Austerity begins

[John23]

Originally Posted by Butterfly4u

John23,
The US Postal Service is privately owned and operated and takes no money at all to support
itself from the US Govt.
Debt has become our money system. If we don't get money from Treasuries and Bonds, the
US Government would be broke.
Europe has been buying our Bonds like crazy in the last 2-3 years because of the Euro
nonsense. That is why the US Govt has plenty of money and the interest rates have been
kept low.
Everyone wants US Treasuries and Bonds.
We can cut our military spending dramatically, and fortunately, the sequester does do that
over a 10 year period.
I do think I have a general understanding as to how our monetary system works, and the more
I feel I understand, the scarier it looks.
The politicans don't have a clue, do they? They are all ignorant, to a great extent as to how
the economy works.
THe jobs are gone. THey aren't coming back.
This is as good as it gets.
Am I wrong?

I'm very, very suspicious of all "official" goverment reported employment numbers. To me, it seems like the whole system/US economy is being artifically propped up. No different than propping up a table with a bunch of artificial legs.

The post office could probably shrink by 1/3. But it's politically untenable to say....we should cut post office jobs. It may not take money from the US Govt, but it seems to have the bloat of a govt agency.

-The whole money game in the US is about up. I.e. what percent of bonds are bought by the FED now? The FED in the last few years has done things unthinkable 20-30 years ago in the market. Like putting your finger in a hole to stop a leak...but you're adding water as well. You can't do both but expect to get anywhere.

-The politicans are way down the grade of cluelessness. If Sarah Palin was a 1 on a scale of 1-10, the other politicians (W Bush, McCain, Obama, Romney!!)...they've been maybe 3's, or 3.5's internationally. The Chinese, Singapore....they're miles more sophisticated and long term in their thinking.

I heard from someone (might have been Jim Rogers, author, financial commentator) that Asia is rising as fast as America is declining. That's pretty sobering.

[gwynedd1]

Originally Posted by John23

Like putting your finger in a hole to stop a leak...but you're adding water as well. You can't do both but expect to get anywhere.

I think they have shoved a hose in the hole. They keep inflating the rentier state which makes us less competitive with China.

If housing prices fell say down to 1/10 , then a 200k house would cost 20k. Rent would not be $1500 a month but $150 a month. Would that not allow us to compete with Asia?

Rent, rent and more rent is the problem and in our system the money supply does not rise without bloating asset prices, economic rents and debt carrying charges.

[Butterfly4u]

The USA can't compete with emerging communist and dictator countries
as far as cost of living.
The USA Corporations have bought our politicans and they wrote our tax laws
to benefit them, so really we aren't a Democracy anymore, it's an illusion.
But country's are not for profit corporations, despite what the Supreme court has
declared.
The only good thing about the sequester is the fact that the Military Industrial complex
is going to get cut over the next 10 years, but my prediction is
the politicans will put an end to the sequester soon, it will not stay in place,
the Corporations won't like the loss of military money, (after all we are still at war, right?)
and all of a sudden, the politicans will end it and come to a Grand Bargain,
the Grand Bargain that will screw the Amercian taxpayer even worse than we are now.
We will see, won't we?

[texdav]

Its not austery .Isn't even back to 2007 levels i ten years.Much more is needed and coming;this is just as both parties admit a down payment.