Tag: US Debt

Bizarre Republican Arguments Detaching Debt Problem From Real Economy

William K. Black is an Associate Professor of Economics and Law at the University of Missouri – Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics.

In April 2009 Black alleged in an explosive interview with Bill Moyers that American banks and credit agencies had conspired to create a system in which so-called “liars loans” could receive AAA ratings and zero oversight, amounting to a massive “fraud” at the epicenter of US finance, equated the entire US financial system to a giant “ponzi scheme” and charged Treasury Secretary Timothy Geithner, like Secretary Henry Paulson before him, of “covering up” the “truth”.

Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and General Counsel of the Federal Home Loan Bank of San Francisco, and Senior Deputy Chief Counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.

Black’s 2005 book, The Best Way to Rob a Bank is to Own One is a classic insider’s account of how financial super predators brought down the S&L industry with massive accounting fraud. Paul Volcker praised its analysis of the critical role of Bank Board Chairman Gray’s leadership in reregulating and resupervising the industry:

Bill Black has detailed an alarming story about financial – and political – corruption. The specifics go back twenty years, but the lessons are as fresh as the morning newspaper. One of those lessons really sticks out: one brave man with a conscience could stand up for us all.

 

Social Security: Beyond Red and Blue

George Carlin said it bluntly a few years ago, and it was dismissed as comedy by more than a few who saw that it wasn’t – who saw that he he was using the comedic stage as a platform to deliver a serious warning, to pass on the truth as he saw it clearly:

They own you. They own everything. They own all the important land, they own and control the corporations, they’ve long since bought and paid for the senate, the congress, the state houses, the city halls, they got the judges in their back pockets, and they own all the big media companies so they control just about all the news and information you get to hear.

They got you by the balls. They spend billions of dollars every year lobbying. Lobbying to get what they want. Well we know what they want. They want more for themselves and less for everybody else.

But I’ll tell you what they don’t want. They don’t want a population of citizens capable of critical thinking. They don’t want well-informed, well-educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interests. They don’t want people who are smart enough to sit around the kitchen table and figure out how badly they’re getting f*cked by a system that threw them overboard 30 f*ckin’ years ago. They don’t want that.

You know what they want? They want obedient workers – obedient workers – people who are just smart enough to run the machines and do the paper work, and just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime, and the vanishing pension that disappears the minute you go to collect it.

And now they’re coming for your social security money.

They want your f*ckin’ retirement money. They want it back. So they can give it to their criminal friends on Wall Street.

Carlin was a unique talent – he had a stage presence that was fun to listen to and he had a way with phrasing and delivery that made the depressing message he had to pass on a little easier to swallow than dry facts would have.

The US $200-Trillion Debt Which Cannot Be Named

Rather than try to do an exhaustive interpretation here, I’ll just lay it out for you and let you read it from the source. The Daily Bell bills itself as “A Daily Compendium of Free-Market Thinking“, and while what they write about in this article is true, you may find their interpretation and spin as leaning strongly towards the idea that socialism and social services are in some sense bad things, although they recognize that drastic cuts are a recipe for social instabilities, to put it mildly.

They also say on their Contact Us page: “We’d be delighted if you want to carry the Daily Bell on your site. All we ask is that you give us credit and include a link back to the original article or interview at the Daily Bell.”

Here from The Daily Bell, is The US $200-Trillion Debt Which Cannot Be Named

The scary real U.S. government debt … Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), which is 60 percent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion – 840 per cent of current GDP. “Let’s get real,” Prof. Kotlikoff says. “The U.S. is bankrupt.” Writing in the September issue of Finance and Development, a journal of the International Monetary Fund, Prof. Kotlikoff says the IMF itself has quietly confirmed that the U.S. is in terrible fiscal trouble – far worse than the Washington-based lender of last resort has previously acknowledged. “The U.S. fiscal gap is huge,” the IMF asserted in a June report. “Closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.” This sum is equal to all current U.S. federal taxes combined. The consequences of the IMF’s fiscal fix, a doubling of federal taxes in perpetuity, would be appalling – and possibly worse than appalling. – Globe and Mail (Canada)

Dominant Social Theme: What? That can’t be. Let’s not talk about it.

Free-Market Analysis: These numbers cited by Laurence Kotlikoff have been all over the Internet for a while now but have not been much reported by the mainstream press. No surprise there, but we are a bit shocked that the Globe and Mail chose to pick them up. Was it a slow news day? The story itself has been around since August.

Because the Globe and Mail has covered it, so shall we. Here is our question: Given these numbers, how can banks and institutions purchase US fixed income securities, let alone the dollar? What sense does it make? These large institutions, with fiduciary responsibility, are basically buying a bankrupt product. And it is not just the US. The entire Western world (maybe with the exception of Germany) is pretty much either flat broke or worse than broke.