President Obama said today that it would be the “height of irresponsibility” to allow the government to shut down because it has (will soon) breached the deficit spending limit that congress has previously agreed to.
Pardon moi monsieur President, but exactly how do you calculate that shutting down the government is somehow more irresponsible than passing yet another in an endless line of hasty extensions to the debt limit, allowing the government to continue spending money it does not have and cannot conceivably ever repay?
I don’t know what they taught you growing up, but to me, spending money you don’t have and CANNOT REPAY was pretty much right up on top of the pyramid of irresponsibility. Somewhere up there near letting your little brother get run over by a car.
This is your debt, Mr. Obama. Not mine. I refuse the debt.
The Superiority of the Simple
The field of study known as economics and the practitioners in that field — economists — often make things seem unbearably complicated. And to be fair, the realm of an economy, with all its various actors, values, motives, relationships and the impossibly tangled webs of causes and effects between them is a very complex field of study. And given that level of complexity, it is certainly true that saying anything of interest about some aspect of such a system would by necessity be saying something pretty complicated.
On the other hand, no matter how complex an economic system is, nor how complex an economist’s description of it may be, rocks still fall down when you drop them.
Fundamentally, when seen as a unity at the level of their appearance as objects, even the most complex system must satisfy the relatively simple set of constraints that act on all objects at the level of their appearance. At the most fundamental level of manifest reality that we know about, the laws of physics are the kind of relatively simple constraints that I am talking about. If you drop a rock, it falls down. There is no set of relationships between the internal components of a rock that will make it fall up if you let go of it.
Similarly, there is no set of relationships among the internal components of an economy that will allow it to borrow its way out of debt or create wealth via printing money.
So when someone named Greenspan or Bernanke tells you otherwise, invariably through obfuscating the obvious by invoking a mind-numbing complexity within an arrogant rant of pontificus proportion, it can be useful to boil their claims down to basics and give it the rock test. If they are telling you the equivalent of “when we let go of the rock, it will fall up”, you can be sure they are full of shit.
And they are.
Financialization = Doom
I haven’t crunched the numbers and done the math, but I’d be willing to bet that most or all of the ‘growth’ in what is reported as the U.S. GDP over the past 40 years or so is due to domestic consumption and the banking and finance industry.
This is a recipe for disaster no matter how you spin or obfuscate its details. Here’s why.
The initials GDP stand for Gross Domestic Product and that name in and of itself harkens back to a time when an economy, and particularly the U.S. economy, was primarily aimed at producing things. Real, tangible things with intrinisc value.
In recent years, the ‘domestic consumption’ component of the U.S. GDP number has been over 70% of the total. This is unsustainable. Over any period of time that you are consuming more than you are producing, you are incurring debt. If your economy is an apple tree that produces 10 apples a month and you are eating 12 apples a month (consumption greater than production), you are going 2 apples per month in debt. If the consumption is chronically higher than the production, the debt increases endlessly. This would be sustainable for as long as you could keep getting loans, except for the inconvenience of interest. In an economy where loans carry interest, there comes a time when the interest payments (aka ‘debt service’) alone become crippling to the economy. From that point on, it’s all downhill. The U.S. of today is right about on that precipice.
So the chronic growth of consumption along with a shrinking of production is unsustainable by itself. But it gets worse. Much worse.
When large segments (in percentage terms) of the economy are skimming money out of the functioning of the economy via transaction fees, arbitrage, price spreads, fraud, and ‘gaming’ (taking advantage of loopholes), it’s akin to running a car with no oil. In energetic terms, such fees are a friction that rob the system of its efficiency. Rather than contributing value to the overall functioning of the economy, the interests of financialization are literally parasitizing the productive members at the expense of the health of the overall system.
Both of these unsustainable trends, consumerization and financialization, are endlessly spun and obfuscated in the media and by status quo economists. But if you strip away all the noise and just look at them in simplistic, big picture terms it is obvious that an economy cannot survive either of them over the long term. Both together are a train-wreck happening right now.
Financialization = Doom.
Documents obtained Tuesday by the Electronic Privacy Information Center suggest that the U.S. Department of Homeland Security has signed contracts for the development of mobile and static systems that can be used to scan pedestrians and people at rail and bus stations and special event venues -- apparently at times without their knowledge.
Have none of these putrid Politicos ever read 1984? Or did they read it and not understand that it was a DYSTOPIA, rather than a UTOPIA?
In our bizarro world, you can count on every public policy being exactly the opposite of whatever it should be. This is exactly the kind of potentially harmful public nuisance that the government should be protecting the citizenry from. Instead it is the government itself that is foisting it upon us.
I’ll tell you why, but first I’ll tell you what they will tell you. They will tell you that the reason for such systems and policies is to protect us from violence and terrorism. But that is total bullshit. The real reason is because some company who developed the technology for these machines is creating an otherwise non-existant market for them by bribing government officials to spend public money [more debt] on them.
First of all, if you look at the total incidence of violence and terrorism that systems such as these would ostensibly be protecting against, their cost in dollars and especailly in loss of liberty is totally out of proportion.
Secondly, this is a classic arms race. Once knowledge of these systems becomes commonplace, which it would immediately, violent individuals and especailly organized terrorists will simply change their tactics to render these systems moot. So it simply won’t work as protection. Instead it will just foster innovation in violence and terror. Notice that that is not bad financial news for companies who manufacture anti-terror technology.
And finally, the idea that you can bombard a person with enough electromagnetic radiation to see through their clothes and not be doing damage to the biological tissues absorbing that radiation is a completely unproven idea. Long-term experience with X-rays and other high-energy radiation used in medical imaging shows that there is at least a good reason to be skeptical of claims that these devices are harmless. Ever notice that the medical technician who X-rays you is always either standing in another room behind lead-lined walls, or at the very least is wearing a lead shield apron while they are imaging you? So there is a reasonably good chance that in the name of providing protection that will immediately become obsolete, the government will be inflicting long-term harm on those people it is supposedly trying to protect.
Apologies to Mr. Orwell, who must be spinning in his grave at an amazing rate, but 1984 is starting to look quaint.