There are just so many indicators that you can watch to see how the economy is performing. Currently, it is moribund if not downright senescent. How so? Just look at the jobless rate figures out this morning. You can easily find better reading than this fodder.

[url]http://news.yahoo.com/s/nm/20101203/ts_nm/us_usa_economy[/url]

The misleading information is saying that the economy added 50,000 jobs but the overall unemployment rate rose to 9.8%. Factor in the 2 million with extended unemployment benefits that are expiring and a lackluster jobs market and you get a picture that is far less rosy than was hoped.

The true unemployment rate has to be considered as people who lost jobs, people who quit looking for jobs, newly graduated kids who want jobs, folks who are going to school because they can't find a job, and people who have short term or part time jobs. (you can add a few more categories if you choose) Until the true unemployment number drops by 2% or more, you DON'T HAVE A RECOVERY!

So when does it look like a real and measurable recovery will kick in? Nobody can predict this, but at present, it looks to be at least 2 years and maybe more than 10 years from now.

Here is another disturbing thought. There is a huge surge of baby boomers who own homes (or are paying mortgages) who will be retiring over the next roughly 20 years. As they retire, roughly half of them will sell their houses so they can live off the equity. Now my question is: Who will buy their houses? Consider that the current generation won't have enough money to buy the houses that will hit the market. What does this do to those rosy projections of increasing home value over the next 20 years?

DarJones

[QUOTE=Fusion_power;239830]Here is another disturbing thought. There is a huge surge of baby boomers who own homes (or are paying mortgages) who will be retiring over the next roughly 20 years. As they retire, roughly half of them will sell their houses so they can live off the equity. Now my question is: Who will buy their houses? Consider that the current generation won't have enough money to buy the houses that will hit the market. What does this do to those rosy projections of increasing home value over the next 20 years?[/QUOTE]You've left out the other side of the equation: [U]where those retirees go to live after selling their homes[/U]. For every retiree selling a home, there's one more person in the market for a retirement living space.

There's another important aspect of this aging of the Baby Boom:

I was just listening to a report about home-care vs. nursing homes which pointed out that in one state there was a waiting list of 3000 nursing home residents who were quite capable of living on their own -- with some home-care (far less expensive than nursing-home residence) -- but could find no affordable wheelchair-accessible housing.

There is a big potential demand -- and it's only going to get bigger in the next couple of decades -- for [U]handicapped-accessible housing[/U]. [I]That[/I] is where we'll see the next big housing boom, but most commentators are overlooking it.

Single-family non-handicapped-accessible housing may be a glut, but there's entrepreneurial opportunity there for upgrading such existing houses to handicapped-accessible. (Throw in a solar hot-water system, while you're at it!) But we don't hear that in the doom-and-gloom news, do we?

- - -

Three years ago I was recovering from surgery with a cast on one leg. My apartment is on the first floor, but getting to it from outside the building requires traversing at least five steps. If my apartment had been wheelchair-accessible, I could've left the recovery center/nursing home a month sooner than I did, saving Medicare and me a couple of thousand dollars each.

That certainly made me look at my future situation harder. I can't necessarily count on being fully mobile for the rest of my life. My present apartment could still be suitable [I]if[/I] it were handicapped-accessible, but it isn't (not only because of the entry steps).

And there are tens of millions of other Boomers like me. Many of us are going to wind up somewhat handicapped, one way or another, for several of our remaining years.

You want housing demand? You want to reduce medical-care expense? The way is here, for those thinking slightly out of the conventional box. Entrepreneurs should look at getting [strike]ahead of[/strike] in tune with this wave.

[QUOTE=cheesehead;239926]I was just listening to a report about home-care vs. nursing homes which pointed out that in one state there was a waiting list of 3000 nursing home residents who were quite capable of living on their own -- with some home-care (far less expensive than nursing-home residence) -- but could find no affordable wheelchair-accessible housing.

There is a big potential demand -- and it's only going to get bigger in the next couple of decades -- for [U]handicapped-accessible housing[/U]. [I]That[/I] is where we'll see the next big housing boom, but most commentators are overlooking it.[/QUOTE]

Sorry, but the cost of basic modifications to most homes (entryway ramp, accessible bathrooms) is not that great ... and as you say, it's far less expensive than nursing/senior-home option, so the net effect is in fact likely to be deflationary. In a broader vein, I am skeptical of the frequent "economic boom in healthcare for aging boomers" arguments ... the basic question none of the healthcare-as-economic-stimulus advocates has addressed to my satisfaction is, where is the net economic value-add from eldercare? (Note this is not an argument that money should not be spent on such things, just whether there is a net economic gain to be had here or not).

-----------------------------

So our feckless "leaders" in Washington are wrangling over a "budget compromise". The key issues are that the hypocritical deficit-chickenhawk Republicans are insisting that the budget-busting Bush tax cuts be extended for everyone, while Dems and Obama have drawn their "line in the sand" at single folks earning < $200k and married coupled < $250k. Note that the tax cuts currently cost ~$350 bln per year, with the folks above those "wealthy" income levels accounting for about one-fifth of that. The Reps claim that tax cuts for the rich are economically stimulative, which is patently false (Former labor Sec. Robert Reich has written extensively on [url=http://robertreich.org/]his blog[/url] about this fallacy). The Reps. also claim that "lots of small business owners earn more than a quarter-million a year and yet are not wealthy" ... come again? Why does owning a small biz make a given income level "worth less" than for non-business owners? Also, the Reps. conveniently act as though letting the tax cuts expire for the higher earners would somehow be nonprogressive, when in fact the mythical "not wealthy" small biz owner making more that a quarter-million would only see the higher rate on the income *exceeding* the minimum threshold.

The dems` pet issue is a one-year extension of long-term unemployment benefits, which is estimated to cost ~$60 bln/year, about the same as extending the tax cuts on the wealthy. They and Obama also want some kind of yet-another-stimulus package. all this is happening against the backdrop of the recently-released recommendations of the bipartisan Deficit Commission, which were [url=http://www.msnbc.msn.com/id/40489484/ns/politics-capitol_hill/]voted down last week[/url] but the story spun as a positive "because there was bipartisan support" for the recommendations. (If there was not *enough* support for the measure, does it really matter what the breakdown of votes on the losing side was? Some of the folks who voted 'yes' may have simply engaged in a common form of political two-facedness, voting for the measure only after they were sure it was going to fail).

Anyway, so the most-likely "compromise" appears to be one in which both sides get what they want, the Dems will get their unemployment extension while they hide behind the fig leaf that extension of the tax cuts for all is "merely temporary until the nascent/fragile/elusive economic recovery takes hold and no longer needs the government to prop it up", The Reps get their continuation of tax breaks for the wealthy, and there`ll probably be some kind of "compromise" stimulus package as well (where the "compromise" will again be that everyone gets pork-barrel spending for their home district), and budget hole ends up yawning even wider. Lovely, just lovely. (Mish has a similar take, with links [url=http://globaleconomicanalysis.blogspot.com/2010/12/meaning-of-compromise.html]here[/url] ... In a rare "this is good" piece he also comments on and approves of the Obama administration`s revival of long-stalled trade-agreement talks with South Korea, which culminated in a [url=http://globaleconomicanalysis.blogspot.com/2010/12/obama-signs-trade-agreement-with-south.html]signed pact[/url] last week).


[url=http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8182605/Chinas-credit-bubble-on-borrowed-time-as-inflation-bites.html]
Royal Bank of Scotland Says China`s Credit Bubble on Borrowed Time, Warns of Sovereign Default by China[/url]
[quote]"Many see China’s monetary tightening as a pre-emptive tap on the brakes, a warning shot across the proverbial economic bows. We see it as a potentially more malevolent reactive day of reckoning," said Tim Ash, the bank’s emerging markets chief.

Officially, inflation was 4.4pc in October, and may reach 5pc in November, but it is to hard find anybody in China who believes it is that low. Vegetables have risen 20pc in a month.

Diana Choyleva from Lombard Street Research said the money supply rose at a 40pc rate in 2009 and the first half of 2010 as Beijing stoked an epic credit boom to keep uber-growth alive, but the costs of this policy now outweigh the benefits.

The economy is entering the ugly quadrant of cycle – stagflation – where credit-pumping leaks into speculation and price spirals, even as growth slows. ... The froth is going into property. Prices are 22 times disposable income in Beijing, and 18 times in Shenzen, compared to eight in Tokyo. The US bubble peaked at 6.4 and has since dropped 4.7. The price-to-rent ratio in China’s eastern cities has risen by over 200pc since 2004

As it happens, Fitch Ratings has just done a study with Oxford Economics on what would happen if China does indeed slow to under 5pc next year, tantamount to a recession for China. The risk is clearly there. [b]Fitch said private credit has grown to 148pc of GDP, compared to a median of 41pc for emerging markets. It said the true scale of loans to local governments and state entities has been disguised.[/b]

The result of such a hard landing would be a 20pc fall in global commodity prices, a 100 basis point widening of spreads on emerging market debt, a 25pc fall in Asian bourses, a fall in the growth in emerging Asia by 2.6 percentage points, with a risk that toxic politics could make matters much worse.
[b]
If there is a hard-landing in 2011, China’s reserves of $2.6 trillion – or over $3 trillion if counted fully – will not help much. Professor Michael Pettis from Beijing University says the money cannot be used internally in the economy.

While this fund does offer China external protection, Mr Pettis notes wryly that the only other times in the last century when one country accumulated reserves equal to 5pc to 6pc of global GDP was US in the 1920s, and Japan in the 1980s. We know how both episodes ended.[/b][/quote]
[i]My Comment:[/i] Speaking of global commodity prices ... I like to watch non-U.S. news networks for most of my international news these days, both because U.S. network news has always been slanted and because in the past several decades it`s become distressingly info-tainment-ized. (Anyone who use to watch [i]Nightline[/i] back in the day with Ted Koppel will surely recognize this phenomenon, if they can force themselves to watch even a few minuts of the present incarnation of the program). Most commonly the BBC. DW-TV (Deutsche Welle), and for a real rag-on-die-Amerikaner-fest, RT (Russia Today). Last Friday evening I was watching DW-TV and almost spewed tea out my nose from guffawing when the business-news commentator, with a straight face, asserted that the recent runup in commodity prices has been due to "the accelerating global economic recovery". Rampant money by the Fed and the ECB and the blowing of a colossal credit bubble in China of course have not the slightest thing to do with it, it's all "robust demand fundamentals".

And an interesting footnote to the above is that just-released Wikileaks cables reveal that not even (or better especially not) Chinese top officials [url=http://www.zerohedge.com/article/wikileaks-reveals-chinese-top-officials-say-not-trust-countrys-economic-data]believe the official economic data there[/url].

Washington-style "consensus", part 2
 

Matt Taibbi`s latest blog post starts with an amusing "ya got the wrong dude, dude" moment apparently suffered by conservative commentator David Gergen in a recent roundtable, which then morphs into a [url=http://www.rollingstone.com/politics/matt-taibbi/blogs/TaibbiData_May2010/239443/83512]very nice discussion[/url] of social security, the Bush tax cuts, and the nature of Washington "consensus" politics:
[quote][i][NYT reporter Matt][/i] Bai is talking here about some very clear and obvious choices Obama is about to make. There`s the question of whether or not to extend the insane Bush tax cuts, and paired up with this is the recent return of that unkillable Beltway cliche, the notion that Social Security is going broke and that the solution to the nation`s deficit reduction problems lies there.

Let`s be clear about what`s going on here. Social Security was never the cause of the nation`s debt problems. This issue dates all the way back to the Eighties, when Ronald Reagan hired Alan Greenspan to chair the National Commission on Social Security Reform, ostensibly to deal with a looming shortfall in the fund. Greenspan`s solution was to hike Social Security tax rates (they went from 9.35% in 1981 to 15.3% in 1990) and build up a "surplus" that could be used to pay Baby Boomers their social security checks 30 years down the road.

[b]They raised the SS taxes all right, but they didn`t save the money for any old Baby Boomers in the 2000s. Instead, Reagan blew that money paying for eight years of deficit spending and tax cuts. Three presidents after him used the same trick. They used about $1.69 trillion in extra Social Security revenue (from the Greenspan hikes) to pay for current-day goodies, with the still-being-debated Bush tax cuts being a great example. This led to the infamous moment during Bush`s presidency when Paul O`Neill announced that the Social Security Trust Fund had no assets.

Well, duh! That is what happens to a fund, when you spend 30 years robbing it to pay for tax cuts for [i][JP Morgan CEO][/i]Jamie Dimon and [i][Goldman Sachs CEO][/i]Lloyd Blankfein. It will tend to get empty. But of course this wasn`t presented to the public as being the consequence of too many handouts to wealthy campaign contributors: this was presented as a problem of those needy goddamned old people wanting to retire too early and being just far too greedy when it came to actually wanting their Social Security benefits paid out.
[/b]
And so in all seriousness none other than Alan Greenspan proposed back in 2004 that the "social security problem" be rectified by means of reforms that should sound familiar to those reading the news of late: raising the retirement age and cutting benefits.
I wrote about this in purl=http://www.rollingstone.com/politics/news/17390/222206][i]Griftopia[/i][/url], but there`s one more key fact here. Social Security taxes are capped, which means that above a certain level (I believe it`s $106,000 this year) there are no additional taxes. Which means that Jamie Dimon pays a disproportionately small amount of Social Security tax -- an arrangement that makes sense, if that money is only going to one place, i.e. back, later on, to the person who paid the taxes, in the form of Social Security benefits.
[b]
But if all that money is just going into a big pile to be stolen by a long line of presidents who are using it to pay for things like pointless wars and income tax cuts for their rich buddies, the Social Security cap means that this stealth government revenue source disproportionately comes from middle class taxpayers. Add in the fact that the proposed solution to the budget problem now is cutting Social Security benefits, and what you get is a double-screwing of middle-class taxpayers: first they see their Social Security taxes used to fund tax cuts for the wealthy, and then they see cuts to their benefits to pay for the fallout from that robbery.[/b]

Of course, that`s not how Bai is presenting it. In his telling of the story, Obama is going to be presented with sober, correct analysis (the Bush tax cuts must be preserved, while Social Security bennies must be cut), and whether or not he forges ahead and defies his hysterical and irrational base to make those cuts will reveal the extent of his character. ... in other words, those of us who think robbing Social Security a second time to pay for the continuation of the obscene Bush tax cuts -- well, that`s "demanding fealty to the one" and "brooking no dissent" and lacking "thoughtfulness and openness to new ideas."
On the other hand, approving those Social Security cuts and green-lighting the continuation of those insane tax breaks -- tax breaks that were extremely radical even by Republican standards when Bush originally passed them amid two preposterously expensive war efforts -- well, that`s being "pragmatic" and seeing "all dogma " as "anachronistic."

Here`s what this all comes down to, dogma or no dogma: who is going to pay for a) the Bush tax cuts b) the bank bailouts and c) the Iraq and Afghanistan wars? If you want to get there by making janitors and pipe-fitters wait until they`re 69 to retire, raise your hand. If you want to get there by making Jamie Dimon rent out his 900-foot rooftop terrace in Chicago two nights a year, raise your hand.

The really infuriating thing? Bai has it backwards. The real consensus, i.e. the consensus of actual human beings, outside Washington, overwhelmingly backs the idea of not f***ing with Social Security benefits and ending the Bush tax cuts for people making more than $250,000. In fact, only 26% of Americans support extending the cuts for everybody.

So when Bai talks about "bipartisanship" and suggests that extending the Bush cuts is a move to the center, what he`s talking about is the Washington consensus.[/quote]
[i]My Comment:[/i] Note that the U.S. government plays similar "borrow from itself" games with the other "trust funds" like Medicare as well ... the total borrowings-against-these accounts, the misleadingly-named "intragovernmental holdings" (a better name would be "internal borrowings") is nearly $5 trillion at present. And since this whole scam was started, there has not been a single year - not even the legendary "Clinton surplus" years - in which the public debt (or surplus) minus the new internal borrowings has been positive. In other words, there has never been an instance in the past 30 years in which the total U.S. government debt shrank.

Apologies for the triple-witching thread-spammery, but the "budgetary compromises" being floated in DC get ever more ludicrous. Quick summary: Wrangling in congress: Democrats want to "help balance the budget" with higher taxes (i.e. by allowing the Bush tax cuts to expire) on the wealthy, and of course want to spend more on unemploymentextensionsmallbusinessinfrastuctureinvestinamericasfutureandsavethesepuppiesfromcertaindeath benefinvestmentimulus goodies which would of course more than negate any extra revenue from the partial tax-cut expiration. Republicans want to "help balance the budget" by nixing another unemployment-benefits extension for those whose 99-weeks-on-the-dole has run out, and continue the tax-cuts-for-the-rich, which would of course more than negate any extra revenue from the non-extension of unemployment benefits. So the 2 sides "compromise" by combining their spend-more proposals and throwing out their respective reduce-debt proposals.

Not to be outdone in its willingness to "compromise on deficit reduction" by keeping the "deficit" part and ditching the "reduction", the White House just proposed cutting social security payroll taxes for the coming year, since after all, giving every worker money to buy another plasma TV next year will be sufficiently stimulative of the Asian economy that it will help restore the solvency of the Social Security trust fund, or something:

[url=http://online.wsj.com/article/SB10001424052748704156304576003441518282986.html?mod=WSJ_hp_LEADNewsCollection]White House Proposes Payroll-Tax Holiday[/url]: [i]WASHINGTON—Aides to President Barack Obama are proposing a one-year reduction in the payroll tax as part of negotiations with Congress on a broader package to stave off income-tax increases due to take effect next year.[/i]

And anyway, since they're gonna raise the SS retirement age to as high as is needed to make up for 30 years of government robbing the trust fund anyway, they can just tack on an extra year later (hint: "sometime during a future administration") to make up the shortfall caused by their "generosity" today.

Maybe another soon-to-be-announced compromise will be the economically stimulative "start a third war" ... but with North Korea or Iran? Oh hell, let's just compromise and do both.

[QUOTE=ewmayer;240403]Apologies for the triple-witching thread-spammery, but the "budgetary compromises" being floated in DC get ever more ludicrous. Quick summary: Wrangling in congress: Democrats want to "help balance the budget" with higher taxes (i.e. by allowing the Bush tax cuts to expire) on the wealthy,
[/QUOTE]

I'd like to see the tax cuts repealed period. I'm willing to pay more in taxes.
TANSTAAFL.


[QUOTE]and of course want to spend more on unemploymentextensionsmallbusinessinfrastuctureinvestinamericasfutureandsavethesepuppiesfromcertaindeath benefinvestmentimulus goodies
[/QUOTE]

At the same time we should get rid of these 'goodies'. I think 99 weeks
of unemployment insurance is ridiculous. 52 weeks maximum should be plenty.

At the same time, congress should be passing legislation that encourages
hiring. e.g. strong tax breaks to companies that hire. (heavy) tax penalties
for moving jobs offshore. And create an AMT for corporations.

And let's get the f*ck out of Afghanistan. NOW. How much are we spending
there?

And let's bring back the 1950's vis-a-vis marginal tax rates.

[QUOTE=R.D. Silverman;240501]I'd like to see the tax cuts repealed period. I'm willing to pay more in taxes.
TANSTAAFL.




At the same time we should get rid of these 'goodies'. I think 99 weeks
of unemployment insurance is ridiculous. 52 weeks maximum should be plenty.

At the same time, congress should be passing legislation that encourages
hiring. e.g. strong tax breaks to companies that hire. (heavy) tax penalties
for moving jobs offshore. And create an AMT for corporations.

And let's get the f*ck out of Afghanistan. NOW. How much are we spending
there?

And let's bring back the 1950's vis-a-vis marginal tax rates.[/QUOTE]


The best thing of all would be to do what Massachusetts does. No
deficit spending at all. Our state constitution prohibits it.

Of course we need to allow for an extreme emergency like a real war.
Congress could override the 'no deficit' rule by say a 95% vote.

$2 Trillion deficit on tap for 2011
 

The NYT reports the estimated [url=http://www.nytimes.com/2010/12/07/us/politics/07cong.htm]cost of the emerging budgetary "compromise"[/url] as a whopping $900 billion over the next 2 years, ON TOP of the current deficits. The CBO/Treasury folks "estimate" the latter at slightly less than $1.5 trillion per year but based on the actual 12-month issuance rate of debt it looks to be around $1.6 trillion. Add $450 billion in new borrowings and, congratulations, Washington, a scant 3 years after running your first trillion-dollar deficit, you are on schedule to have your first $2 trillion one. They must think Moore's Law applies to U.S. sovereign-debt issuance there in D.C. Sheer, unmitigated, reckless, insanity. No one can be sure how this greatest Ponzi scheme of all time will end, but when - not if - it does, it`s gonna be ugly in a way that will make 2008 look a mild case of the financial sniffles. And it will mean both the end of the "American empire" in the global-superpower sense, and I suspect it will smash the myth (which exists mainly in the minds of Americans anymore) of American exceptionalism for good.

Former Clinton labor secretary Robert Reich calls the compromise [url=http://robertreich.org/post/2132901013]"An abomination"[/url]:
[quote]The deal the President struck with Republican leaders is an abomination.

It will cost $900 billion over the next two years — larger than the bailout of Wall Street, GM, and Chrysler put together, larger than the stimulus package, larger than anything that’s come out of Washington in years.

It makes a mockery of deficit reduction. Worse, the lion’s share of that $900 billion will go to the very rich. Families with incomes of over $1 million will reap an average of about $70,000, while middle-class families earning $50,000 a year will get an average of around $1,500. In addition, the deal just about eviscerates the estate tax — yanking the exemption up to $5 million per person and a maximum rate of 35 percent.

And for what? ...[/quote]
[i]My Comment:[/i] Since we refuse to embrace austerity, some time in the not too distant future, austerity will embrace us. And unless the Republicans are actually foolish enough to place an incompetent demagogue like Sarah Palin on the 2012 presidential ticket, Obama may have just doomed himself to being a one-term president.


And on a for-your-amusement note, NYT high priest of neo-Keynesianism Paul Krugman [url=http://krugman.blogs.nytimes.com/2010/12/06/inside-job/]blogs that he finally went to see the movie [i]Inside Job[/i][/url]:
[quote]...about the economist-bashing: I thought it was basically fair. There aren’t, I think, all that many cases when economists are literally paid to offer a specific opinion — although Greenspan’s defense of [i][1990s S&L crisis crook-poster-child Charles][/i]Keating qualifies. But the movie didn’t say there are. [b]What it suggested, instead, was a kind of soft corruption: you get paid a lot of money by the financial industry, you get put on boards, but only if you don’t rock the boat too much[/b].[/quote]
[i]My Comment:[/i] So did you rock the boat any back in the day when you got paid a lot of money by, and put on the board of Enron, Professor K.? Remember? Enron, whose "new economy business model" you lauded in new-paradigmish terms?

[p.s.: Krugman sees the budget deal as containing some good but overall "too little, too late". But of course this is a guy who apparently believes that the problem with the late housing bubble was that it just wasn't big enough to lead to a truly self-sustaining recovery from the post-dotcom-and-9/11 recession. But he has a "Nobel" prize and we don't, so he must be right.]

The Lighter Side of Political "Compromise"
 

Was going to post this over in the Warlogs thread since it ends with a quip about (and my comment turns on that) Assange, but the "compromise" humor seems more-apt here, following the stories of the past 2 das. BTW, the latest developments are that Assange [url=http://www.telegraph.co.uk/news/worldnews/wikileaks/8186786/WikiLeaks-founder-Julian-Assange-is-refused-bail.html]has turned himself into the authorities[/url] in the UK for questioning and was refused bail, but said he will fight any attempt to extradite him to Sweden.

[url=http://www.huffingtonpost.com/andy-borowitz/in-latest-compromise-with_b_793232.html]In Latest Compromise With GOP, Obama Agrees He Is a Muslim[/url]
[quote]WASHINGTON (The Borowitz Report) -- In his latest effort to find common ground with Republicans in Congress, President Barack Obama said today that he was willing to agree that he is a Muslim.

Differences over his religious orientation have been a sore point between the president and his Republican foes for the past two years, but in agreeing that he is a Muslim, Mr. Obama is sending a clear signal that he is trying to find consensus.

"The American people do not want to see us fighting in Washington," Mr. Obama told reporters at the White House. "They want to see us working together to improve their lives, and Allah willing, we will."

But Mr. Obama's willingness to back down on his claim of being a Christian does not seem to have satisfied his Republican opposition, as GOP leader John Boehner (R-Ohio) today insisted that the President must also agree that he was born in Kenya.

While Mr. Obama did not immediately agree to Rep. Bohener's demand, he hinted that yet another compromise might be in the offing: "My place of birth has been, and will always be, negotiable."

White House sources indicated today that the president might be willing to meet the GOP halfway on his birthplace and say that he was born in the middle of the Atlantic Ocean.

Elsewhere, moments after his capture in London, WikiLeaks founder Julian Assange said, "I knew I shouldn't have signed up for [url=http://en.wikipedia.org/wiki/Foursquare_(social_networking)]Foursquare[/url]."[/quote]
[i]My Comment:[/i] The best part about the Swedish sex-crime allegations against Assange is that one of the two women making the accusation was apparently so outraged at Mr. Assange`s previous-night refusal to stop having sex when the condom he was using allegedly broke that in a fit of extreme pique she left the flat where the tryst had occurred, marched right over to the nearest shop selling foodstuffs, and bought oatmeal, which she then cooked for herself and Assange. I guess this truly was a case of "Stockholm syndrome". (I kid you not - for a pieced-together timeline of the whole affair culled from stories in the Sewdish [i]Aftonbladet[/i] tabloid, see [url=http://rixstep.com/1/20100914,00.shtml]here[/url].)

[QUOTE=R.D. Silverman;240502]The best thing of all would be to do what Massachusetts does. No
deficit spending at all. Our state constitution prohibits it.
[/QUOTE]

[URL="http://en.wikipedia.org/wiki/Balanced_budget_amendment"]http://en.wikipedia.org/wiki/Balanced_budget_amendment[/URL]

From the above it looks like there has been attempts to make your statement an amendment to the US Constitution.

[QUOTE]On May 4, 1936, Representative Harold Knutson (R-Minnesota) introduced a resolution in support of a Constitutional Amendment that would have placed a per capita ceiling on the federal debt in peacetime[/QUOTE]

Matthew, there have been numerous attempst (which died at various stages of the process - the one you cite probably got farther along than the rest) to write some kind of balanced-budget clause into the Constitution.

Even if the Knutson amendment had become law, I wonder if it would have any effect now, since America is in a perpetual state of war.

-----------------

So the bond markets appear to be reacting very negatively to the latest budgetary idiocy out of Washington ... the [url=http://finance.yahoo.com/q/bc?s=TYZ10.CBT]10-year bond[/url] - which is the one most closely tied to mortgage rates - has plunged more than 2% in the past 24 hours, which is simply a massive move.

In an interesting (and little-reported by the MSM) aspect of the budget "compromise" is that the Republicans got every budget-busting thing they wanted - mainly extension of tax breaks for the rich, and the Dems similarly got several hundred billions in new pork (and pork extensions), with one key exception: The [url=http://www.zerohedge.com/article/they-did-what]Build America Bonds[/url] program, essentially a subsidy for Municipal bond issuance and perhaps the only thing which has kept multiple states` budget woes from reaching the all-out crisis stage, was nixed by Republicans. Muni bond markets, which were already quite jittery in the past several months, have (in sync with Treasuries) reacted [url=http://finance.yahoo.com/q/bc?s=MUB]badly[/url].

In another [url=http://globaleconomicanalysis.blogspot.com/2010/12/lies-half-truths-and-100-hubris-on-60.html]self-serving interview last Sunday[/url] on [i]60 Minutes[/i], Bernanke said that (a) The Fed is not printing money, and (b) That he is "100% confident" that all non-money which the Fed is printing will not lead to inflation in commodity prices. Both are flat-out, bald-faced lies: By the Fed's [b]own definition[/b] of "money supply" (technically known as M2) they have printed trillions, and the price of key industrial commodities has been rising steadily for the past 18 months. Oil just shot past $90 per barrel yesterday for the first time since the short-lived speculative oil bubble of summer 2008. In my area I recall gasoline briefly touched $4.50/gallon that summer, collapsed to under $2 by December. I've been keeping tabs on the price at the same local Valero station I pass every weekday on my way to work, and it's been rising steadily, up 7 cents in the past week to $3.22. I don't recall it ever having been this high at this time of year. So, Zimbabwe Ben, you are 100% sure that $4 gasoline and a climate of dismal job creation coupled with now-rising mortgage rates are the cure for what ails us?

To give you a sense of just how wildly disingenuous Bernanke has been with respect to the Fed`s money-printing and its (alleged) effect on mortgage rates: Since hitting an all-time low

And recall that Bernanke at the time said, in yet another self-serving (or perhaps 'blatantly propagandistic' is more apt) Op-Ed in [url=http://www.washingtonpost.com/wp-dyn/content/article/2010/11/03/AR2010110307372.html]The Washington Post[/url]:
[quote]This approach [buying huge amounts of mortgage-backed securities and setting interest rates on Fed lending to banks near zero] eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. [b]Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending.[/b] Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion. [/quote]
All the Fed-economists` pet delusions on front and center display here: Stock market valuation is a barometer of economic health, lower mortgage rates will make housing "more affordable" (yeah, we saw how "affordable" housing became from 2002-2007), record-low-corporate bond rates will encourage business expansion and hiring, fake paper "wealth" will fuel people to spend money they don't have which will somehow create "real wealth", yada, yada, yada. Uh, didn't we already try this starting back in 2002? That worked out great, didn't it?

Let's see: The Greenspan experiment in slashing interest rates led to the biggest consumer debt bubble in history, housing became much *less* affordable since the doubling in prices more than compensated for the low interest rates (and millions of folks who could not have afforded houses at the old lower prices even with low rates were lured into the speculative frenzy), rather than creating a "virtuous circle", the same insane policies created a vicious cycle and only hastened the ongoing evisceration of the middle-class wage base, and even with record-low corporate debt issuance rates for most of the past several years, companies are very pointedly *not* investing the cheaply-borrowed funds to create jobs, because the real issue is lack of demand from tapped-out consumers who can no longer be induced to go further into debt at *any* interest rate. And the "positive reaction" to the QE2 announcement in the mortgage-bond markets has proved to be very short-lived. In other words, epic failure on all fronts.

Jon Stewart of [i]The Daily Show[/i] - funny how the "fake news" shows seem to be the best at actually providing critical commentary on the news these days - has a nice [url=http://www.thedailyshow.com/watch/tue-december-7-2010/the-big-bank-theory]piece on Bernanke's lies here[/url], titled "The Big Bank Theory".

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And I see that it's time for the next 100-day update to my unofficial "subprime mortgage meltdown fraud" calendar:
[b]
Today is Day 1400 since the start of the global financial crisis, and there have been 2 related criminal convictions.[/b]