Empty stockings

Both parties are promising far more than they can deliver

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Readers' comments


Stavros Saripanidis

Dear Editors,
These promises are nothing compared to the extremely demagogic statements of Greek politicians.
Some hilarious examples: 1) ditch the IMF and search alternative suppliers of hundreds of billions of euros elsewhere, 2) arrive to a socialist agreement with comrades in Venezuela to receive free oil, 3) convince European officials to become communists and print trillions of euros to donate in Greece as party help, 4) nationalise banks, private enterprises, private factories, and enroll hundreds of thousands of new workers in the gigantic public sector, 5) free hospital care and medicines for everyone, 6) free university courses for everyone.
Greece is probably the last Country in Europe where Trotskyist, Stalinist, Leninist, Marxist, Anarchist, and other Communist Parties have still such a widespread appeal.
Their actions and political statements are very radical.
Confronted to right wing radical, xenophobic, racist, Greek political party, violence and clashes are common.
Greek voters seem naive and immature enough to continue to support such appalling left or right wing extremists.
Both Economist journalists and readers must not forget that Greece suffers from TWO radical violent extremist political movements, the right wing fanatic racists versus the numerous left wing antisemitic/anti-American/anti-Capitalist/anti-European Union/anti-ECB fanatics.


"Stars of the populist left, such as Senator Elizabeth Warren of Massachusetts, suggest that something of the sort could be achieved by extracting more in taxes from the rich and from businesses, and by beating up big banks. An alarming number of Democrats promise that by such means, hard choices about public spending or Social Security could yet be avoided."

Actually what I've heard lately from commentators is that, with the economy improving, we really can afford to kick the can down the road and simply ignore the deficit for the near term. Coming up with a plan to fix the long term deficit is something that could conceivably wait for a future Congress (with a different electoral mandate) to tackle.


The Death of Europe...?

France now has just 9.000 priests measured against 40,000 during the last war. Many churches are replaced by mosques.

In Quai Malakoff, Nantes, the old Church of St. Christopher became the Mosque of Forqane. The Church of Saint -Aubin du Pavoil was the first to be demolished in the western region of France since 1789, that year of the French Revolution and radical atheism.

Art historian Didier Rykner, who directs the magazine Tribune de l’Art, writes that “for the first time since the Second World War churches have been reduced to rubble”.

Last June, the Church of Saint- Eloi in Vierzon ceased Christian worship and became a Muslim place.

The National Federation of the Great Mosque of Paris, the Council of Democratic Muslims of France and the Collectif Banlieues asked the Catholic Church, in a spirit of “inter-religious solidarity”, to rent the empty churches to the Muslims for their Friday prayers.

The symbol of this rampant secularization and/or Islamisation of French territory is the church of Saint- Pierre -aux -Liens, in Gesté. We are in the region of the “Chouannerie”, the Catholic dissidents who suffered most in the Vendée wars against the armies of Robespierre and where in fact most of the churches have been rebuilt since 1800. The historic church has fallen under the blows of the “deconstruction”, as the socialist municipalities dubbed the destruction of Christian sites, borrowing the term from the postmodern philosopher Jacques Derrida.

Robert Schuman once called it “the Europe of Cathedrals”. But today German cathedrals are put on sale on eBay, looking for potential buyers. The church of St. Bernard in Brandenburg is the twenty-fifth to be put on the market by the Diocese of Berlin in the last ten years. Starting price: 120.000 euros.

Sense Seeker in reply to guest-loamsia

The death of Europe? It's maturing and coming to wisdom.

Much as I value history and reminders of the past in daily life, I think all of this shows that the French people are continuing on their glorious march from superstition to rational thinking.

Here's one hoping that the muslims may follow the French-Christian example!


Empty Stockings...? I pray that the USA does not follow...

The standoff between Christianity and Islam in European countries is becoming more and more dangerous each year. According to some experts, today the European community is facing a harsh choice: if the islamization of Europe continues, one might soon have to say good-bye to Christianity in the countries of the Old World, the Voice of Russia said...


Back in 2005 the Russian writer and journalist Elena Chudinova published her anti-utopian novel called "The Mosque of Notre Dame: 2048". Back then that warning book appeared to most Western politicians to be an impossible fable. But today it has become clear that the present standoff between Christianity and Islam in European countries is caused by nothing other than the crash of the ideology of tolerance and multiculturalism, Elena Chudinova thinks.

"Over half a century that ideology ruled the minds of Europeans, but as a result has led to fairly complex problems, which now have to be solved this or that way. Unfortunately, nobody knows yet the correct solution to those problems, as there has never been a similar situation in the history of European countries. However, in any case European politicians will have to give up their position as an ostrich hiding his head in the sand saying that there is no religious standoff at all".

The beautiful can nerve die

Hopefully,Amercians can enjoy their happy Christmas just as our fellow chinese civils,in spite of both parties overreaching themselves and the low decision-making efficiency.

Gary K. Taylor

The world has been laboring under the principles of the Chicago and Manchester schools of economics that began in the early 1980's. Despite the glaring rise of corporate corruption (the Saving an Loan Crisis, Enron and Global Crossing, just to mention a few), decision makers barreled on full speed into the worst economic crisis since the Great Depression. Moreover, it appears that very little has changed in the last five years. The income gap continues to expand almost everywhere, while most leaders appear to be unable to find a solution even though ordinary people have demonstrated and pled for a more humane, responsible, and reasoned world economy.

After all that has transpired in the last 35 years, the only solution is to admit to that these schools of economic theory were wrong. Countries have worldwide eviscerated their public sectors to such an extent that they are unable to impose even the smallest amount of regulation to stop the grossest abuses that have occurred in their societies. Nor are they able to implement and fund even limited programs to ameliorate the damage that has been done.

I would like to suggest a reconsideration of the Freiburg School of economics that offers the world a robust free market economy while assuring that individuals need not have to suffer from the marketplace dysfunctions and socially unacceptable conditions that occur in any vigorous but unpredictable free market economy.

Zbyhnev in reply to Gary K. Taylor

Communism dies hard.

Let’s have a look at the mismatch between narrative and reality - we read the history of modern economies as a succession of crises, and yet, standards of living for EVERYBODY in the civilised world have been improving at an unprecedented rate for decades now. Maybe it is because crises have a salutogenic and purifying effect, and happen in healthy economies of necessity - and preventing them would also prevent all self-correction.

You’ve described the failings of a system (corruption) and propose than instead of making sure the system is fixed, we should replace it with something else. Yet your proposed solution - regulation and a lot of euphemisms for a central planning - is exactly the problem inflated from an accidental to a systemic proportion. State-controlled economy is corruption turned into a governing principle, rather than an infrequent accident.

I’d say the schools of economic thought you lambast succeeded at making the world a prosperous enough place that people are now rich enough to whine and complain about nonexistent pseudoproblems.

teacup775 in reply to Zbyhnev

You mean communist countries like Japan or Germany? Both were pretty much cleaning house on the US and Germany keeps hanging in there.

The standards of living have been rising in China and India, but in the states they have been declining for the bulk of the population for two generations.

Three major bubbles in fourty years is hardly economic robustness. Those bubbles have mostly funneled wealth from the bulk of the public into the hands of a very tiny few.

All you're really saying is more of the same.


'Democrats recall how in October Senator Ted Cruz of Texas bullied fellow-Republicans into shutting down the government for 16 days, in an obviously doomed bid to defund Obamacare'

Repeating something enough times still doesn't make it true. The defunding of Obamacare was not a condition of funding the government. In fact the Republicans offered to fund government, but wanted to delay the rollout for one year. Considering how that debacle has turned out, shouldn't they be lauded for their foresight? Why the continual efforts to paint their demands as something other than what they were?



It's the economy (stupid), and the Obama recovery just clicked in a 4.1% y-o-y growth for the third quarter.
The last time a Republican was president, the economy was losing over 800,000 jobs a month.
So, the Republicans are going to suddenly flip the country GOP? Good luck with that.

ParksDept in reply to Dialectic18

Damn you sequester!!! Oh wait... Anyways, he's still presiding over the worst recovery since the Great Depression, but I guess such extreme circumstances have led to the touting of preliminary GDP numbers as evidence of success.

Dialectic18 in reply to ParksDept

Obama is also presiding over the first recovery of a financial collapse since the Great Depression.
Both financial collapses occurred under Republicans, and both recoveries were presided over by Dems.

Zbyhnev in reply to Dialectic18

The problem with GDP is, it measures volume, but not substance.

The US government is currently spending billions of dollars it does not have to buy services the people do not need. Yes, it shows up as a kind of growth in statistics. But does the fundamental condition of the economy match that virtual reality? Hardly.

And the bill for the debt incurred will eventually arrive.

Dialectic18 in reply to Zbyhnev

People don't need roads?
And, when the US gov't borrows at 1% above inflation to build a road, how is this different than folks taking out a mortgage to buy a home, or a business taking out a loan to purchase new plant and equipment?

Sense Seeker

Until America gets rid of the naive belief that markets and private enterprise solve all problems and that government and public enterprise are inherently bad, it will keep selling out to vested interests and toleratate (legalised) corruption.
It's not a matter of "extracting more in taxes from the rich and from businesses, and by beating up big banks". It's the reverse: the rich, the big corporations and banks have succeeded in corrupting the system with lobbyists, loopholes and tax avoidance, and left the bills for the upkeep of the state (infrastructure, education, defence, etc.) to the working people.
But the propaganda that private enterprise is 'The American Way' and will save all is strong, and the distrust of government is deep, schooling is mediocre and the press is parochial (even educated Americans generally have no idea what the rest of the world thinks), and owned by the wealthy with vested interests.
Recovery is possible, but probably, more anger will follow before enough Americans wake up from the perverted version of the American Dream they are living.

ParksDept in reply to Sense Seeker

'the distrust of government is deep, schooling is mediocre'
I enjoyed seeing these two statements next to each other. Fox Butterfield anyone? Or did you forget who runs the schools? Anyways, you don't seem to understand that rent seeking is a natural byproduct of government and efforts to reduce its delirious effects must necessarily reduce the power of government.

Sense Seeker in reply to ParksDept

Thank you for illustrating my point. All ideology, no evidence.

The problem is that US public schools lack funding, and that is exactly because of this moronic 'starve the state' attitude that results in cost-cutting. Countries in which government has a large role in providing education can do very well, especially if they ensure adequate (public) funding. Improving teacher quality, granting schools greater autonomy and resourcing education equitably have recently been highlighted as some of the unifying traits of the world's top-performing school systems.

Read more: http://www.smh.com.au/national/education/pisa-study-highlights-resources...

ParksDept in reply to Sense Seeker

So how do you explain the massive increase in spending per pupil coinciding with a stagnation in international rankings, see spending per pupil in 1990 v today? Currently, only four countries in the world spend more per student than the US... Do you even realize that one of the solutions to mediocrity that you present would be the reduction of government involvement in schooling? (While another undermines union control...)

Sense Seeker in reply to ParksDept

One of the problems is that much of the funding is from parents. So it's not distributed according to need, but rich kids (talented or not) get good (or at least expensive) education, while poor children lack it. "Resource education equitably", the PISA recommends. So government should probably pay for education for all, but leave schools and teachers the autonomy to deliver quality (and probably measure quality).

In all likelihood, in education, the unfettered free market will entrench inequalities and waste a lot of talent among children of poor and middle class children.

Zbyhnev in reply to Sense Seeker

Do us all a favor and read up on history.

I am writing this from a former Soviet satellite country, where we tried what you propose. It was not so good.

You seem to operate on the assumption that government and corruption are opposites. On the contrary. State-run economies are essentially giant circlewanks of corruption and vested interest. You seem to identify a problem and then propose fixing it by putting that problem in charge of everything. You’re proposing to cure a cold by anthrax. Yeah, it could work. But also kill the patient.

Sense Seeker in reply to Zbyhnev

The Soviet Union was a dictatorship. That makes the confluence of the interests of the ruling elite and commercial interests almost inevitable. The problem was not that the State funded independent schools and monitored the quality of their teaching, as I propose.

In the US it is not the State that captured the productive sector, but the reverse. Parts of the productive sector (Corporate America) has captured much of the State and subverses democracy with its lobbying for juicy contracts, lax oversight and tax loopholes. Which results in a similar confluence of commercial/productive interests that gears the system towards serving vested interest, instead of the public interest.

For anything to work in the US, the democratic system has to be strengthened. Out with lobbyists, campaing contributions, gerrymandering and the lot.

Sense Seeker in reply to Zbyhnev

The following quote from prof Kawaci (Harvard) seems relevant, even though it is about health rather than education:

"Health in formerly communist societies
Several people raised the very interesting question of why even communist societies had health inequalities. That’s a great observation. Looking back, it’s clear that communist societies maintained relatively flat distributions of income; however, they maintained large differentials in terms of non-income-based privileges and assets. For example, in Soviet Russia, it is widely acknowledged that those who were well connected to the Communist party hierarchy enjoyed better access to housing, vacations, foreign goods, foreign trips, and even fancy dachas (second homes) in the countryside.

"Interestingly, when communist countries in the Eastern bloc transitioned to market economies, their Gini coefficients surged ahead, and they experienced one of the sharpest drops in life expectancy ever recorded in history (barring world wars). For instance, male life expectancy in Russia plummeted by almost 6 years following the transition from communism to a market economy.

"In contrast to the formerly communist societies of the Eastern bloc, historical record also shows that when socialist countries invest in the human development of their populace, life expectancy can rise at a spectacular pace. Such is the case of countries like Cuba, Vietnam, and China in the 1970s."


"Senator Elizabeth Warren of Massachusetts, suggests that something of the sort could be achieved by extracting more in taxes from the rich and from businesses, and by beating up big banks."

So asking hugely profitable banks to pay a FRACTION of the BILLIONS they stole from the American taxpayer in marginally higher taxes is "beating them up"?

Is there any question where the financial media gets their funding? Wipe your noses, Economist!

Paul Marks

I see. So the (very mild and half hearted) moves to a slightly more free market approach to healthcare that the Republicans are suggesting would make the public "seethe" according to Lexington.

Not because these moves do not go far enough - but because they are the wrong direction (according to him).

No tort reform. Let the trial lawyers (the biggest Democrat donor group) do what they like, no matter how absurd the case it costs a fortune to defend (due to the perversion of tort law) and doctors insurance is now so high that doctors can no longer practice independently in rural areas.

Down with competition - no trading over State lines it undermines "consumer protection" (i.e. the State backed cartels that rip people off with high prices).

And (although Lexington "forgets" to mention this) the Republican idea of allowing INDIVIDUAL (not just employer based) medical insurance to be tax deductible must not be allowed either - because it might mean the government taking less money (and government must always have more money - never less).

If Lexington was arguing that the Republican suggestions hardly scratch the surface of what needs to be done (that they are weak and half hearted) he would have a point - but that is NOT what he is suggesting. He is suggesting that this is a "cut price" approach - whereas the correct approach (according to Lexington) is even more government.

To Lexington (as for the "free market" Economist generally) government (what they call the "public services") must always expand - never be rolled back.

So the basic fact that American health care is expensive because of decades of increasing regulations and subsidy entitlement programs does not matter to him.

It is not that Lexington does not know the effects of increasing regulation and the growth of subsidy programs (over decades) - of course he knows. It is the same effect one sees with government backed student loans (on tuition costs) and everything else that government regulation and subsidy touches (even David Ricardo, centuries ago, would have been able to work it out).

It is that Lexington PRETENDS not to know.

There are just these magical "trends" to higher health care costs. And the even greater regulation and subsidies of Obamacare will not make things worse (oh dear me no) - even though this was the INTENTION (the OBJECTIVE) from the start. It was the always the basic point of the scheme to make real private insurance even more expensive - so that people would be forced to rely on the government (very Cloward and Piven - as one would expect) although via crony capitalist "private providers" at first (they would be got rid of later - just as the student loan providers were).

Lexington knows all this - but he will never report it. Just as the Economist magazine in general will never report it - or anything else that might put the cult of ever expanding government (sorry "public services") in a bad light.

This is the basic reason why the sales of the Economist magazine (at least in the United States) are falling. People have had enough of the pretence.

The pretence that a Corporate Welfare supporting Keynesian magazine is a free market publication.

Merry Christmas and a Happy New Year.

Did you actually read the article? Lexington said that cuts will need to be made to entitlements, not that "government...must always expand-never be rolled back." He is also not saying that supply-side ideas are all bad, just that the ones most often proposed are of piddling value. Your beloved tort reform would save money, but there aren't enough ambulance-chasers in the nation for tort reform to be more than a drop in the bucket of healthcare costs in most states. Try to actually understand what someone is saying before hauling out your canned speech for the indignant conservative.


Could you point out where he said cuts needed to be made to entitlements? All I read was 'An alarming number of Democrats promise that by such means, hard choices about public spending or Social Security could yet be avoided,' which is at best a nod to the unsustainability of entitlements, however nothing close to calling for cuts to entitlements. No doubt he supports reducing payments to those who pay the most taxes, but this does not mean government 'must be rolled back.' In fact it is implicit that the program will continue to expand, hence the more taxes, and all he would achieve is to get revenue growth to match expenditures. Again this points to an increasing government. Further, Lexington specifically criticizes supply side, aka. classic, economics as insufficient, while touting the benefits of government with a warning against ‘overpromising.’

Paul Marks in reply to ParksDept

That is a very good point.

The Economist magazine people are clearly not socialists - they believe in privately owned banks and so on. But they want them subsidised by the government - Federal reserve "monetary expansion" for the banks, subsidies for the health insurance companies (for the "good of the people" of course) and so on.

Hence the alliance with Barack Obama - the Economist magazine do not believe in his Frankfurt School Marxism (the Economist magazine people went to Oxford, not to Columbia - they went boating on the river. not to Marxist conferences to sit at the feet of Francis Fox Piven) they are not even interested in it. They just see the chance for lots of lovely subsidies (and regulations) rigging the market in the direction of their friends.

However, Farmer Barack does not have good intentions towards his farm animals (such as Jamie Dimon of J.P. Morgan Chase) - in fact he is leading them to a building where they will walk in, but they will not walk out.

The Economist magazine always says "cuts will have to be made to entitlement programs", but when specific cuts are suggested they tear the person who suggests them to bits. As for Lexington - when Senator Rand Paul actually suggested specific cuts Lexington just dismissed him as an "former eye doctor", why does the fact that someone practiced medicine, rather than just write articles in a magazine, invalidate their suggestions?.

The idea that the Economist magazine would support real government spending cuts is absurd (see their welcoming of the betrayal of even the minor Sequester cuts - which do not even hit entitlements). They support TALK (promises) of entitlement cuts - as a way of getting what they really want (ever more tax increases).

On healthcare.

I have already said that the Republican suggestions barely scratch the surface.

Yes tort reform would be a good idea.

And yes competition over State lines would be good thing (another thing Lexington sneers at - dismissing it as a way of attacking "consumer protection" i.e. the State level backed cartels that rip people off with high prices).

And yes making health insurance tax deductible for INDIVIDUALS (not just employer based plans) would also be a good thing (do not hold your breath waiting for Lexington to support that).

But none of this would change the fundamental fact that the increase of government subsidy entitlement schemes (over decades) has exploded health costs (again over decades) in a way that even David Ricardo (centuries ago) would have no problem in understanding.

The same is true in higher education where government regulations and subsidies (for example government backed student loans) have exploded tuition costs.

When Ronald Reagan (the only President to be an economics major - no "eye doctor" he) was at college it was perfectly possible to pay tuition and live - simply by working part time (in his case as a life guard at the local swimming pool).

Do not try that now. Now is the age of the TRILLION Dollar student loan scam, and of health (as well as education) costs pushed into outer space by government interventionism.

Interventionism that Obamacare INCREASES.


America's political dysfunction is simply a symptom, rather than the underlying cause, of its terminal decline. All societies tend to stagnate and self-suffocate once they've been stable and prosperous for a sufficiently long time. People become obsessed with maximizing their particular slice of the pie without heed to longer-term consequences (e.g. everyone rent-seeks). Bureaucracy increases exponentially year-after-year as everyone believes "the government should do something about it" for every possible case of "it." The political class becomes accustomed to being loathed and to muddling through from crisis to crisis. And meanwhile people feel increasingly alienated from their representatives and from those who control society through their vast and usually undeserved wealth.

In the end, democracy fails because it requires a thoughtful and engaged electorate. Without this base, politicians succeed by bribing electors with their own money ("elect me and I'll give you X"). After a while, as everyone plays that game, institutionalized borrowing sets in because current revenues are always insufficient to make good on the bribes promised. So the country becomes indebted - and by country we do, of course, mean individual tax-payers who ultimately foot the bill. Meanwhile the charades play on and people become more and more dissatisfied.

It's a one-way street. America is full of overweight people who cram themselves with junk and who cram their minds with meaningless junk: mindless movies, lowest-common-denominator TV shows, empty websites. The electorate is ignorant, thoughtless, complacent, and desperately unhealthy in every sense of the word. And this is the base upon which its democracy is supposed to function. No wonder politics is a distracting side-show filled with incompetents, idiots, and bigots.

Unqualified Critic in reply to CA-Oxonian

A piece truly written by the extreme and for the extreme. A gross over-simplification of what is a massive and diverse nation. The biggest problem with folks like this one, and indeed the whole of the media too, is that they cater to sensationalism and crass sentiments. "Put the misinformed and misguided fringes in the public's eye, that's what will fetch us the best ratings"; is what the media and these types of people focus on. Unfortunately, when we're forced to digest enough of it, we start to believe it, and find ourselves victims feeding on this trough of ignorance.

Talk to your neighbors, people in your community and folks that aren't just like you, and after a bit of conversation; you'll find that that 'big canyon of difference', that the crazies are trying to sell you, isn't that big at all. Anybody who says different is merely trying to sell you Kool-Aid.

teacup775 in reply to Unqualified Critic

I don't read the same thing.

Thing is, until people get off their duffs and start talking to each other as you say, we all are effectively the people described in OP (original post).

There is no cohesive societal forum for public discourse ATM. PBS kind of puts 'town hall' tours togehter now and again, but I think such a thing is much more desperately needed about now.

Perrodin in reply to CA-Oxonian

"The electorate is ignorant...": aren't you part of that ignorant electorate?
"politics is ... filled with incompetents, idiots, and bigots": you seem to know a lot about politics.
They used to say: "It takes one to know one."
Merry Christmas all the same.
P.S. You could use a dose of that famous "Christmas Spirit".

I'm always skeptical of people who use the phrase "anyone who tells you different". That rarely jives with open-mindedness. For someone lecturing a person for simplistic, dismissive generalizations you're not doing a very good job of that yourself.
However I agree that the differences between Americans are grossly exaggerated. However the reason those differences are exaggerated has to do with some of the things OP is talking about.

WT Economist

"Between 1977 and 2012 prices and median family income almost quadrupled. What voters really want is for that world of stagnant wages and higher costs to go away."

I actually think voters would have been happy with stagnant wages relative to costs. And would even tolerate rising incomes and wealth at the tops if they were becoming no worse off. The reality is worse. Pay has been falling relative to costs for decades. The fact that median family income kept up with prices was only due to:

1) More family members (women) in the labor force.
2) Lost future (retirement) income, which will really start to bite once those who didn't get pensions and didn't cut their spending to make up for it face old age.
3) Rising debts, which is the only think keeping the economy alive today.

What is worse, in the public sector older generations, who were better off, are leaving large debts and fewer assets to younger generations, who are worse off. We've run a current account deficit for decades. Our buildings and utilities are being sold off to foreign buyers, who now get the profits and minimize investments in maintenance.

Obama should have been making "blood and tears" speeches from the moment he took office. The leaders of neither party understand, or want to admit, what has actually happened.

teacup775 in reply to WT Economist

Don't soley focus on public pensions. Corporate pensions have been raided for profit margins for years.

The fiasco of United Airlines is only a foretaste. Then there are the bogus 401ks that have, are and will soak the rest.

teacup775 in reply to ParksDept

401ks for many are subject to hidden fees that leech away lifetime returns, to the tune of 1/3 or 2/3 the total value.

Corporations have been underfunding what pensions remainfor the last few decades, cannibalizing them to boost shareholder profits. The consequences of underfunding corp pensions are the same as those felt by Detriot and that are and will hit municipalities all across the country.

In other words, that pensions invested in the stock market or other instruments is irrelevant to my point.


I think the first thing that the American population wants to see is that government can deliver on anything at all. The signing of the Affordable Care Act into law was supposed to be Obama's defining achievement, but it may prove more to history for galvanizing more political animosity than any other legislative act in recent memory. Nothing of consequence has been delivered since.

The [hopeful] passing of a bi-partisan budget is a step in the right direction, if only because it represents a Republican willingness to put some distance between themselves and the radical conservatives that steered the party, and the country, to the very edge of the fiscal cliff. Looking past the symbolic victory, however, there really is no tactical victory gained by either side.

The Republicans and Democrats may be again learning to play nice, but while we're celebrating shallow milestones, the real issues seem that much further away.

Paul Marks in reply to Rosencrantz

I do not believe that the Sequester cuts (had they been allowed to go ahead - which the deal with the Dems prevents) were "radical" (the total cuts were small compared to the total Federal budget) - indeed I think the chief problem with them was that they did not go across the board (including the entitlement programs). Why should Defence (which is about 13% of the total budget) take 50% of the cuts?

And yet even this (defence getting 50% of the cuts - and the total cut being quite small in relation to the total Federal budget) is "radical conservative"?

As for the deal with the Dems - it is a total mess. As any deal they would have agreed to would be - as my G. Marx put it "I would not want to be a member of any club that would have me as a member" - any deal the Dems would agree is, by definition going to mean bigger (not smaller) government.

As you will live to see over the next two years (as government spending is unreduced and de facto bankruptcy comes closer).

After all the Economist magazine told us that it would be a very bad thing (a "drag on the economy") if the Sequester cuts happened this year - and the cuts happened and the Economist magazine predictions were proved wrong.

Indeed the Sequester cuts this year (along with the increase in oil and gas production - another the Economist magazine hates) may have actually SAVED the economy in 2013.

No Sequester (real) cuts in government spending in 2014 and 2015 - the Economist magazine has got its wish (and people like me have been defeated - I admit that).

Let us see how the economy does in 2014 and 2015.

Because defense spending is incredibly wasteful, for one. Are you familiar with the Joint Strike Fighter debacle? Might want to look that one up.

And they could not make cuts to mandatory spending which involves promised obligations like Social Security and Medicare. They could only cut discretionary spending, which is about 30% of total spending. 57% of discretionary spending goes to the military, so obviously substantial cuts would come from that. The rest goes to veterans benefits, scientific research, health, education, government services, etc....This should give you an idea of why cutting these things is bad.

Certainly the Defence Department is incredibly wasteful - but no more so than any other Federal government department. And military people risk their lives - not common in most other government departments.

As I said I AM prepared to accept the Sequester cuts (unlike both the Republican leadership and the Democrats), but it is utterly unfair (and dangerous) for one department (that takes about 13% of the total budget) to take 50% of the cuts.

On your view that it is impossible to make cuts in "mandatory" spending because it is "promised obligations". When these programs were started (and they started off TINY - a tiny fraction of their cost) many people warned that they would grow and grow and become unsustainable - which is exactly what has happened.

It is not the fault of Constitutionalists (people who pointed out that the "common defence and general welfare" was the PURPOSE of the specific powers granted to the Congress by Article One, Section Eight - that there was no "catch all general welfare spending power) were not listened to. The Supreme Court ruled that these programs were acceptable as "welfare" schemes (please note - as with the recent Obamacare judgement the Supreme Court specifically stated that they were NOT "insurance" programs - there are no "Social Security contributions" it is a TAX, and there is no "trust fund" it is a Ponzi scheme, nothing more).

Be all that as it may - what matters, from an economic point of view, is a the explosion of costs of these so called "entitlement" programs. You say they can not be cut - but they WILL (eventually) be cut (unless they collapse entirely).

The only question is whether they will be cut by political action - or by bankruptcy judges (as is already happening at city and, soon, State level).

Remember there are no investments (the "trust fund" and the "contributions" are a lie - and have always been a lie) - it is Ponzi (a pure Ponzi pyramid scheme).

So they WILL be cut (unless they collapse) - the only question is whether it will done in a regular way (by Act of Congress) or by bankruptcy judges.

"But the Federal government can not go bankrupt - we can just carry on printing even more money".

That is not going to turn out very well.

Personally what I expect to happen is that the age at which people get benefits will continue to creep up.

"But you promised me this stuff at 65 - not 70" (or whatever it is).

The response will be....

"Go sue us" - even back in the 1930s it was ruled that these programs are NOT insurance (they are welfare), ditto the schemes launched in the 1960s (and SCHIP and Obamacare more recently).

"But we have paid into these schemes".

Yes - and that is very sad (it is was very sad for the victims of Mr Ponzi and Bernie Madoff also).

In the end, even if the entire Defence Department was abolished, the cuts to the Welfare State would still have to happen - as Europe (which has little or no armed forces) is discovering.


A lot of very real empty stockings out there as millions suffer through the great recession; the economy has seemed to bifurcate, amplifying the divisions between winners (corporate America and the financial elite) and losers (working Americans and the middle class). As to political outlook and policy, it's not such a hard read- one side aspires to care about the fate of working/middle America, and tries, but is ineffectual for various reasons; the other side offers nothing to working/middle America except 'tough love' (by asking, 'would we really be dong those people a favor by helping them?') and cynicism (government is more likely to screw up than actually help). Is it any wonder that Americans are angry?

modernpublius in reply to hTePFs67YE

The people who have done better in the last few years are those who have had savings in the stock market and equity in their homes. Those are people who have consistently lived below their means and have carefully invested their savings in the stock market. (The key word is "investing", not trading. People who try to "beat" the market tend to not do well.) This includes people of all income brackets.

Those who spend every penny of their paycheck, whether they be a working stiff or a star athlete, have not benefited at all from the improvement in the stock market.

The ability to save money to invest has less to do with income and more to do with priorities. When I was in my 20's, I was able to save 10% of my $20,000 salary while paying off student loans. (Yes. I was married with 2 kids and my wife stayed home.) We never ate out, made do with public transportation, and got perfectly good things at Goodwill, many with tags still on them. After a few years, I was able to get a better job, made more money, etc. The money I saved from those three years has grown from $6,000 to $80,000. I have done well this year because I have saved and because the stock market went up. Please tell me why this is bad, said the ant to the grasshopper.

modernpublius in reply to Pioterk

Timing is everything to traders, but those who have more of a "buy and hold" strategy, it is less important. The market goes up and the market goes down, but in the long term, it has always gone up. I view downturns in the market as buying opportunities-- stocks are on sale. Of course, this requires keeping some money out of the stock market at any given time, but this is done by shaving positions from stocks that have done well.

The people who lose their shirts are the ones who are greedy and try to make money with borrowed money on the day-to-day wiggles in the market. They might as well go to Las Vegas. There is an old saying: Bulls make money, Bears make money, but Pigs get slaughtered.



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