Life After the Day of Reckoning

Posted on October 18, 2011 by MN Gordon

The 2011 fiscal year ended on September 30th and the beans of U.S. Government revenue and spending have been counted up.  Total revenue for the year was $2.3 trillion.  Total spending for the year was $3.6 trillion.  The difference – a $1.3 trillion deficit – was made up with debt, pushing the national debt to $14.8 trillion…over 100 percent of GDP.

Just five years ago mention of a $1 trillion dollar annual budget deficit would have been shocking and unimaginable.  Back then, during the blissful days before the 2008 financial meltdown and economic fallout, a budget deficit of $500 billion was considered outrageous.  But in this brave new world, the federal government has spent $1 trillion more than it has taxed the last three years in a row.

Of course, there are consequences for actions.  Paying the interest on the debt is now the fastest growing budget category.  In 2011, net interest payments rose 15.7 percent to $227 billion.

No doubt, the U.S. Government is bleeding money.  Every month is takes over $108 billion of new debt just to keep the lights on.  So far the U.S. Government has gotten by on the generosity of its creditors and their willingness to buy treasuries at historically low rates Continue reading →

Posted in Government Debt, MN Gordon | Tagged , , , | Leave a comment

Let Them Fail

Posted on October 14, 2011 by MN Gordon

Good jobs are in high demand these days.  Yet, unfortunately, they’re in limited supply.  Gone are the days when any old hack could show up with a tie and a smile, shuffle papers around a cubicle, surf the internet all day, drink coffee on the house, and collect a comfortable paycheck every two weeks.

To get a good job these days you must possess a financially valued skill that can turn a profit for your employer.  And, above all, you must work your ass off.  That’s our experience, at least.

Most university degrees no longer cut it.  Particularly those in soft subjects like sociology of zebras in captivity.  Recent graduates with degrees in such fluff are discovering their learned knowledge of worthless matter…is worthless.  Come to find out, it hardly qualifies them to operate an espresso bean grinder.  Who would have thought?

On Tuesday the Senate demurred to President Obama’s jobs bill, which included tacking $447 billion to the debt to create jobs the market doesn’t warrant.  This must be, without a doubt, the most intelligent thing the blockheads in the Senate have done this century.

By refusing to spend money it doesn’t have to create jobs the world doesn’t need, the government’s giving the economy a shot at making an honest recovery Continue reading →

Posted in MN Gordon, Politics | Tagged , , , | Leave a comment

A Telling Sign of Things to Come

Posted on October 11, 2011 by MN Gordon

The Labor Department reported last Friday that 103,000 jobs were added in September.  Considering the lethargic state of the economy, this number could have been much worse.  Nonetheless, a quick scratch below the surface reveals the headline jobs number wasn’t quite what it first appeared.

In particular, the jobs number included the return of 45,000 communications workers that had been on strike.  If you exclude them from the jobs report, employment increased by a measly 58,000.  Still, even the official 103,000 jobs count was not enough to lower the unemployment rate from 9.1 percent.  There were also several other substandard statistics buried below the headlines in the September labor report.

For example, the average duration of unemployment marked a record high of 40.5 weeks.  In addition, close to 45 percent of the 14 million unemployed had been out of work for greater than six months – up from 42.9 percent in August.  Yet even worse, when including people who want to work, but have given up looking for a job, and people who work part time, but want to work full time, the unemployment rate increased to 16.5 percent. Continue reading →

Posted in MN Gordon, Politics | Tagged , , , , , , | Leave a comment

The Way Out of Our Economic Mess

Posted on October 7, 2011 by MN Gordon

Something big is going on.  You can just feel it.  Unfortunately, the world’s two biggest clowns are on the case.

On Monday, in between Wall Street’s 33 percent markdown of American Airlines’ stock, President Obama took a moment to markdown the stock of the American people.  “I don’t think [American’s are] better off than they were four years ago,” said the President.

Then, on Tuesday, while the credit market was marking 10-Year Treasury yields down to 1.72 percent, Federal Reserve Chairman Ben Bernanke, in a speech to Congress, marked down the effectiveness of monetary policy.  “Monetary policy can be a powerful tool, but it is not a panacea for the problems currently faced by the U.S. economy,” said Bernanke.

No doubt, the domineering President and the interventionist Fed are not talking down their book just for the goodness of candid discourse.  They didn’t attain their political power and influence by walking and talking perfectly upright.  They’re talking down their book because, by doing so, they expect to grow support for their next grand scheme to save us from ourselves.

Of course, you know what that means.  It means spending borrowed money and debauching the currency in unison.  It is the only play they know. Continue reading →

Posted in Economy, Terry Coxon | Tagged , , , , , | Leave a comment