Skip to comments.OWS (And Everyone Else): Pay Attention To Greece
Posted on 10/19/2011 9:56:04 PM PDT by Shalmaneser
There is no such thing as a Unicorn that craps out pretty colored candies.
In the case at hand in the United States we have a government on both sides of the aisle that has made promises that are mathematically impossible to keep. That same government conspired with The Fed and with Wall Street to blow a series of bubbles that led you to believe, over the space of 30 years, that you could have more than you can actually pay for with your work output. This claim was a lie and it infested virtually every area of our nation. Housing, education, medical care - all were used as a means to blow up the bubble to larger and larger dimension whenever it threatened to collapse and expose the frauds.
These claims were active frauds as anyone who examined them with any sort of critical eye toward the mathematical realities of the claims knew they were crap and could never happen.
As just one example of dozens the claim that "house prices are expected to increase 10% a year for the foreseeable future" was interpreted by many as "it's safe to finance the purchase of a house and then withdraw the claimed increase in value as this will go on forever" (see the foreseeable future words for justification in the common man's reliance.)
The lie is the mathematical impossibility of this. A $150,000 house that appreciated at that rate for 10 years would be worth $389,000. But over 30 years that same $150,000 house would be "worth" $2,617,410. Nobody ever asked the obvious question: Exactly how was a "middle class" person going to afford to buy a $389,000 house, say much less a $2,617,410 one?
They couldn't, of course, but this was the lie that was run.
In College education land the same lie was run. It led to an outrageous increase in college costs that dramatically outstripped earnings for degree-holding graduates. This in turn made college a bad deal nearly across-the-board and as it occurred colleges and lenders lobbied Congress to change the law so that when your kid got rooked by this scam they couldn't file bankruptcy and force those who blew the bubble to eat the loss.
We did the same thing with Medical Care. By providing "free" (or nearly so) care to Seniors and illegal immigrants, with the former being told "they paid for it" through Medicare taxes (a bald lie as on average they only put in 1/3rd in inflation-adjusted dollars as to what is spent on them) and the latter being simply told "you deserve it" the increase in medical insurance costs has run approximately 9% annually and will continue until and unless policies are changed. This means that the $700 a month insurance policy for the reasonably-healthy 50 year old ($8,400 a year) who has been promised "no reduction in his Medicare" will cost $171,477 a year by the time he's 85 with no adjustment for the higher expense that comes with age. That is, today's 15 year old will be forced to pay $171,477 a year for his medical insurance when he reaches 50. Obviously, he won't as that amount is more than three times today's median family income and even if we allow a 3% inflation rate (which we should not) it will be more than 100% of the median family income in inflated dollars! Since you can't pay more for something than you earn in total, what the politicians are telling you they will do cannot happen.
This, fundamentally, is the problem.
His slams against the Tea Party ( which he claims is the one claiming that the OWS crowd is being paid, that Soros is behind it, and a whole lot more TRUE facts ! ) are reprehensible!
Karl seems to have disassociated himself from reality. Which builds on itself. There is no 1 to 1 correlation. It is a 1 to 1 plus the activity of those before us.
Read the whole thing including the comments.
Karl Denninger knows NOTHING about the Tea Pary - zilch, nada, zero, nothing!
The GOP has NOT co-opted the Tea Party, rather they’ve done everything possible to subvert the Tea Party. Speaker John Boehner has tried relentlessly to control and obfuscate the desires of the elected representatives of tax-paying citizens not to be screwed by their own government.
marked for later reading.
That's just hogwash. The economic demise of the USA began long before the TEA Party was born - decades before.
Environmental Extremism, political cronyism, & liberal leaning Supreme Courts are the roots of our demise. I'd guess much of the financial collapse recently can be attributed to bad laws & regulations passed by Congress allowing/forcing bad business decisions on financial institutions.
Denninger blames conservatives because US companies are moving jobs offshore. No mention of the stifling taxes & regulations in the US that MIGHT have something to do with it. Duh!
The guy recognizes the problems, but he often blames the wrong people. He blames the TEA Party - a minority, loosely affiliated group - for the political mistakes of the last century. He blames businesses for trying to make a profit. He blames conservatives for not stopping the liberal, corrupt direction this country has taken, as if conservatives have been long silent in warning of this disaster.
There is no question that the Republican Party, especially the leadership, has been complicit in our downward economic & social spiral. The Party now seems to represent only their own personal interests & those of their cronies. The TEA Party will either be the moral cleansing of the Pubs, or the end of the Pub Party, but it wont happen overnight.
While I’ve long admired Karl’s economic insight as to what’s going on out there—and putting it into words that anybody can understand—his recent slams against the Tea Party movement are making it hard to take him seriously.
He bashes the Tea Party for not protesting until change happens...well gee, most of us still have jobs and are trying to hang onto them. He seems to think people should sacrifice themselves in a manner that probably wouldn’t do any good anyway. And I think he’s latched on to the OWS crowd because he’s desperate (for lack of a better word) for proof of his predictions coming true. He’s seeing in the OWS movement what he *wants* to see.
The bold type, underlining, and emphasis were all added by me, as anyone who had actually read the article would know.
Whenever and wherever you see someone making a comment about an article he hasn’t actually read, you can be sure ... sure that the comment is coming from an ignoramus whose opinions have no value.
The problem the author points to is the actual problem: government checks. The day the government started sending out checks was the day the problem started, and the problem won’t end until the government stops sending out checks.
That’s all checks. Medicare, Medicaid, Social Security, AFDC (or whatever they call it now), farm price supports, everything. They should all be stopped. Those of us who have paid into the Social Security system all our lives (I’m in my late ‘40s) should get and will get nothing, because Social Security is a Ponzi scheme. Better that we should suffer than our children.
Cutting back won’t work. Fixing the system won’t work. All forms of government welfare are fundamentally unsound and unsupportable over the long term. That’s all forms, as in everything. If we were real patriots we would force Congress to zero out all forms of welfare, including Geezer Welfare, right now. We would fight to have Social Security and all the rest of it repealed, so that we could start saving for our retirements. If we were real heirs of the Tea Party, we would accept the pain of poverty in our old age as the price for our children’s future.
But we won’t. Like the people who are burning Greece to the ground right now, we will insist that the government honor the promises it has made to us, and like them we will throw a tantrum when it becomes obvious that they simply can’t. Like it or not, accept it or not, the laws of mthematics decree that the federal government must and will stop sending out checks.
I have come to accept the fact that people of my age will get nothing from our forced federal contributions. The locusts of the Boomer generation have stripped the country bare, and there will be nothing left when the last one of them dies. They wanted their Maypo — and they got it. We of the X and later generations can all either accept that fact and start working towards alternatives, or we can wait and burn down the mall when our Geezer Welfare checks don’t show up. Either way, the end result will be the same.