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»There are many issues on which we don’t agree. Yet we find ourselves in remarkable unanimity about the long-run federal budget deficit: It is a severe threat that calls for serious and prompt attention.

While the actual deficit is likely to shrink over the next few years as the economy continues to recover, the aging of the baby-boom generation and rapidly rising health care costs are likely to create a large and growing gap between spending and revenues. These deficits will take a toll on private investment and economic growth. At some point, bond markets are likely to turn on the United States — leading to a crisis that could dwarf 2008.«

This is from a GIGO letter written to the US President by former chairmen and chairwomen of the Council of Economic Advisers. Me wonders why with such ‘advisers’ there’s still any economic activity going on in the United States of America? Joseph Stiglitz declined to sign the letter. Good for him although his reasoning why he did not sign the letter isn’t an example of enlightened economic reasoning either.
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Always look on the bright side. At least Time Magazine can recycle this cover once President Obama follows the ‘advice’ of letter-writing GIGO experts Martin Baily, Martin Feldstein, Glenn Hubbard, Edward Lazear, Gregory Mankiw, Christina Romer, Harvey Rosen, Charles Schultze, Laura Tyson and Murray Weidenbaum.

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I already wrote that the two GIGO posts of Paul Krugman on MMT (Modern Monetary Theory) produced a lot of response by the MMT ‘sect’. Among the stuff I read was a post »Dear Paul Krugman: You Do Not Understand Modern Monetary Theory« by Cullen Roche on seekingalpha.com. Going through the comments I found this GIGO comment pearl of wisdom by a Prof. Daniel P. Remy.

Read the rest of this post »

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We Europeans not only surrendered our monetary sovereignty to an unaccountable bureaucracy in Frankfurt. We also selected some GIGO know-nothing lunatics instead of enlightened philosopher-kings to run our €CB dictatorship. If someone needs a further proof that our central bankers are mindless ideological inflation hawk robots here it is:

ECB raises interest rates amid Portugal woes

Update: Once a Quasi-Monetarist like Kantoos (in German) asks the question — Is the ECB a Club of Deadbeats? — you know the discussion isn’t about who has the bigger … There’s no discussion really. Some losers who play silly Video Games are our central banking masters. Can we please elect some other €CB dictators?

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Via New APPS: Art, Politics, Philosophy, Science I’m informed that one of these new dysfunctional US governor robots turned into a Philosophy Terminator. He wants to terminate the department of philosophy at Nevada-Reno. See here and here (PDF). These governor machines get totally out of control.

Here’s my humble advice to start negotiating with governor Sandoval. The signature of Associate Professor Deborah Achtenberg is an offense for any self-respecting GOP governor robot. It needs some editing: Philosophy (What is this? Who needs that?) Chair Religious (We support real science in Nevada!) Studies Chair Gender (Lesbians in stealth-mode.), Race (We are a proud nation of old white men.), Identity (Get a life!) Faculty Associate

Deborah Achtenberg
Associate Professor
Religious Studies Chair

And please start any correspondence with some reference to the Almighty. That is the way forward! Good luck!

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Hahaha … I missed this. The lunatic right-wing US freak crowd on its best.

This year, the anniversary of our Lord’s crucifixion falls on the anniversary of Vladimir Lenin’s birthday, which is also Earth Day. Some will choose to worship creation today. We choose to worship our Creator. (RedState Blog)

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  1. Apocalyptic Doomsayers: the Apocalyptic Doomsayer embraces conspiracy theories to funnel a bewildering mix of anxieties into a simple good-vs.-evil narrative approximating that of the Book of Revelation.
  2. Failed Historians: shoehorn history into preconceived templates, developing triumphalist story lines that will eventually lead to the victory of a chosen group and the vanquishing of an enemy.
  3. The Mentally Unbalanced: inserted himself into a wild narrative, just as some mentally ill people spin conspiracy theories centered on people they know — estranged spouses, landlords waiting for rent checks …
  4. The Midlife Crisis Case: many conspiracy theorists I met were paunchy 40- and 50-something men facing disappointment in their personal lives. In interviews, it seemed clear that they were struggling with midlife crises …
  5. Fakers: Donald Trump?

Read the story: »Inside the minds of the birthers and other conspiracy theorists«

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… doesn’t mean you know a lot of every subject you’re talking/writing about. So David Leonhardt of The New York Times started his quiz »O.K., You Fix the Budget«. And nearly 9,000 readers worked the puzzle. Mike Keller is totally excited:

Nearly 9,000 readers worked the puzzle. Individually, they were all over the map. But as a group, they accomplished the goal by splitting the difference: almost exactly half the savings came from tax increases, half from spending cuts. Collectively, readers seemed to realize that the hole we’re in is too deep to be filled by tax increases alone or spending cuts alone.

The problem here: there’s no hole. The federal government of the United States of America is the issuer of its currency — the US$. It can produce any amount of US$ it wants by simply crediting bank accounts. Theoretically it can mark up private sector bank accounts with US$ = infinity - 1 US Cent. (Granted: there are some stupid self-imposed rules like the debt ceiling and issuing debt 1:1 for any US$ spent by the government.)

Now here’s my issue with this New York Times propaganda. This whole debt/deficit debate is only a waste of time and a distraction. David Leonhardt should ask his readers how do you think can we annihilate the unemployment rate of 9%. How can we put 25% of US teenagers who want to work in jobs? What can we do about education to avoid that all these students of private sector institutions accumulate mountains of debt for non-education only to be indentured laborers for the rest of their life?

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»”The debt level of the USA is disastrous,” Mr. Juncker said. “The real problem is that no one can explain well why the euro zone is in the epicenter of a global financial challenge at a moment, at which the fundamental indicators of the euro zone are substantially better than those of the U.S. or Japanese economy.”«

From the Wall Street Journal “Juncker: Greece Needs ‘Soft’ Debt Restructuring" (HT: Tom Hickey). So if somebody needs further proof that our EU overlords are clueless idiots here it is. Jean-Claude Junker is either a clueless ignoramus or a shameless liar.

Dear Jean-Claude I can explain “why the euro zone is in the epicenter of a global financial challenge at a moment, …” It is very simple. The US and Japan are issuer of their FIAT currency. By definition they can’t run out of currency and can always pay interest and principal. They may decide for some political reason to not honor their sovereign debt but this is a political decision (a stupid one). Each country of the euro zone is only the user of a foreign currency and can run out of currency. Thus it is perfectly possible for each euro zone member to be insolvent for various reasons. Bond traders are not stupid and know the difference between an issuer and an user of a currency. This is no mystery to them. And I hope by reading these lines it is now also no mystery for you.

PS: It seems to me we must amend the Maastricht treaty with a rule of thumb that every official with the surname Jean-Claude must undergo extra scrutiny before being allowed to hold public office.

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Maybe you have not noticed it yet. But we Europeans live under a European Tyranny. Unfortunately the messenger doesn’t inform us who exactly is the Tyrant who wants us to live under oppression and in misery. (Digression: Me thinks it is the ECB.) But this particular messenger — The Tea Party Folks — most probable haven’t heard that there’s such a thing as the ECB and have a hard time to locate Europe on a map. But there’s one thing they learned about Europe while traveling the place via Fox News. A bunch of Socialists, Marxists, Communists and other freedom hating monsters are living there. Via Bloomberg Businessweek “Summer Camps Offer Adventures, Training, Politics”:

Tampa Liberty School, hosted by Tea Party affiliate group The 912 Project, teaches 8-to-12-year-olds “the principles of liberty, free markets, and limited government.” Jeff Lukens, 53, whose day job is at an auto auction firm, will run this year’s session. The first lesson will teach campers the difference between European tyranny and freedom in America: After walking into a room that’s “kind of dark and gray and austere … [and being made] to sit down, be quiet, and do what they’re told … we tell them, there’s this other place you can go to called the New World,” says Lukens. Once they’ve crossed an obstacle course representing the Atlantic, the campers arrive in America. “It’s colorful, it’s bright, it’s cheery—they get over there and we pop confetti in the air and it’s a party,” says Lukens. The kids later clean up the mess, so they know that “with freedom comes responsibility.” Other lessons teach campers about the gold standard and that “our rights come from God, not from government,” he says.

So in case a future generation reads this blog post in 30 years you can stop wondering why US Congress has abolished Social Security, Medicare and Medicaid.  And it is also no mystery anymore why you must carry Gold coins around. Finally you can also stop whining about people dying in the gutter because of no health care. It is a God given right to dye as a free man.