National Debt

[piqaboo]

Oh my.
I shall have to find a way to stimulate the economy soon, while my money still has value.
Then we shall hunker down and hope, at casa otoid.

[dai bread]

You can bask in a glow of virtue, Piq. You'll be stimulating our economy in a month.

[piqaboo]

You can bask in a glow of virtue, Piq. You'll be stimulating our economy in a month.

To my very best ability. Especially your small business people - tea shops and craft stores, guest houses etc.

Just so long as I and mine dont participate in your round of the Swineflu.

[Haggis@wk]

MARK STEYN on William Forstchen’s One Second After. Why worry about an EMP attack?

“So it wipes out your bank accounts. What’s in there? I mean, really. The average American household is carrying $121,953 in personal debt. What would be so bad if something goofy happened and all the meters got reset to zero? And Joe Schmoe’s credit card debt is as nothing compared to what the government’s signed him up for. . . . When I first heard about EMP a few years back, the big worry was that in a split-second it would vaporize trillions of dollars of wealth. From the perspective of 2009, vaporizing trillions of dollars of debt has something to commend it.”

Hmmmmmmmmmmmmmmmmmmmm

[jamiebk]

I remember Y2K as well.....

[Haggis@wk]

Moody’s warns California that a failure to produce a rational budget will result in a “multi-notch” downward rating on their debt:

California, struggling to close a $24.3 billion budget gap, faces the prospect of a “multi-notch” downgrade in its credit rating if the state’s legislature fails to act quickly to produce a budget, Moody’s Investors Service warned on Friday.

The ratings agency’s decision to place California’s general obligation debt on alert for such a dramatic possible downgrade stunned state officials. …

The state’s current A2 credit rating is Moody’s sixth-highest investment grade and makes California the lowest rated of the 50 states. The A2 rating is just five notches above speculative status and Moody’s raised the potential for the rating to tumble toward “junk” status. …

A downgrade could push California’s borrowing costs up at time when state officials expect to issue up to $9 billion in revenue anticipation notes as soon as possible after a budget agreement is reached — a deal whose timing is in doubt.

Moody’s said California’s leasing debt and other state-related debt are also on review, affecting a total of $72 billion of debt.

California bonds will reach junk status, which will match the state of their political class in Sacramento. This state takes in more revenue per person than almost every other state and still manages to squander 20% more above that. Moody’s has it diagnosed perfectly.

[Haggis@wk]

The Debt Tsunami: The CBO’s latest warning on the long-term deficit is scarier than ever. Hope and change!

Now comes the CBO with yet more news of the sort that neither Capitol Hill nor the White House is likely to welcome: its freshly released report on the federal government's long-term financial situation. To put it bluntly, the fiscal policy of the United States is unsustainable. Debt is growing faster than gross domestic product. Under the CBO's most realistic scenario, the publicly held debt of the U.S. government will reach 82 percent of GDP by 2019 -- roughly double what it was in 2008. By 2026, spiraling interest payments would push the debt above its all-time peak (set just after World War II) of 113 percent of GDP. It would reach 200 percent of GDP in 2038.

Emphasis mine

[dai bread]

Just make sure you're not sucked in to fighting "police actions" for people who should be able to look after their own interests. If you take on another Balkans-type affair you'll be in real trouble. Given peace, I have no doubt the American economy will come right.

One lot that I'm thinking of is very good at looking after its own interests by way of agricultural subsidies, and no, I'm not thinking of the U.S. this time. They should also look after their political and military interests with the same enthusiasm instead of running to America whenever trouble arrives.

[Haggis@wk]

So how’s that stimulus thing going?

Fortune magazine recently reported that the number of U.S. companies in the world’s top 500 fell to the lowest level ever, while more Chinese firms than ever before made the list. Thirty-seven Chinese companies now rank in the top 500, including nine new entries. Meanwhile, the number of U.S. firms has fallen to 140, the lowest total since Fortune began the list in 1995. This is not good.

China also surpassed the U.S. as the world’s biggest automaker in the first half of 2009, with June sales soaring 36.5 percent from a year earlier. The Chinese registered 6.1 million car sales for the first half of the year. That way outpaced American sales, which were only 4.8 million. . . .
Here’s the clincher: Year-to-date, Dow Jones stocks are off 7 percent, while China stocks are up 71 percent. The world index is up 4 percent. Emerging markets are up 25 percent. They’re all beating us. None of this is good.

I’m beginning to feel that this business of shoveling money out to cronies isn’t really helping the economy as much as was promised.

[analog]

China also surpassed the U.S. as the world’s biggest automaker in the first half of 2009, with June sales soaring 36.5 percent from a year earlier. The Chinese registered 6.1 million car sales for the first half of the year. That way outpaced American sales, which were only 4.8 million. . . .

we've become a people who believe we can exist by being office workers.

Economics is simple - over the long run you can consume as much as you produce.

Eric Hoffer opined in the 1970's that the work ethic remained alive only in the Orient.
China and Korea are almost in position to say of us: "Let them eat Credit Default Swaps".

Teach your kids to fix things. "The Age of Conspicuous Consumption on the Installment Plan" is about over, we'll be soon needing to keep our cars and appliances for alive for a decade or two.

"If the girls don't find you handsome, at least they'll find you handy" - Red Greene

a.

[dai bread]

"we've become a people who believe we can exist by being office workers."

Which is why we're regularly smacked on the hand with press releases quoting OECD figures about the number of people in tertiary education. Granted, tertiary education should include Polytechs, but the emphasis is always on Universities, and in particular, I.T. Some people think a university degree solves everything. During the Rogernomics depression I saw an ad. for someone to drive a lawnmower for a council. A requirement was a degree in horticulture.

"Teach your kids to fix things."

There's a book called "The Sand Pebbles" which illustrates this very nicely. It's about the crew of an American gunboat on the Yangtze River during Chiang Kai-Skek's revolution. They've been there for some time, have hired Chinese to do all the dirty work, and have grown fat, lazy and incompetent. When the Chinese desert en masse, only the chief engineer still knows how to run the ship. The others have to re-learn their skills the hard way. Everything dirty and mundane was "coolie work", so the Americans' skills have rusted like their ship. It's a while since I read the book, but I think they all get away safely in the end.

[analog]

Sand Pebbles is among my all time favorite movies. Steve McQueen portrays the young engineman as a misfit. As a young man I too lacked people skills and similarly buried myself in a big steam engine.

They've..........have hired Chinese to do all the dirty work, and have grown fat, lazy and incompetent. When the Chinese desert en masse,...

ooooh i forgot about that point.....
Seems almost prescient with recent NYT headlines...

China Urges New Money Reserve to Replace Dollar

As individuals Americans will work plenty hard.
It's just as a people we've lost the distinction between useful and non-useful work.
This is the machine age. As you observe, education should prepare kids to live in it.
A good friend of mine said in High School (ca 1963) : "They teach us too much Charles Dickens and not enough air-conditioning."

but I think they all get away safely in the end.

Movie plot was given a "human interest" twist. End is not so happy.
One of McQueen's better roles, I thought. As i said i identified with his character.

Will look for the book. Thanks for reminding me of it.

a.

[Shapley]

I have the movie in both VHS and DVD formats. It's one of my favourites. I haven't read the book, but recently saw it on a 'required reading list', and thought that, perhaps, I shoudl buy a copy and read it.

Thus, I can't speak about the book, but part of the problem shown in the movie was the 'segregation of powers' in the Chinese structure, which Petty Officer Holman sought to dismantle. The Chinese labour bosses, to ensure their hold on power, sought to make sure that no coolie developed too thorough an understanding of the plant. Thus we had "bilge coolies', 'engine coolies', 'deck coolies', etc., and very specific turfs designated for each. This was highlighted when P.O. Holman sought to inspect the engine below the deckplates, and was told that none but the 'bilge coolies' were allowed down there. He bucked the system and, as a result, one of his engine coolies was killed in an 'accident'. He selected a new coolie, and set out to teach him the workings of the entire engine.

The boss later ordered the coolie ashore, where he was captured and tortured. P.O. Holman ends up shooting him to spare him the torture.

The deterioration of the general condition of the ship after the coolies are evicted is quite evident in the film, excepting the engine room where P.O. Holman maintains order.

It's a good film. I think I'll buy the book and give it a read.

[analog]

The Chinese labour bosses, to ensure their hold on power, sought to make sure that no coolie developed too thorough an understanding of the plant.

It's a common enough human failing, to believe one can hold oneself up by pushing others down.
I worked briefly for a boss like that, he cost the company tens of millions of dollars. Albert Speer observed same failing in in the Third Reich , one of his first observations in "Slave State" is the mediocre intellect of most Hitler's direct reports.

eric hoffer
The resentment of the weak does not spring from any injustice done to them, but from the sense of their inadequacy and impotence. They hate not wickedness but weakness. When it is in their power to do so, the weak destroy weakness wherever they see it.

says a lot about current politics .

[Shapley]

we've become a people who believe we can exist by being office workers.

I pointed this out recently, but I'll restate it here. In 2008 (the beginning of our current recession), production of goods accounted for 18.9% of our total GDP. With a GDP of 14 trillion dollars, that equates to about 2.6 trillion dollars of GDP in the production of goods. In China, manufacturing accounts for about half of its approximately 4.5 trillion dollar economy, or about 2.3 trillion dollars. The Europian Union, whose manufacturign accounts for about 27% of total GDP of about 14.7 trillion, or about 4 trillion, exceeds the U.S. in manufacturing. But then, again, the EU is not a single nation.

I am in the business of making things. Our company not only makes things, but it makes things for people that makes things. We're not as busy as we've been, but we're busy. Our customers are also not as busy as they've been, but some of them are busy, or we wouldn't be.

I drive across the Mississippi RIver every day. I marvel at the barge traffic, moving raw materials up and down the river. A major rail line runs past my office window, carrying raw materials and finished goods up and down the Mississippi, as well. Both are quieter now than a year ago, but they are still busy moving goods, either manufactured or to be used in manufacture, along their routes.

Last year, when I would drive my son to school every day, we were met most mornings by trucks hauling huge dump-beds for earth-moving equipment. These dump beds were apparently being manuctured south of here, and moved acrross the river to someplace North or East. Since they were painted Caterpillar Yellow, I assumed they were going north to Peoria, IL. The wer probably manufactured in Arkansas, near the steel mills mear Blytheville, but that is just a guess based on the route they were taking. We must have met over a hundred of them during last years school term. It is, of course, possible that they were manufactured overseas and shipped to New Orleans or Texas, But they were clearly being sent for assembly in the States.

We still make stuff here. Big stuff and little. Not so much as before, but there are logical economic reasons for that. Don't lose heart.

[Shapley]

Then, of course, we see things like this. These used to be made in Louisiana. The environmental costs of operating a foundry are such that it's cheaper to buy your manhole covers from India. We would hope the City of New York would have pursued U.S. sources for its manhole covers before importing them, but there may be none remaining.

Then again, they may have all been sued out of business by texting teens who fell through them...

[Shapley]

It's a common enough human failing, to believe one can hold oneself up by pushing others down.

That may have been part of it, but the actuality was to inflate the number of workers required. "His rice bowl" was the term used when referring to one persons 'specialty'. The US sailors didn't even shave themselves, because that was the 'rice bowl' of the coolie barbers.

Unions work that way. Whereas one may may be able to perform a variety of tasks, union rules will require different workers to be assigned to the various tasks. The result is that an employer is mandated to retain a hundred workers to operate a facility that can be manned by fifty. We don't want to break anyone's rice bowl. The added labour costs reduce the competitivenes of the company.

[Shapley]

I recall reading in a book on shipping that one company produced an innovative design. They notched the rear of a set of barges, and a towboat was built with a bow design that fit snugly into the notch. Properly secured, the towboat and barge formed a single unit which acted as a ship, capable of coastal or even ocean transport.

Being a towboat and barge, the vessels fell under a different designation than a ship, and could be manned with about a dozen crewmembers, as opposed to the twenty or so required for a ship of similar size. Also, as a barge, the apparent rules of loading and unloading differed. It was expected that this design would save the company thousands in labour costs alone. Additional savings were provided in the fact that the barge could be detached an left behind during loading and unlaoding, such that the engine could be employed moving another barge, keeping it gainfully employed during an otherwise idle period.

The unions fought this design, and apparently won some concessions that placed the required crew somewhere between the minimum crew and the full ships' compliment. Thus, much of the savings were lost. They didn't want to break anybody's rice bowl.

[Shapley]

It's official. The Deficit has now risen above the $1 trillion mark. This is more than double the record amount, back when the Democrats who now control Congress were telling us that spending was 'out of control'...

[Haggis@wk]

It's official. The Deficit has now risen above the $1 trillion mark. This is more than double the record amount, back when the Democrats who now control Congress were telling us that spending was 'out of control'...

...and it will almost double before the end of the year!!!