Hardly any sector of the economy is immune to social distancing rules cutting into profits, with theaters, hotels, restaurants, gyms and retailers struggling to stay afloat.
Reopening plans have been reversed in nine states and paused in a dozen others, and more than half of U.S. states remain under business restrictions.
The Federal Reserve has printed trillions of dollars without generating runaway price inflation through the use of a neat trick.
The privately owned bank cartel shovels the bulk of the money to Wall Street banks and not to the public at large. Instead of millions of Americans rushing out to bid up prices on consumer goods, a relative handful of bankers is using the free money to bid up asset prices and then pay themselves huge performance bonuses.
Re-Blogged From Liberty Headlines
‘There’s still going to be 25,000 American troops in Germany…’
After more than a year of threats to start pulling U.S. troops out of Germany unless Berlin increases its defense spending, President Donald Trump appears to be proceeding to cut the U.S. military contingent by more than 25%.
About 34,500 American troops are stationed in Germany — 50,000 including civilian Department of Defense employees — and the plan Trump reportedly signed off on last week envisions reducing active-duty personnel to 25,000 by September, with further cuts possible.
AP Photo: President Donald Trump and first lady Melania Trump.
Just when one thinks everybody has gotten the message about the big problems facing Social Security, along comes John Tamny with a piece entitled “Let’s End the Myth About Social Security’s Looming Bankruptcy.” Really? Let’s go over the basics once again.
To his credit, he starts with a denunciation of Social Security. It was, he says, “always a terrible idea for countless reasons.” Yes! It was a terrible idea because it treats us all as dummies, unable or unwilling to provide for our own retirement. Because it tells us we have an “account” with the System, thereby fostering the illusion that our savings have been husbanded in a safe place where they will be available to us upon retirement. Because it provides returns that lag behind what prudent private investments return. Because even miniscule reforms, like tweaking the index used to calculate annual inflation increases, raise howls of protest from the likes of AARP.
Re-Blogged From Red State
The following story is brought to you courtesy of PJ Media. Click the link to visit their page and see more stories
Democratic Senators Kamala Harris, Bernie Sanders, and Ed Markey have gone all Andrew Yang on us and will introduce a bill that gives $2000 a month to everyone.
Yang, the tech billionaire and Democratic candidate for president, made the centerpiece of his campaign a monthly check to Americans of $1000. It actually received some favorable media coverage outside the mainstream. But it wouldn’t have had a chance in Congress.
The Trump administration will seek an additional $250 billion to support small businesses hurt by the widespread economic shutdown and slowdown. Will the government and the Fed save the US economy? What would be the consequences for the gold market?
As of April 7, more than 360,000 people were confirmed to be infected by the coronavirus in the US, and more than 10,000 out of them died because of the COVID-19, as the chart below shows. Actually, the US is entering the worst period of the epidemic, as hospitals are struggling to maintain and expand capacity to care for infected patients.
By David Middleton – Re-Blogged From WUWT
I couldn’t make this sort of schist up if I was trying…
Very little money is actually spent on climate research
Researchers have looked at where USD 1.3 trillion in research funding is spent across the globe. Less than 5 per cent of this money has gone to climate research. Studies that examine how society can cope with the climate of the future are given a very small share of this pot.Ulla Gjeset Schjølberg
JOURNALISTNancy Bazilchuk
ENGLISH VERSIONPUBLISHED Friday 07. February 2020
In a recent study, researchers at the Norwegian Institute of International Affairs (NUPI) and the University of Sussex reviewed how much of US 1.3 trillion (NOK 11.4 trillion) in research funding is dedicated to climate research.
The music died many times in the past. To name a few:
By Bob Shapiro
Keith Weiner blogged recently explaining how borrowing to consume is a bad thing. Nice job Keith.
However, extending Keith’s arguments, it would imply that any consumption makes us poorer. Do you really need to trade in your 10 year old car when it’s still doing a fine job getting you where you want to go?
Keith makes the distinction between borrowing to consume but I don’t see it. Consuming is consuming. It’s only in the aggregate that the situation makes a difference.
By Frank Holmes – Re-Blogged From Gold Eagle
The world is more fragile today than it was in 2007. That’s the opinion of former derivatives trader Nassim Taleb, whose bestseller, The Black Swan, is about how people make sense of unexpected events, especially in financial markets. True to form, he made a whole lot of money after predicting the global financial crisis more than a decade ago.
Speaking with Bloomberg’s Erik Schatzker last week, Taleb said the reason why he has reservations about today’s economy is that it suffers from the “same disease” as before. The meltdown in 2007 was a “crisis of debt,” and if anything, the problem has only worsened.
By Marin Katusa – Re-Blogged From Silver Phoenix
The economy depended on the spending habits of baby boomers the last three decades.
The success and failure of many companies depended on the spending habits of those same baby boomers.
It was all about the baby boomers.
By Associated Press – Re-Blogged From Newsmax
Dubbing it the “nickel plan,” President Donald Trump announced Wednesday that he’s asking every Cabinet secretary to cut their next-year’s budgets by 5 percent.
By Gary Christenson – Re-Blogged From Silver Phoenix
Several countries and cities studied and tested a universal basic income (UBI). At first glance it looks like giveaway nonsense:
By Gary Christenson – Re-Blogged From Deviant Investor
The addictive behaviors of drug addicts are similar to the actions of a modern “Keynesian” economy addicted to “money printing” by central banks and fractional reserve banking.
From Psychology Today on Addiction:
“Addiction is a condition in which a person engages in use of a substance or in a behavior for which the rewarding effects proved a compelling incentive to repeatedly pursue the behavior despite detrimental consequences.”
By Julio Rosas – Re-Blogged From IJR
With congressional candidate and self-proclaimed democratic socialist Alexandria Ocasio-Cortez making big promises to voters, Campus Reform visited the district she’s running in to ask how taxpayers will pay for them.
According to her campaign website, Ocasio-Cortez wants a medicare for all plan, a federal jobs guarantee with a $15 minimum wage and tuition-free public colleges.
By Gary Christenson – Re-Blogged From The Deviant Investor
Wars benefit the political and financial elite. Most wars are on-going, whether they include formal Congressional declaration or military actions. The following wars will continue.
Re-Blogged From Stratfor
Highlights
(EITAN ABRAMOVICH/AFP/Getty Images)
By Associated Press – Re-Blogged From Newsmax
Vermont is willing to pay new residents who work remotely for an out-of-state employer in hopes of increasing its population and workforce.
Vermont Gov. Phil Scott has signed into law a bill that will pay those new residents up to $10,000 over a period of two years in an effort to attract younger people to the state.
“Vermont isn’t just a place to ski and try craft beers, it’s an ideal state for raising a family and growing a business,” Department of Tourism and Marketing commissioner Wendy Knight said Friday.
Re-Blogged From Stratfor
Highlights
(HECTOR VIVAS/Getty Images)
By Gary Christenso – Re-Blogged From http://www.Gold-Eagle.com
Hyperinflation Myths:
By John Rubino – Re-Blogged From Dollar Collapse
The price of oil is rising, which is obviously good news for those who sell it to the rest of us. Russia in particular seems to be enjoying the current trend, so much so that — if I’m understanding this correctly – Moscow is now receiving more in taxes than it’s spending. This is producing something called a “budget surplus,” which is a kind of currency war weapon that can be deployed to improve a country’s geopolitical position. Here’s a quick overview:
By John Rubino – Re-Blogged From Dollar Collapse
In interviews, whenever I try to make the case that US policies are leading to the kinds of currency disruptions common in developing countries, I say something like, “For a glimpse of America’s future, take a look at Argentina, where they’re eating cats and dogs because of hyperinflation … wait, no, I meant Venezuela.”
Mixing up countries kind of dilutes the power of the statement, but for some reason I can’t seem to help it.
Re-Blogged From Stratfor
Highlights
(200MM/iStock)
By Gary Christenson – Re-Blogged From http://www.Gold-Eagle.com
Financial sacrifices are so obvious and commonplace they are seldom acknowledged.
Borrowing money on a credit card, mortgage or car loan to purchase something is typical. You have sacrificed future spending for use in the present.
From the Washington Post
The Trump administration is poised to ask Congress for deep budget cuts to the Energy Department’s renewable energy and energy efficiency programs, slashing them by 72 percent overall in fiscal 2019, according to draft budget documents obtained by The Washington Post.
Many of the sharp cuts would probably be restored by Congress, but President Trump’s budget, due out in February, will mark a starting point for negotiations and offer a statement of intent and policy priorities.
By Rob Williams – Re-Blogged From Newsmax
David Stockman, the former budget director for President Ronald Reagan, said the spending plan now being hammered out in Congress will add trillions of federal debt and smother the U.S. economy.
Congress on Wednesday night released the text of the 652-page budget deal that will raise strict spending caps on domestic and military spending in this fiscal year and the next one by about $300 billion. It includes almost $90 billion in disaster relief in response to last year’s hurricanes and wildfires, and would lift the federal debt limit until March 2019, the New York Times reported.
By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com
As we lurch through successive credit crises, central bankers and economists believe they learn valuable lessons every time, and that the ultimate prize, the suppression of business cycles through monetary policy, will be achieved. Enormous effort is put into computer models to enable economists to predict the future, and no doubt, the modellers are now working with artificial intelligence to improve their accuracy.
We saw, over Brexit, how wrong the Bank of England’s and the UK Treasury’s models were, and these errors were also evident in the OECD’s model. Brexiteers smelled conspiracy, but in the absence of evidence, perhaps we should give them the benefit of the doubt and assume the errors were genuine. If so, all computer economic modelling has been a waste of time.
By Ron Paul – Re-Blogged From Ron Paul Institute
Last Thursday, congressional Republicans unveiled their tax reform legislation. On the same day, President Trump nominated current Federal Reserve Board Governor Jerome Powell to succeed Janet Yellen as Federal Reserve chair. While the tax plan dominated the headlines, the Powell appointment will have much greater long-term impact. Federal Reserve policies affect every aspect of the economy, including whether the Republican tax plan will produce long-term economic growth.
President Obama made history by appointing the first female Fed chair. President Trump is also making history: If confirmed, Powell would be the first former investment banker to serve as chairman of the Federal Reserve. Powell’s background suggests he will continue Janet Yellen’s Wall Street-friendly low interest rates and easy money policies.
By David Haggith – Re-Blogged From The Great Recession Blog
The Trump Rally pushed ahead relentlessly through a summer full of high omens and great disasters, all which it swatted off like flies. Even so, all was not perfect in the market as nerves began to jitter midsummer beneath the surface even among the most longtime bulls. Wall Street’s fear gauge (the CBOE Volatility Index) lifted its needle off its lower post to a nine-month high after President Trump’s comments about “fire and fury” if North Korea didn’t toe the line. (Mind you, the high wasn’t very far off the post because of how placid the previous nine months had been.)
As volatility stirred languidly over the threat of nuclear war, stock prices took a little spill with all major stock indices seeing their biggest one-day drop since May. The SPX fall amounted to a 1.4% drop in a day — nothing damaging. The Dow dropped about 1% in a day. But beneath the surface, the market is looking different and shakier.
By Paul Driessen – Re-Blogged From http://www.WattsUpWithThat.com
With only so much taxpayer cash, what should our priorities be in this year of big hurricanes?
A couple of friends recently said it was terrible that some in Congress and the White House could even consider reducing National Endowment for the Arts funding. It’s a critical program, they feel, essential for the very survival of many community and even big-time theaters, orchestras and other arts programs. The thought of trimming the NEA shows a low regard for this important component of civilized society.
For centuries, Kings and princes funded composers, artists, symphonies, operas and artwork, especially back in the days when royalty controlled the lands and wealth – and paid their peasants a pittance (if at all). Letting them listen to or gaze on some of the artistic creations helped keep them happy in an era when illiterate serfs were happy dreaming of being rewarded in the afterlife.
By Peter Diekmeyer – Re-Blogged From http://www.Gold-Eagle.com
Twenty years ago Doug Noland was so worried about imbalances surrounding the dot.com boom that he began to title his weekly reports “The Credit Bubble Bulletin. Years later, he warned the world about the impending 2008 crisis.
However a coming implosion, he says, could be the biggest yet.
“We are in a global finance bubble, which I call the grand-daddy of all bubbles,” said Noland. “Economists can’t see it. They can’t model money and credit. However, to those outside the system, the facts are increasingly clear.”
Noland points to inflating real estate, bond and equity prices as key causes for concern. According to the Federal Reserve’s September Z.1 Flow of Funds report, the value of US equities jumped $1.5 trillion during the second quarter to $42.2 trillion, a record 219% of GDP.
By Stefan Gleason – Re-Blogged From http://www.Gold-Eagle.com
The dramatic failure of the US Senate’s last-ditch Obamacare repeal effort leaves Republicans so far without a major legislative win since Donald Trump took office. No healthcare reform. No tax reform. No monetary reform. No budgetary reform.
The more things change in Washington…the more they stay the same.
Despite an unconventional outsider in the White House, it’s business as usual for entrenched incumbents of both parties. The next major order of business for the bipartisan establishment is to raise the debt ceiling above $20 trillion.
Connecticut, the wealthiest U.S. state with a per capita income of $39,373 a year, can’t rely on taxing rich people to close its budget deficit, The Wall Street Journal reports.
The New England state faces a budget deficit of $400 million and deteriorating fiscal problems that have led bond-rating firms to lower the state’s credit rating. Connecticut also leans heavily on high-paid hedge fund workers.
By Daniel Lang – Re-Blogged From Zero Hedge
As time goes on, it’s becoming abundantly clear that Trump isn’t going to be able to prevent a major financial crisis in this country. Depending on your beliefs, that’s either because he’s inept in some way, or because he’s being hamstrung by a political system that’s determined to keep our nation on the same unsustainable path. Whatever the case may be, it seems that there is no way that we can change course at this point. We’re headed for a financial crisis, and it’s going to happen sooner rather than later.
By Chris Vermeulen – Re-Blogged From http://www.Gold-Eagle.com
The United States is the world’s largest and most diversified economy! It is currently suffering through a protracted period of slow growth which has held down job creation and labor market participation. The Pew Research Center reported, in late 2015, that a mere 19% of Americans trust the government either always or most of the time.
The FED must print more money in order to keep the party going forward.
The bottom line is that this current bull market has been driven mostly by corporations which are buying back their shares, over the years. Individual investors have increasingly been moving out of equity mutual funds and into equity ETF’s.
By Christopher Flavelle – Re-Blogged From http://www.Bloomberg.com
What to Expect From Trump on Climate Change
President Donald Trump will find the job of reining in spending on climate initiatives made harder by an Obama-era policy of dispersing billions of dollars in programs across dozens of agencies — in part so they couldn’t easily be cut.
There is no single list of those programs or their cost, because President Barack Obama sought to integrate climate programs into everything the federal government did. The goal was to get all agencies to take climate into account, and also make those programs hard to disentangle, according to former members of the administration. In some cases, the idea was to make climate programs hard for Republicans in Congress to even find.
“Much of the effort in the Obama administration was to mainstream climate change,” said Jesse Keenan, who worked on climate issues with the Department of Housing and Urban Development and now teaches at Harvard University. He said all federal agencies were required to incorporate climate-change plans into their operations.
By Michael Snyder – Re-Blogged From Freedom Outpost
It has been said that “as California goes, so goes the nation”. That is why it is such a shame what is happening to that once great state. At one time, California seemed to be the epicenter of the American Dream. Featuring some of the most beautiful natural landscapes in the entire world, the gorgeous weather and booming economy of the state inspired people from all over the world to move to the state. But now people are moving out of the state by the millions, because life in California has literally become a nightmare for so many people.
By GE Christenson – Re-Blogged From The Deviant Investor
Following President Trump’s speech the Dow Jones Industrial Average (Dow) easily broke 21,000, and closed at another all-time high – 21,115.
The Dow closed up for the 12th consecutive day on Monday February 27, another three decade record.
Excel calculated the Dow’s daily Relative Strength Index (RSI – 14 period), a technical timing oscillator. It reached 97.75 (maximum = 100.00) on March 1, an exceptionally “over-bought” reading that has occurred nine times since 1950.
The weekly RSI also reached a very high “over-bought” reading as of March 3, the end of last week.
Margin debt recently registered an all-time high on the NY exchange. Price to earnings ratios have risen into “nosebleed” territory, and the last 1% correction in the S&P was in November – a long time ago. Many other market extremes and highs in confidence indexes are evident.
The Dow reached new highs the normal way – levitated through the creation of massive unpayable debt and the expectation of huge profits (for traders). Daily sentiment has reached a peak and indicates we are at or near a top.
Official national debt is nearly $20 trillion. Regardless, President Trump promised something for everyone:
The Dow likes more debt, until reality strikes.
Previous Peaks in the Dow: (National debt in $ billions.)
Date Dow Official National Debt Ratio Dow to Debt
Jan. 1973 1,067 450 2.37
Aug. 1987 2,746 2,330 1.18
Jan. 2000 11,750 5,776 2.03
Oct. 2007 14,198 9,055 1.57
Mar. 2017 21,115 19,960 1.06
To keep the Dow rising, create debt and don’t worry, be happy…
But it takes more debt to buy each Dow point than it did several decades ago. How much debt will be needed to levitate the Dow to 30,000? Will it require $40 trillion in debt? And what are the consequences of massively more debt? Stagflation is on the horizon.
Consequences of the spending problem according to Ron Paul:
“That leaves only one solution: printing money out of thin air.” [But] “printing money out of thin air destroys the currency, hastening a US economic collapse and placing a very cruel tax on the working and middle classes as well.”
His solution for US government policy:
“… end the US military empire overseas, cut taxes and regulations at home, end the welfare magnet for illegal immigration, and end the drug war. And then get out of the way.”
These ideas will encounter fierce resistance, so much that his plan is clearly “dead on arrival.”
More debt is guaranteed by a century of fiat currency devaluations, a borrow-and-spend congress, the executive branch, central banks that love debt, and an economy that runs on debt and credit. Expect continued dollar devaluation and more Dow highs after a nasty correction/crash.
While the Dow corrects and the U. S. economy struggles in a fiat currency induced coma, gold and silver prices will rise.
By John Rubino – Re-Blogged From Dollar Collapse
In every annual budget debate since the 1980s, one side figures out that the way to get what it wants – which is higher spending – is to frame the request in a particular, ingenious way: We have to borrow and spend way more now if we want to borrow and spend way less later. History has of course proven this argument to be idiotic, but because it moves the pain of living within our means into the indefinite future, it always manages to attract enough votes to win the day.
The following article, published today by a major news outlet, spells it out in one sentence, in the title no less:
By Onan Coca – Re-Blogged From http://constitution.com
The state of Maine is offering the rest of the nation proof that conservative economic policies not only work better in the short term by stimulating the economy, but are beneficial for the long term as well ensuring long–term economic success.
A new article in the Bangor Daily News examines the exciting economic successes of the controversial Republican Governor Paul LePage. Maine’s economic outlook is so bright that many other states in the nation are watching to see how they might incorporate some of the states policies in their own plans. The Daily News notes that Maine has an all-time record amount of “cash on hand,” more than $1 Billion, and that this is mostly due to Governor LePage’s fiscal discipline and economic decision making.
By Clint Siegner – Re-Blogged From http://www.Gold-Eagle.com
Notwithstanding the strong demand for gold and silver globally, buying activity in the U.S. retail market for physical bullion has fallen noticeably in the wake of Donald Trump’s election victory. And retail selling in the U.S. has increased. The bullion markets have entered a new phase.
The two terms of President Obama included the aftermath of the 2008 financial crisis, zero interest rate policy from the Federal Reserve, and multiple rounds of Quantitative Easing. Reasons to buy gold and silver were plentiful. Today, the reasons to diversify into gold and silver are as strong as ever, but they’re perhaps less obvious to the average retail buyer in the US.
Many of the people who felt deeply concerned about the direction of the nation under Barack Obama are currently more optimistic now. U.S. stock markets are moving relentlessly upward. Artificially low interest rates are sending home prices higher. Even the US dollar looks decent when compared to other world currencies.
By Ron Paul – Re-Blogged From Eagle Rising
Many Americans who have wrestled with a 1040 form, or who have paid someone to prepare their taxes, no doubt cheered the news that Congress will soon resume working on tax reform. However, taxpayers should temper their enthusiasm because, even in the unlikely event tax collection is simplified, tax reform will not reduce the American people’s tax burden.
Congressional leadership’s one nonnegotiable requirement of any tax reform is “revenue neutrality.” So any tax reform plan that has any chance of even being considered, much less passed, by Congress must ensure that the federal government does not lose a nickel in tax revenue. Congress’s obsession with protecting the government’s coffers causes reformers to mix tax cuts with tax increases. Congress’s insistence on “offsetting” tax cuts with tax increases creates a political food fight where politicians face off over who should have their taxes raised, who should have their taxes cut, and who should have their taxes stay the same.
By Peter Schiff – Re-Blogged From Euro Pacific Capital
There is much we don’t know about how the Trump presidency will play out. Will the Wall get built? Who will pay for it? Will it have at least some fencing? Will repeal and replace happen at exactly the same time? Will Trump throw a ceremonial switch? Will there be a Trump National Golf Course in Sochi? It’s anyone’s guess. But of one thing we can be fairly certain. President Trump is very likely to preside over the largest expansion of Federal budget deficits in our history. Trump has built his companies with debt and I’m sure he thinks he can do the same with the country. His annual budget deficits are likely going to be huge. This development will make a greater impact on the investment landscape than most on Wall Street can imagine.
In the past half-century, Republican presidents have been the going away winners at the deficit derby, a fact that should make any true conservative blush. The sad truth is that annual deficits exploded under Ronald Reagan and George W. Bush, and generally contracted under Bill Clinton and Barack Obama. Some of the explanation is just luck of the draw, some walked into office in the midst of recessions they didn’t create. But the better part of the explanation is baked into the political dynamics.
By Bob Shapiro
Steve Forbes recently urged incoming President Trump to make tax cuts a priority for the first week or so of his administration. While I also would like to reduce the burden of government on the Private, Productive sector of our Economy, I think that Mr Forbes desire shows more sympathy for Keynesianism than for Free Market / Conservative Economics.
For those of you who may have forgotten, Keynesians champion the idea that government actions – such as putting more cash into the hands of consumers – can stimulate the Economy. Forbes is using the same tried and failed arguments as previous pols.
OK, so here’s the money quote: “There is no such thing as a Tax Cut without a Spending Cut!!!!”
By Andy Sutton & Graham Mehl – Re-Blogged From Silver Phoenix
While economics is a science and should be treated as such, economic forecasting is both a science and an art at the same time. However, anyone can forecast. Just like anyone can forecast the weather. To do so accurately and furthermore to do so frequently is a true talent. We think of it along the lines of the ability to hit a major league fastball; a gift granted to maybe 1 in 500 or a thousand babies each year. Then add to that the ability to hit a major league fastball for an average of .300 over an entire career and we’re talking a few babies in an entire generation.
Economic forecasting is no different. Anyone can take the classes, read the textbooks by all the proper authors, write the research papers, the thesis, and the dissertation, and still muddle around in the dark for the entirety of a career, issuing bum forecast after bum forecast. We would surmise at that point that there might be a problem with the assumptions going into the exercise of forecasting. Think of the scientist who starts conducting chemistry experiments without knowing Boyle’s Law or the Ideal Gas Law, etc. Or maybe has no clue about Avagadro, let alone the number ascribed to him. Your scientist is going to waste a lot of time and produce nothing of value.
By Ken Haapala, Science and Environmental Policy Project (www.SEPP.org)
Updated US Climate Change Financing: A recently uncovered report from the Congressional Research Service (CRS) provides data on federal government financing of climate science and climate change activities. This prompted an update of estimates made several years ago, that were discussed in TWTW at the time. The CRS report covers FY 2008 to 2014, with FY 2014 as estimates based on the President’s FY2014 request. (Today, the fiscal year runs from October 1 of the prior year to September 30 of the stated year. For example, FY2017 would be from October 1, 2016, to September 30, 2017.). The report states:
By http://www.BizarroWorldUSA.com – Re-Blogged From iPatriot
For just shy of eight years now the United States has been economically hindered by the distorted interpretation of economist John Maynard Keynes’ twentieth century economic theory.
Application of Keynesian economics extended the Great Depression longer than necessary as it has for the recent recession.
Classic economic theory suggests that world and national economies experience rises and falls. Periods of stagnation can be moderated with reasoned spending and by controlling variable expenses. Keynesian economic theory, on the other hand, advocates that increased government spending in times of downturn spurs the economy resulting in shorter downswings. The flawed theory doesn’t work in a personal or household situation and it most certainly doesn’t work for individual states or nations. In fact, the larger the entity and economic platform the more in-congruent the premise becomes.
By Dale Netherton – Re-Blogged From http://www.iPatriot.com
If you look at the structure of our government and compare it with how unions are structured you see one fundamental similarity. The government and the unions do not target a bottom line. Both of these organizations have nothing to rein in their spending in the case of government and nothing to rein in their demands in the case of the unions. This oversight by these organizations places them on an eventual clash with the reality of fiscal sanity.
We have seen the unions that have bankrupted the companies they have infiltrated by making demands for wages and benefits that eventually became unaffordable. We are seeing that phenomena played out in the state of Wisconsin. Likewise the government has reached a point where it too cannot just spend with impunity as it has done in the past. The reality of living off of borrowed money has appeared as the fact that creditors that don’t get paid don’t continue to loan money. When the source of loans dries up there is no longer an alternative for the government to acquire money. The illusion that the government can always tax the citizens reaches a point of diminishing returns not only by the unavailability and the affordability but also by political unpopularity. This in the world of finance is bankruptcy whether the government wants to declare it or not.
