Federal Deficit Impasse

[BeenThere...DoneThat...]

Jul 31, 2011 23:01:52 GMT -5 sunrnr said:

The saying of Jesus "forgive them father for they know not what they do" seems to have new meaning to me and seems applicable to Congress at this point.

Only time will tell .....

...you're only just now thinking about Congress and that prayer?

[smackdown]

THEY do bad things. When the mass-terminations occurred in 2007-08, we needed to do TWO primary things (it was discussed on MSN MT a lot)... RAISE the Bank Rate to double digits (12%) and STOP printing money (Bush had already printed way too much and raised the Debt Ceiling too many times). Instead of TARP, we needed-- full and intense individual credit instrument inspection. The moves would have: stopped banks from running to borrow money used solely to cover losing and losses (their collective fund groups had failed to generate positive returns for the 3 prior years), put a premium on spending (dropped us into economic stasis not a free-fall) and created inspection where the most likely concentration of criminal activity would be found.
Knowing what we know now... that everyone from municipalities to pension funds to churches had been scammed by Goldman Sachs Mark to Market facilitation of bogus credit instruments into securities, and a controlled correction of housing values and jobs recovery would work like a transfusion and transfer ill-gotten dark pool wealth back into the economy. By holding the Bank Rate (and thus the Prime Rate) super high, outstanding credit would be repaid quickly (to reduce hyper-interest charges) or fail. We could have EASILY dealt with the fail since the likely defaulters were of common criteria.

You and I would have survived without much variance from before and most of America would have weathered a small recession fairly well. Big Banks would owe a whole lot in salvage costs and likely NOT be controlling the markets or have caused massive fall-out in real estate. Small businesses that were fully asset-pledged to credit would have still failed, but Alternative (energy, etc.) start-ups would have had capital and thus-- legs. I generated a patent request on a wind turbine design and a component design that would have been useful in water power. I had every intention and partners in being one of the latter-described start-ups. On hold now until we clear the crooks. Given the Debt Ceiling hike after all the other free money given to bad business... I'm not likely to ever pull the plan out of mothballs anytime soon.

[flow5]

ZEROHEDGE:
In calendar (not fiscal) 2009, the US grew its budget deficit by $1.47 trillion. In the same time, the Federal Reserve grew its securities holdings from $500 billion to $1.85 trillion, a $1.34 trillion increase. Keeping it simple: 91% of the budget deficit increase in 2009, under the authority of President Obama, was funded by the... United States.
============

Then we had QE2. Rates are low because economic activity is slack & the FED has monetized a lot of new debt.

[flow5]

ZEROHEDGE:

"In calendar (not fiscal) 2009, the US grew its budget deficit by $1.47 trillion. In the same time, the Federal Reserve grew its securities holdings from $500 billion to $1.85 trillion, a $1.34 trillion increase. Keeping it simple: 91% of the budget deficit increase in 2009"

=========

Then came QE2's monetization. The FED has taken an inordinate volume of Treasury's off the market. No supply = low rates. Poor economic performance = low rates.

[BeenThere...DoneThat...]

...kinda sad to think that despite technically having made a deal, we're still at a federal deficit impasse...

[Virgil Showlion]

Seemed pertinent.

[BeenThere...DoneThat...]

...yep... and at some point, this ship will pass the point of saving at all... I'd like to think we haven't passed that point... but deranged hope is what makes the world go 'round, huh?

[smackdown]

"Seemed pertinent."

Instead of getting frustrated, know what we're dealing with. Button pressing investing (gambling) is the only thing they know how to do. We're not dealing with stubbornness... it's outright fear. GREAT cartoon!!!

[usaone]

Investing has ALWAYS been gambling.

The S&P downgrade will be the imputes that congress needs to get a much larger deal done by November using the Gang of Six proposal as a general outline.

[smackdown]

Funded out of... what? No more deals, no more under-the-table cash, no more buying the outcome. The financial sector will be dismantled and crushed by November... we don't need it, we need JOB RECOVERY for families and stability.

[usaone]

Sorry VL. You know that isn't going to happen.

[smackdown]

Quit dreaming. We exhausted the printer and now must reconfigure the existing pool of currency to accommodate by priority. A financial sector that took us down the wrong path and paid itself first-- is LAST. I've been calling for the closure of banks and I'd say that's approaching priority. There is no reason to continue managing retirement accounts if whole sections of the viable economy and society are compromised.

What I see happening sooner... bankruptcy and foreclosure lawyers, financiers, bankers and accountants are issued Cease and Desist orders. They make more debt, rather than stop it. Executive wages are slashed as much as 95% with the bulk of that going to on-board people who can work and paying them to re-assimilate into society to lift the economy. Excesses are shut down-- that means a gas consumption cap. Big Oil becomes a utility. When they refuse, the dissenters are thrown out of the country. We start reconciling. no stone unturned. The financial sector is divested as far apart as can be accomplished. We'll stop looking at degrees like free passes and start measuring performance the old fashioned way-- by what you do, not who you know. Technology won't survive the shift. It was imperfect before Big Business got to it and dangerous afterward. A flight to quality unites us, the push for integrity moves us toward new prosperity without dragging anything from the 20th Century into the 21st.

[BeenThere...DoneThat...]

...I don't remember any of that happening in Zimbabwe, Russia, Argentina, etc.... what makes you think it'll happen here?

[smackdown]

"in Zimbabwe, Russia, Argentina, etc...."

Aren't those economies based on others? We would be that "other" and ours can't be tweaked, it must crash and recover only after purging the crud and duds who bled it non-productively. Time for change instead of trying to live on it.

[flow5]

www.reuters.com/article/2011/08/29/us-usa-debt-lobbyists-idUSTRE77S5B220110829

WASHINGTON (Reuters) - Thousands of Washington lobbyists are scrambling to influence the work of a congressional "super committee" given the job of identifying up to $1.5 trillion in deficit reductions, with many worried about how to gain access to its 12 members.

The committee is due to REPORT ITS FINDINGS BY THANKSGIVING and with such massive potential cuts to the U.S. federal budget being decided by just a handful of lawmakers in such a short timeframe, lobbyists say the mission to protect their clients' interests is unprecedented and potentially impossible.

...It will meet independently from Congress, set its own rules and must come up with at least $1.2 trillion -- and potentially $1.5 trillion -- in budget savings for the next decade. If it fails, or if Congress does not endorse its plan, $1.2 trillion in mandatory cuts will be triggered in 2013.

..."It's absolutely on an unprecedented scale. ... It will touch every industry, every spending category.

...If the panel fails to reach a deal and the automatic spending cuts kick in, such "triggers" will focus heavily on costly government health insurance programs such as Medicare and Medicaid, and the Pentagon budget.

...One lobbyist, speaking on the condition of anonymity, predicted "Holy War" between the health and defense industries, and their legions of lobbyists as they try to protect their budgets ahead of the potential automatic cuts.

...Between 1999 and August 2011, the 12 lawmakers collectively received more than $9.2 million in campaign contributions from the healthcare industry, according to a Reuters analysis of Federal Election Commission data compiled by watchdog group OpenSecrets.org.

According to OpenSecrets, the real estate industry -- determined to stop the debt committee from closing the home mortgage interest deduction in the tax code -- has donated more than $8.2 million to the Democratic members since 1989, and nearly $3.8 million to the Republican members...."