October 8, 2013 Updates
As a complete US government default on all debts looms in 9 days, Washington has gotten even wackier. A Republican leader from Iowa announced on ABC news tonight that if the US defaults on all its obligations on October 17, at least it won’t cause a total “financial collapse” of the US economy.
Why would Republicans think a total default is OK, as long as it only causes a partial financial collapse of the US economy?
This kind of thinking mirrors Tea Party friends of ours who are telling us that they think it would be good to reduce or cancel future payments on military pensions.
These Tea Partiers say it’s no problem to arbitrarily cancel the contracts they signed to pay pensions to Americans who agreed to serve their country for 20 year commitments. These Tea Partiers are saying there is no guaranteed obligation for paying promised pension benefits, or survivor’s benefits to our servicemen’s families.
???
Seems unreal? Reality is crazier than anything we could make up:
NBC News reports this afternoon: “Obama suggested he might accept a short-term agreement that could jump-start talks with Congress.
The Republican Reply: “… the nation’s top elected Republican, House Speaker John Boehner, R-Ohio, described Obama’s possible arrangement as akin to “unconditional surrender” to the president by Republicans.
Agreeing to pay our debts and pay our obligations using a short term agreement is now “unconditional surrender” , according to Republicans… ?
Doubt it? Read: Boehner: GOP won’t allow ‘unconditional surrender’ to Obama
It started with the Republicans and Tea Partier’s refusals to pay active duty military personnel or to pay military families, no $$ for military family moms and kids who already qualify for welfare and food stamps (SNAP benefits), and now some Tea Partiers want to simply stop paying military pensions (forever), and …
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Feel free to copy while giving proper attribution: YucaLandia/Surviving Yucatan.
© Steven M. Fry
Read on, MacDuff.
Surviving Yucatan 
The value of your retirement accounts may have dropped, but the income generated by mine increases regardless of the price fluctuations. All of my dividend paying stocks have increased their dividends this year. The range of increases has been 5% to 25% in the 29 companies we hold.
I suggest a focus on income increases by blue chip, financially strong companies that provide goods and services folks need. Prices fluctuate, income increases. That is the ticket
you hit it out of the park !!!
How ‘bout you stick to that which is about “Surviving Yucatan” and keep your personal fucking politics to yourself…
DG
That was really rude.
Hi DG… mrfungo,
Again, the people of the Far Right demonstrate their inability to describe or defend their ideas and their beliefs. Why? Because, when faced with rational and Centrist – independent – factually-based realities, …the Far Right’s ideas and principles are so flawed that there is no good defense.
As the article posits, their comments prove that they are are physically incapable of realizing their incompetence, they think they are ordinary and normal … and imagine that they are rational – but because of their inherent ignorance, they cannot see that their Emperors (billionaire leaders and Tea Party Politicians) are actually… naked.
This means they can only lash out with juvenile 7’th grade boy mentalities, instead of valid ideas or good fact-based principles- so people like mrfungo of moneymgt@mtaonline.net have offered their best, to the rest of us.
We can choose to not use DG-fungo’s services – as he has demonstrated his level of talents,
steve
Well said Steve,..talentless hacks like DG, offers as you said nada..many tea party folks in federal welfare states are feeling the effects from the shutdown/shakedown and for probably the first time in their small myopic lives are getting a schooling in what it means to be beholden to the federal government. Ted Cruz’s sidekick, Mike Lee R-UT, failed to understand the Federal Government was Utah’s largest employer..so his numbers are sinking like a stone..The most amazing thing to me, many of these folks are on pension/social security/medicare and seem oblivious to the cuts that GOP wants to make to those programs..yet they continue to shill for giant corporations; need more tax cuts..no healthcare for lower income Americans, no food stamps/unemployment insurance..etc..Having been in MX for years..I know many folks moved to Mexico for cheaper living, which is fine..Facts matter, research yourself..there is a reason surveys show that Fox viewers are less informed who NEVER watch the news..The tea party of 40 or so fools is going to tank the entire Republican party..then what? We need a 2 party system..and tea party talking of spinning off will be a total train wreck..President Obama has to stand up to the extortion..GOP sinking poll numbers show America is finally waking up.
Amen….
Your points address the physical facts and real sources of the problems very well, and leave the ideology where it belongs.
steve
Hmmm… Not paying pensions would be a decision made by the Obama Administration during a so-called default. The decision not to pay the interest on the debt would also fall on the executive branch.
Perhaps not running up debt could be good in the long run if certain things were curtailed like multiple foreign wars, wasteful military spending, food stamps, Obamaphones, visa lotteries, Obamacare, airplane flights for Bo the Dog, domestic spying by NSA, Section 8, No Child Left Behind….
Any default would be the President’s fault and only the President’s fault because the executive branch would decide what money would no longer be spent. It is time for the nation to live within its means, and I support the Tea Party forcing the issue.
Hi Viking,
Well Said !
In your understandings, how should we deal with the Republican, Tea Party, big business/investment banking policies that have generated $80 Trillion of debts? (including $50 trillion of leveraged business and investment debt with no assets to back it)
Obama’s $3 Trillion of excesses pale in comparison to the Republicans & Far Right’s $80 trillion.
Why ignore the bigger problem?
Why not address both?
steve
80 trillion? Are you referring to the trust fund obligations? I am afraid that both parties have dipped into those since the 60’s, and I don’t see any solution from the left other than even more spending and government control over the economy/property. Most Republicans pretty much want the same policies as the Democrats as long as their crony businesses are protected.
Now, if you mean 80 Trillion dollars from the wars and bubbles, I will remind you that Obama had 2 years of a Democratic Congress, and nothing was done to reduce overseas military spending, curtail NSA spying, bailouts for big corporations, etc. Nothing. The only thing that was achieved was a huge costly boondoggle known as the ACA and the watering down of education via Common Core.
One should also be reminded that the housing bubble really started under a Clinton Presidency, when the Glass Act was repealed.
Anyhow, I consider myself a libertarian, and I voted for Gary Johnson in the general election because it was obvious that Romney was just a clone of Obama. e.g. Romneycare And yes, I support the continuance of this shutdown and am against raising the debt ceiling because the US needs to start living within its means.
Good question.
The $80 Trillion is the estimated total of actual debt and past $$ losses from the Republican/Tea Party/Big Business cabal’s policies since 2000: investment/retirement account losses + govt. deficits (from $400-$450 billion a year in wars and military spending to put US military in 75% of the world’s countries) + business losses** + the $50+ Trillion in unsecured/leveraged debt that comes directly from the Far Right’s changing regulatory policies to benefit their Big Business cohorts.
**Remember that “Capitalist” Far Right Republican policies set up Bear Stearns and Lehman brothers going bankrupt due to the artificial creation of 8 million virtual shares of Bear Stearns stock and 32 million virtual shares of Lehman stock in the naked short selling market brought to us by Right Wing Republicans – who changed the investment rules to favor their friends and families, and gutted the SEC. What rational person would support monetary policies that allows the creation of 40 million shares of stock from thin air = never issued by the companies….
and then when those companies collapsed due to the weight of massive short selling of the non-existent stock, the Republicans rode in with hundreds of billions of free money to pay off the bad loans through credit default swaps made by their investment banker-friends.
And no, those losses were not paid back to the government, because they were not loans, they were payments on “insurance policies” – paid to Right Wing Republican Hank Paulson’s firm: Goldman Sachs.
So, the push for deregulation started under Reagan spun out too far under Bush, Cheney, Paulson – by stopping the SEC from regulating 40:1 margin borrowing, allowing and encouraging naked short selling, allowing and encouraging credit default swaps….
The total current fiscal problems/liabilities caused by the policies that the Tea Partiers and Far Right Republicans continue to support and push for – really does exceed $80 trillion…. according to Bloomberg reports.
These facts make the Tea Party claims of wanting “healthy reform” and “fiscal responsibility” ~ ring very hollow. because the Tea Partiers have been bought and paid for by the same people who caused the problems – and Tea Party policies continue to further their billionaire leader’s goals and protect their billionaire leader’s policies that created the $80 trillion of current problems.
steve
Thank God someone stands up to the absurdity of our Democrat President and the Democrat controlled Senate that are trying to break this country by buying votes with giveaways. For those who observe the drop in their 401k plans and investments, take the opportunity to move money out of bonds and into stocks instead of complaining about the decline. Eventually these Democrats will get kicked out, Obama is a lame duck, and sensible heads will prevail and this country can move forward. The cause of poverty is the lack of jobs and the government programs that kill them. As soon as the uneducated become aware of that the sooner their lot will be improved.
Hi Wreckless,
I love the name you have chosen.
“Wreckless” describes your understandings, and
“Wreckless” fits your advice to a Tee.
Democrats are surely a part of the problem – generating $5 Trillion of deficits on social programs, while the Republicans (Cheney, Reagan, Bush et al) generated $13 Trillion of deficits on wars and military spending. Toss in another $7 Trillion of losses caused by Hank Paulson’s and big investment banking’s wild policies, and the side you identify as the problem has cost us $20 Trillion of problems.
Then bundle in the calculated $50 Trillion of leveraged unsecured debts caused by Bush, Cheney, Paulson, and other Republican’s policies, – unleashing Goldman Sachs et al to issue $40 : $1 margin borrowing ($40 of loans to so-called Capitalists for every $1 of real assets), naked short selling, and credit default swaps, … plus your favorite folk’s programs that have created a “paper gold” market that is 105% larger than the actual gold on the planet…
The costs of the policies and plans of the people you praise and support, tally to almost $80 TRILLION of worldwide problems – yet the Tea Partiers and other Far Right folks choose to howl about $5 Trillion of past social program spending.
How much sense does that make?
Who has been the real source of the problems?
Whose ideologies have created the biggest risks ~ and biggest problems~ ?
Why ignore $80 Trillion of big business and their supporter Republican’s policy generated debts?
I am neither Democrat nor Republican, but the past 3 decades of $$ balance sheets clearly show which group’s policies have created the biggest risks to our financial futures….
steve
Neither side is small government. We need a true small government, non-interventionist party.
Amen !
Wreckless is the name of my Yacht but thats a longer story than your assignation of blame tale, which as anyone who understands or actually has used the financial instruments you refer to knows that you are simply denigrating the things you have not taken the time to learn about and understand. The derivatives, short selling, credit default swaps are actually what keep the system working. They are simply methods or rather vehicles to transfer the risk from those who cannot or do not wish to take risk to others who can afford to take risks. The failures of the past decades are a result of two things, the business cycle and the failure of regulators. Thats it, thats all of it. Its not Wall Street, its not greedy bankers, those are just scape goats pitched to the masses and you are either one who has been sucked in to believing that or you are doing it to others less informed.
Hi Wreckless,
You have mischaracterized what I wrote, substituting milk-toast versions for the specific problems I identified. You claim:
…”you are simply denigrating the things you have not taken the time to learn about and understand. …”
I think the opposite is true.
Are you actually defending and supporting 40:1 margin borrowing?
Are you actually defending and supporting naked short selling?
I did not criticize legitimate short selling. I specifically identified the naked short selling of Bear Stearns and Lehman Brothers that created 40 million shares of their stock that never existed in reality.
Do you actually defend and support Goldman Sachs et al creating virtual shares of stock, never issued by the companies?
Do you actually defend and support credit default swaps that allowed Goldman Sachs et al to buy insurance policies on stocks that they never owned?
That is exactly like allowing me to take out insurance policies on homes on the Gulf Coast – homes that I do not own or even rent, as a Hurricane Katrina bears down on them. When the homes (businesses) are wiped out, I collect insurance payouts on assets I never owned, and on which I only briefly paid insurance premiums.
The unregulated greedy corrupt Wall Street investment bank policies, allowed by the lack of regulatory oversight, is the main cause of the last fiscal crisis. If we really are going to solve the problems, we must make an honest accounting of what actually caused the fiscal crash… $60 billion of toxic mortgages does not cause $7 trillion of losses.
$50 trillion of unsecured over-leveraged private sector debt worldwide (not counting US govt. deficits) is the real 400 pound gorilla in the room.
Hi Wrecklesss,
You wrote:
…” Its not Wall Street, its not greedy bankers, those are just scape goats pitched to the masses …“..
In rational approaches, we follow the money: Who created and used the corrupt practices of naked short selling, credit default swaps, and $40:1 margin borrowing? Wall Street investment bankers and their cronies.
Who benefited, making the biggest cash hoards in history, from these corrupt practices?
Wall Street investment bankers and their cronies.
Finally, you denigrate the rest of us by calling us “the masses“, treating us as if we were dopey sheep, unable to understand who & what built the crisis – being bamboozled by the media and politicians. In reality, your writings show that you do not understand the facts and root causes of the last crisis, and refuse to acknowledge the same underlying corrupt problems and practices that are setting us up for the next crisis (crises that are NOT part of a normal business cycle).
$50 trillion of unsecured, highly-leveraged debt (at 30:1 and 40:1 ) threatens yet another crisis.
steve
OK, I can’t stand this any longer. What is all this about? Are you all into self-denial and stories of the past? Does no one have anything to say about how to get out of this mess, rather than looking up past statistics and quoting them to their like minded followers? As Steve well knows I lobby for change and to get everyone’s head out of the sand. Who cares what party or orator gets the US out of this catastrophic financial mess, if something is not done and soon there will be no more to discuss except the terms of financial surrender.
Amen !
One last comment, I think you all get sucked by this stuff in Washington. Everyone in Government gets a chance to play to their base, thats all that went on here. There never was a chance that the US defaults on its debt and not just because it would be a catastrophe. Sure the government workers got furloughed for two weeks but they will get that pay back. No harm to almost all of them. The tea party congressmen that started this now have a nation paying attention to them, they have not hurt their chances of reelection, not in their districts. Who ever heard of Cruz before this. The Harry Reids of the Senate can go back to their constituents and say we saved you from those crazy zealots. Then If you look deep into the laws that govern the situation you will learn that there is a requirement that the debts of the country be paid or people are charged with a crime. The power to pay the obligations of government to its debtors resides with individuals who are guilty of a criminal act if they do not make the payment. They have not only the power but the obligation under the law to make those payments regardless of what Congress does. While I know what thats about I will leave it to all of you to research the subject until you find out that there was never truly a risk, just an opportunity for individuals in Congress to make their followers think they have to reelect them to save us all.
Hi Wreckless,
In hindsight, every single point you make looks good.
steve
OK, here is another voice from the other option.
We Can be Better …
As it stands now, we sidestepped default – again. But, again, it’s only temporary. The Reid-McConnell compromise simply raises the debt ceiling for a few months and pushes the fight into 2014, when, once again, we will stand on the precipice of an abyss as Republicans and Democrats spar over extremist views of how to run and fund a country.
And the cycle will repeat, over and over again, until a financial crisis or, more likely, a currency crisis imperils our country, our dollar and our already-declining standard of living.
So why continue to delay the inevitable?
We should attack the cancer.
We should default already.
That would begin to clear the system. Like a company or a family emerging from bankruptcy, we would have a clean slate again. We could arrange our financial affairs more realistically. We could stop worrying about our role as a global currency and begin to focus on building a better America.
Certainly, that prescription is painful. Some – maybe all – politicians would lose their jobs to a population enraged by such a course of action. Stock and bond markets would heave and convulse, temporarily. Our cost of living would rise, in the short run. And America’s standing in the world would decline, for a while and for the better. But someone has to be an adult. Someone has to tell America that the pixie dust Congress continues to sprinkle on the nation is a placebo. We will never heal as an economy until we take the real and necessary medicine.
The people who honestly appraise our situation know in their guts that a default is the likeliest outcome for America, at some point. We’ve already crossed that Rubicon, though we like to pretend we’re still masters of our destiny. We’re not. We are, instead, slaves to our debt-addled balance sheet and the obligations we’ve piled onto our own backs. Through no action other than default can we begin to manage the financial strain we are under.
The sooner we purposefully choose to default, the sooner we can begin to rebuild what we’ve torn asunder over all these years and decades. We can be a better America. We can return to a position of power and strength. We can regain the respect we’ve lost and the financial security we destroyed with debt. We have the economy, the knowledge base and the entrepreneurial spirit to reclaim what we pissed away.
Yet, without a default to cleanse our fiscal sins, we are but a melancholy pirate, wistfully hoping for better days, but in moments of lucidity painfully aware of the sad truth: “Jeff Opdyke”
A quote from someone who is looking ahead at a possible solution, hard as it may seem.
I have been drunk now for over two weeks.
I passed out and I rallied and I sprung a few leaks.
But I’ve got to stop wishin’, got to go fishin’.
I’m down to rock bottom again.
Just a few friends. Just a few friends …
“Default to cleanse our fiscal sins.”
Memorable…
Steve,
I enjoy your willingness to attempt rational discourses with those whose minds are already made up and refuse to be confused by facts. My advice to the Tea Partiers…..if you don’t like government, fine, but then don’t run for office.
Richard
Just think. If there were three or four political parties, coalitions would have to be formed, forcing these egocentric bozos to adjust their stance just to get a modicum of control. I suspect it would limit the extremists like the Tea Party and lead to more reasonable compromise.