Sunday, April 10, 2011

"WE'RE BROKE!"

Quote from James Baker on CNN this morning. As I listened to Mr. Baker who was Reagans Chief of staff and GH's Secretary of Treasury, I just had to smile. He was all over the map with his double speak. Lambasting the two parties for "profligate spending" then admitting that the debt ceiling was lifted multiple times under his watch. He again attacked the spending side of the budget with a torrid attack on "entitlements". Not one mention of the military side of the budget.....roughly 1 trillion dollars a year counting their retirement legasy costs. When pressed on limiting spending and not raising the debt ceiling this year he IMMEDIATELY said we had to lift it. Baker is a consummate banker/politician...very shrewd...but very self serving. He is appearing on the airwaves to prepare the populace for the bankers. Like most operators of his ilk he gives you multiple truths then gives you either false conclusions or more cleverly "distorted conclusions".

For instance who would not whole-heartedly agree that the government spending is out of control. That's simple enough isn't it. Lets start with DISCRETIONARY SPENDING. Out of just over ONE TRILLION ....what does it look like?? Here is 2010...

663.7 billion (+12.7%) – Department of Defense (including Overseas Contingency Operations)
$78.7 billion (−1.7%) – Department of Health and Human Services
$72.5 billion (+2.8%) – Department of Transportation
$52.5 billion (+10.3%) – Department of Veterans Affairs
$51.7 billion (+40.9%) – Department of State and Other International Programs
$47.5 billion (+18.5%) – Department of Housing and Urban Development
$46.7 billion (+12.8%) – Department of Education
$42.7 billion (+1.2%) – Department of Homeland Security
$26.3 billion (−0.4%) – Department of Energy
$26.0 billion (+8.8%) – Department of Agriculture
$23.9 billion (−6.3%) – Department of Justice
$18.7 billion (+5.1%) – National Aeronautics and Space Administration
$13.8 billion (+48.4%) – Department of Commerce
$13.3 billion (+4.7%) – Department of Labor
$13.3 billion (+4.7%) – Department of the Treasury
$12.0 billion (+6.2%) – Department of the Interior
$10.5 billion (+34.6%) – Environmental Protection Agency
$9.7 billion (+10.2%) – Social Security Administration
$7.0 billion (+1.4%) – National Science Foundation
$5.1 billion (−3.8%) – Corps of Engineers
$5.0 billion (+100%) – National Infrastructure Bank
$1.1 billion (+22.2%) – Corporation for National and Community Service
$0.7 billion (0.0%) – Small Business Administration
$0.6 billion (−14.3%) – General Services Administration
$19.8 billion (+3.7%) – Other Agencies
$105 billion – Other


Here is the part I like...LOOK....its right in front of you. Can you see it??? A very smart man like James Baker never mentioned the word. NOOOOOOOO. I wonder why. Its the 800lb gorilla in the room, but the power behind the military industrial complex/energy cabal are all tied together at the hip. It rules the world. IT doesn't protect the world or "defend" us. It literally puts us at an incredible risk. Economically it is an absolute catastrophe. We have 800 military bases in 150 countries. WE STILL OCCUPY GERMANY.......WHY????? The cold war was the excuse. Thats been over for decades. Its all money. Its democracy by the few for the few. Its the best democracy money can buy. Go ahead keep it up. Use divide and conquer on the sheep. Give them slave labor goods from China. Dummy them down with declining education. You don't want a repeat of that 60's crap again. People in the streets is very uncomfortable. Ask yourself one thing when you come up with your solution. Is your solution the best solution for the good of the most people. Meanwhile you can get your solutions for all of this from our next president....a bad comb-over pompous blow-hard that is waving more divisive issues like O's birth certificate while he gives you simplistic solutions that benefit the few. Go ahead gang ....keep falling for it.....and you will....you always have and you always will.

addendum......the defense spending does NOT include the wars in Afghanistan and Iraq.....they are STILL "off budget"......perhaps another 200billion/year. That does not include the long term liabilities including their debt service and long term health care liabilities. Those traumatic brain injuries and limb loss will add up.

"Focus on the good times..."

11 comments:

  1. Very good post Kli. I was watching a movie today from around 1983. It featured Rodney Dangerfield as an incompetent millionaire buying his way thru college. He ran around buying everyone beer and this was to make up for all his shortcomings. As long as Americans keep settling for a cold beer we will never get anywhere.

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  2. Wow nice and clear. Great post Kli.

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  3. Kli, honestly when do the wheels fall off? what really is going to happen. are we and the rest of the world, just going to default and everything resets itself. is there going to be chaos in the streets all through out the world. will a world war break out. can our govt keep things going for the next 5 or 10 years and hope our economy booms upwards. are things really this that bad? earnings have been pretty good for alot of companies, is that just a mirage? who are going to be the survivors of all of this, if hell does break lose? will it be the C, GS,JPM's of the world?

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  4. Economic cycle theory suggest they will extend this another year to fulfill their "obligations" and to position themselves with the proper asset allocation before the "flush"....given all of these negative doomsday possibilities I would not dare predict specific outcomes. That is for the "crystal ball" readers. Certainly history provides you examples of all of your above scenarios. Keep it simple. Gold, food, shelter, no debt, simplify lifestyle.

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  5. Posted in yesterday's thread

    red - you stocked up? Used to have the one year on sale for $800. This is basically six months and some water...not sure how it differs...

    http://www.costco.com/Browse/Product.aspx?prodid=11621995&whse=BC&topnav=

    The entire line...
    http://www.costco.com/Common/Category.aspx?ec=BC-EC17-Cat3605&pos=1&whse=BC&topnav=&cat=75277&eCat=BC|3605|75277&lang=en-US

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  6. Not stocked with fresh supplies yet. Another 2 months until my refurb home is finished and I am ready to start serious planning. Homer you have anywhere from this summer to next summer to get your supply stores in order: food, water, garden, toilet paper, ammo and Alpo.

    Spent weekend painting and sealing cracks. Later will try and get the grandfathered water well working again.

    As for seafood from the Pacific you might want to get a freezer and stock up on things you like that are not too hot at the moment.

    Kli has been pretty depressing this weekend so I think I will get some chocolate and catch a nap.

    What happens when all hell breaks out? The elite believe they can weather the storm in their ranches and compounds in Paraguay, Switzerland and Jackson Hole; This should at least tell you what they are expecting will be coming down the pipeline. If you are in NYC or LA best preparation over the next year is to plan on how to leave and where to go.

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  7. Depressing?? hehehe....this is upbeat for me.......

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  8. so in reality, the last few years was a means for the selected financial institutions to be flooded with money to be well capitalized, so once they are strong enough to survive the worst of the worst, the big players are going to pull the plug. at that point it will be dog eat dog. the strong will survive and the weak will be left looking for crumbs. ouch, that is a scary point of view. i am not sure what to believe at this point. who the hell runs our country? is the president just a pawn? i mean, if there are a few "elite" that control the world financial powers, who replaces them with they get old and die. how would a person get into that group in the first place. it kind of seems a bit unrealistic.

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  9. Who cares if the banks survive? The shareholders? I'm more inclined to think the executives just want enough time delay between their crimes and the consequences that they can avoid prison or worse.

    As for how much control Wall Street has over the government.. They own the SEC, they are the Fed, and they clearly have a great deal of influence behind closed doors in Congress.. And the Justice Department is either playing "hot potato" or "what potato?" with the SEC over MBS fraud and the less-thinly veiled ponzi scams like AIG.

    The President himself? Or any specific congressman for that matter? Hard to say. Extend-and-pretend makes sense from a political viewpoint, the alternative is to make EXTREMELY unpopular decisions (like kicking off a great depression). And believe me Goldman Sachs has an army of alumni in the Treasury ready to make it perfectly clear just how unpopular those decisions would be. (I think "tanks in the streets" is how they phrased it in 2008)

    Extend-and-pretend is also great news if you're an executive at a ponzi bank hoping to make it through another bonus season and maybe some statutes of limitations. Alliance of convenience with the politicians?

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  10. At least some congressmen have to be bought and paid for, after all someone has to repeal all the old bank regulations and make sure any new laws don't actually force the regulators to lift a finger if they'd rather just ignore what their former (read: current) colleagues in the private sector are up to.

    As far as real cigars-in-the-back room corruption, the more comfortable they are in their incumbency the more "friends" they're likely to make. That's where I'd start looking if I cared, but frankly I think we're way past any hope of political reform at this point.

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  11. Jump forward to Pages 5 and 6 of this article if you want to know more about the joke that is the SEC:

    http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-20110216?page=1

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