Bill Gross, PIMCO’s founder and chief investment officer, compared the UK to a drug addict who is hooked on debt and struggling to kick the habit in his monthly investment outlook. His comments were part of a broader warning that the US would turn into Greece within a decade if the government did not find $1.6 trillion (£990bn) of savings “over the next five to 10 years”.
I think he is unfair. The US will become MUCH worse for one simple reason – who will bail IT out? There seems no desire from the Obama regime to cut spending and yet this is crucial in geo-political terms. Reflect on THIS if you will, gentle reader…
“There are about 313 million Americans, 330 million or so in the Eurozone (ie, excluding the United Kingdom). So, if you do a direct US/Eurozone comparison it’s $15.1 trillion DEBT over here, $10.8 trillion DEBT over there, which means at the present rate, in another seven or eight months Americans will be 50 per cent more indebted than the Euros. And I would say that even that understates it, since most Continental nations have far more centralized governments while ours is a purely federal debt excluding another $3 trillion or so in combined state and local debt.”
A false narrative is in play. The idea being perpetuated is that there have been too many “savage” cuts in response to the need for “economic austerity” and now is the time to loosen the bands of fiscal control a bit and “go for growth”..meaning tax, borrow more and spend. One of the greatest cons is that by perpetrated by the Cons lead by David Cameron. The illusion is that Government has responded to the huge national deficit by responsible cuts. It’s a lie…
Using figures produced by the Office for Budget Responsibility, the Tullett Prebon report shows that Government expenditure in 2011-12 was still £22.6 billion, or 3.4 per cent, higher than it was in 2008-09 after nearly a decade of bingeing by the Labour government. That’s how far we have got! And while it is true that the deficit has been reduced — from £140 billion in the first year of the Coalition to £120 billion in the second — this has been achieved almost entirely as a result of higher taxes rather than cuts.
What else? Oh yes, this;
Spending rose 0.3 per cent in the first year and fell by 1.5 per cent in the second. That makes a tiny overall decrease of just more than 1 per cent over two years.
Savage cuts? Too deep, too fast? That’s what Labour says and that seems to be the mood of the people. Here’s another shocking reality…
Our national debt — what we owe as a nation — continues to soar. According to International Monetary Fund projections, it will increase faster over the next two years than any other leading European country apart from Spain. Proportionate to the size of our economy, our debt is one of the two or three highest in the developed world. When the Coalition took over, it stood at a stonking £1,002 billion. By the time of the next election, it will have risen to an unbelievable £1,613 billion.
The problem is that there have been NO nett cuts and that Cameron will be hoist on his petard because without cuts there will be no re-balancing of the economy. That means we will continue to flounder and Labour will sweep to power in three years time. Then, we’re done for.
It is a slow day in a little Greek Village. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.
The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers’ Co-op takes the €100 note and runs to pay his drinks bill at the taverna. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him “services” on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything. At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.
No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism. And that, Ladies and Gentlemen, is how the bailout package works
Official: The American people have been saddled with $15trillion of debt by the government:
It seems like just a few months ago that the statists on left and right were pleading to raise the debt ceiling. Oh, it was just a few months go. They chewed through that uplift toot de sweet eh?
As of now it’s 15 trillion/310million= $48,387 per citizen = alot more per productive worker.
They ain’t ever paying the debt back, but since it was raised by parasites and promised against the sweat of tax slaves, born and unborn, who never signed a contract agreeing to pay any debt, repudiation remains the honest and necessary response.
Well then – it looks like the Debt ceiling will be raised. GOP and Dem “leaders” have agreed to increase US debt by €2.6bn. The world breathes a sigh of relief, or so the MSM portrays it.
Nothing could be further from the truth, however, so let’s start dancing on this debt ceiling.
For starters, US credit rating WILL be downgraded sometime in the next few months. Take that as a given. Why? Because the markets see that which the MSM ignores – namely that the US has adopted EU style profligacy as the default model of Government and this can only lead to sustained economic enfeeblement. There was NEVER any chance of a default, not yet, although four more years of Obama could change that. The US needed to embrace spending cuts RIGHT NOW and instead is has chosen to keep on spending, the cuts can come in the years ahead.
The GOP and Democrats have proven themselves untrustworthy. By agreeing to this folly, they are simply kicking the can down the road. The only responsible people are those in the GOP who said NO to the folly in recent days. They are standing by the principle that you cannot spend your way out of debt. When I see the weakness and indeed duplicity of some in the GOP, I wonder why anyone would want to see them back in power. If the US is going to be socialised, humiliated and bankrupt, best let a Democrat President preside over this rather than some GOP proxy.
The other aspect of this affair has been that it has been entirely a political contrivance by Obama. He has ONE major priority – getting himself re-elected. The GOP seem to want to help him and by going along with this deal, they really do facilitate the Delusionist-in-Chief. He wanted the deal NOW so that he does not have to waste his imperial time going through it all again in the run up to the Election.
The US needed to grasp the need for austerity NOW, not over the next ten years. It has flunked the test. So Obama wins, the GOP wins – and the US looses. Any positive market response to this will fade quickly, the downgrade will happen, unemployment will remain . devastatingly high – but the troughers in DC can continue with their way of regal way life
Sometimes you wonder if there is intelligent life on Earth; For once there was a sensible public rally but few turned up!
The Central London Rally Against Debt, organised with the help of the TaxPayers’ Alliance – was intended to give a voice to those who think the UK is living beyond its means.
Many of those attending, including members of the Conservative and Ukip parties, also want the Government to stop bailing out other EU countries. Matthew Sinclair, director of the TaxPayers’ Alliance, said: “There have been lots of chances for other groups to register their protest, and we want to give a voice to people who represent quite a heavy majority who think spending cuts are right and necessary. “But some areas aren’t being cut at all while spending is rising elsewhere, with contributions to the EU, and international development spending.”
Matthew is right but it seems that the British public is so sated in the need for expenditure and living beyond affordability that it does not seek to yield support to those seek rationality. Is it any wonder Labour may get back into power?
The Daily Mail misreports the purpose of the rally, true to form. It is all about living with what the country can afford. Cutting bloated government is always a good idea no matter what some claim.
When David posted on the withdrawal of a diabetes medication from the Greek marketplace, I was unsurprised to find that more had followed suit.
Leo Pharma has suspended distribution of a psoriasis medication, as well as an anti-blood clotting agent. They have every right to do this, they make and market the damn stuff and the prices are set across Europe.
But not according to the Greek Government, whose officials believe the Danish companies are blackmailing Athens because they monopolise the market with certain key drugs.
Stefanos Combinos, the director general of the economy ministry, told the BBC that Greece was one of the three most expensive countries in Europe for medicines.
The Obama Administration and the Democrat majority in Congress have taken the profligate sins of their predecessors and amplified them.
In only 5 short months, the Obama Administration and the Democrat Congress have passed into law policies which quadruple America’s national debt.
Why is President Obama facilitating this debilitation of America?
Some alarmed pundits think that the Obama Administration is simply clueless, and in good faith believes that an economy strapped with a trillion plus in debt will somehow sort out in the long run.
Others say that President Obama “hates” America. They say that President Obama agrees with Reverend Wright. Obama was in Wright’s church for 20 years. Reverend Wright preached: ”…not God Bless America…God Damn America! America’s chickens are coming home to roost!”
Most of the liberal leaning MSM appears indifferent. Most journalists do not have the economic chops to analize numbers, or to experience visceral alarm at the quadrupling of the national debt. Smitten as they are with President Obama’s charisma and persuasive powers, most in the MSM do not bother with any hard research.
In my “Mere 100 Days” post below, Noel Cunningham asks (and rightly so):
“Patty, do you know what the US public debt was when Obama came to office, or what it is now? Then tell us. Or do you care about these things?
Of the percentage increase, how much is Obama responsible for, do you think?”
FIrst, I do care; I would not post on the subject if I did not care. I cared about President Bush’s financial recklessness, and I now care about President Obama’s financial recklessness.
When we talk of America’s future financial obligations we are not only talking about discretionary budgetary items like the stimulus bailouts, and bridge building, but mandatory items like social security and interest payments on bonds.
One of the problems we have is that when we start talkingof millions, billions, trillions of dollars, sometimes the whole enchilada becomes meaningless. Frankly, it’s difficult to get our brains around the sheer magnitude of the amounts we are discussing.
And then, there is this: what part of the debt has Obama’s and the current Democrat majority run Congress fingerprints on it, and which portion can be blamed on President Bush?What cut-off period do we use? This is important because President Obama and the current Democrat Congress are now responsible for the Federal budget; they need to take responsibility for the mess in front of us instead of continuing to pass it off as a Bush problem.
In light of the above, then, I post this instructive video below:
How the left debate with me "go f*k yourself. There's another one to add to your list you fucking cunt" @wazmcr13 Nice people, aren't they?
THE PRICE OF REWARDING TERRORISM
You do not defeat terrorism by rewarding terrorists, regardless of how many bleeding heart liberals argue otherwise. Want to know where that flawed approach leads to? Read UNIONISM DECAYED 1997-2007 - It's my first book and it explains what happens when you seeek to appease terrorists and call it peace. It's available right now for ATW readers so make sure you get your copy by emailing the editor! This is the book that dissents from the herd mentality that doing wrong can lead to being right. It doesn't and this book spells out WHY.
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