[p2p-research] Post-Depression first: Americans get more money from government than they give back | csmonitor.com
rlanham1963 at gmail.com
Mon Nov 23 13:19:42 CET 2009
I may well be an optimist.
I think saving the banks was necessary. Overdone, but necessary. We need
business credit if the current system is to continue. Stopping it violently
is a win for no one.
I agree stimulus to individuals would have been a better idea. Transferring
individual debts to the nation might have worked, but what message does that
send? One can only do it once!
I do believe (as a Keynesian) that the stimulus should have been around 2x
what it was. We need acceleration if the old system is going to keep
flying. We are dangerously close to a stall now...and people, no matter how
young, strong and idealistic, have no idea of the sort of disaster looming
if the financial system collapses.
Three meals will be relevant in that case.
I don't worry about commodity stocks. I worry about jobs. Without money
flowing, the system dies in a hurry. Keynes knew employment was the key
issue. It has always been so. The question now is are we entering a period
of structurally high unemployment in places like the US. If so, it will be
hard times for a long time for the world...even harder times.
On Sun, Nov 22, 2009 at 10:25 PM, Paul D. Fernhout <
pdfernhout at kurtz-fernhout.com> wrote:
> You sir are an optimist. :-)
> While I'd hope for better, I'd rather see what you outlined than something
> even worse.
> It's been said every country is three meals away from revolution. But
> history seems to have disproved that (like in North Korea during the
> I don't know if this is still valid, but from 2006:
> "World Grain Stocks Fall to 57 Days of Consumption: Grain Prices Starting
> to Rise"
> A somewhat later item from 2008:
> “According to the May 1, 2008 CCC inventory report there are only 24.1
> million bushels of wheat in inventory, so after this sale there will be only
> 2.7 million bushels of wheat left the entire CCC inventory,” warned Matlack.
> “Our concern is not that we are using the remainder of our strategic grain
> reserves for humanitarian relief. AAM fully supports the action and all
> humanitarian food relief. Our concern is that the U.S. has nothing else in
> our emergency food pantry. There is no cheese, no butter, no dry milk
> powder, no grains or anything else left in reserve. The o°©nly thing left in
> the entire CCC inventory will be 2.7 million bushels of wheat which is about
> enough wheat to make 1⁄2 of a loaf of bread for each of the 300 million
> people in America.”
> The CCC is a federal government-owned and operated entity that was created
> to stabilize, support, and protect farm income and prices. CCC is also
> supposed to maintain balanced and adequate supplies of agricultural
> commodities and aids in their orderly distribution.
> “This lack of emergency preparedness is the fault of the 1996 farm bill
> which eliminated the government’s grain reserves as well as the Farmer Owned
> Reserve (FOR),” explained Matlack. “We had hoped to reinstate the FOR and a
> Strategic Energy Grain Reserve in the new farm bill, but the politics of
> food defeated our efforts. As farmers it is our calling and purpose in life
> to feed our families, our communities, our nation and a good part of the
> world, but we need better planning and coordination if we are to meet that
> purpose. AAM pledges to continue our work for better farm policy which
> includes an FOR and a Strategic Energy Grain Reserve.”
> This is an example where people may just think that if you have the cash
> you can magic the food into existence. That works for any individual, but it
> can't work (in the short term) for a society.
> We need some sort of planning system that does not destroy all our food
> reserves because it is not profitable enough to maintain them.
> That is the national stockpile, but individuals also have their own
> I remember reading one funny quip a few years ago on an investment board
> that said something like, "Forget gold, I'm diversifying into canned goods".
> But canned goods go bad eventually. Individual hoarding is not a very good
> answer to a big social problem. We spend approaching a trillion dollars a
> year for defense in the USA and a loaf of bread per person is the best we
> can do for national preparedness?
> The jobless crisis is causing the society's food reserves to be depleted.
> It is a way to save money. So, nationally, although I have not seen this in
> the press, but coupled with the pressure on food banks, I'd suggest that
> many US American families now have no private food buffer.
> So, no private food buffer, plus no national food buffer, well -- that
> should be throwing up red flags all over the place.
> So, yes, to talk in such measured tones, I think you are an optimist. :-)
> But, on the other hand, here we also see the basis of a post-scarcity
> economy and a basic income in a small way. Just baby steps.
> That three trillion of money spent so far on bailouts would have been ten
> thousand dollars in every US Americans pocket if it had not mostly gone to
> the banks:
> "CNNMoney.com's bailout tracker"
> (I don't know if that figure is still accurate.)
> That could have paid for a lot of food reserves per person and stimulated
> more production in the agricultural sector.
> One loaf of bread per person. That's national security?
> --Paul Fernhout
> Ryan Lanham wrote:
>> We are in the 23rd month of recession in the US. The usual recession
>> about 9 months. The implications of this are that government revenues
>> been in a much longer decline than normal. Spending cannot generally
>> suit...even if you aren't a Keynesian, most policy makers are wise enough
>> know that cutting government spending in a recession isn't a great idea if
>> you love a stable society.
>> Consequently debts have increased rapidly. Something must give. Usually
>> return to growth and tax revenues on the rich increase fairly fast. Now
>> with deep cuts on capital gains and lower general revenue levels,
>> revenues will rise more slowly. As such, the capacity to survive future
>> shocks will be lessened.
>> What is more, we have very sick state budgets...California, Oregon, Rhode
>> Island and many others are well past where they can easily maintain given
>> current budget realities.
>> The obvious answer is to tax the rich more--even many of the rich realize
>> this, but that is political suicide and also unlikely given the nature of
>> the US Senate and its veto capacity on all financial legislation. So it
>> won't happen.
>> If the US double dips into more recession...say another 6-12 months of it,
>> which is reasonably likely, the damage will be systematic and a generation
>> of the economy will basically be lost in a decade of trying to recover.
>> Deflation will likely continue and the US will drift into a long, slow
>> sickness that will decay its social capacity and eventually limit greatly
>> its role in the global political sphere. Innovation will slow and move to
>> Europe and Asia much more from which it will diffuse more slowly (think
>> Samsung, Nokia or Blackberry versus iPhone). Less US money will flow to
>> nonprofits and free options...and this will again hammer innovation but
>> well accelerate global localism.
>> From a public policy standpoint, the US is in about as serious a state as
>> has ever been. It is effectively trapped in expensive wars with an aging
>> population and the need for better and broader healthcare...while being
>> politically unable to grow taxes.
>> The net result will be a slower growing US that will shift the world
>> more quickly to Asia--China and India are going to have to start towing
>> world in terms of new ideas, technologies, modes of expression.
>> The only thing that will alter this relatively rapid transition is the
>> rise of some unforeseen industry where the US has competitive advantage
>> it had in computers, software and financial services. That's not likely
>> my view.
>> On Sun, Nov 22, 2009 at 6:22 PM, Paul D. Fernhout <
>> pdfernhout at kurtz-fernhout.com> wrote:
>>> For the first time since the 1930s, personal taxes paid by Americans
>>> enough to cover the payments that the government sends out through
>>> programs like Social Security and food stamps. The trend, visible in
>>> government data on personal incomes, reflects both a deep recession and
>>> government efforts to prop up the economy.
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rlanham1963 at gmail.com
P.O. Box 633
Grand Cayman, KY1-1303
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