sell bonds. I cant believe the chinese keep buying these things. They must be retarded.

Helen Thomas: "Mister President, the idea of raising taxes in the face of the worst recession this country has seen in almost 75 years strikes many as incredibly counterproductive. How can you propose a tax increase in the face of the numbers coming out of Wall Street?"

Obama: "That's a great question, Helen. It's like this- the tax increase is primarily aimed at stimulating economic growth inside our country. We're going to put an extra tax on companies that decide to farm out jobs offshore. We're going to close the loophole on American-based companies that keep their bank accounts offshore. And we're going to put an extra tax on new cars that get less than 30 miles to the gallon. We want our citizens to know that we plan on balancing the budget this year, and we plan on starting to pay off the borderline-criminal national debt. That change needs to start at home. Thanks, Helen, next question please."

It needs to be said;
WORST PRESIDENT EVER!

If I had to pick between reasonable regulation in either banking or cutting your grass I believe it is obvious which is the more serious matter.

Actually, if we are planning on having a huge stagflationary bust, you might just as well spend it. I am guessing that wall street will fail to return this years inflation rate, as will tbonds, as will just about anything dollar based, unless you count the lottery.

Tie this in with the previous posts on MEW, and the Fed gov't is going to provide enough stimulation to keep the ball rolling for quite a while.

After all, buying off half of iraq to get sufficient peace to get the heck outta there is going to be expensive- followed by just about everything else.

I was talking to an old friend about this mess, and he commented that you predicted this in college. I said, yes I did, but I thought it would take a lot longer to get to this stage. I thought I would have a lot longer to prepare. Oh well, reality is what you get.

$10 trillion with $5 owed to ss and medicare. So if we start selling those medicare tbonds, is that inflationary? I would say the money supply is then expanding handily.

The fed is just behind the curve- buy MBS and short tbonds!!!

All you get is dollars, which of course are worth less every year.

You just have to wait until the value of dollar plummets to match the value of the debt you owe;-}

Someday this war's gonna end...

And the Bush Medicare prescription drug benefit added another $8 trillion to the entitlements unfunded liability.

Born on the Fourth of July | FreedomWorks

"The Chinese, for the amount of their losses, are buying Taiwan.

Or, to put it in another way, the US is selling Taiwan off, bit by bit."

Polonius (neither a borrower nor a lender be, hah!), how is this taking place?

Helen Thomas: "Mister President, the idea of raising taxes in the face of the worst recession this country has seen in almost 75 years strikes many as incredibly counterproductive. How can you propose a tax increase in the face of the numbers coming out of Wall Street?"

Obama: "That's a great question, Helen. It's like this- the tax increase is primarily aimed at stimulating economic growth inside our country. We're going to put an extra tax on companies that decide to farm out jobs offshore. We're going to close the loophole on American-based companies that keep their bank accounts offshore. And we're going to put an extra tax on new cars that get less than 30 miles to the gallon. We want our citizens to know that we plan on balancing the budget this year, and we plan on starting to pay off the borderline-criminal national debt. That change needs to start at home. Thanks, Helen, next question please."

Helen Thomas: Well, Mr. President, if we heavily tax "American" companies that offshore low-skill jobs, won't they - and ALL their jobs - just move completely offshore? And if we heavily tax cars that consume too much fuel, won't that close down Detroit production lines and throw more Americans out of work? Meanwhile helping to employ South Korean, Japanese, and Chinese? Mr. President, do you have any ideas that would actually work in the real world? Oh, I forgot, you've never worked in the real world.

Helen Thomas: Where am I?
Other reporter: (whispered)It's a White House Press briefing, Helen.
Helen: Oh, Mr. President, when will you bring the troops home. I mean, Viet Nam is so far away.
President Obama: Yes, well, as I was saying, when I offer health care to ALL Americans, I can ASSURE you that we will operate the program with the same HIGH level of competency that you have become accustomed to in ALL federal programs. You can be assured that we will be FAR more cost effective than any of those evil "PRIVATE" corporations that try to earn a "PROFIT".

I do say that we should have a national holiday to party like it's
$999,999,999,999.99.

Does this include the roughly $2.5 trillion the GSE's, Fannie, Freddie, et.al, are on the hook for?

The US government doesn't back Fannie or Freddie, what a silly idea.

Allow me to quote directly from a Fannie prospectus:

The SMBS certificates and the payments of principal or interest, as applicable, on the SMBS certificates are not guaranteed by the United States, and do not constitute a
debt or obligation of the United States or any of its agencies or instrumentalities other than
Fannie Mae.

Freddie notes carry a similar disclaimer. Anybody who bought Freddie or Fannie securities had it disclosed to them very clearly that there is no government backing, I can't imagine why anyone would think anything to the contrary. Wishful thinking I suppose.

President Obama: Yes, well, as I was saying, when I offer health care to ALL Americans, I can ASSURE you that we will operate the program with the same HIGH level of competency that you have become accustomed to in ALL federal programs. You can be assured that we will be FAR more cost effective than any of those evil "PRIVATE" corporations that try to earn a "PROFIT".
Meltdown Man | 03.12.08 - 3:38 pm | #

Actually, I just realized, Bernacke is finally doing what has never been accomplished before: bringing socialists and capitalists together! He is using government money to buy and support "the capitalist system".

Finally, something we can all support and agree upon.

Well, I am not exactly libertarian, but I'd say that less government socialism has worked out better for:

Hong Kong (China so far keeping their hands pretty well off)
Singapore (recently)
Korea
Japan

Hmmm... basically the growing economies. Now how could that be...

OriginalFrank,

You're preaching "less government" in the midst of a financial crisis that's at least partially due to lack of proper governmental control and regulation of the players in this field. Secondly, I don't know about the others, but in S. Korea, the government has an incestuous relationship with the business community, hardly a hands-off approach. Get real!

200 billion infusion = market up for 1 day. What a deal!!!!

Emperor's Club promises to get it up for only $5,500... an hour

Gandalf,
I just started Atlas Shrugged...about a quarter of the way through...your discourse sounds amazingly similar...I can't wait to read the next chapter

The problem with the Smoot-Hawley tariffs was that other countries responded by raising tariffs of their own.

This time, Congress should stop that mistake from happening again. They should make it illegal for other countries to raise tariffs.

Problem. Solved.

Sam writes:
@ OriginalFrank 3:29 pm:

So you are saying that if we don't kiss corporate arse they will go give live under Hu Jintao and raise their children to speak Chinese? Do you really believe this?

** Err... I may be wrong but I believe there are many other attractive options than moving wholesale to China.

** I know I for one would not want to do to that -- it was hard enough for me to learn Chinese and my child is not at all interested.

"Mission Accomplished!"

When you think about it, THEIR mission was accomplished - we're all going to be poor!

I see the wingnut prognosto-prevaricators are trashing Obama forward.

We have a solid set of track records to compare for the 50 years. You guys own large government, large deficits, and declining socio-economic health. With a few of incidents of treason (Nixon/Watergate/Iran-Contra/Valerie Plame) thrown in for good measure.

You are "Borrow and Spend" or "Steal and Spend" Republicans.

Obama will outspend Bush?

Says you.

OriginalFrank:

Err... I may be wrong but I believe there are many other attractive options than moving wholesale to China.

Then why mention China:

Meanwhile helping to employ South Korean, Japanese, and Chinese?

Those were your words. Do you really think Japan and South Korea would let them into their market?

Let's assume IBM decides to go 'foreign'.

Well since there are military and national security issues if such a move was even pondered, just how do you suppose that will be resolved?

Think it over; it may come to you.

Sam, you are conflating different things.

1. yes, China, Korea and Japan will benefit if we decide to heavily tax cars with lower mileage. That is not much related to where relocating US companies might go. There are many Caribbean locations, for example, that would no doubt be pleased to pick up world HQ for global companies.
2. Let's assume IBM decides to go 'foreign'. Well since there are military and national security issues if such a move was even pondered, just how do you suppose that will be resolved?

Wasn't my hypothetical, nor did I answer. Too vague, too many possibliities, and I am too short on bits.

Ten trillion? No sweat.

Cheney has gotten rid of that problem. Deficits don't matter nor does the debt. You just write it off or down or devalue the currency and then it just kinda goes away, right? Anyhoo we can sell out to the Chinese if it gets really bad. That's why they are saving, right? To buy us out when the time comes.

"OriginalFrank, your comments were directed at Obama's healthcare proposals, not his nonexistent proposals for increased transfer payments"

No they weren't - they were addresing his non-existent plan to tax gas guzzlers and tax US companies that offshore work. You are thinking of someone else's comments.

"every one spends less than we do but has better life expectancy"

My understanding is that life expectancy is heavily influenced by lifestyle choices that are beyond the reach of government healthcare bureaucracies, unless they begin legally enforcing daily exercise, preventing unhealthy food choices, etc. So I don't put much faith in any significant correlation between socialized medicine and life expectancy.

"If you've got some beef with Obama's plan (which is close to Germany's or Japan's) please present them. For starters, please explain why the US will have problems with a system repeatedly shown superior to our current one".

"Superior" is an opinion. Based on my reading, moving to socialized medicine simply exchanges one set of problems for another. For example, exchanging Insurance bureaucrats with government bureaucrats. Personally, I'd rather have neither involved in my medical care. I do see potential benefits in a broader universal health care coverage arrangement, but putting it into the hands of government strikes me as the wrong direction. Think Katrina response -- now apply that level of organization and effectiveness to your cancer operation.

Nation’s Largest Baking Companies March On Washington

Nation's Largest Baking Companies March On Washington | BarterNewsBlog.com - Barter, Indirect Barter, Business-to-business Barter, Barter Companies, Entrepreneurship, Commercial Barter Industry, Multilateral Barter

So as Americans enjoy their favorite breads, pastas and pastries,
the price is on the way up as the baking industry adjusts to wheat
price shocks. According to the USDA, the price of a bushel of wheat
in February, 2007 was $4.71 which rose to $10.40 in February, 2008
for a 220 percent increase. Durum wheat, used for pastas, went from
$5.16 per bushel in February 2007 to $16.40 in February 2008, a 317
percent increase.

“As these prices squeeze margins for bakers, America’s baking
industry is getting ready to stage a major food-related demonstration,
calling it the ‘Band of Bakers March on Washington.’”

Related counter point: The Net Domestic Product (NDP) equals the Gross Domestic Product (GDP) minus depreciation on a country's Capital (economics) goods. This is an estimate of how much the country has to spend to maintain the current GDP. If the country is not able to replace the capital stock lost through depreciation, then GDP will fall. In addition, a growing gap between GDP and NDP indicates increasing obsolescence of capital goods, while a narrowing gap would mean that the condition of capital stock in the country is impro

"The US government doesn't back Fannie or Freddie, what a silly idea."

WideEyedChild,

I think (hope) that's a stab at sarcasm?

The Fed is even now trading treasuries for MBS from everyone but the GSE's--claiming they don't want the impression that they back the GSE's, yet apparently not minding the impression that they are a lender of last resort for Bear Stearns.

And surely you don't mean to think words in a prospectus matter a whit? For heaven's sake the Chairman of the Board of Governors of the United States Federal Reserve publicly announced the other day that banks should just write/cram down mortgage debt for folks that are underwater in their homes. The words in those loan documents matter about as much as the words in a Fannie prospectus.

You see, Fannie and Freddie, et al., are pretty much the only players in the mortgage game right now. Of course the Fed wouldn't let them fail. It would be political and economic suicide. And if the Fed wouldn't let them fail, then their debt is really federal government debt. It should be added to the debt tally.

I really wish you guys were wrong sometimes.

Republican ace in the hole?

WAR
(forget about debt when you can steal resources and markets). With the fall of the soviet union, the post wwII expansion ended. The markets conquered in the cold war are homogenizing labor and production costs - and thinly spreading western style goods and services across the globe. If the US wants to restore its cold war economic hegemony, conquest is the only answer - the neocon answer.

and McCain's the heir apparent.

The point of the book is that industrialists are noble creators and that unions, regulators, progressives in general and anyone who stands in their way is whiny, gutless, dishonest and evil. The characters are caricatures and the book could have greatly befitted from a truly ruthless editor.

There is one basic truth in the book - that innovation can be good - with the subtext that powerful forces will stand in opposition of upsetting their applecart. Other than that, Atlas is the sheerest propaganda.

The Soviet Union was not socialism, it was state capitalism (everybody existed for the benefit of the state). Actual socialism does exist - in the Scandinavian countries and to a lesser extent in Europe as a whole. With a healthy mix of capitalism, it works very well.

Unrestrained capitalism leads to oligarchic dictatorship and societal stagnation - as in the Latin American countries - now us.

The collectivist crap of the Communists never worked anywhere - but neither has Randian capitalism - except, in both cases, for the elites.

I agree that it is important to understand the difference between the "unified budget deficit" and the General Fund deficit. In the graph at http://usbudget.blogspot.com/2008/02/actual-numbers-and-sources-can-be-seen.html, you can see the difference between the unified budget deficit (in purple) and the General Fund deficit or "gross deficit" (in red). This latter deficit includes all of the monies being borrowed from the trust funds, chiefly Social Security. These will need to be repaid and need to be counted to get an accurate view of our financial state. In fact, we should also be looking at the budget's long-run budget projections, shown at http://usbudget.blogspot.com/2008/02/long-run-budget-projections.html.

We'll be lucky if that doesn't blow up by another few hundred billion due to our fallacious wars in the middle east, or hey, maybe Double Dubya will get his birthday wish and invade Iran or some other country and rack us up for another few trillion in debt. Even if we don't hit $10T by Jan 19th, 2009, W's effects will be felt for an entire generation.

Double Dubya doubled the Debt, slurped up the surplus to destroy us with deficit. No sane woman or man should want to be President after this guy, because they're going to be compared very unfavorably to FDR in their attempts to save us. FDR helped the people, and invented political polling to guide the democracy. Modern day politicos help the money, and ignore political polling because they think they should be President-Dictators like Dubya has set a precedent for.

I'll honestly be shocked to see America recover from Dubya's Destruction in my lifetime, which should be at least another 79 years.