Sir:
Irwin Stelzer (“No more consensus: this time there is a choice”) holds up Ronald Reagan as a model of a Conservative working for the ordinary voter. He could hardly have chosen a worse exemplar.
From 1947 to 1981 (the year in which Jimmy Carter left, and the Great Communicator took office), US public debt outstanding had fluctuated between $2 – 2.5 trillion (inflation-adjusted to 2009 dollars). Carter ended his Presidency with the debt no worse than it had been when he began. Under Reagan, the debt doubled in real terms (average 9.7% p.a. increase). Bush senior continued this trend (7.3% p.a.); the next two terms under Clinton showed a significant slowing (1.8% p.a.); but Bush junior picked up the pace again (6.3% p.a.) America now has $11.4 trillion public debt around its neck, approximately 5 times the equivalent in 1980, when Reagan asked voters, “Are you better off than you were four years ago?”
Well, how much better-off is Joe Average now? In the latest issue of Harvard Business Review, Gary Pisano and Willy Shih conclude that “average real weekly wages have essentially remained flat since 1980.” Instead, the “trickle-down effect” has turned out to be a torrent for the upper stratum only: in a 2006 speech reviewing hourly wage rate increases from 1973 – 2005, the economist Janet Yellen, of the Federal Reserve Bank of San Francisco, said “... the growth was heavily concentrated at the very tip of the top, that is, the top 1 percent”. The rest played catch-up by taking on extra personal debt: an investment analyst quoted in The Economist (22 January 2009) says “... the share of household and consumer debt alone went up from 100% of GDP in 1980 to 173% today, equivalent to around $6 trillion of extra borrowing.” Naturally, this process was much to the advantage of bankers, brokers and others in the top 1%.
In short, America has been pretty nearly busted by and for its elite. So much for the party of smaller government; so much for supporting the core Conservative, hard-working average wage-earner; not so much clear blue water, as a tide of red ink. One can only hope that the next British Conservative government, if there is one, will seek not to emulate Reagan and the Bushes.
Yours,
*** FUTURE POSTS WILL ALSO APPEAR AT 'NOW AND NEXT' : https://rolfnorfolk.substack.com
Showing posts with label USA. Show all posts
Showing posts with label USA. Show all posts
Sunday, June 28, 2009
Saturday, June 27, 2009
Down
Read Brad Setser on the USA's deterioration in the net international investment position.
The left-hand scale is in $billions.
To quote Status Quo, "down down, deeper and down".
The left-hand scale is in $billions.
To quote Status Quo, "down down, deeper and down".
Sunday, June 21, 2009
US public debt since 1945 - inflation-adjusted
Sources: Treasury Direct, Robert Sahr. Click to enlarge.
Presiding over indebtedness... or as helpless as King Canute?
Presiding over indebtedness... or as helpless as King Canute?
Saturday, June 20, 2009
US Public debt vs. gold
Still trying to see the debt mountain in context... So let's see how hard it would be to pay off in gold, assuming that in 1791 a single "bag" of gold would have cleared the account.
For the first 70 years, the gold-priced public debt was always less than twice its 1791 level, and often below the starting point.
Now to see the progress of the public debt since 1860:
... and second, since 1945:
For the first 70 years, the gold-priced public debt was always less than twice its 1791 level, and often below the starting point.
Now to see the progress of the public debt since 1860:
... and second, since 1945:
These pictures seem to indicate the influence of:
(a) two world wars
(b) the closure of the "gold window" in 1971
(c) monetary expansion since the 1980s
(d) the Grand Bust of 2000, NOT 2007, and the consequent flight to commodities
- and on this way of measuring the catastrophe, we're 50% worse off than at the end of WWII - plus we're not rebuilding the economy, we're doing the reverse.
Glory days
US Public Debt - annual rate of change
US Public Debt - the long view
Tuesday, June 16, 2009
Survival
In a Dublin talk last week, Dmitri Orlov bears out my repeated theme of diversity, dispersion and disconnection - the way in which efficiency and survival are at odds. It's also a theme of James Howard Kunstler. Even Rob Kirby's latest post refers to a "financial ecosystem" and asserts that the concentration of power at the top threatens the structure.
Big changes are on the way. Jesse reports on how the world is weaning itself off the dollar; the Contrarian Investor notes how China is cornering the market in rare minerals vital to modern technology.
There is a power struggle - a host of power struggles - going on. The good news is that life goes on, too. The bad news is that not everybody makes it.
Don't be the doughboy this time.
Big changes are on the way. Jesse reports on how the world is weaning itself off the dollar; the Contrarian Investor notes how China is cornering the market in rare minerals vital to modern technology.
There is a power struggle - a host of power struggles - going on. The good news is that life goes on, too. The bad news is that not everybody makes it.
Don't be the doughboy this time.
Sunday, June 14, 2009
Giant US slush fund?
Karl Denninger continues to reflect on a story that hasn't had much coverage - two Japanese have been caught in Italy, attempting to smuggle $134 BILLION in bearer bonds. KD thinks it's part of secret additional financing for the US.
This is not quite as ludicrously James Bond-ish as it seems. Bear in mind that some time ago, Brad Setser studied Treasury bond purchases by China and the UK and concluded that the latter country was acting as an additional conduit for the former's loans.
Good news for the Italians - their law says they'll take 40% of the contraband.
This is not quite as ludicrously James Bond-ish as it seems. Bear in mind that some time ago, Brad Setser studied Treasury bond purchases by China and the UK and concluded that the latter country was acting as an additional conduit for the former's loans.
Good news for the Italians - their law says they'll take 40% of the contraband.
Tuesday, June 09, 2009
He who pays the piper calls the tune
A couple of stories catch my eye:
China is requiring new PCs to come with factory-installed Internet filters (don't tell our government)...
... and may be buying American military secrets from the US Government (I believe I suggested this as a possible development quite some time ago, but I'm still looking for the reference.)
China is requiring new PCs to come with factory-installed Internet filters (don't tell our government)...
... and may be buying American military secrets from the US Government (I believe I suggested this as a possible development quite some time ago, but I'm still looking for the reference.)
Wednesday, May 13, 2009
Why inflation is going to hit us
Scott Burns at MSN Money (htp: Michael Panzner) calculates that unfunded government programs for social security and Medicare ($46 trillion) represent a debt equivalent to around 90% of all consumers' net worth ($51.5 trillion). If Americans' net assets decline by a further 10%, then effectively the American citizen is bust.
Can anyone provide equivalent information for the UK?
Monday, May 11, 2009
Sunday, May 10, 2009
Us banks vs UK banks
We are now getting used to hearing that the UK is the worst-placed among the G20 countries to recover from the credit crunch. One reason is that we have few banks, and almost all of them in trouble.
By contrast, as you see here, the US has 8,500 banks, most of them in good condition. The problems are concentrated in their handful of giants. Over there, it would be possible to bust them and have others ready to take on their books of loans (discounted) and deposits.
Here, I think we'd have to create a new bank, if only to provide some competition for Barclays and HSBC.
By contrast, as you see here, the US has 8,500 banks, most of them in good condition. The problems are concentrated in their handful of giants. Over there, it would be possible to bust them and have others ready to take on their books of loans (discounted) and deposits.
Here, I think we'd have to create a new bank, if only to provide some competition for Barclays and HSBC.
Saturday, March 28, 2009
Thursday, February 12, 2009
Symmetry; asymmetry
"China’s January surplus ($39.1b) is roughly the same size as the United States’ December deficit ($39.9b). It is reasonable to think it will roughly match the United States January deficit as well.
The extreme symmetry captures something real. Deficits and surpluses are shrinking globally now that the price of oil is at levels that roughly cover the oil exporters imports. Right now China’s (growing) surplus is clearly the main counterpart to the United States’ (shrinking) deficit" - Brad Setser
"I believe there is a greater than 25pc chance of a departure from the Eurozone given the social and economic behaviours of some countries within it" - John Moulton on the UK and the Euro.
The extreme symmetry captures something real. Deficits and surpluses are shrinking globally now that the price of oil is at levels that roughly cover the oil exporters imports. Right now China’s (growing) surplus is clearly the main counterpart to the United States’ (shrinking) deficit" - Brad Setser
"I believe there is a greater than 25pc chance of a departure from the Eurozone given the social and economic behaviours of some countries within it" - John Moulton on the UK and the Euro.
Tuesday, February 10, 2009
Sunday, February 01, 2009
Thursday, January 29, 2009
Preparing for the Abolition of Freedom in the USA
How many Americans are aware of this?:-
Establishing Martial Law in the United States
(htp: Global Research; referred to me by Paddington)
UPDATE: see this from Jesse re New Hampshire's Resolution HCR 6! Freedom is in the air again!
Establishing Martial Law in the United States
(htp: Global Research; referred to me by Paddington)
UPDATE: see this from Jesse re New Hampshire's Resolution HCR 6! Freedom is in the air again!
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