetization to come. Bad news for jobs and the economy is good news for stocks, if nothing else due to multiple expansion.
“Every nation from Egypt to China to Spain to the US faces a surfeit (surplus) of experienced workers and capable qualified new graduates. And in Japan and the West, we have high and growing pension and medical costs that were never figured into the entitlement estimates (another classic government f*&^-up). So technically we’re broke, and the only reason the accounting shows that we’re still solvent is because we’re being lied to.
“Governments have exempted themselves from their own accounting laws because of a giant asterisk with the following footnote, which is laughable. What it says is that changes could be made in entitlement payouts that would reduce the present value of future unfunded obligations. Therefore, we won’t set aside any reserves on an annual basis.
“Does anyone remember the 1980s era “Social Security Reform Commission?” Remember, the brilliant Alan Greenspan is behind the Social Security assumptions. The system was supposed to be solvent through 2075, then it was 2050, now it’s 2037. I’m guessing it makes it until 2018, but of course all of the “surplus” has been lent to Congress for 30 years. You’re welcome.”
If you aren’t reading Nigel’s posts, you are missing the best writing on this site bar none. Here’s an example from 3 days ago:
“There’s no solution in the minds of Obama supporters that doesn’t come attached to trillions more in spending, debt and new government “investments” (spending again). The inflation problems pointed to in the article are a result of too much sovereign indebtedness caused by irresponsible spending. Taxes have gone nowhere but up for a hundred years, and yet spending has always outpaced it. The “Clinton surplus” was an accounting gimmick that allowed social security revenues to be counted against the deficit.
“The nearly $65 Trillion (with a T) in US debt and unfunded obligations is not an imaginary apocalypse, but a real one. The only reason that this accounting is permitted under the law is that the US Government continues to claim that Congress can change its entitlement spending, making it unnecessary to subtract the present value of future obligations from its revenues.
“If you think that growing the government sector and what my Democratic representative called a “complete fraud” — Obamacare — along with ever-higher taxes on high income earners and the wealthy (not all high income earners are wealthy) are going to bring a new era of prosperity for the majority, then I say you are the one who’s grumpy because the train has left the station and you missed it. The Obama-Pelosi-Reid era is done — over — not because older people are complaining but because young people like me have finally woken up.
“The only crackpot rants I hear are the ones coming from the big-spending, vote-buying left who keep telling us the sky is falling if even one agency has to face a budget cut or who continually whine because government has to obey constitutional limits on what it can mandate. There’s a country that’s producing more of the kind of people that modern Democratic socialists just love. It’s called Zimbabwe, and I suggest that anyone who believes that everything belongs to the government and “The Man” is keeping it away from “The People”, Zimbabwe is your perfect destination.
“Yes, Ibjack, our freedoms do include “my money.” I’m not rich, but at least I recognize that I can’t become wealthy or earn more by using the police power of the state to take someone else’s wealth and income away. It’s so easy to be generous and noble with other people’s money. I may be grumpy, but you’re credulous if you honestly believe that Obama, Pelosi and such intellectual luminaries as Sheila Jackson-Lee are doing anything but feathering their own nests while grandly declaring how much they care by engineering their measly little handouts composed of stolen money.
“That may be your America, but it’s not mine and I will fight you here or anywhere else. Grumpy? Not really. More like determined. Good luck in 2012. About all you guys will have going by then is the race card, and it’s not going to work very well because even Obama’s base is waking up to the idea that government has never produced one job and never will. The train has left the station. Look who’s grumpy now.”