Doctor Doom, Nourielle Roubini, an economist and professor at NYU, always manages to turn an interesting phrase when making his trademark pessimistic forecasts. He’s really done it this week in Forbes.
I wrote about the Federal deficit last week and covered the major points of why we are on an unsustainable path for our taxes and spending and when that could be a problem. The Obama administration continues to revise its spending and deficit estimates upward as an act of surprise over how deep the recession has been. I’ve raised a Spock-like eyebrow over that and have been lighting candles on my alter to the wisdom beings that, hopefully, the White House will get more real. Well, nothing makes things more real than a splash of freezing water in the face while sipping the first cup of the day’s coffee. Roubini is his fully alarmed self. He basically accuses our political class of running one big Ponzi Scheme and we are the suckers.
The fiscal implications of the current policy package are particularly serious. For the time being, fiscal policy has been put at the service of survival, but the current price of survival is that net public debt is going to double as a share of GDP between 2008 and 2014. Even using the very optimistic forecasts of the Congressional Budget Office, which anticipate growth of around 4% over the next few years, the net debt burden will rise from 40% of GDP to 80%–that’s an increase in the debt stock of about $9 trillion. The interest charge alone on that increased debt will be in the region of $300 billion to $400 billion a year, which in turn may mean more borrowing to pay the interest if primary deficits are not reduced. When governments reach the point where they are borrowing to pay the interest on their borrowing they are coming dangerously close to running a sovereign Ponzi scheme.
Ponzi schemes have a way of ending unhappily. To get out of the Ponzi trap, governments will have to raise taxes, or cut spending, or monetize the debt–or most likely do some combination of all three.
Wow! If those estimates are right, just about every one with hands on the budget from the last 4 congresses to the last two Presidents should be in the jail cell next to Bernie Madoff. The information coming from the CBO is really what started ringing the death knell for health reform last spring. It should be completely obvious to any one that has followed the last stimulus package, what currently passes for ‘health care reform’, the escalation of ongoing wars, the Bush medicare pharmaceutical giveaway, bail-out bonanzas, and all those Bush tax cuts from the beginning of his term, that our fiscal policy actions need to be renamed nails in our collective coffin. We simply have to re-arrange our priorities or we will be assigned to the rubbish heap of failed empires. I can’t even image the People’s Republic (our banker) even relishes that outcome. I really, at this point, am incapable of optimism that any of this will be turned around in time. We continue to elect leaders that are either completely out of touch with reality or don’t care about it. We have VooDoo Government.
If Dick Cheney’s evil plan was to bankrupt the Federal Government, it’s working.
Are we beginning to see the omnipresent reification of the Obama hope/change theme recognized for what it is? All of the memes on superior judgment have been an abstract campaign mantra with no basis in reality. Who but a few among us have recognized this? Are we seeing the first signs of a satori from the all too real realm of the economy and Americans who are losing everything because they have no job? All I can say is it is about damned time and I’m praying that it isn’t too late to get fooled again.
r — compared with the harshness of the Great Recession.
those of us who went to university during the 70s most likely dealt with a boy who’s dorm was decked with Farrah. I never tried to get that Farrah do, but I knew many girls that spent hours with perm solutions, dyes, and rollers, trying. If there was ever a living barbie doll, Farrah was it.
We were promised changed. What we are getting is perpetuation of the status quo. Let’s try this headline at the Guardian on for size 
The Treasury just gave ten big banks the okay to
In an important landmark case Reynolds v. Sims, 377 U.S. 533 (1964), the Supreme Court established one of the most significant voting rights rulings impacting our Republic since the enfranchisement of woman and the election of U.S. senators by popular vote. Both of these occurred earlier in the century. Basically, Reynolds v Sims established the means to ensure that the United States was a truly representative form of government. It provided a legal way to enforce the idea that legislatures are those instruments of government elected directly by and directly as representatives of the people. Because of this, all elected officials should be elected in a free and unimpaired fashion. One Person one vote is a bedrock of our political system.
Here are some reports from the day. This one is from MSNBC’s Chuck Todd called 
I inadvertently stepped on a right wing meme back last September when I implied that Fannie and Freddie did their share in contributing to the current financial meltdown. I used figures to show that the problems in the mortgage market were occurring equally in the subprime as well as the prime market. What happened is that I said was associated with the oft -repeated Republican talking point that the CRA (Community Reinvestment Act) caused the meltdown in the mortgage. I still think that was a wild shark jump, but I was called things I won’t repeat here because of that big leap. I was channel surfing last night and heard Glenn Beck (Mr. Emotional Basketcase) repeat this nonsense yet again. So, let me use real research to put clip the right wings off of that one.
When ever I hear folks rant and rave on the evils of European Social Democracies and how horrid they are, I always ask them to name the country that comes up consistently with the highest literacy rates in the world, lowest infant mortality, and much higher the the USA GDP per capita, and at the same time has what you would probably call the world’s most complete cradle-to-grave welfare state. Of course, no one knows the answer because so many folks here have been brainwashed into thinking productivity, budget surpluses, high standards of living, and great education and health care are not possible in socialist states. Well, they are really wrong.