Portfolio.com has a neat interactive feature, “The Green Miles,” by Jocelyn Hanamirian,that shows you what the government’s debt would look like if it were stretched bill by bill across the solar system.
The Bear Stearns buy-out, at $29 billion, for example, takes us just past the moon.
The 2009 federal budget deficit, at $1.2 trillion, takes us past the sun.
“Mr Cheng [former vice-chairman of the Standing Committee and current head of the green energy drive] said China had learned from the West that it is a mistake for central banks to target retail price inflation and take their eye off assets. This is where Greenspan went wrong from 2000 to 2004,” he said. “He thought everything was alright because inflation was low, but assets absorbed the liquidity.”
Mr Cheng said China had lost 20m jobs as a result of the crisis and advised the West not to over-estimate the role that his country can play in global recovery. China’s task is to switch from export dependency to internal consumption, but that requires a “change in the ideology of the Chinese people” to discourage excess saving. “This is very difficult”. Mr Cheng said the root cause of global imbalances is spending patterns in US (and UK) and China.
“The US spends tomorrow’s money today,” he said. “We Chinese spend today’s money tomorrow. That’s why we have this financial crisis.” Yet the consequences are not symmetric. “He who goes borrowing, goes sorrowing,” said Mr Cheng.
It was a quote from US founding father Benjamin Franklin.”
More here at The Telegraph (UK).
My Comment:
Three things give this remark away, in my humble opinion as a long-time propaganda watcher.
1. The speaker is the head of China’s green energy drive. That means he is likely to be on good terms with the green energy people in the US government, the financial center of which is Goldman Sachs. Goldman Sachs has extensive ties with China’s state sector and is counterparty to huge derivative contracts with state banks and companies.
2. It is notable that Mr. Cheng’s language echoes the language of the left-liberal governing class in emphasizing the role of Greenspan at the expense of everything else. Greenspan, being a former Randian and an avowed libertarian, is expendable to this group. Cheng does not mention the role of cheap money, the creation and trading of mountains of derivative contracts, and debt-based policies that go back to long before 2004, and indeed long before Greenspan. He does not mention the Federal Reserve itself.
3. It’s also notable that Mr. Cheng echoes the left-liberal line about over-saving being a problem in China. But the problem is not thrift and savings (i.e. capital formation), which by definition can never be excessive in a capitalist economy where investment is put to work by genuine market forces. The problem is malinvestment caused by manipulation of the interest rate. And that’s a problem in which the Federal Reserve’s role is critical.
Ron Paul on the Federal Reserve, July 21, 2009
Washington Arrogance Has Fomented a Muslim Revolution
by Paul Craig Roberts
Hat-tip to David Redick for the link
“In a government of law, the existence of the government will be imperiled if it fails to observe the law scrupulously. Our government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by example. Crime is contagious. If the government becomes a lawbreaker, it breeds contempt for the law; it invites every man to become a law unto himself; it invites anarchy.”
~ Justice Louis Brandeis
Is Pakistan responsible for the Mumbai attack in India? No.
Is India’s repression of its Muslim minority responsible? No.
Is the United States government responsible? Yes.
The attack on Mumbai required radicalized Muslims. Radicalized Muslims resulted from; (Item numbers inserted by ARTS)
1. the US overthrowing the elected government in Iran and imposed the Shah;
2. from the US stationing troops in Saudi Arabia;
3. from the US invading and attempting to occupy Afghanistan and Iraq,
4. bombing weddings, funerals, and children’s soccer games;
5. from the US violating international and US law by torturing its Muslim victims
6. from the US enlisting Pakistan in its war against the Taliban;
7. from the US violating Pakistan’s sovereignty by conducting military operations on Pakistani territory, killing Pakistani civilians;
8. from the US government supporting a half century of Israeli ethnic cleansing of Palestinians from their lands, towns and villages;
9. from the assault of American culture on Muslim values;
10. from the US purchasing the government of Egypt to act as its puppet;
11. from US arrogance that America is the supreme arbiter of morality.
As Justice Brandeis said, crime is contagious. Government teaches by example, and America’s example is lawlessness. America’s brutal crimes against the Muslim world have invited every Muslim to become a law unto himself – a revolutionary. It is not terror that Washington confronts but revolution……
The change over which Obama will preside will have no American victories. The change will come from
1. America as a failed state,
2. from the dollar dethroned as reserve currency,
3. from America repudiated by its allies and paid puppets,
4. from massive unemployment for which there is no solution,
5. from hyperinflation that produces anarchy.
6. The day might arrive when Washington is faced with revolution at home as well as abroad.
December 5, 2008
My Comment
Roberts’s piece is provocatively stated, so I thought should add this comment. I think he’s fairly correct to state that the Pakistani and Indian governments are not to blame, fundamentally, for what’s happening. However, to the degree that these governments – like others – tend to take the line of least resistance and go along with Washington’s agenda, or buy into it, or stand on the sidelines while that agenda is enacted elsewhere, they encourage the misdeeds of the prime culprit. And, to the degree that they are themselves corrupt or lawless, they don’t help the situation…
(Not following either of the two countries’ internal politics, I can’t do more than make a general statement).
How not to go along, you might ask?
Well, there’s Angela Merkel’s recent condemnation of global central bank interventionism. Why can’t we hear more of that from the global community?
Or has the cat got its tongue on every issue but the issue of Israel-Palestine?
A British Christian libertarian blog on why canceling the debt is questionable from a Christian perspective:
“Should Christians be concerned about this [the levels of debt contracted by the government]? One angle on this is the fact that in the teaching of Jesus, sin is often compared with debt. Two obvious examples are the parable of the unforgiving servant (Matthew 18:23-35), and the fact that in the Lord’s Prayer as found in Matthew’s gospel, disciples are taught to pray “and forgive us our debts, as we also have forgiven our debtors.” (Matthew 6:12) In other words, there is a correspondence between sin and debt.
Many may consider sin not to be serious, but the Christian does. I am reminded of the words of Anselm of Canterbury, addressing Boso in Cur Deus Homo (Book 1, chapter 21) “You have not yet considered what a heavy weight sin is.”
If sin is serious and Jesus compares sin to debt, surely it follows that for Christians, debt is serious as well. And if that is so, government borrowing which will saddle our country with huge levels of debt, possibly for decades, is serious.
Yes, it is true that in the Old Testament, there was provision for the cancellation of debt every 50 years in the Jubilee, but to argue that such a provision means that one of the world’s wealthiest nations (that has incurred its debts by living beyond its means) should have its slate wiped clean is simply ridiculous.
Perhaps the message for Christians who are not horrified by the levels of debt that we are incurring is: “You have not yet considered what a heavy weight debt is.”