Posts Tagged ‘balanced budget’

The Knave New World

May 2, 2019

In 2007, Alan Greenspan published a fascinating book that chronicled not only his own life, but the life of the monetary world in which he grew up,  and in which he ultimately played a major role as Chairman of the Federal Reserve.

  https://www.amazon.com/Age-Turbulence-Adventures-New-World/dp/0143114166 

Mr. Greenspan’s keen observation of contemporary monetary history is demonstrated throughout the book. On page 92, Alan had this to report about the legendary Reagan tax cuts of the 1980’s:

“The cornerstone of the Reagan tax cuts was a bill that had been proposed by Congressman Jack Kemp and Senator William Roth. It called for a dramatic three-year, 30 percent rollback of taxes on both businesses and individuals and was designed to jolt the economy out of its slump, which was now entering its second year. I (Greenspan) believed that if spending was restrained as much as Reagan proposed, and as long as the Federal Reserve continued to enforce strict control of the money supply, the plan was credible, though it would be a hard sell. This was the consensus of the rest of the economic board as well.

But (David) Stockman (Reagan’s Budget Director) and Don Regan, the incoming treasury secretary, were having doubts. They were leary of the growing federal deficit, already more than $50 billion a year, and they began quietly telling the President he ought to hold off on tax cuts. Instead, they wanted him to try getting Congress to cut spending first, then see whether the resulting savings would allow for tax reductions.”

Well good luck with that!

And gollee, that was about 39 years ago, and about 20 trillion $$ of federal deficit ago. . .

Ronald Reagan, God bless ‘im, was the last of the Mohicans of old-style let’s-try-to-balance-the-budget school.

Yet we still pay lip-service to that principle.

But–let’s face it– those days are gone forever. They went out with with saddle oxfords and gumball machines and  Archie Bunker and 1-cent lollipops and debits on the left with credits on the right that balanced each other out.

Now Reagan, God rest his soul,  is no longer with us, nor Kemp,  and the world is a totally different place. Ronald Reagan was the last of a balancing breed that has vanished into fiscal history.

The cowboy hero has ridden into the sunset.

David Stockman is, however, still with us, and still living in the past,  still harping, God bless ‘im, on old-hat financial and fiscal responsibility. Good luck with that, Dave!

https://www.deepstatedeclassified.com/dsd20190426/

In his most recent newsletter, David Stockman posted this assessment of our present situation:

“The Main Street economy is failing. But the Wall Street fantasy is thriving. You can lay responsibility for this dangerous disconnect at the doorstep of the Eccles Building.

The Federal Reserve’s extreme monetary central planning regime long ago disabled capital markets and destroyed price discovery.

Bubble Finance has euthanized workers and savers and lobotomized traders and speculators.

And our monetary central planners know it.”

While Mr. Stockman’s assessment may very well be true, it may also be irrelevant.

The world . . . as it always does and always has, has changed.

Tap your ruby slippers together, David.

RubySlippers

and close your eyes and realize: We’re not in Kansas any more. All the rules have changed. Take off your rose-colored glasses.

We’re not wheelin’ and dealin’ in ole Wall Street any more, or Peoria or Pittsburgh or Palm Springs. Now we are in, as Aldous Huxley once said, a Brave New World. . .

A world in which monetary markets and price discovery are no longer the primary determinants in the money game. . . a world that has, yes Virginia, yes Alice and yes Dorothy, been commandeered by a thunderous consumerist horde who have no wish to be bound by these old financial fuddy-duddy obsolete principles, a world that has been fundamentally transformed by Keynesian realpolitic and by the pragmatic keep-bailing-this-boat central bankers of the world with their legions of yassah data-crunching technocrats to maintain the welfare of us all.

And we will never go back.

Because money itself is, and always has been, truth be told, worthless, being nothing more than klinky coins that can get you a wad of chewing gum, or paper bills that can get you a sugar-high from a vending machine, or electrons that can get you a charged-up night on the town, or a day in the sun, a week at Disney if you’re lucky, and a health-insured, social-security certified lifetime in this knave new world.

The “Capitalism” of Adam Smith and John Stuart Mill and Jacob Marley and JP Morgan and even Warren Buffet has . . . gone the way of the buffalo.

Now it’s just benevolent electrons whirling around the world taking care of everybody.

And when you finally see the writing on the wall, Dave, look at those deficits and . . . read ‘em and weep. Nobody cares about deficits any more.

The central bankers of the world will never have to face the music of fiscal responsibility that keeps ringing in your ears.

We’re never going back to the old balancing acts. Where we’re headed is. . . everybody gets a meal-ticket as long as all’s quiet on the Western front and the red sun still rises in the east. Welcome to the knave new world.

Glass half-Full

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Pax Statismo, and Anarcho

March 28, 2014

In the modern industrial era that began about 200 years ago, a zeitgeist god named Kapital rose up to dethrone the god of the former age, Monarchy. Very early on during the Kapital dynasty, the Marx demigod happened along and he figured out that Kapital god had some real vulnerabilities that would ultimately lead to Kapital’s downfall.

So the Marx whipped up a revolution that ultimately would dethrone Kapital and replace him with a new god for the new age, Communo. As it turned out, from about 1905 until long about 1989 the Kapital and the Communo were at each other’s throats constantly everywhere you look.

But early on during the struggle between the Kapital and the Communo, the Keyneo demigod happened along and detected some serious vulnerabilities within Kapital’s corpus that, if infiltrated, would ultimately enable the Communo to sucker punch  Kapital into mayhem and oblivion.

Meanwhile, changes within the demographic of Communo’s domain morphed him/her into a new multigodural entity. The demigod MediaMad dubbed the new chimera god Statismo. The thing about Statismo is that nothing really matters to him/her. No noblesse oblige, no limits, no antiquated outdated obsolete faith or sentimentalities and for sure no sacred damn cows.

One result of Statismo’s evolving infiltrating insidious insurgent machinations was that institutions of the former Kapital and Communo realms began to topple slowly, one by one, two by two and whats-it-to-you, etc. For instance, one sacred cow of the faltering Kapital was that feral relic, the balanced budget, which had formerly enabled Kapital power throughout the the West and sometimes the East by preserving and extending and colonializing the value of Kaptial’s four currencies: gold, oil, paper and electrons.

Statismo had determined that the balanced budget had to come down, along with several other sacred damn cows like marriage and family and so forth and so on etcerata etcetera etcerata . This devolution would make the way clear for the New Order. Thus the Kapital Void and also the Communo Cloud could be flooded with Statismo Stato.

Here’s the The thing about Statismo revolutionaries:  they don’t give a damn about budgets, fiscal responsibilities, deficits, profits or prophets. When the gods of Kapital and Communo have completed phases I, II, and possibly III of their deathly video-game brouhaha, all hell can break loose and the way will be clear for Pax Statismo and ultimately his doppelgänger twin Anarcho.

Vive la revolution! But this time with no liberte, egalite, nor fraternite.  That was yesterday’s news, even in 1789 when this whole scenario was hatched in the minds of neo-platonist-confucianist-ex-post-facto-nihilist philosophers.

But hey, have a nice day! This will take a while. Put your seat belt on. As for me and my house, I’m waitin’ on Pax Christi.

Smoke

King Nevuhhadnuttin’s dream

January 7, 2010

King Nevuhhadnuttin had a bad dream and he was trying to figure out the meaning of it but he couldn’t and so he called in the wise satraps and the council of advisers; then seemingly out of nowhere, but actually it was from the jailhouse,  this wise woman Danielle steps forward and with mucho aplomb poses this mysterious enigma wrapped in a question:
“The other side? The other side of what?”
And King Nevuhnadnuttin exclaims: “That’s it! That’s exactly what I”m wondering, and what I’m frantically asking, in my dream just before I wake up.”
And Danielle calmly continues, “Precisely, O King, and allow me to describe your dream, for I have discerned it and I can interpret the meaning thereof.”
“Go for it!”says he. “Knock yourself out.”
Then saith Danielle: “We’re careening down a slippery road; the brakes are failing; further down the slope ahead of us in the frozen darkness is a precipice and we’re going to slide right off it into sheer unsupported air.  Here’s one guy speaking urgently from  the back seat pleading the driver to stop spending money because if we don’t we’ll slide right off the edge and plummet to insolvency and fiscal ruination that will lead to societal disintegration and national chaos.
“But over here in the passenger seat is another guy warning with controlled alarm in his voice that we’ve got to keep the money flowing and make it possible for most everyone to keep spending dollars and the only real danger is we have not yet  thrown enough money at the problem  and if we cut off the Fed supply the fall from the precipice will be very bad and our recovery will be long and protracted at best.
“So the driver–and I’m talking about not only you, O King, but your entire realm and every person in it (how’s that for high stakes pressure, huh?)–is worriedly weighing these two opposite warnings, and trying desperately to apply the brakes but finds it impossible while the passenger says just let the thing go because if we build up enough downhill momentum–not to worry–we’ll launch beyond the precipice fast enough and far enough to land on some terra firma which is surely on the other side.
“‘The other side? The other side of what?'”
“The other side of the balanced-budget misconception,” saith Danielle. “You see, according to the prevailing Keynesian wisdom, balanced budgets are an obsolete notion that no longer have any real meaning. They’re just relics from the past–holdovers from ages long gone, like the age of gold, when monetary value was tied to gold, and the age of silver when we were using silver certificates for currency, and the age of bronze when all our value was linked to industrial production, and the age of iron when times started to get hard, and now the age of iron mixed with clay when everything falls apart.”
“Falls apart?”
“O, not really, O King. I was just kidding. We’ll be okay. Have you thought about declaring a jubilee?”
“A what?”
“A jubilee. Free all the debtors from their debts, and let every person and family just take ownership of his/her/their domicile and vehicle.”
“Say what?”
“Just kidding, O King, it would never work, too disruptive and unorthodox–definitely not a workable strategy.”
“Right, Danielle. That would be a…uh…can of virtual worms.  Now who’s dreaming?”
“Me, I guess. I have a dream too.”

Carey Rowland, author of Glass half-Full