Someone Must Lose If Debt Is Forgiven

Solving the world’s debt problem dominated the discussion in the Rick’s Picks forum over the weekend, with the final word going to “Jill,” who congratulated the group for “putting on their thinking caps and devising some kind of solution rather than just abandoning all hope.”  From where we’re sitting, however, it is only those who have abandoned hope who truly understand the problem.  For in fact, there is no more a “solution” to the world’s debt problem than there is a perpetual motion machine or cold fusion generator to remedy the world’s energy problem. In the end, to restate C.V. Myers’ dictum, every penny of every debt must be paid – if not by the borrower, then by the lender. It’s as simple as that. And much as we’d like to believe that some financial genius will come up with a way to spare us the pain of a Second Great Depression, it ain’t gonna happen. Because the world’s debts total in the many hundreds of trillions of dollars, there is simply no discharging those debts without ultimately ruining the financial lives of most creditors, debtors, or more likely, both.

This perpetual motion machine almost worked

However the unpayable sums are dealt with, as long as contracts are strictly enforced, deflation will continue to attend the process. Under the circumstances, the bankruptcy courts — as opposed to a political system that may well eventually succumb to an anti-bank, populist tide — will remain responsible for sorting out which creditors get paid, and how much.  By and large, this would visit pain on borrowers and creditors roughly commensurate with their respective sins of greed, stupidity and recklessness.

A Wacky Idea

In the forum over the weekend, the wackiest-sounding solution for the debt problem would have the U.S. Government print “debt-free money” that would be distributed to all Americans. Here is what the Treasury Department supposedly would have to do, according to the idea’s author, “F. Beard”:  “1) Calculate how much bank credit is in the system;  2) send every American adult (borrowers and savers) an equal [share, based on] total bank credit; and, 3) borrowers could pay off their mortgages, and savers would be compensated for years of suppressed interest rates.  In the end, says Beard, “we end up with a debt-free population, 100% reserve banking and no inflationary spiral, since the counterfeiting cartel, the banks, would not longer be able to create money (credit). A one-time shot of inflation? Maybe, but why? M1 would not change, it would simply become real money instead of credit.” wacky

We’ll leave it to readers to parse the logic of this modest plan, and to write letters to newspaper editors if they wish to see it promoted. However, as far as we’re concerned, it is dead-on-arrival as soon as we calculate “how much bank credit is in the system.”  For in fact, bank credit is non-existent once the banking system’s very real liabilities are subtracted from its mostly fictitious assets. For one, there’s the banks’ counter-party exposure to a derivatives bubble with a notional value estimated as high as a quadrillion (i.e., a thousand trillions) dollars.  And for two, there is all that bad mortgage paper being warehoused at the Fed, which traded Treasury paper for it. The Fed may be able to pretend that, for one, GM is going to repay its bailout loans, but the illusion that the nation’s lowest-quality mortgages have returned from the dead will be far more difficult to concoct as long as an estimated half of the nation’s 75 million homeowners remain underwater.

…and a Wackier One

Whether you screw the lenders or stretch borrowers on a rack to get them to pay, the financial loss in macroeconomic terms will be the same. If the politicians want to try something truly radical, they should consider a Federal income tax moratorium in 2011.  Although this would “cost” the U.S. about $2.5 trillion in lost revenues, that’s not a whole lot more than some of the high-end estimates for the looming QEII.  Granted, it would be hugely inflationary. But the spectacular stimulus it would provide to capitalists, entrepreneurs and workers could conceivably reinvigorate the economy sufficiently to leave everyone better off. You could also argue that because the dollar is already fundamentally worthless, there is no better time than now – when some still believe the dollar has value – to try such a crazy scheme.  Considering that the alternative is a deflationary depression, what have we got to lose? It would be great to see everyone working his or her tail off for a year, and for the economy to be breathtakingly productive. At the very least, it would probably further postpone the Second Great Depression that seems all but inevitable otherwise.

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  • Waynoo November 8, 2010, 6:48 am

    Wacky idea # 3, How about balancing the budget. No matter how much pain or so called suffering for our
    fellow Americans dependent on the dole and over
    financed military, spend only what is received into
    the tax coffers. Also the 2 billion spent every week
    on the so called “wars” could easily finance those
    without healthcare and the rest of Americans who had coverage before the new law (80%) and were fine with their benefits, go back to their health plans. Also cut the
    travel budget for all elected officials-that would be a nice start to SAVING money.

  • roger erickson November 6, 2010, 7:02 pm

    “every penny of every debt must be paid – if not by the borrower, then by the lender”

    That’s a very local view missing all evolutionary history. Coordination creates new wealth, by lowering the real cost of acquiring old goods/services – and making new ones available.

    In parallel, fraud makes a mockery of adaptive wealth creation & debt. Call it “Cargo-Cult” wealth creation. If someone fabricates their supposed wealth, and your supposed debt – does debt really have to be repaid, by either borrower or lender? Not always. Sometimes it goes to court, arbitration, conflict resolution, war, or simple forgiveness.

    Only ideologues deal in absolutes. Everyone else has to deal with continuous, recursive review of supposed axioms. Note, those supposed axioms unpredictably change at rates just fast enough to always be unsettling to Luddites.


    No example that you cite can refute the truism that “every penny of every debt must be paid…” Your phrase “simple forgiveness,” for example, overlooks the fact that when a debt has been forgiven, the lender has paid it. RA

  • F. Beard November 3, 2010, 3:47 pm

    A final thought for this probably dead thread:

    What if QE, instead of being given to the bankers for worthless assets was instead just given to the population so they could pay down their debts? Would it not achieve the same result of fixing the banks PLUS fixing the general population? Max Keiser has pointed this out on several occasions, has he not?

  • F. Beard November 3, 2010, 3:21 am


    Hang in there. Money is a mind blowing topic and deliberately kept mysterious too.

    “The issue which has swept down the centuries
    and which will have to be fought sooner or later
    is the people versus the banks.”
    Lord Acton

    Exciting times, eh?

  • F. Beard November 3, 2010, 12:12 am

    For in fact, there is no more a “solution” to the world’s debt problem than there is a perpetual motion machine or cold fusion generator to remedy the world’s energy problem. RA

    So pennies from Heaven would not solve the problem no matter how many fell? What if they were made of pure gold? Would that help? (Actually, it wouldn’t since gold really isn’t money without some sort of government privilege backing it. A rare earth would probably be better.)

    If the whole world is in debt then the question must be asked “To whom?” Martians?

    So the world is doomed to Great Depression II because of numbers in electronic balance sheets?

  • F. Beard November 2, 2010, 10:08 pm

    Although this would “cost” the U.S. about $2.5 trillion in lost revenues, that’s not a whole lot more than some of the high-end estimates for the looming QEII. Granted, it would be hugely inflationary. RA

    So I propose to eliminate consumer debt without (serious) price inflation and you propose to give an inflationary bonus to the very people who belong to or benefited from the government backed counterfeiting cartel? At the expense of those on fixed incomes and the savers (as usual)? Any limitations on leverage or shall the counterfeiting proceed as usual?

    Taxes aren’t the root problem Rick; they are merely symptoms of a fundamentally dishonest and unstable money system, government backed fractional reserve lending in a government enforced monopoly money supply. Remember, the size of the US government was quite small when the bankers wrecked the economy in the 1920s and 1930s.

    I suppose the borrow-and-spend Republicans will win big today so your plan may be partially fulfilled.

  • F. Beard November 2, 2010, 6:48 pm

    Someone Must Lose If Debt Is Forgiven RA

    Not necessarily. Is the prevention of a deflationary Depression and possibly World War III anyone’s loss?

    But let’s just stick to mathematics; who would lose if the entire US population was sent a huge and equal check of new legal tender fiat?

    1) Savers? No, they would receive an equal amount too.
    2) Borrowers? Nope.
    3) The banks in nominal terms? No, it would effectively convert worthless debt assets into sound ones.
    4) The general population from inflation? No, since the bailout would be accompanied by the abolition of new money (credit) creation by the banks. Only a one-time bout of inflation might occur.
    5) State governments? Nope. Tax revenues would go up.
    6) Federal government? Nope.
    7) Foreign dollar holders? Maybe, but I notice that strong US demand is good for their economies.
    8) The uber rich in relative terms? Yes, here are the real “losers” but only in relative terms. They would cease to be so rich in relative terms to the rest of society but they would still be rich. And considering they most likely got rich via the government backed counterfeiting cartel should we weep for them?

    • F. Beard November 2, 2010, 6:51 pm

      And oh, ha,ha! The uber rich would receive an equal amount too. How could they complain? 🙂

  • F. Beard November 2, 2010, 6:10 pm

    [No, the cat hasn’t had my tongue, I just failed to realize that Rick had posted again]

    For in fact, bank credit is non-existent once the banking system’s very real liabilities are subtracted from its mostly fictitious assets. RA

    Many of it’s fictitious assets would be converted to cold, hard, legal tender as mortgage and other consumer debt was repaid. Of course leverage restrictions would be required from that point on to prevent a repeat of the problem.

    For one, there’s the banks’ counter-party exposure to a derivatives bubble with a notional value estimated as high as a quadrillion (i.e., a thousand trillions) dollars. RA

    What do I care about the banks’ gambling habits? Let them eat those losses that can’t be netted out.

    And for two, there is all that bad mortgage paper being warehoused at the Fed, which traded Treasury paper for it. RA

    What bad mortgages would remain once the population was flush with brand new legal tender? Let the Fed force the now payable debt back onto the banks in exchange for the new legal tender fiat.

    A bubble was inflated with massive amounts of temporary money which is now going back to nothing, a painful process. What I propose, in essence, is converting the peak of that bubble to a plateau with genuine legal tender fiat.

    Not a perpetual motion machine; just a little applied and poetic justice. The banks screwed the population with money (temporary) creation; the population can be
    bailed out with permanent money creation.

  • walter fields November 2, 2010, 3:31 pm

    Sorry Rick, I didn’t realize I had to be real simple for
    some of your readers, i.e. sarcasm, irony, ridicule is a
    no-go zone. As for ‘honorable men’ that of course is
    from the funeral oration in Julius Caesar. I shudder
    to imagine the bookshelves of these readers. What
    riposte is there ? Hey moron, how do you spell
    Wittgenstein ?
    Walter Fields

  • walter fields November 2, 2010, 2:56 pm

    Rick, In the immortal words of W.S. Burroughs:
    We don’t report the news. We write the news.
    Walter Fields

  • flore November 2, 2010, 11:06 am

    you only have to revalue gold 50 times… fysical only.. and the problem is solved.. all debt is extinguished…

  • Howg November 2, 2010, 4:22 am

    “…it is dead-on-arrival as soon as we calculate “how much bank credit is in the system.” For in fact, bank credit is non-existent once the banking system’s very real liabilities are subtracted from its mostly fictitious assets.”

    OK – I’ll bite (I really am trying to understand this…)

    If bank credit is essentially non-existent, then where did the money we do have left come from? (not a rhetorical question).

    The money does not physically exist, Howg — it exists only in the form of a belief system that has yet to fail.

    And even though we owe more than what we have, and more than we can ever possibly have, isn’t that the definition of “credit” in the first place?

    Credit assumes the borrower is good for it. We long ago passed that point.

    How could it be otherwise? (not a rhetorical question).

    See above.

    And why are the liabilities “very real” when the assets were “mostly fictitious”?

    Liabilities are, for one, the health care and pension benefits that scores of millions of Americans are counting on…will someday need desperately. Assets are fictitious because there could not possibly be real collateral to back up a global derivatives game with a noitonal value that has been estimated as high as $800 trillion.

    Did the banks leverage fictitious assets only to incur very real liabilities? (why are they any more real than the phony assets?)

    They leveraged fictitious assets in order to get rich. They were able to get away with it because no one in a position to stop them understood what was going on.

    In fact, (fractional) bank assets are always fictitious, as is our money, as are the loans which make up our money supply (which you insist must be repaid)… which is why we are broke in the first place.

    The crisis today is one of liquidity.

    This notion is so farfetched that perhaps I am wasting my time trying to answer your questions. I’ll stop here. RA?
    A domestic economy based on “credit” is essentially bankrupt from the get-go.
    If this is not a mathematical certainty, then please explain how our collective debt can ever be repaid (exports notwithstanding).

    And if the liabilities are so very real, then how could they afford such healthy bonuses?
    When I’m broke, I cannot afford to pay myself millions++ in salary/bonuses.

    I suggest it is our losses that are very real.
    The rest is a fiction from beginning to end.
    These guys have just walked away with multi-trillions – derived from both ends of the stick.

    First, they created a fictitious pyramid (more than one, actually), that was destined to collapse AFTER pocketing very real profits.
    Then they pocketed the bailout money, (more bank credit).

    Of course, a pyramid has many more losers than winners.
    But they all played the game to win, and paid themselves handsomely even when they lost.

    There is no way to fix the debt problem… ever!
    We need an entirely different monetary policy to do that.
    And if banks gamble away all their “assets”, then it’s not my job to bail them out.
    This is all BS anyways, as in – “the best way to rob a bank is to own one”.

    So again, I ask you… in a perfect world, how would things be different using bank credit as a nation’s money supply?

    If governments at all levels, corporations & individuals all lived within their means, and if there were no bank losses through dubious schemes requiring very creative accounting methods, (and yes, I am being extremely generous here), would a domestic economy then be solvent? (not a rhetorical question).

    So rather than dismissing social credit as a viable alternative out of hand, let’s hear some constructive suggestions as to what could work, (it would appear you have none, except for a temporary tax break which would temporarily help alleviate the crisis).

    So here is one very real suggestion which does appear to work. And it is not theoretical at all.

    Ellen Brown: If You Can’t Beat Them, Join Them
    “…This is just one of many reasons that states should consider following the model of North Dakota, the only state that currently owns its own bank. The state-owned Bank of North Dakota (BND) helped North Dakota escape the credit crisis. The BND has a very large and captive deposit base, since all of the revenues of the state are deposited in the bank by law, keeping the bank solvent regardless of what is happening in the interbank lending market. North Dakota is currently the only state not struggling with a budget deficit…”

    If we were to apply this principle to a nation, then voila!
    We’d have a (real) central bank making our own money.
    Central banks were originally created to do just that, but the system has been subverted, (along with our governments themselves).

    However, if we are searching for solutions within the current paradigm, then we are indeed left with Mario’s conclusion… “let them eat cake”.

    • Howg November 3, 2010, 2:45 am

      I thank you for your efforts Rick – we are talking apples & oranges, so I won’t belabour the point.

      But I would like to see a post from you one day on the math / logic / principle of paying off debt (our money supply) with more debt.

      A simple enough question… How does a system like this work?

      You know by now that I think it’s impossible, but you obviously disagree. You’d be doing us a great service by explaining why this is wrong-headed logic.

      I, for one, do not want to harbour, let alone support, an idea that is too ridiculous to even consider.

      From a practical point pov, you could also explain why N. Dakota got it wrong, and why their state bank would be a very bad idea if applied nationally.
      And why Canada got it wrong from 1935-1974.

      I’m not being sarcastic… I really am trying to understand your pov, but to me, you are missing the forest for the trees.

      So let’s keep it simple.
      How does one pay off debt by borrowing more money?
      How does a country pay off its collective (domestic) debt when its money supply is bank credit?

      I think it would make for a great article, and would certainly help me a lot in understanding what the hell you’re talking about.

      If I understood that and only that, I’d change my viewpoint in a nanosecond, (that is, keep it simple, w/o digressing into the abuses and machinations of the system itself – all a smokescreen imho).

      Many thanks, Howard

  • Nat Both November 1, 2010, 11:46 pm

    C. V. Myers and Rick Ackerman are dead nuts ON!

    The Harvard Biz gang, nor the Wharton gang, nor Wild Horses can stop this thing from washing out. The H & W gangs will in the end have a magnificent revelation. 2 + 2 = 4.

    And … in a few short years you will be buying shoes and shirts made in America.

  • Kevin November 1, 2010, 9:35 pm

    I am totally dumfounded that noboby here or anywhere get’s it.

    The undisputable fact is gangs of private central banks control the worlds’ economies and governments for one reason, to make themselves as much money as possible off the masses via interests rates on debt. The trick is not to kill the patient in the process, not to let the people get wise to what they are doing, and insulate themselves from proscution or government interference.

    Everything else comes from that fact: inflation, deflation, printing, wars, stocks, bonds, housing, credit cards, bankruptcy bla bla bla.

    Understand, you cannot kill the snake by cutting off the tail and all I see are debates here about exactly that or the movements of the snake. Nobody talks or acknowledges this whole thing is by design, how to keep the patient alive so we, the few powerful money men, can thrive and gather wealth, possesions, power, influence, and governments. The official game started in 1913. Can you minions even begin to imagine what they have amassed to their side in 97 years.

    I can testify, the central banks consider and value people as a rancher would a herd of cattle and with equal intelligence. The treatment is identical in all symbolic forms like hay is money or fences are borders. Yes in all forms like sacrificing a few head or even a herd if sick for the betterment of the farm or rancher’s own well being. Since when did a rancher ever eat less meat to save the life of one cow in his herd. That would be humane and that is one thing central bankers are not. They are money junkies, unstoppable, like we are meat eaters. For them, everybody is expendble as long as the get more money or get to keep it. EVERYBODY. That’s your problem people and yet no one acknowledges the power they possess and how they weild it. Minions!

    Are we controlled in this way; without a doubt yes!!!!.

    Point the finger. Say the truth. We know what it is. A few powerful men and groups are pulling the strings. Cut their strings, regain our liberties, then these talks about economics solutions might have merit otherwise you are all just fooling yourselves to think you can solve anything because you really aren’t talkin about the problem are you, just the symtoms of their actions designed for their profit. All this talk symbolizes the masses moaning hoping sympathy from the rulling elite will ease off the gas abit. Pathetic really.

    What is needed are discussions to cease control of money supplies by the people and remove private central banks. That is the only solution. That is the only discussion that should be taking place. Everthing else is granny talk because nothing will or has changed, only adjustments by those bastards to passify you hahaha economic intellects so the game goes on and they profit.

    Call me a liar!


    • Steve November 2, 2010, 8:20 am

      Opps, it started in 1867, with corporatism creation ‘persons’ from a rebellious congress, where once walked Natural Born Men who had liberty.

    • Jim November 11, 2010, 1:06 am

      Kevin , Well said.
      Until the core problem of the total manipulation of societies by ultra rich ( Rothschild’s and company) is addressed, there will be no significant improvement of the problems facing this world.
      As stated, the 97 years of manipulation of the financial markets of the world have certainly allowed them to amass a great fortune of currency.
      Buffet & Gates have a fraction comparatively to these ultra rich

      If there was only the courage to cut the snake’s head off clean and start anew. This country and this world needs to do just that. There needs to be a coordinated plan to move forward with an agenda that starts with the elimination of the Federal Reserve.

  • Bradley November 1, 2010, 6:17 pm

    “All honorable men”?? What decade was that post written? I’d say Rick is honorable for allowing you to post here…

    BTW, Walter, your middle initial doesn’t happen to be “T” does it?

  • ben November 1, 2010, 6:14 pm

    While there may be no remedy for the US debt cancer…eliminating the income tax is definitely a step in the right direction. What a waste that an army of IRS agents and an even larger army of accountants must be paid and leech resources for such an utterly unproductive enterprise as income tax collection. If we returned to the single digit excise and import taxes that the federal governement subsisted on for the first century of the republic, business owners would be so thrilled that not only would enforcement be unnecessary…you will have some business owners throwing in a tip with their tax payments. However things play out with our unpayable debt, the income tax should be properly blamed for the governemnt expansion and concommitant economic collapse, and should have no part in our future.

    Hey…anyone else notice the little 🙂 at the bottom of the page?

  • roger erickson November 1, 2010, 5:59 pm

    Of course all double-entry accounting has to be accounted for, and both debit & credit write-off are accepted methods. All that matters in the end is operational efficiency, and adaptive selection.

    When the Pentagon does re-alignment, it’s starts with cold, War College dictated, operational analysis. If you’re heading into a struggle to the death, you make some hard decisions about what to take & what to leave – and you stick together.

    If we refuse to write off some “fiat” debts, citizens could starve, operational productivity could fall, national security could collapse, yada yada. That would be choosing poorly.

    If we write off some “fiat” credits, a few Madoffs could lose yachts & extra wives, with no noticeable decline in productivity & national security – and in fact an indirect improvement in both. Sounds like a more adaptive choice.

    What’s your selection?

  • Dave_D November 1, 2010, 4:43 pm

    Re: every penny of every debt must be paid – if not by the borrower, then by the lender.

    He failed to mention that innocent bystander called the saver who, in a fiat money system, is always forced to bail out both the borrower and the lender.


    The lender is the saver, or the saver’s agent… RA

  • walter fields November 1, 2010, 4:27 pm

    Rick, you possess a naivete that keeps on giving. Your
    assumption that pschopathic world criminal activity is
    limited to the world you know, i.e. financial. Elsewhere
    things are on the up-and-up. The U.S. Patent Office.
    F.D.A., Bureau of Standards, etc. All honorable men.
    Forget the media which is a vendetta directed at the
    the unique, the original, the useful, the free. Still you
    take in that nonsense of the Times, or something really
    heavy, e.g. Scientific American, on the impossibility
    of cold fusion. You remind me of the brainiac Simon
    Newcomb , world class mathematician – who crucified
    C.S. Peirce at Harvard and Johns Hopkins – who ‘proved’
    that heavier than air flight could not exist. Tell that to
    Wilber and Orville.
    Walter Fields


    I’ll never forget how my deflationist mentor, C.V. Myers, got taken in by the Fleischmann-Pons revelation of cold fusion — later debunked as the consequence of contaminated lab materials. Myers, editor of the Finance & Energy newsletter at the time, was nobody’s fool, but he was ready to proclaim the dawning of a new era in the energy business. Now, ironically, I’d have to concede that if good-old Yankee know-how is going to pull America out of a Second Great Depression, it would be precisely something like proving and perfecting “cold fusion” that does the job.

    Concerning the news media’s vendetta, I’d say it’s more a case of an overweaning desire to sell newspapers at the expense of truth, and to sensationalize even the most trivial aspects of our lives. I spent seven years working as a reporter and editor for a mid-sized daily, so I have an insider’s knowledge of how news gets made. I’ve stayed close friends with a few reporters who would qualify as muckrakers. The world needs good ones, but they are a dwindling breed. Mostly, it’s Woodwardbernstein wannabes who wield power far out of proportion to their modest skills.


    ps: I worked for several years for the late Hal Lipset, San Francisco private eye, so my resume, heavily weighted as it is with fact-finding skills, doesn’t exactly add up to naivete. However, my wife is always telling me that I am too trusting of people in general, so who knows?

    • DG November 1, 2010, 4:51 pm

      FDA???? up and up?

      Are you high on over the counter meds?

      The FDA is clearly bought and paid for by the pharmaceuticals. The same folks that financed Billy Tauzin, that shoved Medicare D down our throats and has tacked on $2o Trillion dollars of liability in 5 short years. That takes some real genius. Honor?
      The same folks that have abused the FCC so badly that I can’t watch major league baseball with my 5 year old without having to explain what an erection is. Thanks!

      The FDA is just another victim of corrupt government bowing down to corporate interest at our expense. BTW, how’s that cure for cancer coming? They are up there with the DOE and energy independence.

      The FDA is a joke.

  • mario cavolo November 1, 2010, 9:20 am

    Hi Everyone,

    While the issues of the day are unfortunate in many ways, there is neither a solution nor is the idea of hope even relevant. Hope for who? Hope for what? We are facing more debt and inflation, we are facing a global economic/societal shift marked by the decline of the U.S. led western region and the rise of the China led APAC region, and that’s life in the history of the world’s economics. Wayalat posits it nicely with his point that default ultimately takes place by “stealth inflation”, and I agree completely. In a recent article, he points out for example, 50% wage increases to Chinese workers who are facing inexorably rising food costs…just check the stats.

    I’ll posit the following model just with respect to the U.S. and European continent:

    1. Currency purchasing power will decrease by 30% to 50% in the coming decade. Nothing new here, just a continuation of what’s been happening.

    2. So then, in the U.S. and Europe that continuing currency/inflation trend will make the life of approximately 300-500 million lower and middle class people’s lives more and more difficult. Why? Because wages and salaries in their sector of society certainly won’t keep up, and for various other reasons we can list.
    3. The OTHER 300-500 million people in the world, you know, the ones who are richer than ever, will feel the pinch but still live comfortable lives. They won’t go broke, they will be able to maintain reasonable lifestyles.

    That’s it. So what? Its essentially a slow cycling non-event, a continuation of history where large groups of people across the globe are on the upward/happy side of change while other groups are on the downward/unfortunate side of change.

    The above model of the future can be applied as well to the APAC region with China/India leading the way.

    Knowing all of this, in this persistently critically necessary low interest rate environment where will the rich folks, the smart money, put their money? – seems kind of obvious at first glance- various stock markets, oil, gold, ag commodities/resources, new rising technology and technology services. I’m also beginning to think that a basket of stable stocks paying 6% to 9% dividends is a smart move too.

    Cheers, Mario

    • Benjamin November 1, 2010, 10:16 am

      “That’s it. So what? Its essentially a slow cycling non-event.”

      Since you gave some ranges, I assume it’s okay to ask: What if it’s 500 down, 300 up? And what if past nonevents that still have a bearing on the present day had similar disparity?

      I’m not trying to be a smart alec here, I’m just saying… A little fire never killed, but if your legs were already nice and crispy…

  • Benjamin November 1, 2010, 7:11 am

    I really like the idea of putting a moratorium on the income tax, but it does seem a “bit” late for that and the gains would only seem spectacular compared to what many people are faced with today (and tomorrow). And I’m sure they’d raise the other taxes we have in order to try and make up for it.

    Which is why I like the idea so much. Taxes that never seemed relevant to anyone would start to be. And one by one… Ah, the ol’ domino effect!

    But what about the millions of government pensioners and their god-awful health care?

    It’d be the best thing to ever happen to not only them, but the nation as a whole as well. If I said it once, I’ll say it again: Health insurance itself what drives up the cost to begin with! So what is the pensioner’s need for it once it’s gone? Right. So it becomes cheaper to take care of them in retirement. As for the one’s still working, let them go find a job somewhere else in the now unburdened private sector.

  • JohnJay November 1, 2010, 5:11 am

    I have no solutions to the debt problem, and the entire USA economic picture gets more bizarre by the day.
    I continue to read consistant reports that the same mortgage notes were pledged multiple times in securitized debt paper sold to different marks.
    As a result, multiple parties are trying to foreclose on the same property.
    Should be fun to see that covered up by the Federal government.
    Here in California, the two candidates for Governor continue to address the illegal alien problem only superficially, that is the elephant in the room they ignore.
    However, seven Senators including Jeff Sessions from Alabama have submitted a draconian solution question to DHS/ICE.
    It is quite simply, how much would it cost to deport every illegal alien in the USA.
    The Whitehouse calls it political theatre, I think it goes a little deeper than that, a lot of Americans are fed up with jobs and factories shipped out, illegal aliens and Green card/H1B Visa immigrants in.
    If the Republicans score big in the election, there could be some fireworks in old DC.
    We will know real soon.

    • ricecake November 1, 2010, 7:36 am

      The Republican only knows three things: 1) No to Whatever Democrat say and want, 2) Tax Cut, especially Tax for the Richest. 3) Start another new war. So, whatever the Democrats left for the USA by the end of their term, the Republicans will finish it off in on time.

      If the Americans were a bit less stupid and elected Al Gore instead Bush, US won’t have todays war torn + bankrupt mess. Yes you might still have the mortgage meltdown crisis. But you won’t deep in debt as now because no war spending of the trillions and + the trillions now and the future war spending. It’s such a shame that the Americans now hope that the Karl Ross, Rash Limbagh Palin party will save them from ruin.

      BTW, Americans Bush beaten themselves to death x 2 too. lol. They really deserve the sorry state they are living in.

    • Larry D November 1, 2010, 6:20 pm

      You mean Karl Rove, not Karl Ross.

      You are mostly correct, but your triptych of simpleminded political economy works for Democrat as well as Republican, just change a few words:

      “…The Democrat knows only four things: 1) No to whatever Republicans say and want, 2) Tax Increases, especially Tax for the Richest. 3) Get involved in another war (WW1, WW2, Korea, Vietnam) and 4) Government will fix absolutely everything.

      If your memory is switched on, you might recall Pres. Clinton’s little war in the Balkans and the mission creep in Somalia as well. Some Democrats have even called for US intervention in Darfur.

    • ricecake November 2, 2010, 1:22 am

      Larry D, OK….. Karl Rove he is. Thanks.

      But now American politic is more than just to pick the less of the two evils. It’s about to pick less of the two evils + insane.

      Democrats or Republicans, Green or Tea? who is less evil + insane? Who are else out there for the picking? Looking at what’s on the American political stage, most of the characters are ugly. Of course nothing look good on the stage of the drama of a dying empire.

      USA’s road map for the near future and future. Just like the 5 states of Grief. The leader to lead Americans go through each of these stages play out like the following:

      1. Denial – Democrats (This phrase is almost compete. Can’t deny any longer. USA is not the #1 of the world in many areas.)

      2. Anger – Current stage. May be Republican will regain power control and then start an new war(s). 2012

      3. Bargaining – Debt default and shrinking payment to the lenders: 2014 or 2016, If the war(s) goes well, the Republicans will get reelected again. If not, then Democrat will win because they know how to sweet talk and give false hope.

      4 Depression – Possible Democrats will get (re) elected for the same reason as above: Democrats are better in pet talk cheer leading and give false hopes.

      5. Acceptance. This time may be the Green Tea therapy will not be so bad.

      If the 5 states of grief process don’t go will, America will get stunk at stage 2 -Anger. Then social turmoil and unrest happen. Dictator will grab the power to rule the dying empire with the most powerful nukes and military in the world. World destruction is inevitable.

      Another alternative is the The Mayan Prophecy of 2012 becomes the truth. Then we will all be spared all of the miseries.