Answer the question folks.
If you said with the consent of the governed, you’re correct.
CAIRO — Vice President Omar Suleiman warned Tuesday that “we can’t put up with” continued protests in Tahrir for a long time, saying the crisis must be ended as soon as possible in a sharply worded sign of increasing regime impatience with 16 days of mass demonstrations.
Let me point out something you probably don’t want to hear, but you should understand: The effectiveness of protest only extends as far as does the implied threat of violence.
I know people will want to argue otherwise. They’re wrong.
Witness Health Care, or TARP. In both cases the majority of the population opposed passage. In the case of TARP that opposition as recorded by Congressional Offices was one hundred to one or more. The people favored telling the banks to piss off, even if it meant economic Depression would immediately ensue.
Incidentally, it is my considered opinion that had we done that, the economy would have undergone that depression but we’d be done with it by now. There would be new banks where there were old banks. Employment would truly be recovering, as would output. But the banksters would all be bankrupt, there would have been prosecutions, maybe even public lynchings of the banksters that caused this mess.
Congress instead ignored the people, and we re-elected the vast majority of those who did the exact opposite of what we told them to do.
That is, we consented.
And that, ladies and gentlemen, is why whatever we tell Washington is ignored. We consent.
Now consider that in Egypt the people have said “leave office now.” The people have declared that the government no longer has their consent. That’s the end of the discussion.
The government, just as it did here in the United States with TARP, has told the people to go screw.
Now we find out if the people have the stomach to enforce their demands.
In the end, a demand without the willingness to enforce it is just hot air.
Keep this in mind, because this dynamic will eventually come here. As I write this I am listening to Bernanke bloviate about how we “can’t” default on the debt we’re taking on at the Federal government nor can we pull back on the stimulus today – we must look “in the medium term.” Yet he also admits that there will be no return to full employment even under his unrealistically-rosy scenario that leaves us with high unemployment for years.
Well, guess what – we’re going to get forced to deal with this on the market’s terms, and not Bernanke’s or that of Congress. Why? Because we can’t support a government that is at the present size, nor can we support the debt that has been taken on. The tax base necessary to do so doesn’t exist.
Supporting the current debt levels in government are mathematically impossible without monstrous cuts to entitlement programs, starting not in ten or twenty years but right now.
The promises made in the form of entitlements currently consume every single dollar of tax revenue. Those revenues don’t even cover interest on the debt. But interest has to be paid, or your ability to borrow instantly disappears.
You can cut the entire rest of the budget to zero and we still can’t balance the budget.
Interest rates are expected inflation + risk of default + a profit, and interest rates are rising, despite Bernanke’s claimed ability to “control” the market.
So consider this America.
Egypt’s government says it will neither leave or allow continued protest. This means that Egyptians either have to nut up or shut up. “Shut up” means that the government can and will then “deal with” those who protested, likely by either locking them up or murdering them.
The time for Egypt’s citizens to choose in an irrevocable form is rapidly approaching. It appears that someone is going to commit violence in Egypt. Unfortunately the only choice at this point appears to be who commits the violence. It will either be the government upon the people, or the people upon the government.
America’s government also has to choose, and if we do not change course eventually Americans will have to choose in the same way Egyptians are faced with today.
The bloviating in Congress today is disgusting. Bernanke says that we must “put forward a credible program” to reduce deficits over the medium and long term. But he’s lying, because we don’t have ten, twenty or fifty years.
We have spent the last two decades building a pyramid scheme with debt at all levels of society and Bernanke and Greenspan were not only complicit in it, they were fully supportive of this outright and outrageous scam, as was Congress and The Administrations – both Democrat and Republican.
Not only has the government doubled in size over the last ten years so has the total systemic debt. That’s a fact.
At the same time GDP has increased by 50%.
Now let’s look at some facts. In 1990 total systemic debt was $13 trillion. GDP was $5.7 trillion.
In 2000 total systemic debt was $25.8 trillion. GDP was $9.7 trillion. Debt doubled while GDP grew 67%. That was unsustainable but we failed to learn a damn thing from it, and cranked down interest rates and blew another bubble.
Systemic debt today is $52.4 trillion. GDP is $14.7 trillion. Debt doubled again (103% actually) while GDP grew 52%.
This means we didn’t pay for any of our alleged growth for 20 years with output. We bought it all with credit cards for the entire last twenty years, and we’re still doing it today.
This is unsustainable and we cannot take ten, twenty or fifty years to fix it.
The interest and medical costs will bury us if we attempt that path.
Bernanke is lying outright. The “outlook” has not improved and the Congresscritters are lying through their teeth about “recovery.” We have instead blown $1,700 billion in federal money we did not have in a puerile and outrageous attempt to avoid facing the truth. Back that out of the “outlook” and GDP is down more than 10% sequentially.
That’s the formal definition of Economic Depression.
Employment has increased by 1 million jobs over the last 12 months but the working-age population has increased by 1.7 million people, so in terms of percentage of workers, which is what matters when one cares about being able to cover debt service by government via taxation, we are not only not recovering we’re moving backward, and this new movement downward began with Benranke’s QE2 threat.
He knows both of these facts are true but he won’t talk about either.
In point of fact all of these actions have been aimed at one and only one thing – bailing out the bankers who built massive pyramid schemes through naked credit emission which has the identical effect in the economy to counterfeiting the currency. But we have no more margin to shove off onto the American public for the purpose of hiding all this un-payable debt. The entirety of marginal productivity and output has been consumed by excessive debt service.
That which cannot continue won’t.
Our choices are between taking our medicine in a controlled manner, and an uncontrolled collapse.
Those are the only two choices.
If we as Americans won’t demand that Washington do #1, or if Washington believes they have consent to ignore our calls for #1 and will continue to receive that consent in the form of votes for Representatives and Senators, that is, there is no credible threat to remove those members from office, we will get #2 and you had better be prepared for it, because you will get little or no warning before it comes crashing into your life.
It’s clear that Washington intends to play games and not address the issues. They’ve been doing the same thing for 20 years. Why would they change now, absent an immediate uproar from the public?
What, if anything, do you in America intend to do about it?
If the answer is “nothing” then talking about “investing” is a waste of time, as there will be no investment worth a nickel when – not if – this all comes apart.