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denninger had a great column this morning-in part:
So this morning we wake up and the French stock market is in freefall, the DAX looks like someone beat it with a baseball bat, and our DOW futures are down nearly 200 points -- all before 6:00 AM.
I'd simply hoist up the old sign (the "Told Ya So" one) and walk off, but there's a point in here that is extremely important to understand for our government -- from Congresspeople to the President.
Many have said that we must "spend now but be more austere later" to both stimulate the economy and yet in the future get the debt under control. This rolls off the tongue of politicians with a smile a wink, whether it be Republicans or Democrats.
It's a lie folks. It's not a mistake, it's a knowing and intentional lie told by politicians worldwide.
Greece tells us exactly what is going to happen. What mathematically must happen. And what nobody is willing to (yet) admit to and accept.
When, not if, fiscal consolidation (the end of deficit spending to the tune of $1.5 trillion a year) occurs GDP will decrease by more than the amount of the deficit cut. This is, again, as I've explained for four years nothing more than simple mathematics -- GDP is defined as "C + I + G + (x - i)."
When you stop deficit spending if "G" decreases. If you raises taxes then either "C" or "I" decreases. As the direct decrease occurs there are fewer people employed to provide the former C, I or G and as a consequence the GDP decrease is more than "dollar for dollar.
THIS OUTCOME CANNOT BE AVOIDED. IT IS AS FUNDAMENTAL AS 2 + 2 = 4!
Greece "sold" to its people that they could "resolve" their problems fiscally without GDP (the economy) collapsing. They lied; the program was implemented and GDP collapsed.
Wall Street and both our and other governments pushed the meme that this problem was "manageable" without GDP collapsing -- resetting to a lower level that actually represented private final demand. They all lied.
The banks all claim they're "ok" due to credit protection and other schemes yet none of them are marking gross exposure to the market and no regulator is demanding that all alleged "hedges" be proved as dollar-for-dollar money good through one dollar of capital.
They have all lied.
And now the market is calling "BS!" on all of it, and the truth is being exposed in Greece.
you want to know how governments TRY and handle this? they tax the middle class more, that's how.
look at greece: (athensnews.gr)
ND bashes government on property surtax
New Democracy's position on the surtax on real estate is given, "we are categorically opposed", the party's press spokesman Yiannis Michelakis said, but added that no public organisation is anyone's private property "and no Fotopoulos can obstruct implementation of the laws".
The president of Dei employees' federation Genop, Nikos Fotopoulos, had said earlier on Monday that the federation would block collection of the surtax via electricity bills as intended by the government.
Michelakis noted that the government over the weekend "announced the sixth surtax in 20 months", adding that the new surtax "confirms the government's resounding failure, belies its assurances that no additional collection measures will be taken and dissolves the last remaining remnants of its credibility".
things that can't go on forever don't.
and in one more bit of news today we have this:
Mick
Indian Industrial Production MISS by almost 50%. I thought those powerful "developing economies" would pull the whole world out.
Yep, Greece tells you what happens when you try to make dramatic spending cuts during a recession...namely...it makes it worse.
The US paid off its WW2 debt without a collapse in GDP, there is no reason it can't resolve the current problem in a similar way.
I don't want to ever see 20% unemployment in this country. If we end up losing our credit rating over that so be it. The social upheaval of having 20% unemployment would be overwhelming.
I don't want to ever see 20% unemployment in this country. If we end up losing our credit rating over that so be it. The social upheaval of having 20% unemployment would be overwhelming.
We have true unemployment over 20% right now.
The FEDS have not updated the way they figure. Which has helped to slow an emotional panic.
When the real number is accounted for and the fake number hits 20%... your gonna see some real suffering, because the real number will be over 35%.
denninger had a great column this morning-in part:
So this morning we wake up and the French stock market is in freefall, the DAX looks like someone beat it with a baseball bat, and our DOW futures are down nearly 200 points -- all before 6:00 AM.
I'd simply hoist up the old sign (the "Told Ya So" one) and walk off, but there's a point in here that is extremely important to understand for our government -- from Congresspeople to the President.
Many have said that we must "spend now but be more austere later" to both stimulate the economy and yet in the future get the debt under control. This rolls off the tongue of politicians with a smile a wink, whether it be Republicans or Democrats.
It's a lie folks. It's not a mistake, it's a knowing and intentional lie told by politicians worldwide.
Greece tells us exactly what is going to happen. What mathematically must happen. And what nobody is willing to (yet) admit to and accept.
When, not if, fiscal consolidation (the end of deficit spending to the tune of $1.5 trillion a year) occurs GDP will decrease by more than the amount of the deficit cut. This is, again, as I've explained for four years nothing more than simple mathematics -- GDP is defined as "C + I + G + (x - i)."
When you stop deficit spending if "G" decreases. If you raises taxes then either "C" or "I" decreases. As the direct decrease occurs there are fewer people employed to provide the former C, I or G and as a consequence the GDP decrease is more than "dollar for dollar.
THIS OUTCOME CANNOT BE AVOIDED. IT IS AS FUNDAMENTAL AS 2 + 2 = 4!
Greece "sold" to its people that they could "resolve" their problems fiscally without GDP (the economy) collapsing. They lied; the program was implemented and GDP collapsed.
Wall Street and both our and other governments pushed the meme that this problem was "manageable" without GDP collapsing -- resetting to a lower level that actually represented private final demand. They all lied.
The banks all claim they're "ok" due to credit protection and other schemes yet none of them are marking gross exposure to the market and no regulator is demanding that all alleged "hedges" be proved as dollar-for-dollar money good through one dollar of capital.
They have all lied.
And now the market is calling "BS!" on all of it, and the truth is being exposed in Greece.
Bascially we need to look at europe . We have been on a expanding program of wealth redistribution since the mid 60's increasingly. Europe long before that. basically investing national wealth in programs that return no increased national wealth and it shows. Too many now dependent on too few.
Also, why in the world would false unemployment reports reduce emotional panic? Are the unemployed fooled into thinking they are employed?
People who still have jobs are oblivious to the fact there are are any unemployed workers at all. When there is 10% unemployment, there are 10% who realize what a crisis our economy is in. The other 90% just don't get it, and are buying gas-guzzling new cars and 48-inch screens and sleep-number beds and beef and Disney passes and having babies, all on credit.
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