Posted on 10/21/2010 12:57:47 PM PDT by FromLori
In an interview with Tom Keene yesterday, Citi strategist Willem Buiter, alongside Howard Davies chairman of the London School of Economics, said that "savage austerity" is in the US' future. "The only question was really the timing and the composition." Alas, for that to happen it would require an overhaul of the entire US kleptocratic oligarchy, and the entire premise of tenured politicians, who don't realize that in addition to boosting revenues, sometimes outlays have to be trimmed as well. Of course, as this is precisely the fatal flaw of Keynesianism, we can only commiserate with Buiter, who calls it exactly right. Too bad that even the possibility of actual austerity in the US would result with riots so severe it will make the ongoing economic freeze in France seem like the peak of Chinese economic growth.
In discussing the ability to postpone the inevitable domestic austerity, Buiter notes that "the U.S. will still be able to borrow for a while at “risk-free rates” , even when there is risk, because its markets remain bolstered by the dollar’s role as the world’s reserve currency. It won’t last forever, that buffer of protection. Market discipline is being eroded by the burden of unsustainable deficits." Which of course explains why the market continus trading as if each day will be its last, and risk on, risk off is the only thing that matters, as only those with the fastest selling systems feel insulated in their hope they can dump positions during a bidless market.
And lastly, Buiter calls out the Treasury on its hypocrisy of condemning others of performing currency manipulation, when the Fed's QE2 threat is the biggest FX intervention move ever, and furthermore, at least others retain some dignity by doing their operations in the open.
(Excerpt) Read more at zerohedge.com ...
If “austerity” means shutting down whole departments of the federal government, it can’t come soon enough. Ought to have been done long ago.
Yup do you think the liberal’s would riot like they are in France if they did this?
That's garbage.
Americans would handle austerity with far greater maturity than the French or the Greeks.
And I hope austerity comes soon, because in America austerity means jobs.
With the nation broke and severely in debt, every department of the federal government that was instituted after 1950 should be shut down. The USA functioned better and far more efficiently without the hordes of bureaucrats and the millions of pages of regulations they pump out to justify their employment.
Either embrace austerity now or have it forced upon us in a horrible fashion in the future.
See commodity prices now as the dollar falls.
I agree that responsible, self-sufficient Americans will handle austerity better than France and Greece, but I fear for the people living in the suburbs of Detroit and other major cities when those welfare checks stop coming.
The Irs would be a great start!!!
I don’t know I think you may be drawing from personal experience or how you or those you surround yourself with would handle it but how about the Black Panther types if they had no problem intimidating voters and then knowing they got away with it I could see them rioting.
I agree and I saw just yesterday lot’s of food mfg. are raising their prices as a result, General Mills, Sara Lee, etc. but I can’t help but wonder how this would be received by the give me free sh*t crowd I think not very well witness France.
All these colossal failures with masters in Education pulling down six figures out on the street! HAHAHAHAHa! Rich! Oh my favorite. The undergrad psychology degree, criminal science masters degree dude turning on the pump at a gas station!!!!! Hurray for austerity. Let them see the true economic value of these worthless degrees. Don't even get me started on cops who can't prey upon motorist unfortunate enough to drive through their patrol area. Or the Army of DOT and Highway patrol people who prey upon the caravans of trucks and commerce that move through their State!
Oh and the States will have to sell off the glittering office buildings that house the products of nepotism and medieval style patronage jobs. Oh I can hardly wait! I want to see these arrogant bastards working with their hands like their Grandfathers and Grandmothers did. I want to see mechanics, plumbers, artisans, machinist and farmers valued over Teachers, managers, coordinators, grant writers, lawyers, law makers and God help us insurance agents. Oh and Doctors can be once again seen as highly skilled plumbers and mechanics!
There is no risk to lenders on money they create from thin air. It cost nothing to create the money so, even if the US defaulted, there would be no real loss. Why saddle the taxpayers with unnecessary interest payments? If the banks insist upon interest, Congress has all the authority it needs to create interest-free money itself.
This election is about the people telling the government that their credit card has been taken away.
And Citi knows what and why? Answers: Nothing. Corruption breeds stupidity.
Being honest and wise today is like being a great artist — Vincent Van Gogh when he was dead broke.
The cities will become wastelands, unlivable areas of dangerous desolation......kinda like Detroit...............
But there will be service cuts and there will be benefits reductions under austerity.
If there are riots, we have learned the lesson of LA. There were three days of riots and the police could not handle it. On the morning of the fourth day 4,000 soldiers and marines arrived and order was restored in a few hours.
And there are plenty of active duty soldiers today who are now past masters of crowd control.
What about investment bankers? They make all of these new class elites look like trusty yeomen by comparison.
Printing money causes rampant inflation. Everything costs more and savings are devalued.
Yep. They would riot like it's 1773.
;^)
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