By Monty Pelerin, on March 10th, 2010 Anyone who has looked at the financial condition of this country knows insolvency cannot be remedied without severe cutbacks in entitlements such as Social Security, Medicare and Medicaid. Similarly, major cutbacks in the welfare and warfare state will be required. These latter cutbacks are not sufficient. The bulk of the cuts must come from entitlements.
For those depending upon these benefits, the bad news is just starting. Bloomberg reports:
Erskine Bowles, co-chairman of the commission on U.S. deficit reduction, said entitlement programs such as Social Security will turn the nation into a “second- rate power” if their costs aren’t reduced.
“We’re going to mess with Medicare, Medicaid and Social Security because if you take those off the table, you can’t get there,” Bowles said today in a speech to North Carolina bankers in Greensboro. “If we don’t make those choices, America is going to be a second-rate power and I don’t mean in 50 years. I mean in my lifetime.”
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By Monty Pelerin, on January 7th, 2010 Here is a good collection of articles from Chris Martenson’s site. These articles show no green shoots, and in no way are consistent with what the government wants you to believe. There is no recovery coming. See recent post about 2010 will be worse.
Take a look at Chris’ site. Be sure to watch “The Crash Course” that he provides online. It will provide a simple and thorough explanation as to why we are here and why getting out the hole is not simple (and I would say, not possible). He also provides good information as to how you might protect yourself and your family in the free “Crash” video.
Daily Digest – January 6
Wednesday, January 6, 2010, 11:01 am, by saxplayer00o1
Contracts down: Is housing headed for double-dip?
Pump prices on pace to top 2009 high by weekend
GMAC Says Lender Will Post $5 Billion Quarterly Loss
Silicon Valley ‘Bloodbath’ Leaves Buildings Empty
Manhattan Apartment Prices Fall as Finance Jobs Lost
Fed may re-enter MBS market later in 2010
TrimTabs suggests government manipulated stocks
Medicaid Long-Term Care Spending Tops $106 Billion
Missouri revenue drops in December, more budget cuts coming
U.S. business bankruptcies rise 38% in 2009
Homelessness and cold weather have shelters at capacity
Unemployment spikes demand for Census jobs
Promise to Trim Deficit Is Growing Harder to Keep
US public pensions ‘facing $2,000bn shortfall’
Over $26 billion borrowed by states for unemployment benefits
U.S. Budget Deficit May Exceed $1 Trillion for Years, Kos Says
read more »
Continue reading Martenson Sees No Recovery
By Monty Pelerin, on January 5th, 2010
Four Horsemen of the Apocalypse
Despite the rising stock market, virtually everything else continues to deteriorate in the economy. An earlier post dealt with this anomaly.
There literally is not one thing that can be claimed as a positive. And that includes the phony GDP third quarter “improvement” and presumably a better (preliminary) number for the fourth quarter. Here is a quick (not all inclusive) list as to why things will get worse rather than better:
Bankruptcies and unemployment continue to increase.
Foreclosures are increasing and will get worse.
The Housing market will worsen as a result of more foreclosures and more mortgage resets in 2010
The Federal Government’s deficits continue to grow
Foreigner financing, necessary to support our deficits, is decreasing
The private sector continues to decline as evidenced by state income and sales tax collections
Private and state pensions continue to fall further behind actuarial soundness putting special pressures on local and state governments
States continue to spend beyond sustainable levels
Consumers will underspend for several years because of too much debt
Health care “reform” adds costs and problems to the out-years
Legislation passed and proposed causes small business to hunker down and refrain from expanding or hiring
The banking system continues to deteriorate
Credit is being increasingly withheld from small business and commercial real estate
The FDIC is out of money
Bailouts, promised to produce returns for taxpayers, are turning sour
Fannie and Freddie are now completely guaranteed by taxpayers
The FHA is repeating the same mistakes as Fannie and Freddie
There is no private mortgage market left; much
Continue reading 2010 Will Be Worse
By Monty Pelerin, on January 4th, 2010
Image by Francisco Diez via Flickr
James Quinn has posted another very informative piece.
It is especially useful for those who don’t comprehend the degrees of financial chicanery and deceit to which our politicians have resorted . The article will also enable you to understand the mathematical impossibility of the Federal Government honoring its social promises and debt obligations. There will be major defaults!
Understanding the criminal irresponsibility of our politicians might also provide you with your own Howard Beale moment:
The article is highly recommended. While I would propose a somewhat different solution to altering the situation (not tar, feathers and rope, although they are deserved), Quinn’s proposal would be a vast improvement over what we currently have. READ THE ENTIRE ARTICLE
U.S. Government’s Road to Perdition
by: James Quinn January 04, 2010
James Quinn
Christmas is a time when kids tell Santa what they want and adults pay for it. Deficits are when adults tell the government what they want – and their kids pay for it.
Richard Lamm
Decade after decade, Americans have voted for intellectually and morally bankrupt dullards that promise them more goodies under the tree. Every day is Christmas in Washington DC. Long-term means the next election cycle to these traitors of the Republic. I have written ad nauseum about the impending financial cataclysm that
Continue reading U.S. Government’s Road to Perdition
By Monty Pelerin, on January 3rd, 2010
Sucker Born Every Minute
Below is a graph from the US Treasury Department. It tracks the rolling 12-month growth rates of taxes received. There are two points to be made:
Two of the three categories are down 30%; the other is down about 8%.
There is no indication that these figures have stopped going down.
The government is telling us that the recession is over. Forecasts for the 4th quarter GDP run as high as 5%
At best, this is surreal mathematics, probably unsaleable to a sixth grader (in private school). At worst, it is outright duplicity on the part of the government.
Simply put, there can be no recovery without private sector growth. The chart below clearly shows the private sector is not growing but continuing to shrink!
I have maintained in several posts that we are nearing an end point where the economy, government, the currency or a combination of the three occurs. If some of us can see this, surely many inside the government know it. After all, they are supposed to be smarter and certainly have access to better data. Because there are no options or ways out of what must happen, I have likened the government to a cornered, wounded animal that is willing to do ANYTHING to survive. Lying to the public is probably the least harmful thing they can do.
Two posts earlier today dealt with other data published by the government that make no sense, at least with respect to an economic recovery. These are
Continue reading Some Recovery
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Friedrich von Hayek
Friedrich von Hayek founded the Mont Pelerin Society.
“Monty Pelerin” is a pseudonym chosen by this blogger to convey general agreement with the philosophy, goals and spirit of the Mont Pelerin Society. No other connection exists between the blogger and the Society.
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