The Doomsday Cycle.

VOX, Research-based policy analysis and commentary from leading economists ^ | 22 February 2010 | Peter Boone, Simon Johnson

[Leisler]

A ‘doomsday cycle’ has infiltrated the economic system and could lead to disaster after the next financial crisis. It says the best route to creating a safer system is to have very large and robust capital requirements, which are legislated and difficult to circumvent or revise.

Over the last three decades, the US financial system has tripled in size, as measured by total credit relative to GDP (see Figure 1). Each time the system runs into problems, the Federal Reserve quickly lowers interest rates to revive it. These crises appear to be getting worse and worse – and their impact is increasingly global. Not only are interest rates near zero around the world, but many countries are on fiscal trajectories that require major changes to avoid eventual financial collapse.......

[Leisler]

We don't have the capital. If we fund as suggested, each part with the required capital, some parts will be left with zero. Who is going to take the bullet?

We are nearing our max out in credit from Uncle China. We may have to promise Uncle China more, but higher interests will squash the economy, making payment on the interests on our national credit card( Bank of China ) harder to pay. Plus the national house needs to have money for the old folks, and the government union retires from the Federal, State, City, County and Towns. How else are the going to pay for that Florida retirement home in Jupiter?

[screaminsunshine]

Destruction of the United States and the Constitution is right on schedule.

[GeronL]

The fact is government and FED policies have led us here and the “stimulus” simply sucked money OUT of the economy by creating government jobs that need to be forever funded.

This country is sliding into full-on economic and moral (another story) bankruptcy. I think next year is the big year, the worst hits. I wonder if the media blames it on Bush or the incoming GOP Congress.

[Leisler]

Politician are people of paper. Lawyers mostly. They’ll paper over the problem.

Adam Smith said there is lots of ruin in a country. We have decades to go before we are a nation wide Detroit. Slums, and a few favored political companies and their union supporters.

That is our future.

The collapse is already well along. Hundreds of once productive cities, that built themselves up with their own capital, and had excess capital to fund two wars, and loan money to the world,and fight the cold war are....
All gone. Now, just Dollar Stores, welfare, make believe schools with 12 years of drone like mental masturbation passing as intellectual development. The cities are like an old nobleman’s estate where the serfs just go through the motions awaiting the return of the special nobleman.

He’s not coming back. Not there. No, the only money to be had for the energetic and intelligent and risk taking is working the Great American Bust Out. Riding, squeezing what wealth is left like a slumlord does out of a uneconomical building. Soros would be an example. And, you know what? I don’t blame him.

The US is winding down. We have killed off, suppressed, regulated out, depressed the entrepreneur, risk taker, the economical destroyer of old forms and builder of new He is an illegal man. Ayn Rand’s Galt is a criminal now. Henry Ford working in is un permitted, zoning illegal garage, OSHA not approved, is today’s felon.

So the system, without new energy winds down. Politicians, welfare, farm subsides, unions, government hacks at all levels, lawyers, favor seeking business all are sand in the gears of progress.

A trend that can not continue, will stop. Ready to get off, because you are going to have to.

[RochesterFan]

Henry Ford working in is un permitted, zoning illegal garage, OSHA not approved, is today’s felon.

I agree with your sentiments in the post. The sentence above was hard to follow. Did you mean that excessive government regulation would make an entrepreneur like Henry Ford into a felon?

[BikerJoe]

The US is winding down. We have killed off, suppressed, regulated out, depressed the entrepreneur, risk taker, the economical destroyer of old forms and builder of new He is an illegal man. Ayn Rand’s Galt is a criminal now. Henry Ford working in is un permitted, zoning illegal garage, So the system, without new energy winds down. Politicians, welfare, farm subsides, unions, government hacks at all levels, lawyers, favor seeking business all are sand in the gears of progress. A trend that can not continue, will stop. Ready to get off, because you are going to have to.

Boy, aren't you a gloomy Gus...

I don't believe we're finished yet...We need to quit all the globalization crap and return to being self-sufficient. The supposed benefits of globalization were:

a) Make the world inter-dependent, lessening the likelihood of war...

and

b) Benefit U.S.-based multinationals by opening markets to them so they could grow, since they'd saturated the national market.

Unfortunately, it HAS resulted in a downward spiral. Increase tariffs (how we funded FedGov for the first 125 years...) and return to self-sufficiency. Our multi-nationals don't bring the overseas earnings back here anyway, so what's the point?

[qwertypie]

I agree. The underlying cause was self-reliant people being conditioned to be whiners. And you don’t magically turn them back into strong people. They just lie down and whine harder.

[qwertypie]

What is your cause for any optimism? Do you really expect the tea partiers to accomplish more than, say, the Gingrich Revolution? I don’t. “Revolution.” Ha! Some revolution.

[Little Ray]

IMHO, it needs to short circuited at “Regulation aimed...”

[Porterville]

fiat money systems apparently do not work... it only took a few decades to recognize this... hopefully, before I die, we will have a new functional system in place.

[Leisler]

Yes. And that is just a superficial example.

[Leisler]

We came here from the globe. Right from the get go we traded. New England ice and rum for slaves and then to the Caribbean. Ships to China( why do you think we call porcelain plates, China? ) What you think of as Globalism is a world wide elite, that favor themselves as a class and all of whom seepopulations as just mindless serfs to exploited for the world wide benefit of this class.

Here is as I see it. Since the dawn of time, men have desired to live comfortable lives off the backs of others by a combination of guile and force. You always need the two. Guile for the masses of the dumb, and force for the few who catch on to the racket and can not be bought off.

This is why all revolutions were founded by moralists. The immoral are always co-opted/bought into the racket. Or killed, imprisoned, deported.

You need the guile class to spin propaganda for the theft. This has usually be the province of the religious class, but today that is out, so you have global warming and lefty, non God needed religions like environmentalism, social justices. The Soviet Union had it’s Marxist Professors. We have Harvard, Yale, Berkley and law schools.

The names of the titles of nobility change over time. Once called Kings, Dukes, Earls. Later Commissars and Richfurers and today, ‘Administer’. Take your pick of those that live well by saying they are indispensable,but then try to free your self of them,and watch them use force. That is how to identify the ruling parasites. When you say, O’h you don’t need me to work your farm, You are so great and knowledgeable, I’ll just walk away and live by my own efforts....watch, their goons will be upon you, with guns and legal papers to force you, so that others don’t get any ideas.

[Leisler]

Who ever thought a bunch of guys in bars in Boston, the Son’s of Liberty, would amount to much? Or that a corporal in Munich beer halls, the fourth guy to join a organization would start something?

It’s a dynamic with unknown variables. You just can not know.

[qwertypie]

Those guys were willing to use guns and give their lives. Are you expecting the same from the present crowd, and including yourself in things other than typing things on the internet?

[Varsity Flight]

++++ Since the dawn of time, men have desired to live comfortable lives off the backs of others by a combination of guile and force ++++++

Since the dawn of time, (some) men have desired to live comfortable lives off the backs of others by a combination of guile and force. Others by God given TALENT.

[Leisler]

I was when I was twenty, and for nothing, really. My intermediate years were busy, but now that I am old(ish) I figure what the heck. But I am patient, I don’t trust my desires to make me see what I want(ed) to see.

Personally, I should be in jail as an ideological enemy of the system. I feel is amoral, unethical, an engine against people’s best interests. For example, I feel police, the judicial system work for and support criminals and keep them safe from citizens who would of killed them off, or severly educated them to their errors, and that the Police and the Judicial system does this for their own benefit.

I feel the education racket is designed to keep student ignorant, both for political control and to extend them as seat filling fodder so that there are more jobs.

I could go on.

Anyways.

I expect guns/violence to be used on us first. You know, to maintain ‘order’.

The Crown did it in Boston, Russian Czar did it. Ruby Ridge and Waco certainly shows that the structure will obey.

Right now, for the next ten-twenty years it is important to win the battlefield for how people view government. That might in and of its self be sufficient, if as we are told the people are sovereign. If not, it will remove the mask and require the government to .....use other means.

[Leisler]

Some people, maybe most, are not talented. But they work hard, or steady, or thrifty. And yet they are supposed to have their efforts harvested by others.

It has been my experience, now with the common interaction with the human products of the welfare/slave state that many of them are quite shrewd and cunning and energetic when it comes to ‘working the system’. Yet I am told these people can not ‘make it on their own’. Meanwhile businessmen,and women die of heart attacks, truckers fall asleep from too many days driving, fishermen go to sea in winter to get fish for tax burdens, ...and on and on...
Taxes are paid in death and blood.

[ßuddaßudd]

Ω

[GeronL]

right on