It's now no longer a question of whether we'll be able to repay this deficit. We won't. It's just a question of how long we can keep the music playing while everyone enjoys the punch bowl.
A great piece of work by James Cook over the weekend sums it up nicely... "You know about the camelâs nose under the tent. Thatâs how socialism begins. Once itâs in the tent all hell breaks loose. You can never undo its damage. You can never roll socialism back until itâs too late. Take Social Security, Medicare, Medicaid, Public Housing, Unemployment and Welfare: all are socialismâs foremost objectives. Once they begin they canât be stopped. People come to rely on them. In our society no one questions their necessity. Every year brings new subsidies for this or for that. Gasahol is socialismâs fuel. Airports built in nowhere places are socialismâs economic stimulus. But socialism has this Achilles heel: it does not produce it only consumes. It is not an architect of growth and prosperity. It is a destroyer of economic health and well-being. It corrupts and corrodes the society that embraces it, eventually bringing lasting ruin. The columnist, George Will and the politician Jeb Bush, recently discouraged the use of the word socialism. Isnât that what the socialists (liberals) in America would like? Donât call a socialist a socialist? Hey, call them socialists all the more. Use the term liberally every chance you get. It aptly describes what they are. Socialism gives us unsound money. It sponsors inflation and currency debasement to pay for its costly schemes. The socialist monstrosity is unaffordable. Social programs we rely on eventually break the budget. The free stuff is too expensive. A day comes when the checks bounce. Socialism causes a nation to go broke and thatâs where we are heading. Itâs called national bankruptcy. It ends on the scrap heap of history." Jeff Saut had some great commentary on Financial Sense back in October of 2008. When asked at what point do the Chinas and Indias of the world stop funding our outrageous spending habits, he astutely replied that once they receive all the proprietary technology from our manufacturing they will stop buying our debt [importing our spending carpe diem]. There's still quite a bit more for them to gather from our manufacturing but the day they acquire the technology they covet is the day we have big, big troubles. It seems to still be a few years away. 2012 is setting up to be the real leg down in the economy. All we can do is trade day by day and improve our discipline to trade our systems more efficiently. The more "truth" that you discover the more you realize how royally phukt we are on a relatively short timeframe. In some ways I would rather not even know what I know now, I'd rather be stupid and just trade MA crosses with sound money mgmt.
The terms "socialist" an "socialism" doesn't really apply to the state of US affairs. "Corruption" is the word you should focus on.
So you are saying that it failed everywhere else but if we could just get after those "bad guys" it would work here? LOL
Why not? The Swedes could do it. Why not Americans? There is a LOT of room to increase taxes in the US and thus increase US government revenues and then pay off debt. It will take a while but it's certainly possible. The US has a population growth of 1%. The real question is how is Japan going to reduce their 170% national debt to GDP with a population growth of 0%.
Japan's debt to GDP is arnd 200% now, not 170%. They seem to be taking the first step in the right direction by getting rid of LDP.
I guess Sweden works OK, but Scandies aren't really socialistic - the term is just not being used in it's proper historical context by Americans. Any hint of a collective solution seems to be socialism! I'm not pro-socialism for the US, but it's amazing how backwards the country is - stubbornly refusing to learn from what has and hasn't worked throughout history. Look at France, yes - their labour market is f*cked - but you don't have to go that far, not even close! The transfer of wealth that's happened the past year in the US isn't about socialism - it's about supporting greedy bankers and the shareholders of banks. These institutions should have been allowed to fail, and the equity holders (shares, bonds) should have taken the hit. If you truly believe in free markets, you cannot take away the RISK part of it. So, the markets aren't free anymore, but the risk is free.
One thing is for sure : we will read ongoing stories about Japanese housewives and retirees investing abroad.