National Debt
Western Financial Flu Hits China
For years, we’ve been locked into a kind of parasitic pas-de-deux with China, a kind of insane codependency in which they are not only our chief supplier of consumer goods, but one of our biggest creditors as well. Now the party looks to be over. And the Chinese people are going to suffer for it, as are we.
November 7, 2008 | Read More
Who’s Really Paying For The Bailout
Ever wonder where our government is going to get the $700 (or $750 or $850) billion it needs for the bloated bailout bill? The same place is gets all of its credit these days, China.
October 17, 2008 | Read More
Is the Wall Street Bailout Really a Government Bailout?
Only a week after passing a state budget, California now says it needs $7 billion from the U.S. Treasury. The LA Times broke the story this morning when it “obtained” a letter from Governor Schwarzenegger to Treasury Secretary Henry Paulson. I’ll bet you twenty dollars against a truckload of Bear Stearns stock that Paulson leaked that letter to pressure dissident House members who are scheduled to re-vote on his $700 billion bailout. But isn’t this the ultimate Voodoo Economics? Sign a bill into law, buy up a few hundred billion in worthless bonds - ie: stick a pin in a doll and click the heels of your ruby slippers together - and suddenly, magically, funny money will start gushing onto the marketplace again.
October 3, 2008 | Read More
Reason #42: China and the Myth of Free Trade
Did you know that an authoritarian communist country is now keeping our supposedly capitalist economy afloat? No? Well, it’s true. And it’s scary as hell.
Politicians from both parties remind me of cult members sometimes, the way they mouth the mantra of “free trade” and parrot the conventional wisdom that globalization and more trade with fewer barriers is always a good thing. They treat “free trade” like it’s a religion. But like most religions, the free trade faith has an awful lot of myth in it.
Globalization has its benefits, for some at least. It makes many of our largest corporations boatloads of…
August 29, 2008 | Read More
Reason #95: The Great Shell (And Exxon) Game
Beyond the direct and indirect military costs for the Iraq War, this enormous mistake is bleeding our economy dry as well. At the outset of the invasion, oil was around $25 a barrel. Incredibly, hawks and war cheerleaders predicted military action would lower the cost of oil. We all know how well that’s worked out.
We’re already paying a almost half a trillion in interest every year for our national debt. Now, we’ll add to that billions more to service the debt we’ve incurred.
In their book The $3 Trillion War, Joseph Stiglitz and Linda J. Bilmes figure that the war has caused…
August 28, 2008 | Read More
Reason #94: War on a Credit Card
When you’ve got a half trillion dollar annual budget like the Pentagon does, it’s easy to squirrel away a few billion here and there.
As of this writing, the official cost of our disastrous invasion of Iraq is over $500 billion and counting. To put it in perspective, that’s almost $20,000 for every man, woman, and child in Iraq and almost 2,000 bucks for every American citizen. But the sad reality is, we’re paying way more than that for this tragic blunder.
Since the invasion, congress has been writing checks on credit to pay for the war. (That’s right, we’re borrowing hundreds of…
August 28, 2008 | Read More
Reason #66: The FDIC and the Myth of Insured Money
What do the housing market crash and the credit meltdown mean to the average American? Well, think about your checking and savings accounts, your CDs, your IRAs. Those funds all sit in bank accounts. Now consider who has been underwriting the trillions of dollars in bad loans and bond issues. Those same banks.
When you go to the bank, you see those stickers posted everywhere announcing that accounts are federally insured, that the “full faith and credit” of the United States government will make sure nothing bad happens to your hard-earned cash if your bank goes belly-up. But if you recall,…
August 27, 2008 | Read More
Pay as you Go, People!
What a radical concept: We shouldn’t spend money we don’t have.
From 1990 to 2002, Congress lived under so called PAYGO rules, as in “pay as you go.” The rules demanded that any new federal spending could not be approved without securing new revenues to pay for it. In other words, for a short time, our government actually tried to live within its means. What a concept!
But George W. Bush’s tax cuts and, later, his budget-busting Medicare Prescription Drug Benefit broke the back of PAYGO and the Republican-controlled Congress abandoned their fiscal discipline. In 2007, the new Democratic congress resurrected PAYGO, but…
August 25, 2008 | Read More
A National Debt Timetable
We’ve heard a lot about benchmarks and timetables in Iraq. Pundits love to bemoan the incompetence of the Iraqi officials and how they bicker among themselves instead of solving their country’s dire problems. But we’ve got plenty of feckless officials here in Washington who can’t come together to address one of the biggest long term threats to our own country: our colossal national debt.
We need a timetable to pay down the national debt. Too often, a new president gets elected or a new party takes over congress and we change course as a country while vital priorities like the debt are…
August 25, 2008 | Read More
Reason #20: Governomics - Spending Like There’s No Tomorrow
Instead of cutting spending as promised, the Bush Administration greatly expanded the federal bureaucracy. Nearly every category of government spending grew like a weed on his watch. And the war in Iraq, which was supposed to cost a pittance (and be offset by Iraq’s oil revenues), will cost U.S. taxpayers $3 trillion by the time it ends. That is, if it ever ends. Unfortunately, George W.’s free spending is not an aberration. Spending has gone up under all our recent presidents, even after adjusting for inflation. Since the 1960’s and Lyndon Johnson’s “Guns and Butter” spending on Vietnam and his Great Society…
August 25, 2008 | Read More
