Normally, I don't have a long enough attention span to get through so many words in the middle of the day. I did this time, and I can't think of any better way to outline what I've been saying about our economy and where we are headed

http://www.ritholtz.com/blog/2008/11/the-shallowest-generation/

11/15/2008 12:46:51 PM

I'm still reading but this is a really good but depressing read

Quote :

"The facts are: we have a $10.5 trillion national debt; $53 trillion of unfunded liabilities; a military empire that has U.S. troops in 117 countries and has spent $700 billion on a pre-emptive war that has killed over 4,000 Americans; a $60 billion trade deficit; an annual budget deficit that will exceed $1 trillion in the next year; a crumbling infrastructure with 156,000 structurally deficient bridges; almost total dependence on foreign oil; and an educational system that is failing miserably. We can not fund guns, butter, banks and now car companies without collapsing our system."

[Edited on November 15, 2008 at 1:24 PM. Reason : .]

11/15/2008 1:19:59 PM

I should send this to my parents...

11/15/2008 1:22:16 PM

Haha, we should all send this to our parents.

Assuming our parents commit some of the grievous, bad decisions mentioned in the article.

11/15/2008 1:28:27 PM

my parents, at least, wouldn't have difficulty blaming this on the others in their generation.

11/15/2008 1:54:25 PM

I was just thinking about this as I was driving home last night.

I think so many of today's problems could have been prevented. I think people saw these things (vague, I'm not entirely clear what I think) coming and could have made some tough, smart decisions to minimize the predicament we are in now.

It's like nobody wanted to be responsible and leave the party at midnight. And certainly nobody wanted to be the bad guy who cut the music off and told everybody to go home.

And the article talked about leadership. That's definitely something I haven't witnessed. Not just Bush but in many ways Clinton and Bush, Sr... And the CEO's. I mean, I look at the auto industry, and I see all these good people and their jobs, and you don't want to screw them. But their leadership, Jesus Christ...they've had decades to improve themselves. And it's not that they haven't been trying. I believe that they have. There's no way they went to bed every night, thinking, "This is no problem. In 2008, we'll get a massive bailout and be right back on top." But they clearly haven't been trying hard enough.

Overall, just a serious lack of vision and very little sense of real responsibility...to the past, to the future, to the world.

The system definitely rewards mediocrity. And I hate to say it...but our best and our brightest might have smoked a little too much reefer back in the day.

11/15/2008 2:05:22 PM

http://en.wikipedia.org/wiki/Boiling_frog

11/15/2008 5:51:06 PM

And yet, I would not trade living at this time for any earlier time in human history. In-so-far as we have problems today, historically speaking they are quite minor. Nuclear war is no longer an issue, and the idiological debate over the ownership of production ended almost a generation ago.

If we are shallow it is because we have figured out how to work and live together in relative harmony without all of the struggle earlier generations had to endure. I seriously doubt our parents would prefer it to be otherwise, I damn sure do not.

11/15/2008 6:04:36 PM

A good read. I disagree with a few knitpicks (I don't think that the decline of manufacturing as a percentage of GDP is necessarily a sign of a weakening state) but the overall conclusion is good.

My initial gut instinct is that following the end of the Cold War, the United States partied hard as the victors and basically squandered everything in the process. It LOOKED sustainable at first because we had that initial post-Cold War "peace dividend" plus a spectacular Gulf War I that made us feel invincible, but even as both those illusions faded, we kept partying on anyways.

11/15/2008 10:36:32 PM

Quote :

"Optimists like to point out that Europe and Japan have much worse unfunded liability problems than the U.S. That is like taking pride in being the best looking horse at the glue factory. In the end, we’ll all still be glue."

LOL

I enjoyed it, but as bad as the baby boomers were about spending, subsequent generations have been just as bad if not worse.

11/15/2008 10:38:30 PM

Quote :

"Nuclear war is no longer an issue, and the idiological debate over the ownership of production ended almost a generation ago."

I disagree with both of these assertions. Enough nuclear weapons to end civilization still exist. The threat's not as dire as before, but it hasn't disappeared. Countless socialists, communists, and anarchist remain.

11/15/2008 10:45:53 PM

Countless homicidal maniacs still exist too, but I do not find the "in the mouth of madness" movie scenario plausible.

Similarly, there are lots of nukes, but other than calling each other names the posessors of the largest stockpiles seem to have no interest whatsoever in waging war upon each other.

Everyone here seems to be mistaking themselves for society. "Society" cannot overspend, people overspend. If you feel you owe too much then pay down some debt. No one doubts that the Government has overspent, but thanks to its ability to tax US dollars it is no where near spending beyond its means to repay.

[Edited on November 15, 2008 at 11:09 PM. Reason : .,.]

11/15/2008 11:09:34 PM

Quote :

"No one doubts that the Government has overspent, but thanks to its ability to tax US dollars it is no where near spending beyond its means to repay."

Really? How do you pay off a debt when its four times your annual income AND you spend more than you make every year?

also, feel free to tell me why I shouldn't shit myself over this image, provided in a GAO document:

http://www.gao.gov/financial/citizensguide2008.pdf

[Edited on November 16, 2008 at 8:23 AM. Reason : .]

11/16/2008 8:13:29 AM

What that graph represents is a voluntary gift to special interests. A simple 51% vote of congress could cut that graph down to zero. The supreme court ruled long ago that you do not have a legal claim to such entitlements, you receive them at the pleasure of the Government. It would be a shock to those depending upon it, but the over 65 crowd rarely riots. As for the debt, A 51% vote in congress could also eliminate that expense too. Foreign governments seem to no longer invade each other over debt rejection. But this idea is unneeded, as the interest on our debt is not that large, especially compared to the entitlements you mention.

[Edited on November 16, 2008 at 9:15 AM. Reason : .,.]

11/16/2008 9:11:42 AM

i love the decline in the interest from 1990 to 2000, as evidenced by clinton balancing the budget and actually starting to pay down the national debt from our surpluses. i personally believe that for the next decade, that should be our number one priority. get out of debt, then worry about other shit.

11/16/2008 12:24:07 PM

with a Dem president n Congress it wont happen

11/16/2008 12:49:58 PM

umm, did Clinton ever pay off anything, or just balance the budget?

Also, the capital isn't the only factor in a monthly/yearly payment on a loan. The fed rate also dictates this.

11/16/2008 1:07:40 PM

Quote :

"Countless homicidal maniacs still exist too, but I do not find the "in the mouth of madness" movie scenario plausible."

That's it, get complacent. You're right. There's no threat to your precious capitalism.

Quote :

"Similarly, there are lots of nukes, but other than calling each other names the posessors of the largest stockpiles seem to have no interest whatsoever in waging war upon each other."

Such things can change in little more than heartbeat. I'm sure you've noticed the increasing tensions between the US and Russia. Of course, that's not the only possibility. Pakistan, India, China, and Israel all have nukes. Iran and Syria supposedly wants them.

11/16/2008 6:34:46 PM

Quote :

"The Advertising industry spends $275 billion per year to convince you to spend money you don’t have for things you don’t need."

11/16/2008 6:47:14 PM

This was the best read in a while. Thank you, OP.

11/17/2008 3:56:30 PM

Quote :

"i love the decline in the interest from 1990 to 2000, as evidenced by clinton balancing the budget and actually starting to pay down the national debt from our surpluses."

This has been covered before, but that didn't actually happen. The budget cutting occurred after the Republican takeover of the House (unless my Social Studies teacher lied to me, I recall that the House does hold the purse strings) and was actually an accounting trick of including Social Securities holdings in the overall budget computation, even though they cannot be touched to pay for discretionary outlays.

This doesn't excuse the, frankly, flabbergasting mismanagement by the GOP over the last 8 years, but Clinton's prosperity is due more to an accident of history than some magic powers only he possessed.


On the other hand, good read. One of the benefits of Barack Obama's election is that it begins to herald the end of the Baby Boomer's hold on power and their generally shallow and delusional ideology.

11/18/2008 5:34:44 PM

The collapse of the Soviet Union.

11/18/2008 5:44:03 PM

Do you remember after Bush got elected in 2000? The question then was "how do we spend the surplus?"

I believe one of the ways was to send everybody in the nation a check for a few hundred dollars. Something that he would do yet again before he left office.

My question then and today is the same; why do we need to spend a surplus when there's a large outstanding debt? Congress DOES have the strings of the budget. And the president is the one who submits the budget to congress. They both play a big role, but I would even venture to say that the president has MORE power since he WRITES the budget and also... has that veto pen. Yes, Clinton used the veto pin, Bush rarely did so.

Perhaps balanced budgets come from the president and congress not cooperating. But without a doubt, Republican presidents inflate the deficit like there is no tomorrow
1. Look at a graph
2. Look at what the presidents did

Both point to Regan, Bush, and Bush#2 being super-amazingly bad for our government's fiscal soundness. This doesn't mean Clinton was fiscally great, but he wasn't absolutely frighteningly terrible... like the rest of them.

[Edited on November 18, 2008 at 5:50 PM. Reason : past tense]

[Edited on November 18, 2008 at 5:51 PM. Reason : ]

11/18/2008 5:49:49 PM

Quote :

"When I see “poor” people appearing to live a more luxurious life than myself, I don’t feel jealous. The thought that goes through my head is: Which banks or finance companies were foolish enough to loan these people the money to live this lifestyle? These foolish financial institutions will never get their loans repaid. What does bother me is that the Bush-Paulson-Pelosi Bailout of Stupid Banks will use my taxes to buy these bad loans from the foolish banks. So, who is the fool in this scenario? The “poor” person got to drive a Cadillac Escalade for a period of time, the foolish banks got bailed out, the bank CEOs took home $30 million, and I lived within my means and footed the bill for the reckless actions of others. It appears that the fools are the Americans who lived their lives according to the rules. The anger is building. I don’t think the politicians running this country realize what true anger looks like. They are used to Americans being herded along like passive sheep."

11/18/2008 5:50:27 PM

^^ There is some legitimacy to that, the whole "spending is bad unless we're spending money on what we want" attitude is part of what undid the Republican party in the last 14 years. To me, there isn't a dimes worth of difference between the two when it comes to fiscal responsibility.

11/18/2008 6:18:34 PM

A degree less serious than the original article posted, but somewhat related.

http://www.youtube.com/watch?v=kF05oDvHPq8

Quote :

"Gimme that, it's mine!"

11/27/2008 1:28:41 PM