US Government Shutdown

[Revoltingest]

Well Revolt what you said was interesting and one can not deny your experience and background with things. eek!

"Lord save me from a government with great power and good intentions." A roiling cauldron of very upset : Our elected representatives can no longer be allowed to just run around loose unsupervised anymore. It just doesn't work. The folks that elect someone to be their representative in government need to have more control over how their elected representative votes. Yes some folks would say that the American government is to complicated for the American voter to understand and participate in. My answer is that if the American voter is too stupid to keep track of and supervise their own government, then the United States of America experiment is going to fail. Government for the people and by the people. It is not us against them, they are our servants and we need to supervise them.

I especially like the part of your post which I underlined.

 

[metis]

A quick comment.

In 2007, roughly 60% of all investment transactions occurred, not through the regular banking system, but through the shadow-banking system, which was mostly unregulated, as Alan Greenspan told Congress during testimony. This system had evolved starting around 1999, and was mostly due to two groups of people: two women working at one of the larger banks (I can't remember which one at this time), whereas they designed "credit-default swaps" (which they later abandoned because they saw too much risk being taken), and two men in California that worked at a large mortgage company that devised "sub-prime mortgages" that made them millionaires because it allowed so many more people to buy housing. Fannie and Freddie were getting their butts kicked, so they also went along with sub-prime starting in 2005.

Now, I mention this because some on the right have totally distorted what really was going on and where. Yes, the government did and does have responsibility for regulations in this arena, but as Greenspan testified, they couldn't keep up with it, nor was he inclined to do so because he felt that these investment firms wouldn't take risks that would jeopardize their own companies. However, he admitted to Congress that he was wrong about that.

Also during his testimony, Greenspan said he knew we were in trouble in 2005, but hoped that there would be a "soft landing", whereas we would slow down growth and maybe slip into only a slight recession or less. Obviously, that didn't happen.

As far as the bank assets are concerned, some seemingly forget that the Fed had to use bank "stress tests" to see which were solvent and which weren't. The irony is that the Fed did it illegally, but thankfully they did as such because no one bank or investment firm knew which others were solvent. What was illegal was that the Fed required the largest to take government loans even if they didn't need it, because no one knew who needed help or with ones might be safe to merge with. By doing as such, this allowed the Fed to examine their books much more thoroughly.

IOW, the "stress test" allowed the government to sort out the solvent from the insolvent, and then deal with them accordingly. If they hadn't, our system would have frozen up even far more than it did, and some economists later said that we could have slipped into a depression possibly even deeper than the Great Depression. And this is what was keeping me awake at night.

 

[Revoltingest]

In 2007, roughly 60% of all investment transactions occurred, not through the regular banking system, but through the shadow-banking system, which was mostly unregulated, as Alan Greenspan told Congress during testimony. This system had evolved starting around 1999, and was mostly due to two groups of people: two women working at one of the larger banks (I can't remember which one at this time), whereas they designed "credit-default swaps" (which they later abandoned because they saw too much risk being taken), and two men in California that worked at a large mortgage company that devised "sub-prime mortgages" that made them millionaires because it allowed so many more people to buy housing. Fannie and Freddie were getting their butts kicked, so they also went along with sub-prime starting in 2005.

You make no direct connection between the "shadow-banking system" & the companies which crashed.
Links to support claims in your post would help.
Btw, Fannie & Freddie were hardly victims in this debacle. These GSEs (gov created & run companies) were instrumental in creating the subprime market.
http://www.cato.org/publications/briefing-paper/fannie-freddie-subprime-mortgage-market

Now, I mention this because some on the right have totally distorted what really was going on and where.

One man's distortion is another's truth. The financial crash was complex in origins & play out. Opinions will differ.

Yes, the government did and does have responsibility for regulations in this arena, but as Greenspan testified, they couldn't keep up with it, nor was he inclined to do so because he felt that these investment firms wouldn't take risks that would jeopardize their own companies. However, he admitted to Congress that he was wrong about that.

Gov couldn't keep up with it, but even worse, gov created the very market instabilities (inflated housing market & encouraging risky borrowing) which it sought to manage.

Also during his testimony, Greenspan said he knew we were in trouble in 2005, but hoped that there would be a "soft landing", whereas we would slow down growth and maybe slip into only a slight recession or less. Obviously, that didn't happen.

By 2005, we'd already been in trouble for 4 years. But I saw different leading indicators from what many economists watch. After 9.11.2001, I watched the commercial real estate market crash due to businesses closing or contracting. My tenants downsized or went out of business as venture capital funding dried up. This resulted in job loss, income reduction & borrowing difficulties, which lead up to the failure of lenders like Countrywide as borrowers defaulted. Gov regulation continues to wreck the economy, eg, no discounts on fed loans, taxing discounts as schedule E income, massive borrowing, fiat currency.

As far as the bank assets are concerned, some seemingly forget that the Fed had to use bank "stress tests" to see which were solvent and which weren't. The irony is that the Fed did it illegally, but thankfully they did as such because no one bank or investment firm knew which others were solvent. What was illegal was that the Fed required the largest to take government loans even if they didn't need it, because no one knew who needed help or with ones might be safe to merge with. By doing as such, this allowed the Fed to examine their books much more thoroughly.
IOW, the "stress test" allowed the government to sort out the solvent from the insolvent, and then deal with them accordingly. If they hadn't, our system would have frozen up even far more than it did, and some economists later said that we could have slipped into a depression possibly even deeper than the Great Depression. And this is what was keeping me awake at night.

For any position taken, one can always find an economist who will support it. So "some economists said" carries no weight with me.

 

[mystic64]

The financial crash was complex in origins & play out.

The above I very much agree with and you guys have presented two interesting approaches to it. Generally speaking nothing is ever simple. In my mind it all started when American companies begin to move their manufacturing plants overseas to take advantage of "cheap labor". This created the beginnings of recession, at least relative to the US. From there the "excuse" for everything that the government did was to stimulate the economy. And these things were done without solving the original problem, which was that large numbers of high paying middle class jobs had ceased to exist. Because the original problem was not solved first, everything that they did just made things worse. And this worse was made even worse when the US went into debt to fight two wars.

To me the question is, "How do we get out of the mess that we are in without solving the original problem which now also include the things that congress has done to fix things?" In my mind shutting down the government and holding the American people hostage is not the answer. Something different needs to be done. And part of that something different that needs to be done is, what are we going to do about congress? Something different needs to be done there also? "Good old boy" and "back room" politics just is not working. And no bill should come up before congress that the average American voter can not read and understand. This needing teams of legal specialists to decide what a bill in congress actually says is ridiculous.

 

[BlandOatmeal]

The above I very much agree with and you guys have presented two interesting approaches to it. Generally speaking nothing is ever simple...

It looks pretty simple to me: In the last century, it was called a "Ponzi scheme". It works like this: (1) Someone (a couple of women in New York, a rich banker, etc.) offers something of "potential" value (a home mortgage, cradle-to-grave security, etc.) in exchange for money up front (trillions of dollars of debt, which the taxpayers must ultimately pay). The schemer then flees the scene: takes the money and runs, writes an autobiography, goes on speaking tours, starts a think tank, lectures at a prestigious college, you name it), the middlemen go belly-up and, of course, the sucker (i.e. the taxpayer) is stuck with the loss.

At present, it is our Democrat-controlled President and Congress who are keeping the scheme going. If the Republicans replace them, I expect they will do the same.

Nothing complicated there. The only thing seemingly complicated, is the details -- which, of course, lawyers and financial consultants will be happy to sort out for us,

FOR A FEE.

There is no "soft landing" for the ultimate suckers (the taxpayers) in a Ponzi scheme. Greenspan was hoping for a soft landing for middlemen like himself. This is how it all ends:

Rev 13
[11] And I beheld another beast coming up out of the earth; and he had two horns like a lamb, and he spake as a dragon.
[12] And he exerciseth all the power of the first beast before him, and causeth the earth and them which dwell therein to worship the first beast, whose deadly wound was healed.
[13] And he doeth great wonders, so that he maketh fire come down from heaven on the earth in the sight of men,
[14] And deceiveth them that dwell on the earth by the means of those miracles which he had power to do in the sight of the beast; saying to them that dwell on the earth, that they should make an image to the beast, which had the wound by a sword, and did live.
[15] And he had power to give life unto the image of the beast, that the image of the beast should both speak, and cause that as many as would not worship the image of the beast should be killed.
[16] And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:
[17] And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.

As for the "beast coming up out of the earth", I believe he is the one elsewhere described as the "False Prophet", who is not a person or institution but a spirit -- something unseen, something that's real only in people's heads, yet so powerful that it drives world eventS: an idol in the mind, something that people entrust their lives to; a false hope -- the promise of something from nothing.

Call it what you will. I call it the "Great Ponzi". What do you trust in? Technology, that can " make fire come down from heaven"? [Hint: There is a cost.] Science, which promises to have all the ultimate answers "just around the corner"? [Hint: There is a cost.] Fiat currency? The "full faith and credit" of a government? [Hint: There is a cost.] Political campaign promises? [Hint: There is a cost.] The dictatorship of the proletariat?" [Hint: There is a cost.] "Big Brother"? [Hint: There is a cost.] Just who is this one who can make an image of such an idol, and give it power in the hearts and souls of the masses?

GREEDO

Jobba the Hutt is in men's souls. He is their god.

---------------------------------------------

Romans 8
[6] For to be carnally minded is death; but to be spiritually minded is life and peace.

 

[Revoltingest]

The above I very much agree with and you guys have presented two interesting approaches to it. Generally speaking nothing is ever simple. In my mind it all started when American companies begin to move their manufacturing plants overseas to take advantage of "cheap labor". This created the beginnings of recession, at least relative to the US. From there the "excuse" for everything that the government did was to stimulate the economy. And these things were done without solving the original problem, which was that large numbers of high paying middle class jobs had ceased to exist. Because the original problem was not solved first, everything that they did just made things worse. And this worse was made even worse when the US went into debt to fight two wars.
To me the question is, "How do we get out of the mess that we are in without solving the original problem which now also include the things that congress has done to fix things?" In my mind shutting down the government and holding the American people hostage is not the answer. Something different needs to be done. And part of that something different that needs to be done is, what are we going to do about congress? Something different needs to be done there also? "Good old boy" and "back room" politics just is not working. And no bill should come up before congress that the average American voter can not read and understand. This needing teams of legal specialists to decide what a bill in congress actually says is ridiculous.

It started even before low skill jobs moved overseas. We've many factors which contribute to economic instability. Consider old gov policies which lead to housing market inflation:
- Tax deductability of interest & property taxes subsidized home ownership relative to renting.
- A policy of always expanding the money supply faster than economic growth is institutionalized currency devaluation, which leads homeowners to see their investment as a hedge against inflation.
- No income tax on profit (with some limitations) from a sale.
The above will lead people to pay more for property than the value they receive for housing. So when the economy has a downturn, which happens periodically, prices will adjust downward, making the economy more crash prone.

 

[metis]

The above I very much agree with and you guys have presented two interesting approaches to it. Generally speaking nothing is ever simple. In my mind it all started when American companies begin to move their manufacturing plants overseas to take advantage of "cheap labor". This created the beginnings of recession, at least relative to the US. From there the "excuse" for everything that the government did was to stimulate the economy. And these things were done without solving the original problem, which was that large numbers of high paying middle class jobs had ceased to exist. Because the original problem was not solved first, everything that they did just made things worse. And this worse was made even worse when the US went into debt to fight two wars.

Even though the above was not a direct cause, there's no doubt that this was a contributing factor, plus it really has affected our recovery in a negative manner since good paying jobs with benefits are getting harder and harder to find.

Secondly, using housing to stimulate economic growth has been used by every President from Eisenhower on, because growth in this area has a very significant effect on economic growth overall. No doubt there were mistakes made by both parties here by allowing for too much deregulation, as Greenspan testified, but the intent was to encourage easier housing at lower costs, and this was being done since the 1970's, but then got out of hand as I mentioned in my last post.

To me the question is, "How do we get out of the mess that we are in without solving the original problem which now also include the things that congress has done to fix things?" In my mind shutting down the government and holding the American people hostage is not the answer. Something different needs to be done. And part of that something different that needs to be done is, what are we going to do about congress? Something different needs to be done there also? "Good old boy" and "back room" politics just is not working. And no bill should come up before congress that the average American voter can not read and understand. This needing teams of legal specialists to decide what a bill in congress actually says is ridiculous.

I've long been a believer in the KISS philosophy, so I fully agree with you. Even the roll-out of the ACA has been compromised because KISS was ignored, and the site was too complicated and not fully tested. When I saw on one of the news stations how the site operated, my gut reaction was "You idiots!". They had movable cartoon figures, for just one example, which only complicated things, and it's my understanding that they are now trying to simplify the process. To them I say "Dah!".

 

[mystic64]

It looks pretty simple to me: In the last century, it was called a "Ponzi scheme". It works like this: (1) Someone (a couple of women in New York, a rich banker, etc.) offers something of "potential" value (a home mortgage, cradle-to-grave security, etc.) in exchange for money up front (trillions of dollars of debt, which the taxpayers must ultimately pay). The schemer then flees the scene: takes the money and runs, writes an autobiography, goes on speaking tours, starts a think tank, lectures at a prestigious college, you name it), the middlemen go belly-up and, of course, the sucker (i.e. the taxpayer) is stuck with the loss.

At present, it is our Democrat-controlled President and Congress who are keeping the scheme going. If the Republicans replace them, I expect they will do the same.

Nothing complicated there. The only thing seemingly complicated, is the details -- which, of course, lawyers and financial consultants will be happy to sort out for us,

FOR A FEE.

There is no "soft landing" for the ultimate suckers (the taxpayers) in a Ponzi scheme. Greenspan was hoping for a soft landing for middlemen like himself. This is how it all ends:

Rev 13
[11] And I beheld another beast coming up out of the earth; and he had two horns like a lamb, and he spake as a dragon.
[12] And he exerciseth all the power of the first beast before him, and causeth the earth and them which dwell therein to worship the first beast, whose deadly wound was healed.
[13] And he doeth great wonders, so that he maketh fire come down from heaven on the earth in the sight of men,
[14] And deceiveth them that dwell on the earth by the means of those miracles which he had power to do in the sight of the beast; saying to them that dwell on the earth, that they should make an image to the beast, which had the wound by a sword, and did live.
[15] And he had power to give life unto the image of the beast, that the image of the beast should both speak, and cause that as many as would not worship the image of the beast should be killed.
[16] And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:
[17] And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.

As for the "beast coming up out of the earth", I believe he is the one elsewhere described as the "False Prophet", who is not a person or institution but a spirit -- something unseen, something that's real only in people's heads, yet so powerful that it drives world eventS: an idol in the mind, something that people entrust their lives to; a false hope -- the promise of something from nothing.

Call it what you will. I call it the "Great Ponzi". What do you trust in? Technology, that can " make fire come down from heaven"? [Hint: There is a cost.] Science, which promises to have all the ultimate answers "just around the corner"? [Hint: There is a cost.] Fiat currency? The "full faith and credit" of a government? [Hint: There is a cost.] Political campaign promises? [Hint: There is a cost.] The dictatorship of the proletariat?" [Hint: There is a cost.] "Big Brother"? [Hint: There is a cost.] Just who is this one who can make an image of such an idol, and give it power in the hearts and souls of the masses?

[youtube]O4CprSU375E[/youtube]
GREEDO

Jobba the Hutt is in men's souls. He is their god.

---------------------------------------------

Romans 8
[6] For to be carnally minded is death; but to be spiritually minded is life and peace.

Revelation 13:1, "And I saw a beast coming out of the sea having ten horns and seven heads, and on his heads were ten crowns." Bland what is said in this verse in Revelation is the formula for a cheap energy fuel. Uranium oxy iodide. 10 Iodine (I), 7 oxygen (O), and ten uranium (U). When this fuel is heated in the presence of calcium carbonate (limestone) it gives off a tremendous amount of heat. The lamb is oxy iodide (one head (O) and two horns (I)) and when it is added to the beast reaction it causes the fuel (Beast) to burn cleaner and hotter. In some parts of the world folks that want to use this cheap energy that is produced will have to join an economic group that is using this cheap energy to create a paradise on earth and they will have to wear a mark as a member. The use of this cheap source of energy by the people of the United States is going to be an interesting debate because the Christian Bible says that this energy is evil. And the US government will probably be shut down again over that one .

 

[mystic64]

It started even before low skill jobs moved overseas. We've many factors which contribute to economic instability. Consider old gov policies which lead to housing market inflation:
- Tax deductability of interest & property taxes subsidized home ownership relative to renting.
- A policy of always expanding the money supply faster than economic growth is institutionalized currency devaluation, which leads homeowners to see their investment as a hedge against inflation.
- No income tax on profit (with some limitations) from a sale.
The above will lead people to pay more for property than the value they receive for housing. So when the economy has a downturn, which happens periodically, prices will adjust downward, making the economy more crash prone.

To me reading what you and Metis are writing is very educational. I spent most of the 70s, 80s, 90s, and early 2000s meditating (basically studying metaphysics), so most of what I know about politics is what I have learned from hanging out in internet politics forums. And you guys are very very helpful! It is appreciated!

 

[Revoltingest]

To me reading what you and Metis are writing is very educational. I spent most of the 70s, 80s, 90s, and early 2000s meditating (basically studying metaphysics), so most of what I know about politics is what I have learned from hanging out in internet politics forums. And you guys are very very helpful! It is appreciated!

Helpful? I've just been trying to make everyone angry!

Anyway, I'm back to post something I saw in the news today....
State Department Buys Million Dollar Granite Sculpture from Irish-Born Artist | The Weekly Standard

At the end of September, the federal government's fiscal year was drawing to a close, the threat of a shut down was increasing, and the State Department was shopping for art. Four contracts were awarded in the last two weeks of September, including $1,000,000 for a granite sculpture by Irish-born artist Sean Scully to be installed at the new U.S. Embassy in London. Notice of the awards was posted Sunday afternoon of Thanksgiving weekend on the Federal Business Opportunities website.

I just can't take gov's crying about a funding shortage when they pi** millions away on some silly costly vanity pieces which won't advance the cause of diplomacy one whit. We could save some real money by firing these government supported pretentious art collectors.

A recent work by the guy who just got $1,000,000....

In the old days, sculptors would get stone from a quarry, & carefully chisel out a work of art.
Now, with inflation, the poor starving artist can only stack up the stones in a whimsical pile.

 

[mystic64]

Helpful? I've just been trying to make everyone angry!

Anyway, I'm back to post something I saw in the news today....
State Department Buys Million Dollar Granite Sculpture from Irish-Born Artist | The Weekly Standard
I just can't take gov's crying about a funding shortage when they pi** millions away on some silly costly vanity pieces which won't advance the cause of diplomacy one whit. We could save some real money by firing these government supported pretentious art collectors.

A recent work by the guy who just got $1,000,000....

In the old days, sculptors would get stone from a quarry, & carefully chisel out a work of art.
Now, with inflation, the poor starving artist can only stack up the stones in a whimsical pile.

Revolt you are fun ! Controlled conflict sells news papers, the viewers love it. And viewer numbers are where the money comes from relative to a successful message board. What I do not understand Revolt is why are you are not in the artist business? With your gift of "revolution" it would be like printing money ! And putting an Irish artist's work in an American embassy in London or somewhere in DC could be seen as a slap in the face to the British which could give things a "revolting" touch . Anyway Revolt, I do agree with you that paying a lot of money for a pile of rocks when the money could be spent better somewhere else, is ridiculous and that doesn't even include the shipping cost of something as priceless as that sculpture will be.

 

[Revoltingest]

What I do not understand Revolt is why are you are not in the artist business?

I'm too lazy.

Anyway Revolt, I do agree with you that paying a lot of money for a pile of rocks when the money could be spent better somewhere else, is ridiculous and that doesn't even include the shipping cost of something as priceless as that sculpture will be.

I'd rather waste this money on training & health care for the poor.

 

[esmith]

It is common knowledge that most if not all government agencies go on a spending spree at the end of the fiscal year (Sept 30). It is the "spend-it-or-lose-it" mentality.

As Congress fights over the budget, agencies go on their ‘use it or lose it’ shopping sprees - The Washington Post

Government filed $5m order of crystal glasses before shutdown | Mail Online

 

[Revoltingest]

Well, you know that we owe our tremendous diplomatic success to the millions we spend on
toney art & crystal champagne flutes.
(It certainly can't be that civil servants are addicted to the luxury & power of their stations.)

 

[mystic64]

I'm too lazy.

I'd rather waste this money on training & health care for the poor.

I am to lazy also ! And I am "poor", so I like your approach to things!

 

[mystic64]

It is common knowledge that most if not all government agencies go on a spending spree at the end of the fiscal year (Sept 30). It is the "spend-it-or-lose-it" mentality.

As Congress fights over the budget, agencies go on their ‘use it or lose it’ shopping sprees - The Washington Post

Government filed $5m order of crystal glasses before shutdown | Mail Online

No truer words were ever said! If you can get by with less, then less is what you get. So you have to spend it all in order to get more even if what you spend it on is stupid. They could completely fund Obama Care just on government waste alone if they applied any sanity to the whole thing.

 

[mystic64]

Well, you know that we owe our tremendous diplomatic success to the millions we spend on
toney art & crystal champagne flutes.
(It certainly can't be that civil servants are addicted to the luxury & power of their stations.)

I was under the impression that luxury and power was the reason that you became a civil servant. And from there it is just a matter of not getting caught. Normally it is the rich that contribute to the artist world, but now because of high taxes they don't have any money to do that anymore. So I guess that our almost bankrupt US govenment and its employees have to do it now.

 

[1robin]

It is common knowledge that most if not all government agencies go on a spending spree at the end of the fiscal year (Sept 30). It is the "spend-it-or-lose-it" mentality.

As Congress fights over the budget, agencies go on their ‘use it or lose it’ shopping sprees - The Washington Post

Government filed $5m order of crystal glasses before shutdown | Mail Online

Ours has been on a spend everyone's money or loose it spree since sept 30th of 1930.

 

[Apex]

Ours has been on a spend everyone's money or loose it spree since sept 30th of 1930.

You can thank our wonderful congress for this backwards mentality. I can't count how many times I have heard people I work with (I am in the gov) wish they could actually base our finances on saving money and not get punished for it.

Bottom line from congress is, if you do not spend all your allotted budget every FY, then you will lose it the next FY. This line of thinking only works if you have budgetary requirements that remain constant year to year. Which is no where close to reality.

 

[BlandOatmeal]

Have we begun the next budget debate yet? Obama's approval ratings are so low, worms have to dig deeper burrows to get under them. He needs a diversion, in which to blame the Republicans.