What a mess Pat: Like you I don’t see any way out of it.

It’s going to be a massive inflation to “cheapen” the debt. I don’t see why anybody is surprised by any of these events: they are the intended consequences of policies which are designed to transform completely our nation so that it will become a more integral part of the new world order. 

Ron Paul had some ideas on this and the related issues but, for some odd reason, nobody was listening:

http://www.youtube.com/results?search_query=ron+paul+on+the+bailout&search;_type=

Not that anybody asked but the proper course of action would be to:  have everybody file Chapter 7s, 11s, and 13s; audit the Fed; reduce personal tax rates to a flat ten percent of gross income and corporate rates to one percent of gross; eliminate capital gains and estate taxes; place a one hundred percent tariff [at the very least] on all products not produced by U.S. companies in the U.S.; and penalize all companies that hire illegals with criminal penalties and an involuntary liquidation of all business and personal assets of corporate officers, which will also have the beneficent consequence of helping the illegals self-deport at no cost to Joe the Inbred Manhattanite

I also never understood this “isolationist” epithet. It’s not like I can’t call up a colleague in London or anywhere else. I still have a letter from Peking from a young entrepreneur that I received just after the “incidents” at Tiananmen Square. I’m sure we could have done a few deals....had I responded but then I’m not a latte-drinking running dog lackey of global one world imperialism.

More precisely:

“...all products not produced in the U.S. by U.S. companies ....”

Makes me wonder if that “crazy” Hal Turner’s video claiming that sometime after the new year, the Treasury will declare a Force Majeur and convert to the Amero after the Dollar’s inevitable demise.
Nothing suprises me anymore.

....devaluation of the dollar is coming to us sponsor by Socialism......will be ugly…

leverage yourself to the hilt, buy as much land as you can afford, buy gold and hide it good......then pay off your land and leveraged positions with the one million dollar bills you get back as change from the gas station after buying a coke......

then live like a king, unless the masses put your head under the guillotine.

Nothing can stop the onslaught of the
criminal elite once they have you in their sights.
The designed implosion of our society is shortly
to be followed by a starving time (administered by
foreign troops - Chinese? - on our soil) as was
experienced by the Irish in the mid 1800s under
the iron fist of British rule: http://www.irishholocaust.org.

Now would be a very good time to get your
larder full… and hide it!

While I agree with Pat, the problem is the American people are simply too stupid and short-sighted to change. That applies especially to our friends in the South. As long as the Republican party stands for war, support for Israel, Ag subsidies, and social conservatism, the South will support it. I don’t think the South has ever cared about anything else. They’re not much for book Learning or thinking in Dixie.

The solution is obvious: let’s break the country up and start over.  Again.  The entrenched elite is not gong to give up their position; they simply too huge a stake in the current system.  They don’t care about us at all.  So, let’s break the country into its natural constituents each with more of a cohesive population and similar interests.

Lets consider economics 101:

National Income accounts are expressed as:

Y= C + I +S + G +(X-M)

Where C is consumption, I is investment, S is savings, G is government spending and x-m is exports minus imports.

Now with C having been reduced dramatically because our consumers depend on bank credit to spend, and sice monetary policy is now like pushing on a string, the only options left are to use the fiscal tools of increasing government spending on job creation, and reducing imports while growing exports.

Therefore those who oppose this simple Keynesian analysis reming me of our proud medical traditions where bleeding a sick patient was considered a viable option.
At this point monetary policy is going to heal us like taking mercury when you are starving.
So while we are witnessing a perverse giveaway to the bansters, what we really need is job creation.
We are not Keynesians, we are just thieves stealing the people’s money and saying look Keynes did it!
What hypocracy!!!!

Another great article. Takimag has the best collection of writers and political thinkers in the world. Thank you for making this happen.

Now with C having been reduced dramatically because our consumers depend on bank credit to spend, and sice monetary policy is now like pushing on a string, the only options left are to use the fiscal tools of increasing government spending on job creation, and reducing imports while growing exports.

That’s not the only option left. Another option is to not interfere with the recession and let it run its course. There’s no alternative to building real wealth through work. Wealth redistribution (socialist policies) cannot create value. For every act of wealth creation undertaken by government, there is an act of wealth destruction accompanying it in the way of taxes and debt (taxes on future generations). And the programs that the government creates never add as much as value as that taken out of the economy via taxes, because government bureaucrats using other people’s money can never run organizations as efficiently as self-interested entrepreneurs and shareholders using their own money.

“That’s not the only option left. Another option is to not interfere with the recession and let it run its course.”

If we were facing a “recession” I would be on the beach in the Bahamas.
What we are facing is the start of a multi century supercycle depression like the world has not seen in 300 years. Bob Prechter is forecasting the Dow at 400 before this is done.

At this point it may be too late for Keynes or government intervention to make much of a difference. It may delay things a few months or years but a total collapse is going to hit us like we cannot even imagine.

“ There’s no alternative to building real wealth through work. Wealth redistribution (socialist policies) cannot create value. For every act of wealth creation undertaken by government, there is an act of wealth destruction”

After having seen the wealth destruction of the last couple of years at the hands of “laissez Faire” where we have destroyed 60 trillion $’s, you have to be deranged to repeat this claptrap.

Al, the last couple years haven’t seen laissez faire wealth creation. Fannie/Freddie under-write half of all mortgages in the US. These are government sponsored enterprises with a political/social agenda, artificially creating a market for subprime mortgages where there shouldn’t be one. It was bound to fail, and now it has.

If we were facing a “recession” I would be on the beach in the Bahamas.
What we are facing is the start of a multi century supercycle depression like the world has not seen in 300 years. Bob Prechter is forecasting the Dow at 400 before this is done.

I agree. At this point it may be too late to prevent it. It seems inevitable that the powers at be will increasingly intervene in the economy, through massive hundred billion dollar + bailouts, to protect their interests.

Most of the folks worldwide is too dumb’ish.

Here’s a sweet joke about muslims not about their religion, I know better.

Two newly arrived muslim boys (to men) have arrived in the U.S. in their college dorm.

They turn on their computer and the first thing they see is:

FREE HORNY NAKED WOMEN

“Wow,” says the first, enraptured.

“Oh, don’t be so gullible,” says the other, “that’s only in heaven.”

What we are facing is the start of a multi century supercycle depression like the world has not seen in 300 years. Bob Prechter is forecasting the Dow at 400 before this is done.

Prechter is famous for being spectacularly wrong. While I think the next 5-10 years are going to be something most people alive have never seen, anybody predicting 400 on the Dow is an idiot unless we have WWIII or collapse all the way back to a barter society.

In NO way are we worse off than we were before the Great Depression. There is no dustbowl. People aren’t living in shacks they can barely afford. People have lots of stuff, most they just haven’t paid for but its still all here and still real. If things got that bad there would just be a Jubilee to cancel all debts to avoid the riots and we would start all over again with a clean slate.

Just assume that ALL the stocks on the DOW are 1/20th the price of what they are now. Johnson and Johnson at 3 dollars a share. This would imply all their real estate is worthless and they never make a profit. Is that a realistic projection for any modern society?

“What we are facing is the start of a multi century supercycle depression like the world has not seen in 300 years. Bob Prechter is forecasting the Dow at 400 before this is done. “

Want to go broke in a hurry?  Just follow Prechter’s advice for a few years.

A depression is a transfer of wealth and I think its a mistake to think politicians are too stupid to do the right thing.

Oligarchial collectivism.

While i hope Bob Prechter is wrong, the social mood is slowly changing.

If Citicorp stock can drop from around 200 in the 90’s to 3 and change last week, the same can happen to any other stock. Look at GM.
While the social mania has carried us for a while lets not forget what happened to the dot coms in 2000.
The basic fact is only 10% of GDP is real goods, the rest as we are witnessing is smoke and mirrors.

I thought the sorry state of the US economy is the product of several years of conservative economic policies 8 yeras of Reagan,and 12 years of Bushes. The recourse to “socilialism” liike the recourse to “capitalism” in the former Soviet Union, following the collapse of communism is merely the systems undergoing a purgative as a result of thier self induced constipation and excesses.

All this about a country where “consumers” will actually step on and kill some poor wall-mart lackey door opener. How does one expect these people actually understand that they spend more than the make. They will actually kill someone to by Chinese made goods. Incredible!

Due to the Vietnam War, at Bretton Woods, Nixon in what was it 1973-?-took us off the gold standard.

That of course led to the inflation of the 70’s up to Jimmy Carter and stagflation, since without a golden anchor limiting how much paper can go into circulation, leads to too much, diminishing its value.

Anyway I read the other day that, of all the specie or money paper out there on the books so to speak or on ‘record’, only about 17% of it is in fiat paper or actual dollar bills i.e. the printed money, the other 83% of it is blimps or dots on a computer screen.

Remember the scare in 1999/2000 when allegedly no one really knew if the computers would all go out or not, and so not switch over successfully to the new millennium. Unless that was only a ‘media event’ and there was no danger with that, it must have been because only 17% of the currency at any given time is in dollar bills, the rest of it is in computers?

If formerly it was the iron age what is this – the age of beeps. Beep-beep.

Jim R, the Y2K nonsense was a media event driven by ignorant clowns, people trying to make a buck by selling books and unneeded services, and a few delusional knowledgable people in the field.

The reality is that the insurance and banking industries already knew about the problem 30 years prior when the last house payment showed a large problem. The same with annuities.

The real scare was that the power grid or pacemakers would somehow fail. Anybody who was involved with this knew that the calculations were based on real time clocks that roll over all the time, not clocks based on the calendar time. For example a pacemaker may have a 16 bit register clock that rolls over every 65.635 seconds. However, new time minus old time is always the same whether the clock has rolled over or not. These are the clocks that are used to determine if the device has to pace the heart not the calendar clock.

This is why it was such a non-event when it came. All it really did was waste alot of money having old cobol programmers as consultants at high wages go through old code that probably didn’t need to be looked at.

here is one way to solve the problem...this is an online ad from visa.....

“Our Economy is in trouble! We need consumers like you to help boost the U.S. Economy by spending!!

But how can you spend your own money when the Economy is in such bad shape?

By spending a Fully Loaded Free Visa Gift Card on Us! We’ll give you money to spend that will help boost our Economy!

Get a Free $500 Visa Gift Card and go shopping, out to eat, or use it for anything else that puts money back into the economy.

Do your part to help your Country get back into shape! Don’t wait, the U.S. Economy needs your help Now!”

sweet, going deeper into debt is patriotic.  Now my wife can’t argue with me when i want to buy that jet ski.....

The best we can hope for, are secessionist movements to start, and maybe that will decentralize the Federal Goverment enough and bring us back to a Republic once again.

The best we can hope for, are secessionist movements to start, and maybe that will decentralize the Federal Goverment enough and bring us back to a Republic once again.

Conventional wisdom holds that the United States spent its way out of the Great Depression by funding our theaters of combat in WWII.  Just spent a lot of money. Therefore, goes the conventional wisdom, we can spend our way to prosperity again.  But wait a second.  WWII spending took place when we believed national survival was at stake.  As such, the spending had a sharp focus and yielded a plethora of new technologies:  quantum jumps in aviation, ship-building, metallurgy, ballistics, guidance systems, signalization, data processing, and even artificial intelligence. And much more than that, the period produced entire strata of otherwise unemployed managers, technicians and scientists. Once the war ended, they were more than ready to convert their know-how and expertise to peacetime uses.  In other words, the government didn’t fund just a lot of consumer spending, but instead created transformational technologies and a managerial elite.

How important was this managerial elite?  Just consider that economists hold that management and technology are two key components, along with capital, that spur development. Consider the Japanese and German recoveries after the war.  These two belligerents, despite their wartime devastation, used their technologies and managerial experience to quickly work their way back to prosperity. 

For some reason, conventional economists simply repeat Keynesian ideas of spending our way to prosperity … but without taking the focus and the impact of the spending into account.

In WWII we used our money to destroy most of the worlds manufacturing capability.......we laid waste to the competition.  After the war we were the only game in town.  A perfect setup for monetary growth.

Mr. Buchanan, I believe your commentary is incorrect. The current financial crisis is the result of eight years of the failed economic policies of the Bush administration, in particular, the deregulation of the financial services industry. And never forget, if we are united and have hope, there is nothing that the American people cannot do, including making 2 plus 2 equal 5.

One can’t help but be pessimistic if one is based on reality and views the economy is such terms.

However, the fact is that the economy is in large part based on bs. Eventually reality caught up and some of the bs went bust. But the solution will not be based on realist terms either. It will be more obscure conspirator overly complex bs.

The world still needs the US as the major consumer of mediocre junk. While Europe and Japan usually get the high end stuff. The world likes, to some extent, having the US play cops everywhere with high tech equipment. They may complain here and there about the US, but fact is, everyone is going along with the plan just fine and no one wants to take on a leadership role- always a great opportunity for neocons.

Just like AIG, Citigroup, and others were to big to fail, so to is the US in the world economy. Just as the oil price is completely manipulated- currently kept artificially low (or as it should be, in my view), so, too, the US will be kept artificially alive through who-knows-what means by the masters of the universe.  It will be so complex, so mindboggling, so expensive, with so much bs, that our fine media will throw its arms up in the air and give up even trying to understand it or to inform us about it, just as they did when this whole mess started. It will involve enriching a whole lot of rich old white guys; it’ll involve letting a bunch of young crooks steal billions, some minor sum will find it’s way to the little guy. They’ll invent yet another game/scheme that’ll get all the rich to play with their money and money will start flowing. Not to mention at the slightest sign of things improving, the stocks will soar. You know that Americans are just waiting for some sign of improvement and that may not come, but you’ll see numbers twisted around so that things looks better than they are.

The world still needs the US as the major consumer of mediocre junk.

No it doesn’t. The world doesn’t need to send its products to America for Americans to consume. The rest of the world is more than able to consume all of those products itself.

However, the fact is that the economy is in large part based on bs. Eventually reality caught up and some of the bs went bust. But the solution will not be based on realist terms either.

Reality eventually catches up to all of the bs. BS just delays the crash and puts a greater load on the next generations to bear.