|"jobs, jobs, jobs..."|
Inserted into now five years of speeches, as in , "now I'm going to focus on ...", usually with the required optics of sleeves rolled up.
Five years not enough for the government to downhill spend our way to "jobs, jobs, jobs?" Going to take ten years of these beatings?
Watch what happened to the funny money: high unemployment, so wages suppressed. Wages suppressed so prices suppressed. No actual new value in the economies for the printed funny money to go after(except for what value can be found in the artistic talents of a secretary printing 12 or more zeros on a piece of paper and walking it over to the Fed), and couldn't erupt as price inflation, so... it sloshed into the equities marketplace, and showed up as inflated stock prices. Wall Street traders wait with bated breath ever month, "Is the tsunami of funny money insanity going to rain for another 15 minutes?" and gleefully gets in front of it for as long as the insanity rains, because the funny money has nowhere else to go!
But notice: stock market highs caused by last chance inflation is not the same as stock market highs caused by economic expansion and real value; stock market prices are being scored in units of funny money with nowhere else to go! A totally hollow market bubble. MainStreet sees this; no jobs, dusty 'For Lease' signs springing up like weeds, and yet... record highs on Wall Street. Puzzled? Shouldn't be.
Why doesn't it show up as new jobs and circulation in the economies? Because those who take risk and run uphills saw exactly what the current infestation did to the GM bondholders on a whim, for example, and nobody in their right mind is going to sign up to prepay their own ransom out in front of this fiscal Wreck on Rails. So what that leaves is, those playing in the government chutes and ladders shed risk game willing to give it the old college try using OPM with risk shed unwillingly onto others. No skin in the game state capitalism. Curt Schilling's Studio 38 is the new model of 'jobs, jobs, jobs.' Solyndra is the new model of 'jobs, jobs, jobs.' The most inefficient and undisciplined system of taking on risk imaginable, because it deliberately -isn't- taking on risk, it is shedding it onto unwilling others...
But here's the good news! They didn't just run the printing presses with QE1 and QE2, etc. They dropped a bond on the FED[*]-- a promise to overtax the stimulated economies that would result, and clawback the funny money. Only nothing got stimulated, but here comes the clawback anyway. Only, the same flat on their back economies not only get overtaxed for the principal of the bonds, but interest too! And after paying back principal plus interest, the Fed turns the interest back over to Treasury to spend. Translated: the treasury takes that interest just paid by the private sector as taxes, and then goes out into the same economies and demands value for those dollars.
Secretary artistically prints zeros on paper into the economies, $2T in funny money into the economies, $2T out in value produced by the private economies, $2T out in taxes from those same(well, chutes and ladders same)economies, interest out in taxes, interest out in value...and all that sucking out of the private economies is supposed to 'stimulate' them. Do the accounting of value and where value comes from in all of that...
Do you feel stimulated yet? How can that -possibly- work? It's not amazing that it didn't; what is amazing is that anyone thought it would; a secretary printed 12 zeros on a piece of paper! Seriously?
What happens when interest rates climb from 0.25% to just 1.25%? Short term federal debt service jumps by a factor of 500%, not 1%...interest payments on that debt go up by a factor of x5.0...and that is with only a 1% spike in rates. Yes, not all treasury marketable securities debt is 0-1yrs..but 30% of it is, and moot, because the hidden/unmarketable securities debt which was formerly subsidized by the #1 willing debt holder-- the SS Trust Fund-- is not only long term out of the debt holder subsidy business, but freshly a beggar at the Treasury window, demanding that those old unmarketable securities be replaced with brand new debt...so not only must new debt be found for the raised debt ceiling, and new debt/revenue be found to redeem the unmarketable securities, but new debt/revenue must be found to -replace- the hole left in the budget by the exit of the longterm subsidy from SS Trust Fund...in these flat on their backs economies, none of the above is going to happen. We can't even stay afloat without borrowing 40% of every dollar spent, much less find all that -new- revenue. This is the long predicted by some result of decades of hosing over the future. Well, the leading edge of the Boomers is just now leaving the peak of their earnings and taxpaying years and riding up on the beach of retirement; the enormity of the blunder of this government fiscal mismanagement can't be overstated, and here it comes.
This left wing shed risk chutes and ladders nonsense has killed the risk-reward engines that drive economies uphills, and that isn't coming back until America realizes it didn't win the Cold War, it caught the Cold, and needs to cough up all the left wing phlegm.
Focusing only on downhill public debt fueled downhill spending is guaranteed to get us to the bottom of every hill. We are well on our way to the inevitable left wing terminus, which is, two wretches in rags in a hovel pointing at their sores as proof that they deserve the last piece of not so maggoty rotted meat.
[*]Yes, I'm ignoring the part of QE1 and QE2 that was MBS via fanny and freddie, but that obfuscation is ultimately the same thing: risk shed onto treasury in the name of some failed social experiment being beaten like a dead horse, even today, five years after the 2008 crisis it caused. These two ticks have their fangs sunk into 90% of every new mortgage written today...'run the economy' total insanity.
(Edited by Fred Bartlett on 10/20, 9:44am)