To Hell In A Bucket

Posted on September 15, 2017 by MN Gordon

“No one really cares about the U.S. federal debt,” remarked a colleague and Economic Prism reader earlier in the week.  “You keep writing about it as if anyone gives a lick.”

We could tell he was just warming up.  So, we settled back into our chair and made ourselves comfortable.

“The voters certainly don’t care about the federal debt,” he continued.  “They keep electing the same spendthrifts to office.

“And the politicians know the voters don’t care.  They also know that making more and more promises is the formula for getting reelected.

“Deep down, the aging masses know they need massive amounts of government debt to pay their social security, medicare, and disability checks.  On top of that, many of the so-called gainfully employed are really on corporate welfare; they hang their hats on government contracts to fund their paychecks.

“You know as well I do how this crazy debt based fiat money system works.  The debt must perpetually increase or the whole financial system breaks down.  Continue reading →

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The Government Debt Paradox: Pick Your Poison

Posted on September 8, 2017 by MN Gordon

“Rule one: Never allow a crisis to go to waste,” said President Obama’s Chief of Staff Rahm Emanuel in November of 2008.  “They are opportunities to do big things.”

At the time of his remark, Emanuel was eager to exploit the 2008 financial crisis to raid the public treasury.  With the passage of the American Recovery and Reinvestment Act in February 2009, Emanuel’s wish was granted.  The Obama administration had the opportunity to do big things.

Politically, the passage of the Recovery Act was a huge success.  Washington was able to dole out funds to their preferred projects like never before.  What could be better for a Congressman than to direct massive amounts of funds to infrastructure, healthcare, energy, security, law enforcement, and just about everything else?

Some Congressman even directed money to bridges and buildings that were then named after them.  No doubt, this flattered their egos.  But what it really did was memorialize their political swindle. Continue reading →

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How to Make the Financial System Radically Safer

Posted on September 1, 2017 by MN Gordon

Clear thinking and discerning rigor when it comes to the twisted state of present economic policy matters brings with it many physical ailments.  A permanent state of disbelief, for instance, manifests in dry eyes and droopy shoulders.  So, too, a curious skepticism produces etched forehead lines and nighttime bruxism.

Nonetheless, these are small prices to pay for the simple delight that comes when a central planner opens their mouth and inserts their foot.  Last Friday, for example, Fed Chair Janet Yellen gave a speech to her friends and cohorts at the annual central banker’s powwow in Jackson Hole, Wyoming.  There she patted herself and the financial regulatory community on the back for what she believes has been a successful execution of financial regulations:

“The events of the [2008] crisis demanded action, needed reforms were implemented, and these reforms have made the system safer.”

How Yellen knows the reforms have made the system safer is unclear. Continue reading →

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Calling Mitch McConnell’s Debt Ceiling Bluff

Posted on August 25, 2017 by MN Gordon

Senate Majority Leader Mitch McConnell woke up on the wrong side of the bed on Monday.  Who could blame him?  His summer vacation’s been ruined.  President Trump’s been riding him all month like a pack mule.

What’s more, on Monday McConnell had to rise early and put on his suit and tie like an ordinary working stiff.  While his Congressional cohorts were busy vacationing on their summer recess, McConnell had important business to tend to that couldn’t wait until Congress’ return on September 5.  Namely, he had to make a public display of unity in his home state of Kentucky with Treasury Secretary Steven Mnuchin.

Following a social media lambasting of a deplorable taxpayer by Mnuchin’s new bride, and Mnuchin’s visit to Fort Knox to confirm the “gold is safe,” it was finally time to get down to business.  Together, McConnell and Mnuchin held hands and insisted the U.S. government will raise the debt ceiling and avoid defaulting on its debt.  McConnell even made the following declaration: Continue reading →

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