Tuesday, 23 January 2018

The shutdown scam

"[The US] government wastes so much that it has to borrow money! That $$ has to be paid back with interest via inflation and/or passed on to the next generation. The more that government spends — even for a 'good' cause — the less wealth its nation creates."

~ Mary Ruwart

Did you notice what wasn't being talked about in the just-ended US-government "shutdown"? Answer: the reason several government departments were being partially shut down - that being: because the government can't pay its bills -- that being: because it spends too damn much.

David Stockman noticed -- and he knows all about these things, he being that former Reagan Budget Director who resigned over the Reagan Administration spending too damn much and, as a consequence, having to borrow too damn much. That was back when all these big deficits started ....
Since 1975 there have been 14 shutdowns and we have had the privilege of being on-hand up close and personnel on 11 of these.
....Five shutdowns occurred while [I] was a member of the US House (1977-1981) and another six during [my] stint as director of OMB. The idea back then, needless to say, was that shutdowns came about mainly when anti-spenders refused to capitulate to the incessant demands of the swamp creatures for more appropriations, pork and graft.
....During the Reagan shutdowns, in fact ... they ... had some modest success in containing the worst excesses ...
....No more. On the surface the current fight appears to be over DACA, immigration and the Wall, and therefore a purely political enterprise in which both parties are attempting to feed their respective bases with copious amounts of rhetorical red meat.
....But, in fact, that's not the half of it----or even the most of it.
What is "the most of it" is the spending. That is to say, all the over-spending and consequently excessive borrowing.
The underlying issue behind the appropriations stall ... is a spending arms race between the two parties....
.....Needless to say, however, Wall Street is looking in entirely the wrong place for clues as to the implications of the current shutdown scam. The danger does not lie in adverse impacts on current quarter GDP; it lies, instead, in the implicit confirmation that a fiscally driven bond market collision will soon monkey-hammer the casino revilers...
.....What is really happening, of course, is that the Trumpite/GOP is proving in spades that America is now saddled with two pro-government parties. This means a good shutdown is going to waste and that there is no stopping the fiscal doomsday machine that is now racing toward a national calamity, unimpeded...
....If you think the law of supply and demand has been repealed by the financial gods in order to make Bubble Finance sustainable---why then there is nothing to sweat.
....Otherwise, now would be an opportune time to get out of the casino. The GOP has vacated its historical function as the party of fiscal rectitude and has now become the second pro-government party in the land.
....Accordingly, there is nothing left to stop the nation's fiscal doomsday machine...

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