.....................................................................................................................................................................................

.....................................................................................................................................................................................

Saturday, May 23, 2009

Guest Post: Ladies and Gentlemen, the US Is Insolvent

Submitted by Jesse of Le Café Américain

“We are out of money.” Barack Obama May 23, 2009

Obama openly says what anyone with common sense has known for quite some time: the US is broke, and will not be able to honor in full its financial and fiduciary obligations.

The question remains how the US restructures that debt and how big a haircut the debt holders will take as a part of it.

20%? 30%? More like upwards of 50% at least in real terms.

And who are these debt holders?

Anyone who has Treasury debt obligations and financial assets, from the Long Bond to the US Dollar, and financial assets guaranteed by the Federal Reserve and the Treasury.

Technically the debt will be serviced and the interest paid according to the terms of the agreements, with devalued US dollars.

The process will continue until the debt is restructured and the dollar is replaced with a new dollar. This may take some years.

Oh, don’t worry too much. There will be spin and qualifications piled upon this admission, most likely before the markets open in Asia on Monday. But this trial balloon of admission is how you start breaking the bad news to people unwilling and ill prepared to receive it.

But regardless of what is said, we are now in the endgame for a credit bubble of historic proportion.

The Incontrovertible Truth About Debt, Deleveraging, Devaluation and Recovery

Why the US Has Gone Broke: Chalmers Johnson

DrudgeReport
‘WE’RE OUT OF MONEY’
Sat May 23 2009 10:32:18 ET

In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: “We are out of money.”

C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.

SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?

OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we’ve made on health care so far. This is a consequence of the crisis that we’ve seen and in fact our failure to make some good decisions on health care over the last several decades.

So we’ve got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it’s putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.

So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid and Medicare. If we don’t reduce long-term health care inflation substantially, we can’t get control of the deficit.

So, one option is just to do nothing. We say, well, it’s too expensive for us to make some short-term investments in health care. We can’t afford it. We’ve got this big deficit. Let’s just keep the health care system that we’ve got now.

Along that trajectory, we will see health care cost as an overall share of our federal spending grow and grow and grow and grow until essentially it consumes everything…

Topics: Guest Post

Email This Post Email This Post Posted by Jesse at 7:21 pm

32 Comments » Links to this post

32 Comments:

  • Glen says:
    May 23, 2009 at 7:35 pm

    I was just over at Jesse’s and came as a very big but expected surprise. Wonder how the markets will take this frank admission? No doubt they’ll surge again once again on news that the Administration was merely stating the obvious.

  • bbot says:
    May 23, 2009 at 7:45 pm

    The front page of drudge report makes it look like the world’s ending. Government bankrupt, oil prices increasing, flu pandemic spreading…

    Fun times.

  • frances snoot says:
    May 23, 2009 at 7:56 pm

    here’s another link: http://www.istockanalyst.com/article/viewarticle/articleid/3243149

  • Jonathan says:
    May 23, 2009 at 8:13 pm

    I’m scratching my head over this one…

    BHO is correct here, but I cannot help but feel that he is talking his book. He acknowledges we dont have the money to pay for medicare/medicaid in its current form; that it is a massive long-term problem that needs to be fixed. These are extremely important steps towards kicking this problem.

    However, he has said these things before in a more watered down fashion (I must admit, “we are out of money” is a shockingly direct statement from a sitting President), and the solution proposed has been a state-run universal health care program intended to reduce costs.

    Will that be the end run proposition here? Use direct and forceful language to create the sense of fear, then ram the solution down the public’s throat and convince them its what they want? (we’ve seen this playbook over and over, with the prior administration and with the new).

    Would be curious to know if he made any follow up comments on this with a proposed solution.

  • fboness says:
    May 23, 2009 at 8:19 pm

    I was so over Chalmers Johnson years ago. I wish he’d get over himself.

  • VG Chicago says:
    May 23, 2009 at 8:40 pm

    No problemo!
    As an average American up to my eyeballs in debt, I am very much looking forward to paying off my debts with heavily devalued dollars.

    Vinny GOLDberg

  • Independent Accountant says:
    May 23, 2009 at 9:04 pm

    YS:
    Here I go again, “Got gold? Get more. Got bonds? Sell, Obama said so”.

  • Hugh says:
    May 23, 2009 at 10:13 pm

    Obama was talking about deficit spending not insolvency. This is really more of the same old same old. Obama-Geithner-Summers-Bernanke don’t blink an eye at funneling trillion after trillion into a corrupt and collapsed financial system. But when it comes to entitlements all of a sudden they decide these are unsustainable and need cutting. First, it was Social Security. Now it is Medicare.

    Yes, Medicare has funding problems but, considering it deals with an older, sicker population, it has minimal overhead and delivers reasonably good service (except where it has been interfered with as with its drug plan).

    Let us be very clear about this. Obama’s healthcare plan has less to do with delivering affordable healthcare to all Americans and more with funneling money to the insurance industry (with its high overhead and tendency to deny needed care).

    It is in many ways a replay of his economic plan. Homeowners and ordinary Americans are sinking? Who does he help? The banks.

    Tens of millions of Americans get no or poor healthcare? Who does he help? The insurance companies.

    Just as it was never clear how funneling money to the banks was going to revive the economy, it equally unclear how shoveling money at the insurance industry will control healthcare costs.

    So my take on this is that Obama is using high deficits and a bad economy to push his version of healthcare. If he actually cared about US insolvency, he would have better policies and a much better team.

  • Jesse says:
    May 23, 2009 at 10:26 pm

    I have heard that there were not insignificant numbers of Germans who believed that the war could be won even as the Russians reached the Oder River and the Western Allies breached the Rhine.

    Remarkable.

  • Todd Wood says:
    May 23, 2009 at 10:27 pm

    Ind. Accountant,

    Wow. Buy gold? Really? You can’t eat gold, can you?

    You may not live in a large city. That would be good. It will be tough meeting up with a food dealer carrying gold so far. Even when you get there, who is to say the dealer doesn’t just take your gold.

    If you live in a small town, everyone will know that the gold bugs also carry their weapons on a hair trigger and will just leave them to rot.

    Do you have another take on the situation?

  • LeeAnne says:
    May 23, 2009 at 10:29 pm

    Obama: " …So, one option is just to do nothing. We say, well, it's too expensive for us to make some short-term investments in health care. We can't afford it. We've got this big deficit. Let's just keep the health care system that we've got now."

    Who is saying we should just keep the health care system we've got now? Or that, "…one option is just to do nothing." As I recall it, universal health care was the center piece of the debates leading up to the election by all 3 Democratic candidates: Obama, Clinton and Edwards. It sounds to me like Obama is attempting to trivialize the solution while exaggerating the problem.

    "Along that trajectory, we will see health care cost as an overall share of our federal spending grow and grow and grow and grow until essentially it consumes everything…"

    Hasn't the military and finance done that with no end in sight? -$2 Trillion missing from the Pentagon, More $Trillions tossed out in Iraq, Bush policies continued with the finance industry taking viggerish of a large percentage of its 40% from the real economy while deemed worthy of all taxpayer money as far as the eye can see to keep the malefactors afloat and continuing too big to fail.

    Why is health care being mentioned in this context? Why are arguments favoring a single payer system being left out of the debate while the parasitic health insurance industry sits at the table like Senators? The crisis of the real economy is an emergency that justifies pushing through and making it the #1 priority of this administration to resolve. Either a single payer system or a universal health care system with an opt out if single payer isn't the will of the people. Without open debate that includes that option how can the country be said to have representative government?

    Health care is the number one priority for the Democratic Party for every person in this country who is under insured, over paying for insurance, or lacking insurance for themselves, their families, their friends or children.

    The answer to what we do about stopping the acceleration of health costs in this country begins with getting rid of the parasitic health insurance industry, ending R&D subsidies to big pharmaceutical companies, and putt an end to TV, radio, and direct mail advertising of health care services and pharmaceutical products.

    Its hard to reconcile Obama's loyalties with the growing number of disconnects between his campaign rhetoric, his betrayal of the Liberal principles he espoused during the campaign, and his tilt to the right. Speaking in the first person, as in "I have enough to do …" gives us a clue to his character, I believe; he is a savant, deluded about his personal power. His personal power isn't in any kind of prospective that we can fathom because he can't fathom it himself. He is proving that we can no longer expect the leadership from him we had hoped for.

    Wiki a”Savant syndrome”

  • Jesse says:
    May 23, 2009 at 10:35 pm

    Why make this statement now?

    Of course Obama is teeing up his health care initiative on the back of a crisis, in the same manner that the Bush Administration piggybacked the Iraqi initiative on the 911 tragedy.

    Empires do not fall in a day, nor world reserve currencies in a year.

    There is not one mind in the Obama Administration, but several camps.

    The most visible division is between the economic team of Geithner-Summers who are crony capitalists, and the more hard core Clinton Dems who are socialists.

    I think now that the bankers have been paid, we will see a stronger turn to the socialist agenda, and perhaps some new pigs will get their turn at the trough.

    But this will take years more to play out, make no mistake.

  • Hugh says:
    May 23, 2009 at 11:11 pm

    Rubin was Obama’s principal economic adviser followed by Summers. Geithner was a protégé of both although probably more of Summers’. Both Rubin and Summers were Treasury Secretaries under Clinton.

    Clinton’s economic policies were neoliberal. That was what the business-friendly DLC was all about. So I have no idea how by any stretch of the imagination any “hard core Clinton Dem” could be called socialist.

    I am also unclear as to what socialist means. Any program of the federal government which affects all Americans can be called socialist: Social Security, Medicare, national defense, the interstate system, the EPA, education, etc.

    The resistance of virtually all Democrats to even including single payer universal healthcare in any discussion of healthcare reform options shows how unsocialist they all are.

    It is not politicians who are socialist but increasingly ordinary Americans who look to government rather than private enterprise for solutions to problems like banking and healthcare.

    The tragedy as I see it is that Obama had a real opportunity to make government effective. Instead he seems determined to show only that government can do as bad a job as private enterprise, even where workable government solutions are available.

  • autodidact says:
    May 24, 2009 at 12:15 am

    This is bait and switch. Obama said in the campaign that health care would be paid for by increased taxes on the rich. People making under $250K would not see a tax increase, “not one dime.”

    Now that the incomes of the rich are declining, that new revenue will not even begin to pay for adding tens of millions of new health care consumers to the government’s dependents list, even if they could achieve cost reductions for all the other health care consumers.

    The admission that we are out of money is the prelude for tax increases. There will be no money available for health care reform unless funds are raised from cap-and-trade or carbon taxes. The public will pay these hidden taxes in the form of increased gas taxes, electric bills, and increased prices for goods and services that require energy to make and deliver.

    I do not agree with cap and trade — the lower troposphere has hardly warmed compared to thirty years ago. Sea levels have been rising since the end of the last ice age, and the current trend is about 3 millimeters annually, which is a couple of hair’s breadths. The climate models are full of huge uncertainties. If the sun’s unusual dormancy continues (magnetic field, solar wind, sunspots all down dramatically), we could easily see an extended period of global cooling which will be much more unpleasant than warming.

    But if we must have cap and trade, let the money go into building a new energy infrastructure, one that is not dependent on foreign sources. (The obvious choice is nuclear, because wind, solar, and geothermal are not likely to be more than a supplement. Nuclear is reliable and we have the fuel in this continent.) Presently, the budget is configured to spend cap-and-trade receipts on middle class tax cuts. If not for this, there will be no money for health care reform.

    Yet, this is the plan, as described in the May 4 issue of the New Yorker, the article about Peter Orszag, Obama’s budget director. It’s all a game, pushing the numbers around from one program to another. The numbers will no doubt turn out to be phony anyway. To claim they can halve the budget deficit in four years, while still spending the prodigious sums on “investments” and “stimuli” that are planned is something that would make Rosy Scenario blush with embarrassment.

  • juan says:
    May 24, 2009 at 12:59 am

    But this will take years more to play out, make no mistake.Agreed. But other hand, hasn’t it been playing out now ever since defeated powers in Europe and Asia caught up in terms of productivity, etc, and since the U.S. war against VietNam.
    IOW hegemony within a world system is relative and speed of transition into multi-polarity has been accelerated by attempts to prevent, such as the more than foolish ME wars and, almost in conjunction, beginning of a depression, destruction of fictitious capital and arriving fiscal policy limits.

    In a word – uncontrollability.

  • biofuel says:
    May 24, 2009 at 1:08 am

    Here’s a simple way to look at it. The banks and the Fed “created” a huge amount of money and gave it to the populace. The populace took it, spent it and could not pay it back. The banks then went to the government and said made us whole. The government took on the loss. The predicament has always been a political development, but at this point it became more so than before. The question becomes which group of the tax payers and government beneficiaries will fill the hole. Tax hikes not happing during a economic downturn; that leaves beneficiaries; the budget consists of three mammoths: military, health care and retirement. Everything else is comparatively pocket change. The military will be preserved as long as possible. That leaves the other two. There has been a discussion which of the two to axe first, and health care is the first.

    So, looking at it in this light, Jess is right, the government is insolvent at the PRESENT level of expenditure. On the other hand, there is still a lot of “meat” on its body, and provided deep cuts are made, the government may return to solvency. Health care beneficiaries are the designated hole fill.

    The most interesting question is where all that money that the banks/Fed made went from the populace. There is a lot of wealthy people out there sitting very quietly.

  • Todd Wood says:
    May 24, 2009 at 5:19 am

    LeeAnne,

    Fascinating inclusion of “savant” into the discussion. Usually, savant abilities create such disequilibrium, that it is unlikely that one would become president.

    Also, I don’t think that community organizers, of Obama’s ilk, have problems with overestimating their importance, or delusions of grandeur. I sure that he waited on phone calls, just like the rest of us.

    But, I see your point. Savants may have a handle, but they can never get their own hand on it in any balanced way.

    If Obama were a savant, we would see all talent, but no direction.

    Obama has direction, it is just that many don’t agree with it.

    Following the “savant” concept further, what could give a savant balance?

    I once believed that religion represented a part of the brain, since everybody has one. Now, however, I believe that it represents a way of organizing the brain for social functioning.

    Of course, there are no invisible beings and there is no “dying and going to heaven in a Jesus name.” This is it. We have arrived at the Gates, everyday. Chris Hedges thinks likes this as do, revolutionary theologians. Beyond that, it is a wonderful mystery.

    So, a “complex” understanding and practice of religion, superseding intact, or repaired, neural structures relating to parental authority could balance the savant.

  • Todd Wood says:
    May 24, 2009 at 5:34 am

    Go to Latin American authors for Liberation Theology:

    If you can get passed the Marxism, this book includes interesting insight into the psychology of the economically oppressed…

    http://www.amazon.com/Pedagogy-Oppressed-Paulo-Freire/dp/0826412769

    Some of the theology is obtuse here, but this book is it…

    http://www.amazon.com/Doing-Theology-Revolutionary-Situation-Confrontation/dp/0800614518

  • Kevin says:
    May 24, 2009 at 5:40 am

    Why is this news? The US has been insolvent for nearly a decade. It is only capital flowing in from abroad that is keeping the truth from being more widely known. But someday, maybe quite soon, the US’s foreign creditors will wake up and decide to stop playing “Weekend at Bernie’s” with the rotting corpse of the US economy.

    For years after the collapse of the Roman Empire the victorious barbarians kept the illusion of a Western Roman Empire alive. And for nearly 200 hundred years life marched on in the West in a not too dissimilar way. Only with the Islamic conquest of the Mediterranean did the Western Roman Empire really end and the Dark Ages in Europe were ushered in.

    The US is currently in a similar state of limbo; although the time frame of decline of much condensed in comparison to Rome’s. The collapse of the dollar will be the US’s version of Rome’s loss of the Mediterranean. A Dark Age in the US is just around the corner.

  • X says:
    May 24, 2009 at 6:35 am

    Cutting the defense budget say in half would considerably brighten our fiscal future and ease the long overdue tax increases we unavoidably face. We would still have by far the strongest military and no country or alliance could threaten us. Of course we would have to curtail many of our military adventures overseas. Adjusted for inflation the pre-Korean War defense budget was probably less than 150 billion a year, suggesting we may be able to cut more than half.

  • Stevie b. says:
    May 24, 2009 at 9:31 am

    Jesse – admire your blog and suggest it would be nice to see reader comments there too!

  • LIL says:
    May 24, 2009 at 9:49 am

    Anybody who voted for this clown is getting exactly what he/she deserves.

    Those that saw thru this guy from the beginning are saying: FRAKING, DUH!!! We TOLD you so.

    Now you get to reap what you sow.

    As for those of us who have seen this coming, we have put down our pitchforks and have prepared for the worse.

    As for the the dumb “people with gold will rot” comment, consider the following: many of these people are preppers and survivalists, so they are 2 years a head of you in preps; they don’t want anyone on their land, hence the 2nd Amendment; and asides from gold, they have things to barter.

    Gold will be the standard when the American dollar is worthless. Even China gets that, which is why they are hoarding and buying gold.

    If anyone here has any sense, you will start prepping a year or two of food, necessities, barter items, just in case.

    As for Obama and his values and agenda, there is only so long we will put up with this.

    Watch for states in the South to secede.

    I guess that Russian guy that predicted the fall of he Soviet emoire, and is nor predicting thefall and separation of the USA, is right!

    In case that sounds crazy, talk to a truckdriver that drives across country, you will be surprised what they tell you.

    People are talking secession and defending their rights, if need be.

    WAKE up sheeple!

  • Sara says:
    May 24, 2009 at 9:50 am

    Also, I don’t think that community organizers, of Obama’s ilk, have problems with overestimating their importance, or delusions of grandeur.You haven’t known the community organizers I have. If Obama is typical of the breed, he was running for office from his first day on his supposedly humble job. Make a show of serving the community, get their support, then leapfrog over them to power. Toss a few scraps their way every now and then, and they’ll continue to campaign for you and pull the forelock to you ever after.

  • LIL says:
    May 24, 2009 at 9:51 am

    Ps- That is not an endorsement of violence by the way.

  • Doc Holiday says:
    May 24, 2009 at 9:58 am

    This hidden “interview with its honesty is virtually unavailable on the internet today. The lack of interest in this story is interesting and it is a great example of captured media!

    Do a Google search or a news item; this might as well have been a National Enquirer nude photo….

    Very interesting how fascism works!

  • joebhed says:
    May 24, 2009 at 11:00 am

    Jesse, et al-

    You know, I have wondered for a while as this reality rooted itself somehow into our intellectual comfort zone of finance, when would we broach this new paradigm, and who would do it?
    Jesse is one who has been willing to call it for what he saw of it all along, which I appreciate.
    I hope he keeps that up for sure.

    But, Jesse and others still do NOT get the full meaning of the terms.

    I have posted here a number of times the quote from Robert Hemphill, former credit manager of the Atlanta Fed.
    The problem is that ALL money is created as debt. He saw it as a Fed banker. Google it up.

    I have also put this link in the mix and do so again for one reason, as the title says “HOW Debt Money Goes Broke.”
    http://www.financialsense.com/fsu/editorials/2005/1212b.html

    Ladies and Gentlemen, THE DEBT MONEY SYSTEM IS INSOLVENT.
    (Translation: “We’re out of money”.)

    Now, that reality has previously been quasi-acknowledged by Volcker on occasion, and now Obama, both stating a certain truth that all of you who learned the curriculum at your bizschool need to unlearn.
    This unquestioned bizschool curriculum is that the county’s debt-money system WORKS, and is not responsible for the boom-bust cycles of American capitalism as we know it.

    The problem IS the debt-money system. It is not the fiat money system. It is not the capitalist economic system.

    It is the debt-money system.
    Both jesse, and Steven lachance, the author of the Debt-Money paper, acknowledge that at some point we will need a new money system.

    Hint to Jesse.
    A new “dollar” will not do it, unless it is tied to a sustainable form of money that serves as the nation’s means of exchange, government-issued and debt-free, and let the bankers get back to banking.
    See Friedman’s Framework for Economic Stability.
    Greenbacks.
    The way forward.
    Or else, we do it all over again.
    Thanks, Jesse.

  • Todd Wood says:
    May 24, 2009 at 11:30 am

    Sara,

    That is politics, but not what they used to call, “idiot savant” behavior. Psychotic delusion occurs when one attributes synchronic/sacred events to oneself.

    Obama does say, “I” often, but his other features do not suggest a mental illness, but politics.

    Thank you for your analysis.

  • "DoctoRx" says:
    May 24, 2009 at 11:44 am

    The real problem with the Obama statement is that away from a teleprompter, he can say odd things. Of course the U.S. cannot be out of money.

    Let us remember the cyclicality of matters. Approx 9 yrs ago, there was talk of a bond shortage w the Govt in cash surplus and the economy booming.

    Well before any Federal debt default, we can see bondholders of bank holding companies finally take their hits; ceasing the foreign wars a la the VietNam financial crisis, etc. etc. With enough sense of crisis, “temporary” freezes on various COLAs such as on Soc Sec can even be considered.

    Let us recall the era of Carter bonds, denominated in foreign currencies.

    I vote against such an easy route to Armageddon.

    Not to say that I’m especially optimistic, a la the “Fake Recovery” of Harrison/Roubini.

  • LeeAnne says:
    May 24, 2009 at 12:11 pm

    Todd

    Interesting comments. Thank you for the reading suggestions. I thought that ’savant’ may be a bit over the top.

    As for Obama’s direction, i believe that it is Rahm Emanuel. I know -that’s a no-brainer. But just ‘how much’ direction is the question.

    ‘Open Secrets reported that Emanuel “was the top House recipient in the 2008 election cycle of contributions from hedge funds, private equity firms and the larger securities/investment industry’. Emanuel went from Clinton government to investment banking where he worked on deals for Wasserstein in 1998 and left in 2002 when Wasserstein joined Lazard. Wasserstein’s investments were in media companies (Rahm received a master’s degree in Speech and Communication from Northwestern University in 1985). He was also on the board of Freddie Mac at a troubling time for the company.

    Wiki
    “Top” house recipient, if it is true, makes Emanuel Wall Street’s point man to Obama, the straw man -at least on this issue. It is likely that Rahm Emanuel provides Obama with direction from the prospective of being Wall Street’s captive. Emanuel’s capture can be pragmatic or, more ominous, ideological. If it is pragmatic, in time TBTF finance can be dealt with later as easily as any group on government life support.

    In an article detailing Wasserstein’s spectacular reorganization of Lazard, the gulf between corporate management and deal makers in Wall Street is clear:

    BusinessWeek November 2006
    The Taking of Lazard
    'Many Lazard insiders say that Wasserstein's essential achievement –the one that made the [Lazard] IPO possible …in 2002. Wasserstein had to throw a lot of money around to attract top talent. But he also made Lazard a refuge for veteran deal makers demoralized by the one-size-fits-all commercial imperatives and bureaucratic constraints of the big houses.'

    'One of the most productive newcomers has been Garry W. Parr, who left a lofty perch at Morgan Stanley to join Lazard in 2003. Parr once co-headed Morgan's M&A department with William M. Lewis Jr., who quit Morgan and joined Lazard a year after Parr did. Parr, 49, and Lewis, 50, joined Lazard on the condition that they not have to manage anyone but their secretaries. "Lazard offers senior bankers the opportunity to focus on clients," says Parr, a financial-services specialist whose many big-ticket assignments include advising Bank One (JPM ) on its $59 billion merger with JPMorgan Chase & Co.‘

    ‘That’s because none of Lazard’s deal makers are allowed to be full-time administrators. …”You have to have clients and be involved in big transactions. Otherwise, you get no respect.”‘

  • "DoctoRx" says:
    May 24, 2009 at 12:43 pm

    Here’s the link to the text of the interview and here’s the relevant section:

    http://www.c-span.org/pdf/obamainterview.pdf

    (or go to cspan.org and you can’t miss the interview).

    SCULLY: Yet, it all (health care reform-ed.) takes money. You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?
    OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we’ve made on health care so far. This is a consequence of the crisis that we’ve seen and in fact our failure to make some good decisions on health care over the last several decades.
    So we’ve got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it’s putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.
    So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid . . .

    Back to me. BO’s comment was in the context of paying for health care “reform”.

    I don’t think this is as much news as Jesse thinks it is.

    Yes, things are a mess. As a retired physician who hated Hillarycare, didn’t vote for Obama, thinks he’s doing a miserable job, etc., I do want to be fair. He’s prob listening to his team telling him the economy will rebound, things will get better, and he wants to believe in Rosy Scenario a la LBJ. And his youth was filled with socialist/Communist stuff, and his sainted father who came to the US to enjoy our freedoms (!?) was a Marxist . . . you get the point.

    Good times or bad, statists will be statists. Redistributionists will be redistributionists. And so it goes.

  • Todd Wood says:
    May 24, 2009 at 6:02 pm

    LeeAnne,

    Thanks for the comment. I guess the only question about Rahm is how does he like his coca..cola.

    I really don’t know these guys. Your insight shows me that some people do. Good work.

  • John says:
    May 24, 2009 at 7:46 pm

    Doc:

    The reason no one is picking this up is because the story IS NOT NEWS. You find me a person in the country today who doesn’t already know we’re broke and I’ll find you a person who’s been in a coma for 20 years. Don’t assume that because you find something outrageous and alarming that everyone else will. Is this fascism or you being out of touch with reality?

    • Subscribe to: Post Comments
    | Subscribe | Blogroll | Topics | Archives | Videos | Contributors | Search |