I think I may not have been clear about what I meant in my statement. I believe we're talking about two different segments of the same problem.

I absolutely agree with you that there has been very poor management of the U.S. debt over the past few years, especially in over the financial bail out/sub-prime mortgage/housing bubble fiasco. And yes, some (many?) of those individuals culpable are working with the current cabinet.

However, my thoughts were more to the fact that 1/2 the American national debt (some $5+ Trillion) is interest. I see this as a crime no single individual could commit over night. Yes, the last few years have had fuck-ups and thefts of the common purse on a colossal scale, but the majority of the (compound) interest on the the U.S. debt was accumulated before the bank bail out. I see those responsible as being the people who permitted the system with a privatized central bank. Money is now created by private companies through debt which the taxpayer is charged compound interest on.

NEW YORK -- Here's a new way to think about the U.S. government's epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest.

More than half. In fact, $4.8 trillion.

If that's hard to grasp, here's another way to look at why that's a problem.

In 2015 alone, the estimated interest due - $533 billion - is equal to a third of the federal income taxes expected to be paid that year. /CNN, 2009.

>> ^notarobot:

@NetRunner, @GenjiKilpatrick, It is unfair to blame any single person in recent memory. Not Bernake, not Greenspan. They were making the best choices they knew to make given the system they have inherited.
The people at fault are no longer alive today. I'm sure I don't know American history as well as Americans, but I know that similar issues are being faced by pretty much every country that has left the management of the nation's money supply in the hands of private interests. For myself, in Canada, I'm pretty worried.
"Give me control of a nation's money and I care not who makes it's laws" — Mayer Amschel Bauer Rothschild
“Once a nation parts with the control of its currency and credit, it matters not who makes that nation's laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of Parliament and of democracy is idle and futile.”
-William Lyon Mackenzie King, former Prime Minister of Canada.


The people at fault are very much alive because they could've done something to prevent it years ago. They're in Obamas cabinet now.

@NetRunner, @GenjiKilpatrick, It is unfair to blame any single person in recent memory. Not Bernake, not Greenspan. They were making the best choices they knew to make given the system they have inherited.

The people at fault are no longer alive today. I'm sure I don't know American history as well as Americans, but I know that similar issues are being faced by pretty much every country that has left the management of the nation's money supply in the hands of private interests. For myself, in Canada, I'm pretty worried.

"Give me control of a nation's money and I care not who makes it's laws" — Mayer Amschel Bauer Rothschild

“Once a nation parts with the control of its currency and credit, it matters not who makes that nation's laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of Parliament and of democracy is idle and futile.”

-William Lyon Mackenzie King, former Prime Minister of Canada.

>> ^davidraine:

>> ^crotchflame:
Literally everything they're harping about here is true for any medium of exchange...be that fiat money or gold.
So what is it they're calling for here?

I don't think they're calling for anything -- Simply explaining. Also, the point is that everything they point out is not true for any medium of exchange. The hallmark of fiat currency that makes it true is banks' ability to conjure money out of nowhere, which starts the inflationary and speculative balls rolling. With a fixed money supply, this can't happen.


There's nothing about inflation or speculation that requires fiat money. You could argue that bubbles are made worse by fiat but they aren't avoided completely without them and a fixed money supply leaves you no monetary policy to readjust (this adjustment can both expand during a recession and contract to slow a bubble - which Greenspan famously didn't do). Most of the problems cited in this video are very real, but they're not directly the result of fiat but rather bad policy. It's like saying because people occasionally steer into things, cars shouldn't have steering wheels.

>> ^ChaosEngine:

>> ^marbles:
Is this what passes for financial experts nowadays? Outside of Rickards, the rest are fucking dis-info tools.
The Ben Bernanke said gold isn't money. He also said in response to Why do people buy gold?: "As protection against of what we call tail risks: really, really bad outcomes". Bad outcomes like... destroying an economy by design?
Meanwhile, If Central Banks Believe in Paper Money Why Are They Loading Up On Gold?
Also former Federal Reserve Chairman Alan Greenspan disagrees with Bernanke. 2 years ago: "What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment". (This is when gold was around $1,000/ounce)
In 1971, gold was $35/ounce. Now it's $1700/ounce. So it only took 40 years for the dollar to lose 97% 98% (edit) of it's value against gold.
It doesn't take an idiot to understand that if you save a $100 bill and forty years later it only has the purchasing power of $3 $2--that something is seriously fucked up with our monetary system.
You don't like gold? No problem. Just get rid of the economic central planning and let there be competing currencies. Gold will ALWAYS win in a a free market.

Rubbish. Gold has nothing but perceived value. In real terms, it is useless. If the world economy completely destabilised tomorrow, gold would be worthless. It's time we started basing our economy on the the real cost of things, energy. Ultimately, everything has an energy cost. Today energy is cheap, mostly because of fossil fuels. When energy starts becoming much more expensive, that will be the single greatest economic change in history.


The US dollar has nothing but perceived value. In real terms, it is useless. If the world economy completely destabilized tomorrow, the US dollar would be worthless.

Gold has nothing but perceived value. In real terms, it is useless. If the world economy completely destabilized tomorrow, gold would be worthless.

According to history, one of these statements is true, the other is laughably false.

So what do you measure you energy cost in?

>> ^marbles:

Is this what passes for financial experts nowadays? Outside of Rickards, the rest are fucking dis-info tools.
The Ben Bernanke said gold isn't money. He also said in response to Why do people buy gold?: "As protection against of what we call tail risks: really, really bad outcomes". Bad outcomes like... destroying an economy by design?
Meanwhile, If Central Banks Believe in Paper Money Why Are They Loading Up On Gold?
Also former Federal Reserve Chairman Alan Greenspan disagrees with Bernanke. 2 years ago: "What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment". (This is when gold was around $1,000/ounce)
In 1971, gold was $35/ounce. Now it's $1700/ounce. So it only took 40 years for the dollar to lose 97% 98% (edit) of it's value against gold.
It doesn't take an idiot to understand that if you save a $100 bill and forty years later it only has the purchasing power of $3 $2--that something is seriously fucked up with our monetary system.
You don't like gold? No problem. Just get rid of the economic central planning and let there be competing currencies. Gold will ALWAYS win in a a free market.


Rubbish. Gold has nothing but perceived value. In real terms, it is useless. If the world economy completely destabilised tomorrow, gold would be worthless. It's time we started basing our economy on the the real cost of things, energy. Ultimately, everything has an energy cost. Today energy is cheap, mostly because of fossil fuels. When energy starts becoming much more expensive, that will be the single greatest economic change in history.

Is this what passes for financial experts nowadays? Outside of Rickards, the rest are fucking dis-info tools.

The Ben Bernanke said gold isn't money. He also said in response to Why do people buy gold?: "As protection against of what we call tail risks: really, really bad outcomes". Bad outcomes like... destroying an economy by design?

Meanwhile, If Central Banks Believe in Paper Money Why Are They Loading Up On Gold?

Also former Federal Reserve Chairman Alan Greenspan disagrees with Bernanke. 2 years ago: "What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment". (This is when gold was around $1,000/ounce)

In 1971, gold was $35/ounce. Now it's $1700/ounce. So it only took 40 years for the dollar to lose 97% 98% (edit) of it's value against gold.

It doesn't take an idiot to understand that if you save a $100 bill and forty years later it only has the purchasing power of $3 $2--that something is seriously fucked up with our monetary system.

You don't like gold? No problem. Just get rid of the economic central planning and let there be competing currencies. Gold will ALWAYS win in a a free market.

Full orignal article: http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html

Krugman's semi-recent commentary on the misreading of that quote: http://krugman.blogs.nytimes.com/2009/06/17/and-i-was-on-the-grassy-knoll-too/

Arnold Kling explains more fully: http://econlog.econlib.org/archives/2009/06/defending_what.html

Krugman wasn't calling for a housing bubble. He said Greenspan's fixation on using monetary policy without any attempt to directly deal with the drop in aggregate demand would lead us to one of two bad places: a double-dip recession, or a housing bubble. Krugman at the time thought the double-dip was where we'd end up, but we got the housing bubble instead.

Also, 1936 != 2002.

Never forget.

http://videosift.com/video/Greenspan-Destroys-Deregulation-in-16-Seconds>> ^marinara:

did you know right before AIG went under, they bought a japanese insurance agency. so now USA taxpayers going to pay for stuff just like we're seeing. (since we own AIG)

See Greenspan >> ^dystopianfuturetoday:

But I thought unregulated markets were supposed to self regulate? Did the invisible hand just give us the finger?

>> ^NetRunner:

>> ^bmacs27:
Frankly, arguing for "Keynesian economics" isn't what anyone is doing anymore. The monetarists laid that to rest years ago.
True, but a bit misleading. The monetarists laid "Old Keynesian" economics to rest, but that led to the neoclassical synthesis and New Keynesian economics.
In other words, the Keynesians did exactly what the Austrians refuse to do -- they looked at the new data, and the theories of other schools, and used both to formulate new and improved theories of economics that retained some of the insights of the old theory that still hold up to scrutiny (e.g. price stickiness).


They can't because they don't quantify anything. That's what I meant by "Often I find it's the Austrian schoolers that are unwilling to accept facts (read data) that call their theory into question." Coincidentally, it's the same weakness that makes it a poor school of economics for evaluating the consequences of policy decisions with respect to a stated objective.

>> ^quantumushroom:

BTW how has rampant, unchecked socialism worked out for Greece? Ireland?


Your whole comment is full of false premises, but you really should go read up some on Ireland. It's been a darling of free market cheerleaders like Heritage for decades.

>> ^bmacs27:
Frankly, arguing for "Keynesian economics" isn't what anyone is doing anymore. The monetarists laid that to rest years ago.

True, but a bit misleading. The monetarists laid "Old Keynesian" economics to rest, but that led to the neoclassical synthesis and New Keynesian economics.

In other words, the Keynesians did exactly what the Austrians refuse to do -- they looked at the new data, and the theories of other schools, and used both to formulate new and improved theories of economics that retained some of the insights of the old theory that still hold up to scrutiny (e.g. price stickiness).

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"Frontline: The Warning" covers some of the same material covered in the interview above - Greenspan, Rubin, Summers and Geithner during the Clinton years. It also profiles Brooksley Born and her concern about derivatives.

http://videosift.com/video/Frontline-The-Warning-Sneak-Peek-PBS