CaveLamb wrote:



Very much what I thought as well.
Although you made a better analogy of it.

When are you numbskulls going to get it thru your heads that
US federal debt is not the problem
It is not even A problem much less THE problem.

The massive private sector debt is and always has been the problem.
The private sector is what brought the economy to its knees
the government and government debt had absolutely nothing
to do with it

Now we had people in government like Russ Feingold that wanted to
regulate the banks and lending and wanted to stop the runaway train
before it went over the cliff, but the public canned him.
The public doesn't want the government to regulate the banks
and so the government doesn't regulate the banks
You can't blame that on the gov.
The public gets rid of anybody who tries.

Right now the banks are claiming huge amount of profits
when in fact they have no income at all
What they have is enormous liquidity due to households and small
businesses paying back debt and saving and
they have trillions in phony assets on the books
those assets are still being valued at 2007 values (or higher)
even though there is no realistic hope of selling at book values
And the interest due on these trillions in assets is still
being counted as income based only on the prayer that someday
they will be able to sell and collect that income from the sale proceeds

meanwhile the banks are spending lavishly
they are paying Executives like never before
and to do this they use money that they really don't own.
The banks (and other financial institutions) are enormously in
debt and even though today they are reporting profits
in reality they are just digging the hole they are in even deeper

And when the **** Hits The Fan its the tax payers that will
bail the banks out again
and the guys who made billions will laugh and walk away unscathed

And this isn't the governments fault. Anybody in government who
tries or has tried to do something about this gets canned by the public.
Anybody who says the government should seize the banks books
and put an end to the fraud therein gets labeled a socialist and
is
tossed out the door.

the private debt and its consequence caused the recession
And private debt is what is driving the slow recovery
This is a classic market failure of unprecedented proportions and
the voting public is telling the government to stand aside and let
the market perform its magic.



In the good news category, my VA pension just showed up in my
checking account today. Well, it's good news for me anyway.

If the government checks stop coming its all going south
very fast.

The house of cards that fell apart 3 summers ago has been hastily
rebuilt. It is now even higher and more flimsy than it was then.
and the only thing keeping it all from collapsing is what the gov
spends in excess of what it takes in.

Three years ago it all collapsed because of attempt to reign in
government spending that left the private debt hanging way too
far over the ledge and it fell off.
The market response to cutting back gov spending was swift then, but
it will be even swifter this time around.

Washington is not going to cause another collapse now.
Every single Congressman knows that
They know it will all collapse if they don't continue
funding the deficit and so they will continue the deficit.

There is not even a ghost of a chance the government will
try to run with a balanced budget anytime in the foreseeable future

-jim



--

Richard Lamb
http://www.home.earthlink.net/~cavelamb
http://www.home.earthlink.net/~sv_temptress