August1991 Posted October 2, 2005 Report Posted October 2, 2005 I find much wishful thinking in this thread. I have noticed that people who dislike the United States tend to use any argument to justify its imminent demise. In capital markets, when a bondholder renegades on his debt, no matter who it is, its a default. You can call it whatever you want, "bankruptcy", "tax", "risk premium payment", "asset transfer", or whatever, the effect is the same. But that makes a country no different than a corporation, or an individual because they do the same thing.When a corporation goes bankrupt, the debtholders become, in effect, shareholders.When a government defaults on bond payments, bondholders become, in effect, taxpayers. But a government can impose taxes any time so it's not obvious what government default is. There is a big difference between a corporation and a government, Toro, as you intimate here: A nation defaulting can be more serious than a corporate bankruptcy because it can impovrish a nation, even tear it apart.Although it would help if you didn't confuse the words nation, government and country.Toro, it should be obvious to you that governemnt is an institution different from others. The key difference is the way in which governments obtain money. To use your comment above, when a government defaults, what does that say about the country? ---- This argument that trading oil in euros would have a dramatic effect on the value of the dollar is an odd one. The total value of oil traded relative to the global economy is a mere fractionI meant it not as a practical influence, but as a 'faith' one. The 'greenback' is the reserve currency of the world, (especially in black markets) but only because (lately) of faith in it's value. The oil price in some markets is denominated in US dollars. The payment is likely in something else.If any wants to understand the US and what is likely to happen to it, they should leave the economists out of it and read some Toynbee. There will appear a much clearer vision than any economic to and froing. The US is in the classic position of all failed Empire states. It could survive under modern conditions with the help of other countries but it is forfeiting any claim to gain assistance.Here, I tend to agree with eureka. Except, I don't consider the US to be an empire. It does not have colonies, it does not exact tribute, it does not impose its law abroad. We should be thankful we have such benign neigbours and they, in turn, should be thankful that such people as Canadians live to their north. Quote
Toro Posted October 2, 2005 Report Posted October 2, 2005 When a government defaults on bond payments, bondholders become, in effect, taxpayers. But a government can impose taxes any time so it's not obvious what government default is. It is very obvious when a government defaults. Its when they don't pay. We can argue all day what the meaning of "is" is, but the capital markets know what a default is. That's what matters. This has become a silly esoteric argument. Although it would help if you didn't confuse the words nation, government and country. Geez August, stop being so anal. Quote "Canada is a country, not a sector. Remember that." - Howard Simons of Simons Research, giving advice to investors.
August1991 Posted October 2, 2005 Report Posted October 2, 2005 It is very obvious when a government defaults. Its when they don't pay. We can argue all day what the meaning of "is" is, but the capital markets know what a default is. That's what matters.This has become a silly esoteric argument. It is not an esoteric argument, but the idea is sadly misunderstood - on both the left and the right. And the idea is relevant since it underpins Bush Jnr's tax cuts.What does it mean to say that a "government doesn't pay"? It can only mean that the government is unable to generate tax revenue. Now, think what that means: a government that has lost the ability to tax has lost legitimacy. US government bonds enjoy the lowest interest rates in the world. IOW, bondholders feel the US government can tax whenever it wants. That observation seems relevant given this thread's title. By focussing on default, you are missing the main point, Toro. When a government borrows, it is in effect imposing a tax. Although it would help if you didn't confuse the words nation, government and country.Geez August, stop being so anal.I'm not being pedantic. There have been elections won and lost in Canada over the meaning of the word "nation".In short, the country Canada and the Canadian government are not the same thing. It is important to keep this in mind always. Quote
Toro Posted October 2, 2005 Report Posted October 2, 2005 What does it mean to say that a "government doesn't pay"? It can only mean that the government is unable to generate tax revenue. Now, think what that means: a government that has lost the ability to tax has lost legitimacy. Exactly. Thus, governments can go bankrupt. That's the point I've been making. US government bonds enjoy the lowest interest rates in the world. IOW, bondholders feel the US government can tax whenever it wants. That observation seems relevant given this thread's title. August, you might want to check your facts. Canadian short-term bonds yield below US bonds currently. Deustchebunds and Japanese government bonds yield below T-bonds. By focussing on default, you are missing the main point, Toro. When a government borrows, it is in effect imposing a tax. Any deficit now are taxes in the future. But it is an esoteric argument because any default is a transfer of assets from lenders to borrowers, no matter who those may be. Governments are different, but not as different as you are saying. Countries, like corporations, may not survive, or may split, or may be annexed, etc., and thus not able to pay off its debts. So to say that governments are entirely different from any other borrower is simply false. A bit different, yes, but any entity is different. A government's credit rating, like that of a corporation, is based on its ability to pay its debts. And that rating is a reflection on the probability of a sovereign going bankrupt. Same with the interest rate. All interest rates have a risk premium imbedded to account for this possibility. I'm not being pedantic. There have been elections won and lost in Canada over the meaning of the word "nation".In short, the country Canada and the Canadian government are not the same thing. It is important to keep this in mind always. <{POST_SNAPBACK}> You are being pedantic. In financial markets, there is no difference. If you on a trading floor and made that argument, you wouldn't be trading for much longer. Besides, this is a message board, not a meeting of the Privy Council, so loosen your tie a little. Quote "Canada is a country, not a sector. Remember that." - Howard Simons of Simons Research, giving advice to investors.
August1991 Posted October 2, 2005 Report Posted October 2, 2005 Exactly. Thus, governments can go bankrupt. That's the point I've been making.Governments don't go bankrupt, they default on payments. But Toro, I never argued that governments don't default. I am arguing about the meaning of government.August, you might want to check your facts. Canadian short-term bonds yield below US bonds currently. Deustchebunds and Japanese government bonds yield below T-bonds.The real interest on US government bonds, and for comparable terms, are unbeatable. But frankly, bonds issued by governments in Japan, Canada or Germany are all the same, more or less. Risk-free, because the chance of default is basically zero.A government's credit rating, like that of a corporation, is based on its ability to pay its debts. And that rating is a reflection on the probability of a sovereign going bankrupt. Same with the interest rate. All interest rates have a risk premium imbedded to account for this possibility.In the case of government debt, the credit rating truly is related to the ability to generate tax revenue. The only comparison to a corporation would be a monopoly with a legally-guaranteed income stream, and even then.But Toro, have you ever asked yourself why interest rates on government debt are so much lower than debt of other issuers? (I am trying to look at this argument from your viewpoint.) Governments are different, but not as different as you are saying. Countries, like corporations, may not survive, or may split, or may be annexed, etc., and thus not able to pay off its debts.Governments may not survive, but countries, short of flooding, always do. As to your comparison between corporations and governments, both can issue debt but corporations can't tax. This is the difference I'm referring to. The ability to tax makes government defaults legal. IOW, it pushes a government default into the realm of politics.You are being pedantic. In financial markets, there is no difference. If you on a trading floor and made that argument, you wouldn't be trading for much longer. Besides, this is a message board, not a meeting of the Privy Council, so loosen your tie a little.I can understand why bondtraders would treat government bonds as being issued by the country. The government has the ability to tax in a country. But as you say, this is a message board, not a trading floor.---- But let's try and get to the crux of the matter. I think we can both agree that the US government is nowhere near default and so the default question is purely academic. In the current situation, it doesn't matter whether the US government borrows or taxes. As to the academic question of default, Toro, you seem to think that a government is unwise to have a deficit and borrow because it may mean that some time in the future, the government will not be able to tax and it will have to default. I am saying that a government unable to tax is in serious trouble whatever the cause, and I suspect past borrowings are not its real problem - political legitmacy is. And I'll finish up with my main idea, a government's purchases matter far more than how it pays for them. Quote
Toro Posted October 3, 2005 Report Posted October 3, 2005 The real interest on US government bonds, and for comparable terms, are unbeatable. But frankly, bonds issued by governments in Japan, Canada or Germany are all the same, more or less. Risk-free, because the chance of default is basically zero. Again, I don't want to beat this dead horse much longer, but during the Asian currency crisis, the "risk-free" rate for fairly-well developed countries like Korea and Malaysia rose to 15-20%, and some higher, while overnight rates and repurchase agreements soared into the triple digits. That occurred because investors feared that the countries would go bust. But Toro, have you ever asked yourself why interest rates on government debt are so much lower than debt of other issuers? (I am trying to look at this argument from your viewpoint.) Well, its lower, but not always "much" lower. The reason why its lower is both because the corporations within that jurisdiction use the currency issued by the government, of which the government has monopoly power to issue and thus any inflation that devalues the government bond will devalue the corporate bond, and because governments are far more powerful than corporations (understand that, anti-globalization types) and are able to expropriate the property of corporations through legislation. But from the context of a global investor, we compare cross-country, and thus your statement is not necessarily true. So a corporation whose bonds are rated AAA in a AAA rated jurisdiction, i.e. the United States or Canada, will often have a lower interest rate than a sovereign whose rating is lower. Governments may not survive, but countries, short of flooding, always do. August, this simply isn't correct. Take a look at a map of the world 100 years ago and tell me that it looks exactly like it does today. One of the biggest borrowers in the 19th Century was the Austro-Hungarian Empire. As to your comparison between corporations and governments, both can issue debt but corporations can't tax. This is the difference I'm referring to. The ability to tax makes government defaults legal. IOW, it pushes a government default into the realm of politics. And I don't disagree with that. I think we can both agree that the US government is nowhere near default and so the default question is purely academic. I agree. Toro, you seem to think that a government is unwise to have a deficit and borrow because it may mean that some time in the future, the government will not be able to tax and it will have to default. No, that's not what I'm saying. I am, for example, against legislation banning deficit financing for governments at the national level (but not necessarily for provinces). What I am saying is that there comes a point at which deficit financing becomes unwise, as it can not only imperil the health of an economy but it can destroy a country. Currently, the imbalances in the global economy are worrying to the health of the economy, but the United States isn't going to go bankrupt. Quote "Canada is a country, not a sector. Remember that." - Howard Simons of Simons Research, giving advice to investors.
theloniusfleabag Posted October 3, 2005 Report Posted October 3, 2005 Dear Toro and August1991, Currently, the imbalances in the global economy are worrying to the health of the economy, but the United States isn't going to go bankrupt.What I am saying is that the US, under Bush, is doing the things that take a country in the direction of bankruptcy, and are not taking any steps in the other direction. Sure, August, the gov't retains the ability to tax...but this one not only refuses, but is cutting taxes instead. Quote Would the Special Olympics Committee disqualify kids born with flippers from the swimming events?
August1991 Posted October 3, 2005 Report Posted October 3, 2005 I don't think this is beating a dead horse. The nature and purpose of government is one of the key differences between the so-called left and right (as witnessed by debates on this board). We are far from a consensus, and the collapse of the Soviet Union is only 15 years behind us. Here's a text to read about this issue, if you are interested. The text discusses, as we have, the problem of bankruptcy - or, in the text's version, the problem of this generation's concern for future generations. Incidentally, the text makes plain that the original idea is from David Ricardo, updated by Robert Barro. Quote
Toro Posted October 3, 2005 Report Posted October 3, 2005 August I meant I was beating a dead-horse using the same specific examples. I understand the argument of Ricardian equivalence, and that borrowing is future taxes. But what I've been saying is that, indeed, countries, governments or whatever you want to call them, can go bankrupt. The most drastic form of resolution to a corporate bankruptcy is liquidation. The bondholders sell off all the assets of a company to satisfy the debts and the company ceases to exist. With countries, the most drastic form of resolution is war. The country that is owed money by another country invades the borrowing country to recover its debt. Now, fortunately, this is rare, but it is an option. This is why I argue that, in the end, when a borrower reneges on his/her/its obligations, it is a transfer of wealth, no matter what mechanism through which that transfer occurs, be it through the courts, through legislation, through taxation, through war, etc. Governments are no (or not much) different than other entities in this regard. And that's why, to say that governments cannot go bankrupt is, in my mind, false. Otherwise, the term "bankrupt" has no meaning. Quote "Canada is a country, not a sector. Remember that." - Howard Simons of Simons Research, giving advice to investors.
August1991 Posted October 3, 2005 Report Posted October 3, 2005 But what I've been saying is that, indeed, countries, governments or whatever you want to call them, can go bankrupt.I know of one case, Newfoundland, which went bankrupt in the early 1930s and had Commission Government installed. Usually though, a government fails to meet payments on certain debt and is determined to be in default.My point still is that governments can and frequently do confiscate assets. It's called taxation. The only difference between taxation and default is legitimacy. People are more likely to lend if they will not be arbitrarily taxed, and people are more likely to pay taxes if they believe the tax is fair. The most drastic form of resolution to a corporate bankruptcy is liquidation. The bondholders sell off all the assets of a company to satisfy the debts and the company ceases to exist. With countries, the most drastic form of resolution is war. The country that is owed money by another country invades the borrowing country to recover its debt. Now, fortunately, this is rare, but it is an option.I'm not aware of any country invading another to collect a debt - but no doubt such a war has existed. People have found many reasons to justify war. Saddam, for example, invaded Kuwait not to collect a debt but to avoid having to pay one. That's a curious reversal of your suggestion.This is why I argue that, in the end, when a borrower reneges on his/her/its obligations, it is a transfer of wealth, no matter what mechanism through which that transfer occurs, be it through the courts, through legislation, through taxation, through war, etc. Governments are no (or not much) different than other entities in this regard. And that's why, to say that governments cannot go bankrupt is, in my mind, false. Otherwise, the term "bankrupt" has no meaning.I don't want to become Hugo ver 2.0 but a tax is a transfer of wealth which a government can legally impose at any moment. A corporation can only impose such after bankruptcy.This power of taxation explains the typically lower interest rates of sovereign debt. ---- What I am saying is that the US, under Bush, is doing the things that take a country in the direction of bankruptcy...For you Thelonious, that belief is a question of faith. It would not survive the scrutiny of the scientific method to which you have, no doubt, not submitted it. Aside from being too often ignorant of economics, the Modern Left is also committing many errors of the mediaeval Catholic Church. I digress.... during the Asian currency crisis, the "risk-free" rate for fairly-well developed countries like Korea and Malaysia rose to 15-20%, and some higher, while overnight rates and repurchase agreements soared into the triple digits. That occurred because investors feared that the countries would go bust.Korea and Malaysia, like Turkey, Argentina and Russia, are hardly good examples of competent tax-collecting regimes. I am not surprised rates on their paper went to double digits.As to the overnight rates, these were signals sent by the Korean, Malaysian Central Banks attempting to behave like "real bankers". The capital markets in many countries are a mile wide, and an inch deep. Don't get me wrong. I'm not criticising those markets. Their formation is critical in the economic development of the country. But let's be realistic here. As to government vs. corporate yields: Well, its lower, but not always "much" lower. The reason why its lower is both because the corporations within that jurisdiction use the currency issued by the government, of which the government has monopoly power to issue and thus any inflation that devalues the government bond will devalue the corporate bond, and because governments are far more powerful than corporations (understand that, anti-globalization types) and are able to expropriate the property of corporations through legislation.We have fortunately avoided the whole question of money. For corporations, I don't think it matters what currency is used to denominate debt except in the (important) sense of the potential value of that currency.For the US government, the issue is critical. All US debt is denominated in US dollars so of course monetization is always a solution. But IMV, we are not really discussing that here. My point is to understand this institution called government, and in particular the fact that it does not matter whether it borrows or it taxes to pay for its purchases. [incidentally, I am inclined to think governments should borrow up to the point where their bonds encourage a functioning capital market but no more. That's an intuitive thought but I can't justify it. The intuition parallels the idea that governments should issue money up to the point of optimal transactions but no more.] ---- As to governments and countries: August, this simply isn't correct. Take a look at a map of the world 100 years ago and tell me that it looks exactly like it does today. One of the biggest borrowers in the 19th Century was the Austro-Hungarian Empire.I would have though the same several years ago, but I think differently now. It is the Austro-Hungarian regime (government) that is no more, but the mountains, rivers, villages, homes are still there.Quebec independence is essentially a question of which government will have the power to tax in this region. (I know that I'm simplifying tremendously but I have heard it said that "Quebec is already separate" - meaning that culture, language, mountains, rivers are distinct from government.) Borders change, true, but we are looking at the shifting territory governments claim to represent. And of course, this can have tremendous effects on the people living in a particular territory. But our idea of government is new, at most a century or two old. I am certain governments in the future will be radically different from what they are now. Markets, on the other hand, will function as they have for several thousand years. Quote
theloniusfleabag Posted October 3, 2005 Report Posted October 3, 2005 Dear August1991, My point is to understand this institution called government, and in particular the fact that it does not matter whether it borrows or it taxes to pay for its purchases. Here's a text to read about this issue, if you are interested.I have read the text, and don't disagree. However, while reading it, I recalled something I posted earlier...that is is now too late to consider future taxation as a possible solution to the problem. The idea of covering gov't expenditure by 'tax now or borrow and tax later' is being acted upon by the US by doing neither. The solution to that problem doesn't seem to be covered in the aforementioned text. You seem to argue that nothing need happen, and that as long as the gov't retains the 'right to tax', it is as good as money in the bank, no matter how big the debt. However, it is directly pertinent to the level of taxation required. As you say, only the date of execution hasn't been fixed. Pres. Bush, like his penultimate predecessor, Pres. Bush, can throw a big party, with lavish spending, knowing that they won't be around when it comes time to pay the bill. However, that bill needs to be paid, if they think they should ever like to have the credit to throw another one. It is a future gov't, and ultimately the American people, that are going to get hosed for a huge bill that they cannot pay. How do you suppose the American people will react when a wheelbarrow full of money won't buy a loaf of bread? Quote Would the Special Olympics Committee disqualify kids born with flippers from the swimming events?
theloniusfleabag Posted October 4, 2005 Report Posted October 4, 2005 Dear August1991, Aside from being too often ignorant of economics, the Modern Left is also committing many errors of the mediaeval Catholic Church.Yes, me, the ignorant left, and Alan Greenspan just don't seem to get it. Are you suggesting that Alan Greenspan hasn't got a clue about economics, or has he just gone off his rocker? Quote Would the Special Olympics Committee disqualify kids born with flippers from the swimming events?
August1991 Posted October 4, 2005 Report Posted October 4, 2005 Dear August1991,Aside from being too often ignorant of economics, the Modern Left is also committing many errors of the mediaeval Catholic Church.Yes, me, the ignorant left, and Alan Greenspan just don't seem to get it. Are you suggesting that Alan Greenspan hasn't got a clue about economics, or has he just gone off his rocker?<{POST_SNAPBACK}> Alan Greenspan is telling Bush Jnr that his Administration is spending too much money. That's the meaning of this whole thread. According to Toro, non-defence spending has risen under Bush Jnr (and defence spending has certainly risen) so that means the US federal government takes a bigger piece of the pie. I think that's wrong, And Greenspan (I believe) thinks that wrong. Bush Jnr? Alot of fart, but no beef. In addition, Bush Jnr did not throw those steel lobbyists out of his office when they came to speak to him about tariffs. (Thatcher would have had no time for them.) Pres. Bush, like his penultimate predecessor, Pres. Bush, can throw a big party, with lavish spending, knowing that they won't be around when it comes time to pay the bill. However, that bill needs to be paid, if they think they should ever like to have the credit to throw another one. It is a future gov't, and ultimately the American people, that are going to get hosed for a huge bill that they cannot pay.The American people get hosed however its done.Your child goes away to go college and you give them a debit card and a credit card for emergencies. Your child throws a big party, and rather than use the cards, uses money borrowed from a Japanese roommate. Does this make any difference to you? You'll pick up the tab. The US government is the child at college and the US taxpayer is the proverbial parent holding the phone receiver. Toro and I have been discussing the arcane case of the parent being bankrupt, or more likely, the parent refusing to advance any more money. Both cases simply do not apply in the US, but they might apply in other countries. ---- This issue matters. Richard Gwyn wrote a silly column today, ignorant of this whole thread and our discussion: Two persuasive tests exist of the success of any nation-state in today's global circumstances. One is whether it is paying its bills, so that it's not loading its debts onto coming generations and so can make tough choices among the virtually unlimited demands for spending. On that score, Canada stands near the top of the class. Countries that we once thought were far better organized and tougher-minded, like Germany and Japan and the U.S. and France, are all in a fiscal mess. (I will start another thread explaining the other test, and my view of Gwyn's article.)I am struggling to explain myself on this issue so let me try another angle. The US (the country) is richer now than it was 30 years ago. On average, more Americans have more stuff and their incomes are higher. That is what is important. Bonds, shares, diverse financial capital are claims on real wealth. Since they move around, are sometimes divdied, and have so many different contractual terms, it is easy to be confused. I have said that the Left confuses symbol for reality and I feel this is often the heart of the Left's confusion - financial capital and real capital. The situation of any individual American or the US Government matters less than the US overall. In this, the US economy has more real wealth and generates more real income than before. In this case, who cares about the financial capital? Quote
Guest eureka Posted October 4, 2005 Report Posted October 4, 2005 On what average, August. I have posted somewher evidence that almost all the gains in the US have gone to the top twenty per cent of the population. The bottom twenty or so are worse off. And its going to get worse as the Bills come in. Quote
theloniusfleabag Posted October 4, 2005 Report Posted October 4, 2005 Dear August1991, Your child throws a big party, and rather than use the cards, uses money borrowed from a Japanese roommate. Does this make any difference to you? You'll pick up the tab.Not exactly, wait till the child finds out all my spending has been the Japanese kid's money too! The US government is the child at college and the US taxpayer is the proverbial parent holding the phone receiver.What is the parent going to say when the bills are far higher than they could ever hope to pay back (that is, the principal plus interest are beyond their means to structure a payback within the next hundred years), and that the party isn't seeming to end? ( the kid must be an alcoholic by now, they figure) Quote Would the Special Olympics Committee disqualify kids born with flippers from the swimming events?
August1991 Posted October 4, 2005 Report Posted October 4, 2005 On what average, August. I have posted somewher evidence that almost all the gains in the US have gone to the top twenty per cent of the population. The bottom twenty or so are worse off.And its going to get worse as the Bills come in. <{POST_SNAPBACK}> eureka, if I understand you well, you say that the claims on American wealth go to the top twenty per cent of the (presumably US) population. If true, that's a Marxist argument implying that the rich will become so rich and the poor will become so poor that eventually there will be a revolution. (eureka, historical evidence suggests you're wrong.)But, what if the problem is not "rich vs. poor" but rather "foreign vs. American". eureka, have you considered the possibility that Foreign Capitalists are getting rich at the expense of American Workers? Or, Foreign Capitalists will drive the US Imperialist State into bankruptcy? What is the parent going to say when the bills are far higher than they could ever hope to pay back (that is, the principal plus interest are beyond their means to structure a payback within the next hundred years), and that the party isn't seeming to end? ( the kid must be an alcoholic by now, they figure)I'd say, vote in a Republican government that stops holding parties - and that's what Greenspan is saying.Thelonious, the method of payment is not the problem - the problem is the drunken parties. Debit, credit or Japanese roommate, who cares? Method of payment does not legitimize the purchase. Yet the method of payment is the basis of Gwyn's argument for why Liberals make Canada a good country. Paying cash may help a family decide whether to buy something but it is meaningless for a government. Quote
Toro Posted October 5, 2005 Report Posted October 5, 2005 eureka Its not true that "almost all" of the gains have gone to the top 20%. For example, virtually any statistic you look at, the median household is better off. And as I run across these statistics, I will post them for you. Nor is it true that the bottom 20% are worse off. However, you are correct when you say that the wealthiest have benefitted more. The rise in income of the bottom 20% has dramatically lagged the rise in income of the top 20%. And again, if I run across those statistics, I will post them for you. Quote "Canada is a country, not a sector. Remember that." - Howard Simons of Simons Research, giving advice to investors.
Guest eureka Posted October 5, 2005 Report Posted October 5, 2005 The statement is not mine but is from the site I gave. I believe that it was the World Fact Book. Don't have time for more now as I have to go away for a few days. Quote
Toro Posted October 5, 2005 Report Posted October 5, 2005 The statement is not mine but is from the site I gave. I believe that it was the World Fact Book.Don't have time for more now as I have to go away for a few days. <{POST_SNAPBACK}> No, I remember it. Have fun. Quote "Canada is a country, not a sector. Remember that." - Howard Simons of Simons Research, giving advice to investors.
theloniusfleabag Posted October 5, 2005 Report Posted October 5, 2005 Dear August1991, Thelonious, the method of payment is not the problem - the problem is the drunken parties.I agree with you, and so would Toro, I imagine. Where we are in disagreement, it seems, is that you feel the accumulation of said debt without plans or action for repayment, or even curbing the rise of debt, isn't an issue. Here is a link to a 'debt' conspiracy theorist...but the facts are correct. http://mwhodges.home.att.net/debt.htm or, this one... http://www.brillig.com/debt_clock/ Quote Would the Special Olympics Committee disqualify kids born with flippers from the swimming events?
Montgomery Burns Posted October 6, 2005 Report Posted October 6, 2005 http://money.cnn.com/2005/09/24/news/inter....reut/index.htmFederal Reserve Chairman Alan Greenspan told France's Finance Minister Thierry Breton the United States has "lost control" of its budget deficit, the French minister said Saturday. "'We have lost control,' that was his expression," Breton told reporters after a bilateral meeting with Greenspan. "The United States has lost control of their budget at a time when racking up deficits has been authorized without any control (from Congress)," Breton said. I suppose we should not be surprised by this, but it is kind of scary if it is true. <{POST_SNAPBACK}> How nice of the France's Finance Minister to go blabbing a private conversation to the press. However the irony is delicious. France, with its morbid economy, tut-tutting the USA's economy. Quote "Anybody who doesn't appreciate what America has done, and President Bush, let them go to hell!" -- Iraqi Betty Dawisha, after dropping her vote in the ballot box, wields The Cluebatâ„¢ to the anti-liberty crowd on Dec 13, 2005. "Call me crazy, but I think they [iraqis] were happy with thier [sic] dumpy homes before the USA levelled so many of them" -- Gerryhatrick, Feb 3, 2006.
masterkush Posted October 8, 2005 Report Posted October 8, 2005 ---- I knew Canada's left wing was anti-American but I didn't realize to what extent it was so ignorant of basic economics. <{POST_SNAPBACK}> this canadian knows america on the brink 7,000+billion in debt and racking up 500+ billion each year it works out to 26,000 per person 1/3 cant pay their share they are destitute 1/3 the elite rich have their money offshore and dont pay taxes on it the last 1/3 is the middle class which is dwindling fast due to outsourcing and plant closings leaving the rest of the middle class with a burden in excess of 90.000$ us natl debt add to that their personal debt like mrotgages ,car loans, etc... their personal debt is staggering alone what you end up with is the rich elite are insulated in off shore banks america slipping into third world status and no where to turn but to seek foriegn oil wells to try and fix the problems while americans buy from the walmart / consortium to build chinese economy so elite rich class gets more money every thing is broken broken levees broken homes broken teeth and broken bones every thing is broken Quote
Toro Posted October 9, 2005 Report Posted October 9, 2005 What is also broken is the author's sense of proportion and perspective. Quote "Canada is a country, not a sector. Remember that." - Howard Simons of Simons Research, giving advice to investors.
masterkush Posted October 9, 2005 Report Posted October 9, 2005 ECONOMETRICS BUSHWHACKER STYLE 7500 billion debt add 6 trillion in last 6 years take money from feema and gut it give it to nazi homeland security Take money from levees rebuild IRAQ with it when katrina hits wait for red cross to pass a collection to continue repairs 3 months and still waiting for clean up to occur natl debt stands at 90,000$ per person that can pay their share not counting all the personal debt you owe already YOU are bankrupt USA you owe CHINA and JAPAN your sorry existance IF both china and japan called in your debts you would have a $ that is worth a bubble gum and a toothpick for any inteligent people out there check the numbers there is no way you can pay America can truly be called TEXMEX now america no longer applies hey buddy got a dime! 6 years ago greenspan warned them not to borrow they went on a 6 trillion $ borrowing spree America the beatifull is now America the homeless 1/3 americans are below poverty line 1/3 the ELITE dont pay taxes they have off shore bank accounts 1/3 the middle class 2.7 million mid class jobs ,20$ an hour+ jobs gone since 2001 GM delfi annouces 185,ooo l25$ hour lost their jobs today FORD is teetering on brankruptcy GM teetering on bankruptcy your tax base is disappearing before your eyes since the year 2000 the year of the stk mkt crash America's elite the wealthiest americans have lost so much money they are now trying to get Iraq's oil wells you will soon be eating tacos with mexican illegal aliens in the streets and the mexicans will soon outnumber the demos and reps when they get power it will be little white college boys that shine thier shoes she's gone boys Quote
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