The computer/internet/technology boom of the 90′s was the only thing that saved Clinton’s bacon–without it he would have been right–we’d have had “deficits as far as the eye can see.” Instead, within a few years, he was able to claim (inaccurately, but he was close) that we had a surplus.

We have no way of knowing what the next technology breakthrough area will be, or even if there will be one soon, but we do know there’s no guarantee that “greeen” technology will be it. It’s a very safe bet that if the government directs all its resources in one direction it will be the wrong direction.

The level of government spending overall has reached record highs (I don’t have the exact figures) as a result of the latest budget, the porkulus, and TARP. We no longer have a surplus of economic capacity to fall back on. The only way for us to avoid high inflation and stagflation is to reverse much of the porkulus and cancel any entitlement programs created by Obama (and some from W, too), while reducing tax rates to the initial Reagan schedule and reducing business tax rates, too. Additions to the ranks of government workers must also stop–layoffs wouldn’t hurt.

We can’t behave as if there will be another tech boom/bubble to bail Obama out of his mess, but that is apparently what he is counting on.

Congress is ecstatic to borrow money in the short-term market at 1 or 2% … long-term rates have been down near 3%. Because interest (read__”minimum payment”) is cheap for $trillions in borrowing.

At 1%, the gummint can “borrow” a trillion dollars for only $10 billion per year in “deficit.” That is the short-term market … rates for 3-month to 2-year Treasury notes.

What happened before (Carter-Reagan) is that 30-year bonds yielded as much as 14% ($140 billion cost each year for a $trillion in debt … in 1981-82 dollars!) We only recently returned to selling 30-year bonds.

When you see a headline “Fed buys $6.95 billion in Treasuries, money is being created from nowhere … and separately, the Treasury prints even more.

Buy a wheelbarrow … you’ll need it soon enough for your next trip to Walmart.

Understand: There is no money in the Treasury. It has all been spent.

European standards of living in Western Europe have (long-term) been dropping in comparison to the rest of the world. Eastern Europe (except for the last six months) have been increasing.

“I work to live, I don’t live to work” is a throw-away statement. It is meaningless. Work is irrelevant if it’s not productive. America is the most productive society on Earth. We work more hours, but we also represent 1/4 to 1/3 of the world’s economy. The poorest in this country have standards of living that far and away exceed the “average” of most nations and the “best” of many.

Quite frankly, if my taxes weren’t so freakin’ high, I could make this statement, too!

When a government just prints money in this manner, it causes massed inflation, which results in the need to print more money so that it can afford its spending programs. It’s becomes a cycle of print-devalue-print-devalue… It takes decades (and often a complete replacement of the currency) to fix.

Meanwhile, the government is borrowing as much money as it can, restricting the supply of credit. So the government spends, businesses falter, and the whole economy grinds to a halt as the sands of socialism gum up the capitalist grease.

given the magnitude of the recent printings and the near certainty that econ growth will not be large enough to depress it, the ONLY chance that we don’t get it is if

a) we have a depression for 5 years
not good

or b) a new technology arrives that makes us much more productive

Those other world events are not small potatoes, either, but right now only inflation seems to be a sure thing.

No one knows for sure but I would say other world events will make inflation look like a very small problem. Looks like plenty of peanut butter sandwiches are on the menu.

We should all be so lucky to be able to say as well and actually do this. To date, I’ve yet to meet a single person who wishes he spent more time working than enjoying life.

If this is a Euro-style thing, then the Europeans have this nailed.

We should all be so lucky to be able to say as well and actually do this. To date, I’ve yet to meet a single person who wishes he spent more time working than enjoying life.

If this is a Euro-style thing, then the Europeans have this nailed.

In response to the wondering about “something for nothing”, the US Govt has the power to tax you explicitly (e.g. income or estate taxes), or implicitly (grant itself more money, or a greater share of the real claims on (mostly) US assets.

The former (explicit) tax is hard to avoid. You can either leave the country, make less total income, or engage in some fancy tax protection footwork. The latter (share dilution) tax can be avoided with a mere phone call. “Broker, buy Euros (or gold, etc) for dollars.” Wealth stored in non-dollar form. Done.

The US benefits from the world viewing the dollar as the foremost currency to store wealth. But if foreigners see that they’re about to get screwed through the dilution of their shares/dollars, you’ll here them scream “Gangway! I’m outta here!”

I will wait for the next auction for final judgment- that’s where the rubber will really meet the road.