This fiscal year, the deficit will rise to about 13 percent of G.D.P., more than twice the non-wartime record. In dollars, that equates to a staggering $1.8 trillion. Fiscally, we are in uncharted territory.
Assume, in a relatively benign scenario, that all of this is directed by the recipients — China leads the list — to purchases of United States debt. Never mind that this all-Treasuries allocation is no sure thing: some countries may decide that purchasing American stocks, real estate or entire companies makes more sense than soaking up dollar-denominated bonds.
He also gets right on when he says gov’t uses inflation to tax people:
Legislators will correctly perceive that either raising taxes or cutting expenditures will threaten their re-election. To avoid this fate, they can opt for high rates of inflation, which never require a recorded vote and cannot be attributed to a specific action that any elected official takes.
What do you guys think about government intervention on the economy and Obama/Bush policies on it?
Editing the title of the article needs a little work.
The headline got super inflation… 😉 Lend us $1.8M and we’ll pay you back $1.8T… promise…
[Sorry, it’s been fixed. If you still want to give $1.8T, email us for the bank account number to wire it to. -ed.]
I thought someone needed a new toilet seat or hammer……
I think it sucks and shows how spineless and self serving our elected leaders are – all of them.
Basically Bush raped the American tax payer on his way out the door and clueless Obama continues along in the same vain.
Health care reform – yeah right. I see no talk about lowering health costs and insurance premiums or reigning in out of control corporations that pretty much leach off the system like the parasites the health care system purports to cure.
So we have civic clueless Demacorps and Recorplicans manipulating the media for their own narrow selfish agenda at the expense of true American liberty and freedoms.
The educational system has worked, most people are sheep to the feed bin with blinders on when it comes time to vote – if they even bother to do so.
“Top story today – Michelle Obama wears shorts!”
uh-huh.
While the tards on both sides of the one party government (and their cheering sports fans, nonetheless) bicker over nationalizing the health care system and dumb ass global warming taxes, the repo man is hooking up the end of his truck to the country.
While the drooling masses are worrying over whether or not Paula Headcase is going to be back on American Idol next season, the economy has been hollowed out.
People had better get used to a lower standard of living. There isn’t going to be any “free” health care. There isn’t going to any cap and trade horse shit. The money isn’t going to be there. It isn’t there now. And since it was all put on the national credit card, it was never there in the first place.
You stupid fuckers have been bitching about the crab grass in the front yard while roof of the house has caved in and the foundation collapsed.
What do you guys think about government intervention on the economy /// You have societal failure when government fails to intervene or when government intervenes and makes things worse. Helthcare is a good example of both. For years has failed to intervene, and now is intervening and making it worse.
and Obama/Bush policies on it? /// See above. Bush even worse–intervening in order to make it worse.
nospam, we just got our electric bill and if cap and tax passes you are correct, there won’t be any money.
Our real estate taxes almost doubled this year and now the electric bill has more than doubled in the last month at a time when we have been cutting back.
We’re getting real close to the zombie apocalypse….
Let’s not forget that Warren Barfett backed Obama saying he was the right guy for the job. Warren was supposedly advising Obama. Doesn’t look like Rahm is allowing that any more.
I believe Buffet is now saying that Obomba’s policies regarding the economy are bad. Well duh, what the hell did any of you (that voted for him) think he was going to do? Ruin an already headed south economy. Quadruple the deficit in 6 months and start taking over private industry.
Mission Accomplished
Prepare for the $100 loaf of bread.
I’ve always wondered how this country can have an vibrant economy and have no manufacturing base.
I guess people thought that New York City was the economic example to emulate across America.
It’s no coincident that the countries with an expanding manufacturing base will be the new economic drivers in the world.
Our economy has gone through phases, 1st agriculture then to manufacturing then to service and now finical. China will have us beat in all areas in 20 years.
How and why did our government allow this to happen?? Who does our government represent?
I think maybe the government would be willing to spark inflation to decrease the real value of the obligations they are shouldering. They would be oh so happy for a little inflation.
The problem, for them, is that is pretty tough to accomplish inflation right now. Total money being destroyed by not renewing credit or extending credit is at least an order of magnitude higher than the gov sending money to every bank with a sad story.
The money that IS being sent to banks is largely not being lent out because the banks are functionally broke. There is money being used for credit, but that is going to good credit risks. The cohort that took liars loans or pick-a-payment loans are now out in the cold. Since that was a HUGE industry, maybe 30% of the residential mortgage market, we’re talking an enormous amount of money.
In short, the deflationary forces at work are much stronger than any inflationary forces that the our government could secretly muster.*
What our country, especially, needs is a new shtick. Maybe we go to alternative energy and a smart grid. Maybe we invent cheap reliable, and safe energy some other way. Maybe we make virtual reality like in William Gibson or Bruce Sterling books. Maybe we have a big war and invite the world.
The only way to beat deflation, if I understand the issue properly, is to create a massive LEGITIMATE use of labor and investment. Printing money, bridges to nowhere, and ignoring the problem have all been tried and found wanting.
Anyone want to stop trolling the tread and address the issue?
*In the short to medium term. If you’re looking out far enough(maybe 5 years), I could certainly see inflation becoming an issue. The thing is that if inflation did get going it would mostly just go into the markets and get incinerated in the next crash.
I agree entirely with Warren Buffett. Does that make me a, Buffnik?
We are reaching the point where the economic effects of bad government on the economy are going to be dire.
At that point they aren’t going to be able to redistribute enough money to cover those most needy and the pain of trying to stay alive is going to be major.
Americans should be very angy at this man.
He made his fortune by de-industrialising America, reaping his money via replacement of workers with slave labour (read cannot consume the goods they make) and NOW
proclaims this …..
We are all screwed. Prepare for the death spiral.
Buffet you and your class created this. You knew that swapping goods and services with US$ bonds is not trade. Yet you persisted. All the crap that has occurred since then has been as a result of substitution activities that were inclines to nowhere.
I do not believe we can easily resume industrialisation. Prepare for the death spiral.
We are swimming in debt and Barry wants the government to manage health care.
The Billion Dollar Gram
By the way …
this death spiral was not caused by bad government. It was caused by the financial classes de-industrialising. Forever any employer sort the lowest wage. This death spiral is the result of total power of man to yield to this danger, slavery (and piracy, mayhem). The most foolish and tragic ideology was the concept of ‘creative destruction’.
http://tinyurl.com/obamadeficits
Spend spend spend spend
borrow borrow borrow borrow
and
Pay back 10c on the dollar with inflated $$$$$$$
Works every time!!!
I agree that Personal freedom, personal responsibility, pulling our own weight, works… but we can’t depend on churches for charity. I say strip those churches of tax-free status and let them live in the real world.
#23 – right on. Only option to reduce this debtload.
Alfred, your beloved Republicans will not stop spending. That is a pipe dream. Reagan cut taxes and then didn’t stop spending. He increased spending. The only way to stop politicians from spending is to remove the value of money to buy anything. Lucky for you it looks like we are headed in that direction … assume crash positions.
Alfy, you sound like you were abducted by a capitalist cult. You aren’t part of the Illuminati are you?
What were the pilgrims fleeing… the church How did the pilgrims have plenty… the Indians taught them how to survive.
Easy, 34 Billion over 50 years
Eliminate the Federal Reserve and we will find out how much we REALLY owe the rest of the world.
Market manipulation got us here, through artificially low interest rates and deregulation that allowed the financial industry to rape us all.
What do you guys think about government intervention on the economy and Obama/Bush policies on it?
The government got us into this mess to start with.
#11, Who does our government represent?
The Fed.
I can hardly wait for the collapse.
There is only one way to even have a chance of keeping what is yours. Think about it.
Bush INCREASED the public debt by $2.5 Trillion dollars and drive the economy into the ground.
Now Obama is dealing with an inherited recession further contributing to the deficit due to lower revenue base.
Smart guys like Buffett are exactly the team Obama brought in to oversee spending. Easy? No, but glad to see the right team in place to deal with the disaster left behind.