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Balanced Budget Amendment Task Force B.S.

by ARGeezer Tue Oct 7th, 2014 at 02:12:55 AM EST

Since those with great wealth hold most of the debt issued by the US Government in the form of bonds, and since they have disproportionate influence on Congress via large campaign contributions they could insist that the government buy back their bonds and retire them. But they don't because that is not what they really want. The main reason they hold this debt is that there are no alternative investments they find attractive. The USA desperately needs to build a renewable energy and transportation infrastructure before the cost of fossil fuels makes such an investment much more expensive, and building that infrastructure now would cap the cost of electricity, as there is no fuel cost for renewables, so renewables come on line first, per the Merit Order Effect. But this would cut into the profits from their fossil fuel holdings. The real reason they are pushing this faux debt crisis is to provide a reason to cut program they despise - namely anything that benefits the average citizen: food stamps, long term unemployment, Social Security and Medicare.


This Peterson Institute sponsored add claims: "88% of Americans will have more confidence in the economy IF THE UNITED STATES REDUCES ITS NATIONAL DEBT." If this is even true it is only because organizations like the Peterson Institute have spent so much money telling them it is true. In fact, seriously reducing the National Debt by reducing or eliminating the amount of US Government Bonds outstanding would cripple and crash the economy, as this asset class it the foundation for banks and finance. If a bank needs more reserves because it has just made a large loan or because assets on its balance sheet have just been shown to be impaired it is their US Government Bonds that they can 'repo' with the Fed or other banks most cheaply and reliably. And that is just one thing US bonds do.  Paying off the National Debt would reliably crash the economy. It is an insane goal.

Display:
So 88% of Americans worship the Confidence Fairy! It is rare that 88% of Americans agree on anything. If true, this is a tribute to the effectiveness of conservative efforts through think tanks and owned media to establish public opinion that is favorable to their goals. This opinion has been able to spread due to the capture of most of Academic Economics by these same wealthy conservatives. Most economists have been taught that 'money is a veil over the economy'. If they don't take money all that seriously they are less likely to 'follow the money', which I am sure is just fine with those few who hold most of it.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 3rd, 2014 at 01:37:09 PM EST
Evidently, the elite investor class understands limitations of compound interest growth, and now is switching to grabbing material assets and to expanding economic, political domination. The inflation scare, austerity stories are just top notch propaganda for Stalin, Goebbels to envy.

Banking will not be the same. You will borrow by directly pledging (and then renting) your assets.

by das monde on Tue Oct 7th, 2014 at 03:26:19 AM EST
[ Parent ]
Quite some time ago, I remember seeing a poll (on Krugman's blog) where Americans were concerned about debt and favour its reduction. Interestingly it was a poll from... the Roosevelt times.

I actually believe that it is the normal way of thinking: assuming that debt matters much on the national level (and indeed, if you are in the new DMark regime, it matters, as you use a foreign currency). By normal, I do not mean correct. I mean that it as little to do with propaganda - it is just the normal way of thinking and it stems from...

...People extrapolating from the family level to the nation level. If it works on a small scale (I have to lower my debt), it must be the same on the large scale (debt ratios are fundamental for our country). If you are optimist, you can see this simply as a failure of the educational system to teach the fundamentals of systems/ecological/holistic thinking. But even so, today it will be very difficult to win this battle on the rational level as it goes against very strong common sense.

by cagatacos on Tue Oct 7th, 2014 at 10:40:44 AM EST
[ Parent ]
If you are optimist, you can see this simply as a failure of the educational system to teach the fundamentals of systems/ecological/holistic thinking.

And if you are a pessimist you can note that this failure of the educational system is hardly accidental. Proponents of the quantity theory of money held sway until they were superseded, temporarily by Keynesians. Friedman and the monetarists, via repeated, unfounded assertion succeeded in discrediting Keynes in the '70s and their allies held and hold editorship of 'top journals' in economics. At least a few at the top understand the importance of retaining a weak theory that is useful to and beloved by their wealthy patrons.      

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 7th, 2014 at 11:14:00 AM EST
[ Parent ]
I think the problem is more general: Thinking in terms of systems was never a priority of anyone really. Economy, ecology, industry, cognition, ...

The same with teaching people with finding generic falacies of thought (to protect them against both populists and themselves), ...

Nobody really ever pressed for system thinking in education (or the human inability of failing to see past its belly - which can be probably taught against).

by cagatacos on Tue Oct 7th, 2014 at 11:42:21 AM EST
[ Parent ]
I agree that lack of systems thinking is a general failuer, but economics is a key discipline in the socio-economic power game which, of necessity, involves thinking about the overall economy. This makes it especially important to control what is taught in that discipline.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 7th, 2014 at 12:28:58 PM EST
[ Parent ]
Yes. My question is: how can this problem (i.e. economic policy) be solved in a democratic and civilized way? Arguing for 'less austerity' is not popular in the sense it goes against the perceived views of almost everyone. The 'serious' (for VSPs and the peasants alike) solution is more austerity.

Where is FDR when you need him?

I fail to see any viable way...

by cagatacos on Tue Oct 7th, 2014 at 01:04:26 PM EST
[ Parent ]
If you extrapolate from the household, then you should be a lot more sanguine than most people in the population.
Most household will not greatly worry about taking a debt of several times their annual income at the beginning of their career, because they have plenty of time to pay it back.

Governments don't retire or die at all, so they shoudl be able to take even more. So why should we crazily worry about a debt of 80% of GDP in a country where tax take is about 50% ?

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Wed Oct 8th, 2014 at 03:14:20 AM EST
[ Parent ]
Just as marketing companies do market research to test the effectiveness of their marketing, the Peterson Institute's "finding" that 88% of Americans are concerned about the debt is just a measure of the effectiveness of their ad campaigns.

But the more interesting point is his: One person's debt is another person's asset.  Without the US Government creating huge amounts of debt, rich people can't accumulate huge amounts of assets.  The last thing these rich people want is for the US government to actually pay down some of that debt (a la Clinton surplus years) because that means they have less means of storing their assets.

So as you say, propaganda about debt is actually propaganda about downsizing redistribution programs.  But I differ slightly from your assertion that paying down the debt would crash the economy.  It might, but it would asymmetrically effect the rich more, denying them an easy way of parking their assets risk free.

If I were "in power" I would be tempted to call their bluff and pay off a lot of the national debt either by raising taxes or just by issuing more currency "the trillion dollar coin".  Conservative heads would explode, because I would be effectively devaluing accumulated riches.The problem is those riches would probably go into property instead, and almost inevitably lead to a property crash.  And then I would not bail out the banks (and rich people) and effectively reduce wealth inequality.

Of course there would be short run economic turmoil, and probably an attempted coup d'Etat. I would re-direct the attentions of the NSA to the financial elites and root out the conspirators...

But it would be a rocky road...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Oct 7th, 2014 at 02:37:39 PM EST
[ Parent ]
Were you to truly have 'power' you could raise taxes on the top 0.3% of income earners, raise inheritance taxes on estates over $2 million and use the proceeds to pay off the bonds they hold. But it would be necessary to counter that action by equivalent or greater fiscal stimulus. But, if you had that power, it would be possible to vigorously prosecute the fraud that led to the collapse, change the management of the TBTFs and claw back the net worth of the corporate officers. That would 'pay for', at least in the popular mind, a lot of social programs and leave the country with a financial system that was appropriate to its needs. But the real use of such power should be to move on mitigation of climate change as vigorously as possible, while re-educating the population as to what government can do and demolishing the b.s. that has passed for economics over the last century and a quarter. Within a decade and a half we could have replaced almost all fossil fuel energy with electricity for power and transportation and be well into a process of sequestering carbon long term to eventually reverse anthropogenic climate change.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 7th, 2014 at 03:56:35 PM EST
[ Parent ]
If taxes on the top 0.3% simply caused them to hold less Government bonds (because the proceeds were used to pay off those bonds), there should be no net deflationary impact - some assets currently in the name of individuals would transfer to being in the governments name. But unless you are positing a confidence fairy, or "wealth effect", the impact on the real economy would be minimal - as all other assets held, collectively, by the wealthy would be unaffected. It's effectively a paper transaction transferring ownership an asset from one party to another neither of whom are doing anything productive with the asset.

In fact all the propaganda about how the Government debt overhang is damaging "confidence" could be used in favour of the transaction - any damage to private sector "confidence" due to loss of wealth would be counterbalanced by the increase in confidence due to reduced Government debt.  Effectively, one largely B/S argument cancels out another...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Oct 7th, 2014 at 06:36:13 PM EST
[ Parent ]
Yes, if they are held by private individuals I think that would be true. It is financial corporations that use US Govt. bonds as assets for repo, etc. Perhaps the retirement of bonds held by private individuals would create a shortage and drive up the face price. I think some 'dark pools' may well contain US Govt. bonds which might be 'reverse repoed' to banks in temporary need of showing greater regulatory capital, etc. for an appropriate fee. At least that is the impression I have.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 7th, 2014 at 08:45:03 PM EST
[ Parent ]
Breaking the economic, social, and political power of current wealthy elites is one thing.  A necessary thing, in my opinion.  But by itself, it won't create a more just and equitable economy.  It's just a start.

As I'd argued before, one both has to create a system in which large personal accumulation of wealth is simply impossible, and in which the social and political power of immortal corporate entities is neutered.  Keep money in infinite circulation amongst small producers and consumers, and spread out the real work of the economy amongst as many hands as humanly possible.

by Zwackus on Thu Oct 9th, 2014 at 12:52:07 AM EST
[ Parent ]
The society you're describing there is not going to have electricity.

Unless you exempt the government from the prohibition against large, complex power structures.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Oct 9th, 2014 at 05:24:41 AM EST
[ Parent ]
Power generation and an electrified national rail transport system are two pretty natural public monoplies, along with health care and basic banking. At one time steel would have been another. Now scalable electric furnaces have solved that problem and the problem with aluminum. But what about the production of the rolling stock? And the production of electric vehicles?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Oct 9th, 2014 at 10:26:17 AM EST
[ Parent ]
A typical rolling stock production line is going to run a gross turnover well over € 1 bn. At a skilled labor rate of € 30-50 per hour, and assuming a total labor content of maybe 50 % (when you count the whole supply chain), that runs to something on the order of 10 million man-hours, or about 3½ thousand people employed full-time for two years.

And many parts of the supply chain only work because of economies of scale, so in reality you're talking more like ten thousand people on an average of 30 % of full time.

Ten thousand people marching in more or less the same direction 30 % of the time, for two years. That means large, complex organization.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Oct 9th, 2014 at 10:41:05 AM EST
[ Parent ]
And there are almost certainly other such needed large organizations, so a workable plan is needed to deal with these facts. One such would be to confine political activity to individual human beings acting on their own behalf with fictitious legal entities barred from contributing to or participating in political activity. Combine that with a much flatter distribution of both income and wealth and we might have the possibility of some semblance of democratic governance. The real problem is getting there.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Oct 9th, 2014 at 10:51:42 AM EST
[ Parent ]
I didn't say that large corporate entities need to be destroyed, but they do need to have a lot of their independence curbed, and their political clout broken.  They are servants of the people, which exist because they are useful.  They are not independent entities which have a right to grow for their own sake or for the personal enrichment of their owners or managers.

Industrial and manufacturing entities that benefit from economies of scale are one thing. They need to be subject to democratic accountability, whether that be via central government supervision or an alternative democratic channel.

 Mass producing products for consumers is an entirely different thing, and services like retail different still.   Consumer products can be mass produced, but a lot of what is being cut for centralized efficiency is design work, which is something we ought to be looking to maximize.  As for retail, the efficiencies aren't worth it, as it's mostly people who get cut, allowing local retail dollars to be vacuumed up, never to be seen again.

by Zwackus on Thu Oct 9th, 2014 at 10:29:39 PM EST
[ Parent ]
Effective regulation of big corporate entities is precisely the field of Jean Tirole, new Nobel prize of Economics.
by Bernard on Mon Oct 13th, 2014 at 06:24:33 PM EST
[ Parent ]
Funny, what I'm hearing in the Spanish press is that he's all about effective market liberalization.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Oct 13th, 2014 at 08:12:21 PM EST
[ Parent ]
Why do I suspect that they are one and the same to those who awarded the prize? Reform? Is that you?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Oct 13th, 2014 at 11:42:03 PM EST
[ Parent ]
The "official" economics pundit on France Inter, the very liberal Dominique Seux (pronounced Sucks), just claimed the Nobel for his side on the grounds that 1. Tirole does micro not macro; 2. he's a "reformist social-liberal".

Tirole is not a pundit, is out of public view, and so it's hard to get a notion of what his standpoint is unless one is an insider. But it seems the main thing he has worked on is the effective regulation of big corporations.

The example given by Sucks hardly chimed with his how-to-recuperate-Tirole- for-our-side theme: Tirole suggested that employers should pay a tax on lay-offs to make them share the "social cost".

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Oct 14th, 2014 at 02:00:27 AM EST
[ Parent ]
El País (2005): "Sin un regulador fuerte, no hay liberalización eficaz"

Apparently the electricity market liberalization failed because of insufficient competition due to the fact that there are not sufficient international interconnections to make up a European supergrid.

Electrical engineers, look upon my works and despair!

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Tue Oct 14th, 2014 at 04:33:55 AM EST
[ Parent ]
In California professional electrical engineers tend to support Democrats, as they are the more likely party to support public works - their onetime mainstay.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 14th, 2014 at 09:37:48 AM EST
[ Parent ]
More from the Guardian:
Last year, the prize went to three economists, Eugene Fama, Lars Hansen and Robert Shiller for their work on predictions in financial markets.

If Jean Tirole covered his area in a manner comparable to the way Eugene Fama covered his we are in real trouble! Let us hope for a comparison with Robert Schiller instead.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Oct 13th, 2014 at 11:50:34 PM EST
[ Parent ]
As this post has the same title as the BBA Task Force, excepting the B.S. at the end, it will come up in Google searches on that title. Hopefully that will provide an antidote, for some at least, to the effects of the pernicious and interest serving propaganda the original BBTF release contains.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 3rd, 2014 at 01:39:57 PM EST
In Money and Banking I learned that US Government Bonds were the largest and most liquid asset class in the world. That fact alone should make people pause before advocating seriously reducing that class of assets.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 3rd, 2014 at 01:42:55 PM EST
The same problem occurs with German bonds in the Euro area and the German debt brake.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Oct 3rd, 2014 at 01:45:07 PM EST
[ Parent ]
Exactly! Germany will not issue enough debt for its own economy to thrive, let alone the entire Eurozone. Nor will it willingly allow the ECB to issue needed debt. And further reductions in debt would be disastrous.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 3rd, 2014 at 02:06:14 PM EST
[ Parent ]
And, were the USA to significantly reduce the amount of outstanding bonds it would cripple not only the USA but all economies using Eurodollars. A wonderful way to cause a depression.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 3rd, 2014 at 02:08:39 PM EST
[ Parent ]
Brace yourselves for the second decade of the Voluntary Depression. This is going to be fun!

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Oct 3rd, 2014 at 03:59:49 PM EST
[ Parent ]
And it would hamstring the government's ability to maintain the dollar as global reserve currency, thereby removing the main thing keeping the house of cards up.
by rifek on Sun Oct 5th, 2014 at 11:22:26 PM EST
[ Parent ]
No, what keeps the dollar as reserve currency is the carrier groups.

So the house of cards that would come down would be the global economy, not (in the first round) the global trade system.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Oct 6th, 2014 at 02:25:44 AM EST
[ Parent ]
The house of cards I'm referring to is the US economy.  And if the US government can't take the steps necessary to protect the carrier groups, er, I mean the dollar (which it wouldn't be able to under Peterson's lunacy), the groups wouldn't stay on board two seconds.
by rifek on Mon Oct 6th, 2014 at 05:26:57 PM EST
[ Parent ]
The military protects the economy that funds the military - until it doesn't. Then both can collapse. This is an update of the old Medici motto: "Money to get power. Power to protect money." But if the economic base is neglected or not handled intelligently... Capitalists have always needed to be protected lest their own excesses lead to their destruction. Pepe Escobar suggests that the hysteria in D.C. over ISIL and its provocations is distracting the USA while Russia and China work to lure Germany into becoming the sixth addition to the BRICS.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 7th, 2014 at 12:11:26 AM EST
[ Parent ]
The US economy's ability to support carrier groups does not hinge on the US economy's willingness to supply currency reserves for the rest of the world.

The rest of the world's ability to run their economies in a smoothly functioning manner depends on the US economy's willingness to supply currency reserves. But the US' ability to support carrier groups does not depend on the frequency of major depressions in its clients and colonies.

Sucks to be the rest of the world when the imperial center goes nuts.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Oct 7th, 2014 at 01:58:08 AM EST
[ Parent ]
The Anxieties of Empire » CounterPunch.org

There are "get-out-of-jail-free" cards that come with superpower status, but they don't always work.

Still, it is better to be a superpower than to be dependent on one as those get-out-of-jail-free cards lose their value [...]

The United States can and does get away with murder -- many times over, and with lesser and greater crimes as well -- for two main reasons.

First: because it has the mightiest military in the history of the world.   Keeping that infernal juggernaut up and running costs more than all the rest of the world's armed forces put together.

This does not mean that America can win all the wars it fights.  Quite the contrary -- witness the Bush-Obama wars that have, by now, been going on for nearly a decade and a half [...]

What then does the U.S. gain by being the mightiest military power in the history of the world?   The short answer is: it gains the ability to wreak havoc wherever it pleases [...]

The Biblical David didn't just defeat Goliath; he annihilated him.  The American Goliath doesn't get annihilated.  That is what those get-out-of-jail-free cards are good for.

The troops the Pentagon sends might as well take "born to lose" for a motto, but, with its grotesquely overblown budget, the American war machine has enough depth to withstand defeat time and again, and still to bounce back - effectively undiminished.

by das monde on Tue Oct 7th, 2014 at 02:26:56 AM EST
[ Parent ]
The rest of the world's ability to run their economies in a smoothly functioning manner depends on the US economy's willingness to supply currency reserves.

The emergence of a rival, largely self sufficient, trade block with its own currencies, payments clearing system and investment bank could diminish the power that the USA currently enjoys. Carrier groups are not particularly useful in the interior of Eurasia. China currently has a foot in both worlds and its trade surpluses provide other trade partners the potential to obtain $US as needed. Perhaps the prospects for such a rival trade block will be clearer in 2025.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 7th, 2014 at 10:59:18 AM EST
[ Parent ]
The emergence of a rival, largely self sufficient, trade block with its own currencies, payments clearing system and investment bank could diminish the power that the USA currently enjoys. Carrier groups are not particularly useful in the interior of Eurasia.

Which is why the Americans move so aggressively to encircle Russia and destroy its ability to govern the Asian interior.

The potentially feasible alternative power bloc would be a joint Russo-Chinese trade bloc. But Russia is unlikely to accept being the junior partner in that bloc, and China lacks the ability to force Russia into their orbit. Besides, while the two countries formally share a border, Trans-Uralian Russia is four thousand kilometers of nothing, which is a non-trivial barrier to trade.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Oct 7th, 2014 at 11:45:17 AM EST
[ Parent ]
Well, the block would not contain just China and Russia and functions are somewhat differentiated. China is a manufacturing giant, Russia is a fossil fuel giant, China is a rising military power while Russia is an established military power than is renewing its military. If India is integrated into the block it will become much more significant. Pakistan and Iran already have good relations with China while Iran is a client of Russia for purchase of military equipment and nuclear technology and Saudi Arabia is hedging its bets while increasing its sales to Asia. Roads, rail, pipelines and fiber optics will further integrate all of Central and South Asia.

Both India and China will continue to have a foot in each world, but they will be less vulnerable to economic warfare with their own payments clearing system and international investment bank and they will have motive to prefer trade within their block to the extent feasible, as it is less vulnerable to disruption.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 7th, 2014 at 12:48:43 PM EST
[ Parent ]
China has ten times the Russian population. No way, no how is Russia going to be anything other than a (very) junior partner in any kind of Sino-Russian union. Adding India would not help this.

If Russia were prepared to be a small fish in a big pond, it would be trying to join the EU.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Oct 7th, 2014 at 01:30:32 PM EST
[ Parent ]
Well, Russia will do what it must. Establishing a new payment clearance system in Asia for payments involving BRIC members makes too much sense to refuse simply because you will not be dominating the alliance. Of course Russia will be more important if Germany continues to invest and trade with it, and Germany would almost certainly go into depression were it to actually cut trade ties with Russia. I can only wonder why Putin has not implemented currency controls, but sanctions will still probably do at least as much harm to Germany and Europe as to Russia. Time will tell how effective Washington is in convincing Germany and Europe to act against their economic interests.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 7th, 2014 at 01:51:55 PM EST
[ Parent ]
Well, Russia will do what it must.

Which is why I find this whole conflict so mystifying. What do you gain by forcing your old rival into dependency on your only real potential future rival?

by generic on Tue Oct 7th, 2014 at 05:22:04 PM EST
[ Parent ]
The US has so far gotten all of Eastern Europe, and then some.

The US might have gotten Russia pulled into their sphere as well. But they fucked that up in the 1990s, and I think those bridges are pretty much burned.

So now the game is to grab as much as they can, as fast as they can, before the Russians either reconstitute their empire or bring their sphere into another power bloc with all their clients tagging along for the ride.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Oct 7th, 2014 at 05:34:48 PM EST
[ Parent ]
Yeah, instead of really trying to help Russia transition to a more effective form of governance and mode of business operation the whole opportunity was tossed to the neo-cons and Wall Street as a giant piece of meat. It was an historic opportunity to perhaps cement a relationship that could have stood the USA and Europe in good stead for another century. Clinton might have been served better even had he retained Baker as Sec. State. Albright and especially Brzezinski went for 'winning' the end of the cold war. Clinton should have had a long series of conversations with George Kennan.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Oct 8th, 2014 at 07:53:30 PM EST
[ Parent ]
Russia has resources and lesser needs than the large populations of China, India. That is quite a leverage. Besides, ego matching might fall secondary to more reality-based issues.

By the way, Putin is very popular in China.

by das monde on Tue Oct 7th, 2014 at 02:21:48 PM EST
[ Parent ]
Yet, here in France, conservatives are going loony over the debt. France is on the brink of catastrophe, they say. What is disastrous is the debt.

Of course, the aim is (at last) to cut back redistribution and reduce wages. But the "catastrophic debt" theme plays into a deeply-held cultural frame. People are anxious when they're in debt, and feel stronger when they have a safety net of savings, and they project their private circumstances on the state. Sure there are paid propagandists and useless dopes in the media who are "just doing their job", but with "catastrophic debt" they're shooting fish in a barrel.

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Oct 3rd, 2014 at 02:34:23 PM EST
[ Parent ]
"These cornerstones look like they are just what we need! No one will notice their absence. And while we are at it we might as well take the capstones from the arches."

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 3rd, 2014 at 01:45:43 PM EST
[ Parent ]
And, of course, were the largest US Government bond holders to try to divest themselves of said debt they would quickly find themselves holding much less debt than they previously owned even after subtracting their initial sales.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Oct 4th, 2014 at 02:57:20 PM EST
[ Parent ]
You should wrap some of your comments into the main diary, and re-post this on Kos.
by Zwackus on Sun Oct 5th, 2014 at 07:18:12 PM EST
I think they mean, "88% of Americans whom Pete Peterson knows...."  That would make sense.
by rifek on Sun Oct 5th, 2014 at 11:19:13 PM EST
In fact, seriously reducing the National Debt by reducing or eliminating the amount of US Government Bonds outstanding would cripple and crash the economy, as this asset class it the foundation for banks and finance.

Yes -but that is something that should be addressed.

The financial system must not rely on the USA (or a few major countries) making the budgetary decisions that the financial system lasts. With the implicit threat that if those countries do not do so, well then we'll crash their economies.

That is incompatible with any semblance of democracy.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Mon Oct 6th, 2014 at 02:38:43 AM EST
American Exceptionalism Thrives Amid Struggling Global Economy - Bloomberg
The U.S. is proving to be an oasis of prosperity in the midst of a troubled world economy.
Is the bust so near?
the U.S. is breaking away from the rest of the world partly because it has made more progress in working off the debt-driven excesses that helped precipitate the worst recession since the Great Depression. Only the U.S. and Germany among major economies have reduced total public and private debt as a share of GDP since 2007, according to data compiled by the McKinsey Global Institute.
The conservatives love Obama, surely.
by das monde on Tue Oct 7th, 2014 at 04:16:11 PM EST
This is a reflection of the health of the recently downsized financial sector. I have to wonder at the health of the overall economy when subscription forecasting service PwC is predicting a decline in total per family purchases this Christmas Season. Naturally, the National Retail Federation is predicting a 4% increase, while WSJ's MarketWatch notes "Holiday retail-sales forecasts are all over the map." Things are great for those who still have well paying jobs, especially in the financial sector. Less so elsewhere. I will be convinced when we have wage push inflation to worry about, rather than needing to raise the minimum wage - not that I don't support raising the minimum wage.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 7th, 2014 at 05:48:21 PM EST
[ Parent ]
Conservatives probably would love Obama were he able to get a skin transplant.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 7th, 2014 at 05:49:29 PM EST
[ Parent ]
Like they loved Bill Clinton?
by IM on Wed Oct 8th, 2014 at 10:56:15 AM EST
[ Parent ]
Clinton was hated because he was seen as a traitor to his people - a Southerner who was insufficiently racist, insufficiently homophobic and insufficiently gynophobic. Obama is from Chicago and is unlikely to betray the Pritzkers.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Oct 8th, 2014 at 11:20:58 AM EST
[ Parent ]
But having a president who can win a national election but who arouses intense regional hatred is a proven way to prevent any real progressive action. Hillary will fill that role just fine.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Oct 8th, 2014 at 11:23:56 AM EST
[ Parent ]
But having a president who can win a national election but who arouses intense regional hatred

I don't think so. Even New Democrat, southerner Bill Clinton did arouse considerable southern hatred. I mean at least Obama hasn't been impeached so far.

You won't find a progressive - you won't find a democrat - who won't be hated by the republican base.

by IM on Wed Oct 8th, 2014 at 12:36:50 PM EST
[ Parent ]
Fortunately, the most rabid of that base are mostly in their last few years of life. There is no Democrat that the Tea Party faction of today's Republican Party would accept, but there are no leaders in the Chamber of Commerce faction of today's Republican Party that the Tea Party will really accept either. The Republicans are reaping the whirlwind and I say 'happy harvest!' (Today I saw Sen. Ted Cruz railing against 'unelected judges' (SCOTUS), overturning laws prohibiting same sex marriage! And this is the most conservative Supreme Court since 1936!)  But the intensity of the vitriol against Obama would not be there for a white politician of the same views. And a lot more citizens would be looking at their self interests rather than the skin color of our POTUS.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Oct 8th, 2014 at 08:08:55 PM EST
[ Parent ]


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