Posted on 02/01/2009 10:37:34 AM PST by BobL
So what's the answer?
We're looking at something on the order of $5-10T (if not more) in added national debt by the time this little event is over (this includes standard budget deficits, "stimulii", and bank failures). This gives us a total debt of around $20T, which will cost $1T to service at 5% interest and $2T to service at 20% interest. Considering that the government collected $2.6T in all taxes in 2007 (income, corporate, etc.) and will probably collect a lot less in the next few years, you should be able to see the problem here. This may well lead people to give up on our dollar. If people give up and we have to print the money, it will be a Mexico/Argentina type situation. So what are the options? I'll start with a few of mine:
1) Default. Why not, everyone else is doing it, and no more stigma. Also, lots of foreign countries (like China) will be out of luck. Of course anyone with T-Bills will also be out of luck.
2) Figure out why we don't produce anything anymore. Here are some hints: Environment, Labor, Safety Mandates, Courts. I'm not saying that we get rid of all regulation and protections, but I am saying that we are simply no longer wealthy enough to be doing really stupid things (such as shutting down agriculture in California due to a fish, or forcing air bags and tire pressure sensors in cars, or closing off HUGE areas of the country to mineral exploration and forestry, or essentially banning nukes and now coal power plants). We also need to end the regulation of air quality levels in cities (since it prevents industries from locating there or expanding). We need to keep reasonable pollution requirements on cars and point sources, but if the air gets a bit dirty in a city, then sensitive people can move out (i.e., we are not yet Communist, we do allow people to choose where to live). Needless to say, ALL California environmental regulations that have a national effect (such as mileage standards) need to be eliminated. And, needless to say, Global Warming will have to wait a bit, we can get back to saving the world once we're able to feed our people and supply them with toilet paper (don't laugh, this is going to be bad).
3) Eliminate labor unions. If you don't like your job, find a better job. Even with some reasonable back-off in labor and safety regulations, there will still be no need for unions...those days are long gone and THEY are responsible for the DESTRUCTION of our manufacturing base, more than anyone else. Obviously also get rid of government labor unions too…and you’ll see why in the next section.
4) Cramdown all government pensions to PBGC levels. It's insane that a firefighter who retires at age 42 gets $65,000 per year, inflation adjusted, for the rest of his life. This is no different than welfare. I'm sorry if they feel that they had a "deal", but this country is now broke and we have much higher priorities than paying country club dues for someone who probably is still working and living in a mansion. Sorry. On the same note, scale back early retirement health care to at least 55 years old, if not 60 years old. Again, this 42 year old guy should not be treated like a ward of society, he is perfectly capable of finding productive work with benefits. There's probably more here, like dealing the 90% of these guys that claim "disability" when they retire.
5) Likewise, increase the Social Security retirement age to at least 70, if not 72. We need to get that system solvent without decimating the younger workers. As for the old-timers saying that they had a "deal", just tell them that we made a mistake in calculating their benefits, based on what they paid in, and now we're adjusting our payouts.
6) For energy...instead of having windmills all over the place, why not build 500 or so nukes and be done with the issue? Of course you have to make it possible to build nukes in a reasonable timeframe, so you need to eliminate the interference of environmental groups, unfriendly local/state governments, etc. Also use standardized designs and consider giving $1B of "stimulus" to each plant (through progress payments as they get built). At least with nukes we will get something back for our "investment", much as Hoover Dam and the TVA are still paying returns from the Great Depression.
7) Financially, no easy answers. These welfare payments of $500/$1000 (called tax rebates...even if you don't pay taxes) are a JOKE and a waste of money. The only thing I might recommend in this area is to continue Bush's tax cuts (people have NO CLUE how much they will be hammered, even middle class people, if these cuts expire). As we all know, the idea of trying to keep housing prices artificially high is about the dumbest thing possible, but seems to be the top priority now. A country with several million extra houses will not get wealthy by building millions more.
8) As to banks. First, stop increasing the bleeding. We keep trying to force them to lend money to people who probably will not pay it back...so stop that. Second, most of us (here at HBB) well know that the banks are effectively insolvent and need trillions to get past this mess. We need to decide whether to add that to the debt (it is part of the 5-10T that I mentioned above), or simply let them collapse and deal with whatever happens. But the idea of giving them a $20-$50B at a time, drip, by drip, and then forcing them to lend to deadbeats is just plain stupid.
Anyway that's all for me. If you notice, the only place I would spend new government money is possibly to help build nukes, as that is where you actually get a long-term payback. Other than saying that the stimulus welfare payments are a dumb idea, I see nothing of value in the rest of the bill.
Obviously, what I have above would be met by vicious opposition, particularly from the party in power. But then again, it is a great chance for them to show leadership, sharing the pain, and changing the direction of this country, FOR THE BETTER.
Finally, what needs to be understood here is that this country is BROKE and its present structure will condemn us to THIRD WORLD status, unless it changes. There can be no recovery as long as this country has its levels of debt and future obligations, and then does everything possible to prevent economic growth. Unless we attack these things systematically, we lose. The only reason we did not slide down earlier is that China essentially kept us supplied with goodies for free (by buying our debt), and we sucked out the money from the trillions of dollars in retirement funds (by having them invest in REITs).
Just some thoughts.
“We didn’t need any regulation or protections for the first 100 years.”
Unfortunately, we do need some regulations. I’m sure even China and Mexico City have some. Prior to our cleaning up, we had REALLY dirty air in Los Angeles, and a river on fire in Ohio. I grew up near smoke stacks and still remember the air.
But we can roll them back to a very reasonable level. The first 90% of pollution is VERY easy to deal with, it’s the next 9%, and then then next 0.9% that gets extremely expensive. It only took 10 years, by 1980, to get 90% of the junk out of car exhausts (mainly by use of catalytic converters). It was a piece of cake. We need to take that 90% and live with it for a while.
So, for example, take the regulations that were in place, maybe in 1975 and just go forward with that (maybe tweak a bit if they were bad in some areas), but that’s it.
DEFINITELY eliminate all the updates to the Clean Air Act, the Clean Water Act, Affirmative Action (that, unfortunately, Bush signed into law). Get rid of the ADA, just trash it...it costs billions. Get rid of Air Bags (but do keep seat belts - they do get you 90% there). Lots more...but I can’t think of them now.
I lack information on food storage. Any ideas on that topic would be welcome i.e. what type of foods, how to store food etc. etc.
“I’m up for any suggestion.”
My suggestion:
Have Sarah use the theme: “Back to the Past” for her campaign. Today, it sounds more like what the Dems will use against her, but in 4 years, people will be BEGGING for a return to those days. She needs to get with business leaders, (legitimate) economists, bloggers, and many others and map out that platform soon. That is both how she gets elected, and then how she gets a mandate to govern.
I’ll be ping you if I start a doomsday thread. There is a lot of info on the net. I don’t know a whole lot beyond the obvious, but I’m sure that others do.
Also, keep in mind that there will be food available (for the other 99% of the masses), so we can try to figure out just what will be there. One thing that I definitely expect are long lines to buy food.
Seeing how our Governor has returned home from his stint in Washington (where he spent 8 years being abused by a bunch of ingrates he spent every waking hour making sure no one blew them up)we might just do that.
““Here It Comes” Karl Denninger
http://www.freerepublic.com/focus/f-news/2175802/posts";
Yea, I read that also. Incredibly scary and part of my motivation for starting this thread. But he’s adding up the numbers, and the results are bad.
“It wouldn’t surprise me to see Texas looking at options”
“Seeing how our Governor has returned home from his stint in Washington (where he spent 8 years being abused by a bunch of ingrates he spent every waking hour making sure no one blew them up)we might just do that.”
Yea, but the interesting part will be how the feds try to convince us to take our share of their debt (which will be about 1.5T, by my estimate), not to mention us asking for our share of the Social Security Trust Fund (ha, ha, gotcha). Civil War 2 anyone?
There are occasional articles on coming food shortages. I do know that once bulging grain silos are now empty. I have seen it i.e. Boone Iowa.
The regulations I am speaking of are more the hiring quota, sub-prime minority loan, paying farmers not to farm type of intervention.
It wouldn’t surprise me to see Texas looking at options.Despite the fact that Texas can legally secede, it would surprise me if they did. Texas absorbs more Federal money than it generates.
“Despite the fact that Texas can legally secede, it would surprise me if they did. Texas absorbs more Federal money than it generates.”
Maybe, but the difference is relatively minor, considering all the crap that we have to go through to get those crumbs (like federal permission to expand a highway or build or expand a refinery...heck we could even have real light bulbs again). If we could shed our federal shackles, we’d be MUCH BETTER OFF. The biggest problem, in my opinion, is that Texans really don’t appreciate just how much better off we’d be.
“I’ve grown up and spent most of my life in Michigan, I am well aware of the pollution of industry.
The regulations I am speaking of are more the hiring quota, sub-prime minority loan, paying farmers not to farm type of intervention.”
I’m with you then. It’s just that there are some libertarian types that think business leaders are simply a bunch of angels that would never harm the environment or endanger workers. They’re not, their job is to maximize investor returns, nothing else. So they do need some help once in a while with their decisions.
I concur, most business leaders are only slightly less gready than any politician.
Amen.
http://www.freerepublic.com/focus/f-news/2144465/posts
This one is directly related to food storage.
Thanks Snippy, I knew it was there.
“Despite the fact that Texas can legally secede”
Not true. Even if it WERE true in 1845, forced repatriation into the U.S. in 1865 would have effectively ended secession as a right.
In any case, such a thing is NOT in Texas’ State Charter. It’s a common myth in Texas, and I used to believe it, myself. Until, to prove the point, I looked it up.
What IS in the State Charter is that Texas has the right to self-determine a split into 5 States. The Fed Gov’t saw Texas as similar to a LA Purchase and wanted to carve it up. Texas politely refused. But. The Feds put into the charter that we COULD splinter into 5 States, if we ever decided to do so.
Texas does not have the “legal” right to withdraw from a Federal Union. Of course, that doesn’t preclude the option of, “Come and take us if you think you can.”
And I agree. Texas is the place to be. Glad I’m here. My home value is steady, and my job seems secure.
Does anyone know where the Here It Comes thread went?
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