This is scary:
Warren Buffet a highly influential American has finally hit the panic button, saying that we are going to be crushed under a mountain of debt taking into consideration the amount of debt the country is piling up.
Last year, Warren Buffett says, we were justified in using any means necessary to stave off another Great Depression. Now that the economy is beginning to recover, however, we need to curtail our out-of-control spending, or we’ll destroy the value of the dollar and many Americans’ life savings.
Here are some not-so-fun facts from Buffett’s editorial today in the New York Times:
* Congress is now spending 185% of what it takes in
* Our deficit is a post WWII record of 13% of GDP
* Our debt is growing by 1% a month
* We are borrowing $1.8 trillion a year
$1.8 trillion, that’s a lot of money. Even if the Chinese lend us $400 billion a year and Americans save a remarkable $500 billion and lend it to the government, we’ll still need another $900 billion.
Which brings us to the million Dollar question “where’s it going to come from?” Most likely the printing press. And, ultimately, that will destroy the value of the dollar.
From Fortune Watch
From The Nation:
Myth 1. It’s a dangerous world. We face an array of serious national security threats that require an experienced Commander in Chief.
Myth 2. The surge has worked. To withdraw from Iraq now would snatch defeat from the jaws of victory and embolden Islamic extremists.
Myth 3. We cannot allow Afghanistan to become a safe haven for terrorists. We therefore must redouble our military efforts there or face another terrorist attack.
Myth 4. Iran is responsible for much of the violence against US forces in Iraq; by using its proxies in Lebanon and Gaza, it threatens to dominate the Middle East.
Myth 5. To talk to the leaders of “rogue” states like Iran and Cuba without conditions legitimizes their position and weakens American leverage.
Myth 6. Vladimir Putin’s Russia is an authoritarian state pursuing an anti-American agenda aimed at reconstituting the Soviet Union in the form of a new Russian empire.
Myth 7. Because the American military is stretched thin by the wars in Iraq and Afghanistan, we must increase the size of our conventional armed forces.
Myth 8. A League of Democracies would create a global coalition for peace and freedom and would enable the United States and its democratic allies to intervene to solve humanitarian and other crises when the UN Security Council is paralyzed.
Myth 9. Globalization has strengthened the economy, and we cannot avoid it by hiding behind protectionist walls.
Myth 10. The world needs American leadership.
Interesting myths, no? To find out more about why they are myths, click and read The Nation:
The solution being proposed by the Bush administration is the most expensive bailout in the nation’s history, sharply curtailing the ability of the next president to push for tax cuts or new spending.
We will GLADLY post John McCain’s plan if anyone comes across it. Here is Obama’s plan, from his website:
Bring about real change to our economy
Obama and Biden will cut income taxes by $1,000 for working families, because the economy needs to be revitalized from the bottom up, not top down. Read more »
Obama and Biden will enact a windfall profits tax on excessive oil company profits to give American families an immediate $1,000 emergency energy rebate to help families pay rising bills. Read more »
Obama and Biden believe that trade with foreign nations should create American jobs, not send them overseas. They will stand firm against agreements that undermine our economic security. Read more »
Obama and Biden believe that we should invest in innovation and manufacturing jobs in the growing clean energy market, freeing us from our dependence on foreign oil within a decade and creating 5 million green jobs. Read more »
Obama and Biden believe that rebuilding our highways, bridges, roads, ports, air, and train systems will create jobs, ensure safety, and bolster our bolster our long-term competitiveness. Read more »
Obama and Biden will increase federal support for research, technology and innovation for companies and universities so that American workers can lead the world in cutting edge jobs and products. Read more »
Obama and Biden will level the playing field for small business by eliminating all capital gains taxes on start-up and small businesses. Read more »
Obama and Biden will strengthen the ability of workers to organize for good wages, healthcare, and secure pensions. Obama and Biden will fight for passage of the Employee Free Choice Act. Obama and Biden will ensure that labor appointees support workers’ rights and will work to ban the permanent replacement of striking workers. Obama and Biden will also increase the minimum wage and make sure it remains a real wage year over year. Read more »
Obama and Biden will crack down on fraudulent brokers and lenders. They will make sure homebuyers have honest and complete information about their mortgage options, and they will give a tax credit to all middle-class homeowners. Read more »
Obama and Biden will establish a five-star rating system so that every consumer knows the risk involved in credit card borrowing. They will establish a Credit Card Bill of Rights to stop credit card companies from exploiting consumers with unfair practices. Read more »
Obama and Biden will reform our bankruptcy laws to protect working people, to ban executive bonuses for bankrupt companies, and to require disclosure of all pension investments. Read more »
Obama and Biden will help working families by doubling funding for after-school programs, expanding the Family Medical Leave Act. They will provide low-income families with a refundable tax credit to help with their child-care expenses, and encourage flexible work schedules. Read more »
Joseph E. Stiglitz, professor at Columbia University, was awarded the Nobel Prize in Economics in 2001 for his work on the economics of information and was on the climate change panel that shared the Nobel Peace Prize in 2008. Stiglitz, a supporter of Barack Obama, was a member and later chairman of the Council of Economic Advisers during the Clinton administration before joining the World Bank as chief economist and senior vice president. He is the co-author with Linda Bilmes of the “Three Trillion Dollar War: The True Costs of the Iraq Conflict.”
This is not the first crisis in our financial system, not the first time that those who believe in free and unregulated markets have come running to the government for bail-outs. There is a pattern here, one that suggests deep systemic problems — and a variety of solutions:
1. We need first to correct incentives for executives, reducing the scope for conflicts of interest and improving shareholder information about dilution in share value as a result of stock options. We should mitigate the incentives for excessive risk-taking and the short-term focus that has so long prevailed, for instance, by requiring bonuses to be paid on the basis of, say, five-year returns, rather than annual returns.
2. Secondly, we need to create a financial product safety commission, to make sure that products bought and sold by banks, pension funds, etc. are safe for “human consumption.” Consenting adults should be given great freedom to do whatever they want, but that does not mean they should gamble with other people’s money. Some may worry that this may stifle innovation. But that may be a good thing considering the kind of innovation we had — attempting to subvert accounting and regulations. What we need is more innovation addressing the needs of ordinary Americans, so they can stay in their homes when economic conditions change.
3. We need to create a financial systems stability commission to take an overview of the entire financial system, recognizing the interrelations among the various parts, and to prevent the excessive systemic leveraging that we have just experienced.
4. We need to impose other regulations to improve the safety and soundness of our financial system, such as “speed bumps” to limit borrowing. Historically, rapid expansion of lending has been responsible for a large fraction of crises and this crisis is no exception.
5. We need better consumer protection laws, including laws that prevent predatory lending.
6. We need better competition laws. The financial institutions have been able to prey on consumers through credit cards partly because of the absence of competition. But even more importantly, we should not be in situations where a firm is “too big to fail.” If it is that big, it should be broken up.
These reforms will not guarantee that we will not have another crisis. The ingenuity of those in the financial markets is impressive. Eventually, they will figure out how to circumvent whatever regulations are imposed. But these reforms will make another crisis of this kind less likely, and, should it occur, make it less severe than it otherwise would be.
Strike 1: “I don’t really understand economics” - source:
Republican presidential frontrunner John McCain has raised eyebrows by confessing that he ‘doesn’t really understand economics’.
At a recent meeting with the Wall Street Journal editorial board, the presidential hopeful said he would rely on his adviser and former Senate colleague Phil Gramm as an expert on the subject.
Strike 2: “The fundamentals of the economy are still strong.” - source.
Strike 3: Oh, who was his advisor? This jabrone:
Is that not three strikes? Throw this bum on the street… just like his voting record on Veterans Issues has done to other veterans… those I might add that don’t play the POW card to become an elected member of the Senate.
Iraq’s Saddam Hussein had threatened to drop using the US for oil transactions as early as in 2000 and as late as 2003. Before he knew it, American forces invaded, eventually killing him. A couple of random posts here and here.
Today Iran did just that:
Iran, OPEC’s second-largest producer, has stopped conducting oil transactions in U.S. dollars, a top Oil Ministry official said Wednesday, in a concerted attempt to reduce reliance on Washington at a time of tension over Tehran’s nuclear program and suspected involvement in Iraq.
PLAY
