Sorry folks, you get politics today, not markets.
The markets are simple - we're screwed. I've been doing a lot of detail-level writing on that account of late.
But why are we screwed, and why can't we stop it?
Actually, we can stop it. We just (collectively) refuse to stop it, because stopping it means we must take responsibility for not only our own actions but those of our nation.
Let me share with you a quote off the thread from yesterday's Ticker:
There is no forum whatsoever to ask the hard questions, and demand factual truthful answers. In the past, we relied upon the media to ask the hard questions and uncover the coverups. Not any more...it is now part of the government, and you will never see any such thing again.
In response I said:
Yes there is.
Get off your ass.
Which elicited the following as a reply:
yeah yeah yeah. What do you suggest that might change things in the short term to benefit the nation as a whole?
If you told me we were going to have a major protest to disrupt normal activity in Washington DC with hundreds of thousands of people...I would be there in an instant. Because these scumbags might begin to think twice when they have to face an angry mob
Translation: "You do the work and take the risk of sticking your neck out and I'll show up to eat the popcorn and drink the beer as long as I can be part of an anomymous, amorphous angry mob."
Is this any different from any of the other popcorn-eating contests over the last 30 years?
Well, in fact, no.
Let me put out some inconvenient facts that you may or may not know about, but which happen to tie into the upcoming theatrical release of I.O.U.S.A, a movie featuring Warren Buffett, and former Comptroller General Dave Walker (who resigned in disgust).
America's GDP, or the total of all goods and services produced in this nation in a given year, is about $14 trillion dollars.
America the nation currently has an outstanding debt of about $10 trillion dollars, and has more than doubled in the last ten years. But this number is not the real total, because it does not count all the "promises" (read: entitlements) that people have been told they will have.Those "promises" are Social Security, Medicare and Medicaid, in the main. They total,approximately $90 trillion dollars in current liability.
What's worse, about 1/3rd of that was added with the "Medicare Part D" drug benefit, even thoughCongress was at the time fully aware that there was already $60 trillion or so sitting out there in unfunded liabilities.They did not carebecause the AARP, and you, screamed and demanded that Congress "do something."
Oh they did something all right. They did thevery same thingthat you think you have a right to do - that is, spend more than you make.
That's right. You have a right as an American to have a 4,000 square foot house on an acre, even if you only cut hair for a living. If you can't get that loan honestly, you simply will make up an income and use some sort of "exotic" mortgage product to get it.
Your car broke down? Its beneath you to buy a used one, right? Just hit the home equity line and buy a new Suburban. $40,000. Cool. Oh, and charge the gas too.
Your kid comes homefrom school complaining that one of his friends has an iPOD. To shut him up, you go buy him one - even though you don't have the $200 it costs. You just pull out the plastic and charge it. It will all be ok.
Your grandmother is takendeathly illand whisked tothe hospital. She's 85, and has cancer. She has had a good life, but now it is drawing to a close. When you get there,the doctors ask what you, as her closest kin want, as she's unconscious at the time. You tell them that they should preserve her life at all costs. Of course you don't have any money to pay for the $500,000 in medical bills. Its ok; she was in a nursing home and didn't have anything anyway, so there's no estate for the bill to eat into; Medicare will pick it up. After all, she's entitled to the best medical care money can buy as an American.
You love the $3/quart strawberries at the local WalMart. You won't pay $3.50. As a consequence, the grower has fired all of his United States citizens as pickers and is employing illegal Mexicans. You don't care, as you've got a good job - you answer the phones for Joe's PCs and help people with their computer problems. Unfortunately Joe's customers want to pay $50 less for that PC, so he fires you and outsources your job to India for $2/day. Oops.
Folks, what is going on in this country is exactly like what happened yesterday on the forum. Each and every day.
You drive around your neighborhood and see the "For Sale" and "Foreclosure" signs and the boarded-up businesses. You whine about $4 gasoline, $5 cheese and Ice Cream that is both more expensive and now is in a 1.5 quart instead of a 1/2 gallon container.
Your employer cuts medical benefits or expects you to pay more. You grumble or, if you're unionized, you might actually strike. You end up capitulating anyway, then your job gets shipped to China.
We all feel the squeeze, but will we accept that we are part of the problem? That we have a spending deficit (that is, we spend more than we make), we have a savings deficit (we don't save anything, on balance), we have a balance-of-trade deficit (we demand $30 DVD players from China, therefore, all the people who made them here are fired and they are manufactured there where workers are paid 25 cents/hour) and we have a common sense deficit (that is, we think we can continue to do this until the cows come home and there will be no consequence.)
Well, now we've got the beginning of the consequences, and what America is doing, for the most part, is sticking its fingers in its ears and going "LA LA LA LA LA LA LA LA" - because actually removing the fingers from your ears requires that you admit that you are likely part of the problem as you're in debt up to your eyeballs and are unwilling to live within your earnings capacity!
Would you like to knowthe rest of the consequences that are coming for you, your children and grandchildren if you don't remove the fingers and stop chanting? Do you even know what they are? Let me lay a few out for you:
You think this is all about finances? No. How many of you voted Democrat last Congressional election? Did you do so based on a promise to bring "the boys" home from Iraq? Did it happen? Did Ms. Pelosi and Mr. Reid introduce a bill to de-fund the war or refuse to approve the spending, as they said they would?
Did you sit behind your computer or TV, or did you show up in Washington DC and shut the city down along with 10 million of your fellow Americans? I don't recall any mass protests, and 20 "Code Pink" ladies don't count folks.
Who's fault is it, if you really believe we should not be in Iraq, that we still are?
Folks, we have choices in this country. One of them is to sit on our butt and whine and complain or stick our fingers in our ears. Another is to demand that someone - anyone - bail us out.
The third, and the most appropriate choice, is for us to take responsibility for ourselves and for our nation. We simply must recognize that:
We MUST frame the political debate in this nation around these principles. We MUST teach these facts to our children. We MUST stop demanding that the government give us that which as a nation we cannot afford, and WE MUST shout down those in the public space who continue to insist on unsupportable, unsustainable spending both by individuals and by the government.
It is no accident that the bankers, Universities, Realtors and credit merchants want you to spend more than you make. They love themoney you give themand they do not care if you go broke or wind up eating dogfood in your retirement.
That's a fact.
Now what are you going to do with the information above, and if you have sons or daughters, does it change your answer?
This was my answer as recently asJuly 31st. You don't have to show me 100,000 people in aparkbefore I'll travel 900 miles to wave a sign, hand out flyers and press palms. I'll do it whether the other 99,999 people show up or not, because its the right thing to do.
What choice are you going to makeAmerica?
(Photo by Brian Reisinger)
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