CrackingUp

The Scariest Chart Ever

The continuation of our Ponzi scheme seems obvious...borrow from the rest of the world until our currency is nearly worthless, which will allow us to run massive current account surpluses as our manufactured goods will have become dramatically more competitive. In twenty years, the hyperinflation will reveal the very negative real yields of the debt issued in 2009.

Also, in 2014, would you rather buy a Chevy for $25,000 (in today's dollars) or a Toyota for $100,000 (in today's dollars). Imagine that...Walmart China will have to start a "Buy Chinese" ad campaign because everything is made in the currency-manipulating USA. And they thought they were soooo smart, dumbing down the next generation of first-worlders with leaded toys and melamine-laced powdered milk for candy bars. Of course, I have learned Mandarin just to hedge my bets...

"Here is a chart of federal borrowing"...it appears that the author is implying government borrowing rather than bank borrowing from the Fed, which the chart represents; though I could be mistaken on his intent.

If so, it's hilarious that the fear-mongering author of this article did not even copy the content from another blogger correctly.

Everyone chillax and stop herding - if we can just make draconian cuts in entitlement benefits (Medicare/Social Security), which cost us $800B last year (hint: the bailouts, just like the cost of the Iraq occupation, will be a joke in the long run), we just may survive.

The US model does an amazing job of harnessing human potential, despite the short run pain it can cause. Our paranioa makes us work hard and die younger than countries with socialized medicine (who spend far less per capita on health care), but it sure as hell beats the USSR in the 1970's and 1980's. We just need to have enough children to outvote the pill-hungry, me-me-me baby boomers and buy up the excess supply of assets left when they have departed...or open up the borders. Who of them will want to terrorize the poor decrepit US at that point?

Two On McCainomics

Universal health care is a joke - I am just finishing the first year of my MBA in Toronto (I only left the US for the chance to study derivatives under John Hull..too bad structured products are out of favor now) - my wife is having our second child in September and I am quite concerned about the pathetic quality of care up here. The only reason universal health care exists is because it leeches off of the innovations provided by the incentive-based system in the US. My first child was born in the good ol' US of A under my PPO - I EARNED my health care through a lot of hard work and intelligence...I provided VALUE to my country...what a novel idea!

There is a balance, but universal health care is not it. I just read an article about how "average Americans" plan to spend their rebate checks and was disgusted by the stupidity and entitlement of certain Caucasian Americans (I am third generation Irish). Some folks need to start feeling some severe pain to understand how good they have it and why folks willing to work for 1/20th the wage are taking their unskilled jobs - don't talk to me about the Renminbi being pegged to the USD, because it is not and the PRC is only digging its own grave by financing the war in Iraq. You can't use $1 Trillion in US debt as a weapon if that use will make it worthless. Regulated capitalism...free market socialism...sounds like convergence to me...

How will the US create comparative adavantage over the next 25 years? Surely not through government spending - internationally or domestically. At least the advisers of the Dems understand the fundamentals of prosperity creation. McCain is a joke and I hope that the stupid and entitled individuals mentioned earlier are not tricked again.

Better Off Now Than 5 Years Ago?

I am confused Malkiel - could you be more explicit in your assessment of my brain? As a registered Democrat from Massachusetts (born and raised), I am concerned that you may be percieving my comments differently than intended.

I am making two interrelated claims:
-Entitlement has made the percieved (and experienced) pain of the current downturn more acute for the middle class
-Pure self-interest on the part of some, as opposed to enlightened self-interest, has led to a far more critical series of events than would have occurred in a more balanced environment

If you disagree with my position - which I welcome in the spirit of innovation - please be more clear in stating your arguments rather than reverting to what feels like a personal attack.

Better Off Now Than 5 Years Ago?

The natural elite will always be better off then we were five years ago - the pain for the middling mediocrity is only evidence of the problem of our entitlement culture. Enlightened self-interest has been beaten down by the greed of leaders that act in destructive self-interest, a tide that is about to change in the home of the greatest economic model known to man!

Pain for some is unavoidable in such a system, but there is no substitute for the incentive it provides. Hopefully the middle class will vote for the American dream rather than continuing to vote for leaders that represent blue-blood, monarchist, anti-American elitism. Fear is a powerful selling tool, but hope springs eternal in times of trouble.