What happened to all of the doom and gloom economic threads?

[Ulaven_Demorte]

With the Dow climbing near 10,000 again what's happened to all of the dire, end of the world ravings of our resident "conservative" economists?

Where is all of this inflation we were warned about? According to reports the Consumer Price Index is down 1.5% overall from last year. Despite Augusts increase in prices, gasoline is still down 30% from the high a year ago.

Despite the dire warnings of some of Lit's resident math wizards the Chinese are still very much interested in buying US Treasury securities.

I guess the sky isn't falling after all.

 

[The_Trouvere]

When the wingnuts say things are going to get worse, that is what they hope for.

 

[firespin]

Care to look up and post for us the change since January 20th in:

- the unemployment rate
- the annual deficit
- the national debt
- the price of gasoline
- the value of the dollar

?

Or are you thinking that, with the natural cyclical decline in the growth in unemployment, and the increase in prices for equities, this is a great time to spend the other 75% of the stimulus money, which is the biggest contributor to the increase in the deficit, the national debt, and the decline in value of the dollar?

 

[RobDownSouth]

Care to look up and post for us the change since January 20th in:

- the unemployment rate
- the annual deficit
- the national debt
- the price of gasoline
- the value of the dollar

?

Or are you thinking that, with the natural cyclical decline in the growth in unemployment, and the increase in prices for equities, this is a great time to spend the other 75% of the stimulus money, which is the biggest contributor to the increase in the deficit, the national debt, and the decline in value of the dollar?

Let's see....gasoline.....if memory serves me correctly, last summer it was around $4 a gallon. I paid $2.24 a gallon this morning.

Good point!

 

[Ulaven_Demorte]

Care to look up and post for us the change since January 20th in:

- the unemployment rate
- the annual deficit
- the national debt
- the price of gasoline
- the value of the dollar

?

Or are you thinking that, with the natural cyclical decline in the growth in unemployment, and the increase in prices for equities, this is a great time to spend the other 75% of the stimulus money, which is the biggest contributor to the increase in the deficit, the national debt, and the decline in value of the dollar?

The unemployment rate is leveling off. Monthly job losses aren't nearly as high as they were.

The deficit is bigger, it takes money to recover from the economic malfeasance that got us where we were at the end of last year.

Ditto for the debt..

Gasoline is down by 30% over last summer's high of over $4 per gallon.

Are you going to actually answer any of the questions I asked or just ignore them and pose your own questions instead?

 

[Ulaven_Demorte]

Let's see....gasoline.....if memory serves me correctly, last summer it was around $4 a gallon. I paid $2.24 a gallon this morning.

Good point!

Oh but he specified since January 20th, conveniently ignoring the prices we were all paying at the same time last year. Context is the enemy..

 

[RobDownSouth]

Oh but he specified since January 20th, conveniently ignoring the prices we were all paying at the same time last year. Context is the enemy..

Using that arbitrary date, it's been a catastrophic year for conservatives: the unemployment rate for white presidents is at an all-time high of 100%!

 

[koalabear]

With the Dow climbing near 10,000 again what's happened to all of the dire, end of the world ravings of our resident "conservative" economists?

Where is all of this inflation we were warned about? According to reports the Consumer Price Index is down 1.5% overall from last year. Despite Augusts increase in prices, gasoline is still down 30% from the high a year ago.

Despite the dire warnings of some of Lit's resident math wizards the Chinese are still very much interested in buying US Treasury securities.

I guess the sky isn't falling after all.

"One thing I did notice about the "tea baggers" gathered.. it seemed to be a veritable sea of Caucasians, with nary a minority in sight.. Curious that."

Such a credible moron.

 

[firespin]

The unemployment rate is leveling off. Monthly job losses aren't nearly as high as they were.

The deficit is bigger, it takes money to recover from the economic malfeasance that got us where we were at the end of last year.

Ditto for the debt..

Gasoline is down by 30% over last summer's high of over $4 per gallon.

Are you going to actually answer any of the questions I asked or just ignore them and pose your own questions instead?

Let's see, you asked two questions, one of them rhetorical, the other one not particularly relevant...but inflation is not a major problem yet. The issue you're not addressing is the problem if our continued structural deficits which Obama has promised lead to the dollar not being accepted as a reserve currency, which will increase the price of everything imported: fuel, cars, electronics. That's the inflation scenario to be worried about, but it won't develop in a few weeks or months.

You lectured me on another thread about trying to avoid the point, where you just did that with the unemployment rate and the price of gasoline. This is why you seem like a stooge to me. (I'm guessing you don't know how to tell the value of the dollar, so you get a pass on that one.)

 

[trysail]

I freely admit it— ninety-five percent of the folk who post on the subject of economics around here scare the bejesus out of me. That's no different from the general population which also scares the bejesus out of me. The ignorance on display is astounding; it is mind-boggling; it is beyond comprehension.

I find it nearly impossible to believe that people actually believe money grows on trees. They actually believe in something for nothing. They actually believe there is a free lunch. They actually believe in perpetual motion machines. They actually believe in Santa Claus and in the Tooth Fairy. It is truly frightening. Over the course of my life, I've watched as the uneducated and ignorant destroyed companies. They killed Pan Am, they killed Eastern Airlines, they killed Texas International, they killed Bethlehem Steel, they killed General Motors, they killed Chrysler, they created and killed doomed-to-fail Fannie Mae, they created and killed doomed-to-fail Freddie Mac. In virtually every case, they were warned and warned and warned and warned again of the consequences of their actions; because of their obtuse, willful, ignorance it didn't make a goddamn bit of difference.

Now they're well on the way to killing an entire country ( thus accomplishing a task requiring truly special talent— shooting themselves in the foot while commiting economic seppuku ).







While the purported authorship of Alexander Tytler has been disproven, the accuracy of the statement inaccurately attributed to him is unfolding:

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."

Whether the eventual bankruptcy of the United States will lead to dictatorship, I do not pretend to know. Given its current trajectory, we're going to find out. The "something for nothing," finger-pointing, envy-peddling, overspending, name-calling, entrenched politicos are taking the U.S. down a path that will have unpleasant consequences.

 

[trysail]

Do you understand that the United States of America is bankrupt?


Balance Sheet
The United States of America

Assets.....................................Liabilities

..............................................Social Security.....$11,000,000,000,000
..............................................Medicare.............. 66,000,000,000,000
..............................................Treasury Debt.........9,000,000,000,000

.........................................Total Liabilities......$86,000,000,000,000

Source:https://personal.vanguard.com/VGApp...0252006_ALL.jsp
(pasted below)

Against these known liabilities, the government has the ability to tax:

The whole stock market.........................~$18,000,000,000,000
All of the privately owned real estate.........~35,000,000,000,000
(basically, that's the net worth of everybody in the whole country)________________________________________________

November 2, 2006
Interview: Can you count on Social Security?
Olivia S. Mitchell is the International Foundation of Employee Benefit Plans professor at the Wharton School of the University of Pennsylvania. She is also a professor of Insurance and Risk Management at Wharton and serves as director of the Pension Research Council and Boettner Center for Pensions and Retirement Research.

Professor Mitchell recently spoke with Vanguard.com® about the future of Social Security. The statements and views expressed in this interview are Professor Mitchell's and do not necessarily reflect those of Vanguard.

"We have a few years left to fix Social Security, but if we don't fix it now, the huge claim that will also be made on the economy and on our resources by Medicare will undo the possibilities for Social Security reform."

– Professor Olivia Mitchell

There's a lot of confusion about the state of Social Security. Is the system in trouble?

Professor Mitchell: Social Security is currently taking in more money than it needs to pay Grandma. That surplus is being delivered to the U.S. Department of the Treasury, which in exchange gives the Social Security Administration an IOU in the form of special nonnegotiable bonds. There are about $1.9 trillion worth of these government bonds in a file cabinet in West Virginia.

Then what is the crisis facing Social Security?

Professor Mitchell: The time will come, probably within about a dozen years, when there won't be enough revenue from payroll taxes to pay the benefits currently promised.

So in 2018 or so, retirees will get letters telling them, "Sorry. There's no more money to pay you"?

Professor Mitchell: No. When tax revenues going into the Social Security system start to fall short, the Social Security Administration will have the right to go to the Treasury and start cashing in those IOUs.

If Social Security can lay claim to $1.9 trillion, what's the problem?

Professor Mitchell: The problem is that Treasury has already spent those funds. There's no money sitting around waiting to be given back. As a result, when Social Security starts cashing in its IOUs, Treasury is going to have to figure out how to raise the funds. It will have to raise taxes; cut expenditures for things such as education, roads, and warships; or issue new bonds and pass the debt on to future generations. Someone is going to pay.

Suppose, though, that Treasury does find the money to redeem those IOUs it gave the Social Security Administration. Does that put the system back on solid footing?

Professor Mitchell: No, because in about 2040 that Treasury file cabinet in West Virginia will be empty. There will be no more IOUs. At that point benefits will have to be cut by about one-third, or taxes will have to be increased by 50% to 80% to keep the system going.

And there would be no way to avoid that?

Professor Mitchell: One solution would be to change the way benefits are calculated. Under the current formula, benefits are raised every year at the rate at which wages are increasing. That is about 1.0% to 1.5% higher than the cost-of-living indexes.

I served on a recent presidential commission that recommended benefits be tied to cost-of-living increases instead of being tied to wage increases. You would always have the same purchasing power under this formula. At the same time, this simple change would bring the system back into solvency, with money left over to raise benefits for people at the bottom of the economic scale, to give more to elderly widows, and to make the system more equitable for low-wage workers.

What happened?

Professor Mitchell: Congress refused to consider Social Security reform seriously, unfortunately. What concerns me deeply is that postponing the decision is just wasting time. We have a few years left to fix Social Security, but if we don't fix it now, the huge claim that will also be made on the economy and on our resources by Medicare will undo the possibilities for Social Security reform.

How does Medicare fit into the Social Security problem?

Professor Mitchell: The current unfunded liability of Social Security is about $11 trillion. That is the additional money needed to pay current promised benefits. By contrast, Medicare's unfunded liabilities are gargantuan, about $66 trillion.

It is ironic that when Medicare Part D, the drug bill, passed, this boosted Medicare's underfunding problem by about $35 trillion. Yet this was never mentioned when the bill was passed―by either political party.

Many other countries ration health care for the elderly based on age. That is not something we have wanted to do, so far. But if we are unwilling to ration supply, we will have to raise taxes to pay for the rapidly mushrooming health care costs. Yet again, neither political party has confronted this certainty.

So little or nothing is being done to fix Social Security. Medicare will present us with its own huge bill or force us to ration health care. All that sounds pretty bleak.

Professor Mitchell: I agree that there seem to be huge risks and few degrees of freedom. Yet there are some factors under your control.

One of them is to keep working—if possible—until you are age 70 or 75. This boosts eventual retirement income because your assets are saved and invested longer.

Another is to invest in your human capital. Get new training. Educate yourself. If you are 50 years old, realize you might have another 25 years in the workforce. So there is no earthly reason to refuse to learn the newest version of your computer software "because I am going to retire soon." That is not likely to leave you in a good position to get a job in your next life.

You can also invest in your own good health. People who make an effort to stay in good health in their 50s are much better off in their 70s and 80s. Not only will they need less money to take care of their health, but they will also feel better.

Save more. Some people think that it's too late to start when they are in their 50s. Naturally, starting younger is better, but you can make a big difference if you save another few years.

If you are a retiree already, consider unretiring. Go back to work, even part-time if you must.

You can also cut back on consumption. The first reaction is, "That is terrible." But it is a viable and sensible thing to think about. Recent surveys show that after retirement, consumption tends to fall by about 20%. You don't have to pay for parking. You don't have to pay for expensive work clothes and the long commute. You can spend more time cooking gourmet meals rather than going to restaurants.

Other options are also worth mentioning for those who are not intending to return to work. You can buy annuities to avoid the worry of outliving your money. You can buy long-term-care insurance if you are worried about being bankrupted by going into a nursing home. Inflation-linked investments are now available for the retiree concerned about inflation's drag on spending.

At the end of the day, though, you should think broadly about the resources you carry with you into retirement. Financial capital is only one part of the picture. There is also health capital, of course, and intellectual capital. And let's not forget social capital, by which I mean your relationships, your community ties, your networks, your hobbies. Retirement is not just about money.

Thank you, Professor Mitchell.

 

[trysail]

I didn't write this. The author would not want me to identify him ( here ). The author is known to me and is "not dumb."

If you ask me, what is my biggest worry right now it is irresponsible fiscal management in Washington. I want to start and say this is not meant to be a condemnation of the Obama Administration. What I am going to talk about applies equally to the Bush administration and Washington behavior in general. It is a condemnation of the system and not any one administration.

The simple fact is this. Our government has an easier time spending money than raising revenues. Spending money creates votes. At least that is what virtually all politicians believe. Cutting spending means taking money away. That loses votes. So do tax increases.

With that backdrop, let us look at Social Security. Everyone knows it is a problem. Too much money going out and too little money coming in. If Social Security were a private pension fund, companies would be required by law to add more money. But the government doesn’t have to follow the same set of rules. To fix Social Security means either raising taxes, increasing the tax on benefits, cutting benefits or extending the beginning age to something like 70. The solution is simple on paper. It is entirely based on actuarial science. Unlike Medicare, there is no tort reform needed, no great inefficiencies to fix, no rationing need and no fraud involved. It is all about the math.

The reality is that 2010 is an election year and the four choices I just offered are all ugly ones for politicians to make. So they opt to kick the can down the road until the next Congress convenes. And the next Congress will do the same. And so on until the crisis becomes so extreme that the can can’t be kicked down the road any longer. How bad must the crisis be? Do I have to remind you that a year ago after Lehman failed and the financial markets locked up completely, the House of Representatives still chose to vote down TARP! Only after the stock market dropped another thousand points or so and only after it became crystal clear that financial ruin was inevitable with non-action did the House reluctantly decide to pass TARP.

That moves me to Medicare next. The problem would seem more complex than Social Security. There are potential cost savings. Tort reform might be nice but malpractice insurance premiums comprise less than 2% of total health care costs in this country. Medicare fraud is a lot bigger. Clearly, reducing redundant testing would help. But those aren’t the root problems. The root problem is that Medicare costs are rising faster than Medicare revenues. Recently Part D was added with no revenue source. Medicare taxes are rising more slowly than Medicare costs. Once again the economic answer is obvious but Washington lacks to political backbone to either raise taxes to the necessary level or cut benefits to stay within revenues.

That brings me to the current health care reform proposals. Whatever happens, it is likely that the Day One revenues will match the Day One costs. That is a prerequisite requirement of President Obama. Whether it is a skeleton program or a full-fledged one with a public option (unlikely as I see it now) doesn’t matter. What is obvious, at least to me, is that future benefits (costs) are likely to grow faster than future revenues for exactly the same reasons as Social Security benefits are rising faster than revenues and for exactly the same reasons that Medicare revenues don’t keep pace with costs. It will only serve to build on the problems already imbedded in our system.

All this makes it virtually certain that we are moving down a dangerous budgetary road until we set up mechanisms in Washington to force fiscal discipline. States usually mandate balanced budgets. That is one approach. It doesn’t work at the Federal level because the Federal government requires the flexibility to finance wars and to finance the safety net required in difficult times. TARP and other economic programs over the last 12 months were steps many deemed necessary. However, that doesn’t mean that programs like Social Security, Medicare and whatever gets created under health care reform shouldn’t be structured in a way that requires fiscal responsibility.

Americans get that point even if Washington doesn’t. That is why members of Congress received so much push back during the recent recess. That is why Democrats risk losing big in the mid-term elections if they seek to ram a bloated and burdensome set of new programs through Congress.

The true measure of our fiscal state is the value of the dollar and it has been falling slowly but steadily all year. A gentle decline is a bit disconcerting but tolerable. However, a rapid deceleration would be debilitating. Could it happen? Of course it could. Will it happen? I don’t know. There is no evidence that it will happen today. Everyone warned that the American consumer was overlevered for decades and it didn’t unwind until 2010. Right now the U.S. has about $12 trillion in debt. With low interest rates, the cost to service that debt is roughly $200 billion. But if short term rates were 4% and long term rates were 6%, debt service costs would triple. Said differently, if Congress balanced the budget before debt service, we would have an annual deficit of $600 billion, one of the three highest in history! And that presumes that no more debt is added from today onward.

Just so you understand what can happen, if the dollar sinks at an accelerated rate and if Washington were forced to act to save the dollar, either interest rates would have to be increased dramatically or the dollar devalued. That would choke an economy and make imported items from cars to oil prohibitively expensive. We don’t want to go there. The best way to avoid that is to become fiscally responsible at the Federal level.

Recessions correct economic and monetary imbalances. Too much demand creates inflation which forces monetary tightening and then a recession. Too much capacity leads to recession. Erupting asset bubbles create recession. Huge trade imbalances lead to economic upheaval. Even a nation as rich as America cannot borrow an infinite amount of money without repercussions.

That brings me full circle. The forecast, once again, is for sunny days ahead. But somewhere out in the ocean afar a hurricane is brewing. It may fizzle. It may miss us. But if we just sit back and ignore it, it could become our economic Katrina. When? Not tomorrow and probably not next year either. Economic recovery will increase gross tax receipts and begin the process of reducing the deficit. But that benefit won’t be long lasting. Americans learned the hard way that they must live within their means. So far, that is a lesson that Washington hasn’t begun to contemplate. In fact, current policies provide incentives at all levels to borrow and spend rather than save. I am not sure what will cause Washington to change but if it doesn’t we may not witness an economic hurricane but we almost certainly will have to deal with plenty of storm clouds before all is said and done. Right now it would be nice to believe that history will show 2007-2009 was the worst economic event since the Great Depression and not a prelude to something worse. Central banks have taken many right steps to stabilize financial markets. Now Washington must display prudence.​

 

[trysail]

Warren Buffett: We need to curtail our out-of-control spending, or we'll destroy the value of the dollar and many Americans' life savings.

Some not-so-fun facts from Buffett's editorial today ( 8/19/09 ) in the New York Times:

•Congress is now spending 185% of what it takes in
•Our deficit is a post WWII record of 13% of GDP
•Our debt is growing by 1% a month
•We are borrowing $1.8 trillion a year
$1.8 trillion is a lot of money. Even if the Chinese lend us $400 billion a year and Americans save a remarkable $500 billion and lend it to the government, we'll still need another $900 billion.

So, where's it going to come from? Most likely the printing press. And, ultimately, Buffett says, that will destroy the value of the dollar.

 

[KingOrfeo]

With the Dow climbing near 10,000 again what's happened to all of the dire, end of the world ravings of our resident "conservative" economists?

Where is all of this inflation we were warned about? According to reports the Consumer Price Index is down 1.5% overall from last year. Despite Augusts increase in prices, gasoline is still down 30% from the high a year ago.

Despite the dire warnings of some of Lit's resident math wizards the Chinese are still very much interested in buying US Treasury securities.

I guess the sky isn't falling after all.

The problem is not the stock market; that actually has little direct relevance to anyone who does not have their own money invested in it.

The problem is not inflation; moderate inflation is actually a sign of a growing economy, while deflation is a sign of recession or depression.

The problem is unemployment. And that is still a problem. When the jobless rate drops significantly, then we'll know we're on the road to recovery.

 

[KingOrfeo]

While the purported authorship of Alexander Tytler has been disproven, the accuracy of the statement inaccurately attributed to him is unfolding:

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."

But, the process described there has, in fact, never happened in all of human history. Many republics have self-destructed, but none by the path of the people voting themselves too-lavish benefits from the public treasury -- not Rome, not Athens, not the German Weimar Republic, not the English Commonwealth, not Salvador Allende's Chile -- none.

 

[The_Trouvere]

Are you going to actually answer any of the questions I asked or just ignore them and pose your own questions instead?

He is going to ignore them and post his own questions instead.

 

[The_Trouvere]

I freely admit it— ninety-five percent of the folk who post on the subject of economics around here scare the bejesus out of me. That's no different from the general population which also scares the bejesus out of me. The ignorance on display is astounding; it is mind-boggling; it is beyond comprehension.

I find it nearly impossible to believe that people actually believe money grows on trees.

Beginning with Ronald Reagan, when Republicans are in charge, they argue that tax cuts pay for themselves, and do not require cuts in popular middle class entitlements. I hope this Republican lie is one of the things that frightens you.

Were you bothered when George W. Bush started two wars while cutting taxes?

 

[IrezumiKiss]

The problem is not the stock market; that actually has little direct relevance to anyone who does not have their own money invested in it.

The problem is not inflation; moderate inflation is actually a sign of a growing economy, while deflation is a sign of recession or depression.

The problem is unemployment. And that is still a problem. When the jobless rate drops significantly, then we'll know we're on the road to recovery.

For the purposes of here, though, the bulk of the constituency in the Pussy Loser Glee Club were pointing wildly to the then failing stock market early this year and yelling, "See? See? SEEEEE? Obama's a jinx! We're DOOOOOOOOOMED!!!"

Jus' sayin'.

 

[The_Trouvere]

While the purported authorship of Alexander Tytler has been disproven, the accuracy of the statement inaccurately attributed to him is unfolding:

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."

If Alexander Tytler did write that he wrote it shortly before the signing of the Declaration of Independence. Back then someone studying democracies had few to study. There was ancient Athens, possibly the Roman republic, and Great Britain. That was about it. In those governments only a minority of adults could vote.

At the beginning of the twenty-first century we can see that if a democratic government lasts for over two generations it is more stable than an autocracy. An autocracy can shift from Czar Nicholas II to Vladimir Lenin, or from the Shah of Iran to the Ayatollah Khomeini in a few months. Democracies do not make rapid shifts like that because most people do not make rapid shifts in their political opinions.

One should also consider that since the eighteenth century major wars have usually been won by the side that was more democratic.

 

[The_Trouvere]

But, the process described there has, in fact, never happened in all of human history. Many republics have self-destructed, but none by the path of the people voting themselves too-lavish benefits from the public treasury -- not Rome, not Athens, not the German Weimar Republic, not the English Commonwealth, not Salvador Allende's Chile -- none.

I can think of one more example. The democratically elected government of Iran did not go out of existence because Iranians voted too lavish benefits. It was overthrown by a CIA engineered coup that installed the Shah of Iran as an absolute monarch. The Shah was never a popular dictator. By installing him in power the CIA guaranteed that when he was overthrown the people of Iran hated us.

 

[firespin]

For the purposes of here, though, the bulk of the constituency in the Pussy Loser Glee Club were pointing wildly to the then failing stock market early this year and yelling, "See? See? SEEEEE? Obama's a jinx! We're DOOOOOOOOOMED!!!"

Jus' sayin'.

LOL.

The market was tanking when it looked like Obama could get his agenda passed.

The stimulus bill passed on February 14th. The Dow was around 7800 at the time, roughly where it was when he was elected.

The market then went down to 6500 in the next 15 trading days, a 16% drop.

That seemed to remind people that too much government help was, well, too much, so we haven't seen too many more bad ideas and the market is happier

 

[The_Trouvere]

Warren Buffett: We need to curtail our out-of-control spending, or we'll destroy the value of the dollar and many Americans' life savings.

Some not-so-fun facts from Buffett's editorial today ( 8/19/09 ) in the New York Times:

•Congress is now spending 185% of what it takes in
•Our deficit is a post WWII record of 13% of GDP
•Our debt is growing by 1% a month
•We are borrowing $1.8 trillion a year
$1.8 trillion is a lot of money. Even if the Chinese lend us $400 billion a year and Americans save a remarkable $500 billion and lend it to the government, we'll still need another $900 billion.

So, where's it going to come from? Most likely the printing press. And, ultimately, Buffett says, that will destroy the value of the dollar.

Why didn't Republicans complain when GW started two wars while cutting taxes?

 

[trysail]

"Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds, ought and six, result misery."

-Charles Dickens
David Copperfield


"Ten Trillion And Counting"

http://www.pbs.org/wgbh/pages/frontline/tentrillion/

"Frontline" on PBS

 

[trysail]

The alternative [ to a free market system ] is that the Third Deputy Assistant to the Fifth Director of the Second Minister of the Secretary of The Bureau of Snoofles in The Department of Horse Supplies decides that snoofles are no longer a state priority. As a result, the snoofle factory is ordered to reduce their production. Since the price of snoofles cannot be permitted to vary and the underlying demand for snoofles is unchanged, block-long lines of horses at the snoofle store are subsequently the norm each and every day. The "black market" for snoofles thrives.

It turns out that the Third Deputy Assistant to the Fifth Director of the Second Minister of The Secretary of The Bureau of Snoofles in The Department of Horse Supplies served his apprenticeship in The Directorate of Primate Affairs and had never previously seen a snoofle in his life. His appointment as Third Deputy Assistant to the Fifth Director of the Second Minister of the Secretary of The Bureau of Snoofles may have been related to the fact that his sister-in-law's father is the personal assistant to the Second Minister of the Secretary of The Bureau of Snoofles.

Yes, it is always possible to find examples where any system is less than perfect. Is this where I trot out Winston Churchill's summary judgment of democracy?

 

[trysail]

It is a fine line we tred between being widely understood and technically correct.

When one talks about phase changes and the heat released or absorbed when they occur, most people's eyes glaze over and they tune out. If one says that it takes less heat to boil alcohol than water, they seem to get it.

I don't really know how to deal with the fact that even most "educated" people don't have a solid grounding in math, chemistry and physics. A person can get a Ph.D. today and never even be exposed to the term "heat of vaporization," much less understand the implication of it in practical terms.

Hell, most people don't even have a feel for orders of magnitude - they bandy around millions, billions and trillions like they are about the same. They are just generic "big numbers" in most minds.

The sad result of this lack of well-rounded education among so-called educated people is they (and the people who follow them) are vulnerable to superstition based on emotion.

I'm amazed about how little the average guy knows about the "size" of things....I've asked smart people to guess the approximate size of the container that could hold all of the humans in the world, in cubic miles. The guess is always hundreds or thousands of cubic miles....The answer is a little more than a tenth of a cubic mile.

The volume of petroleum produced each year is a little more than a cubic mile.

I find it helps to visualize thing in terms of physical size.

This applies to money also. One trillion dollars— $1,000,000,000,000— do you have any idea how much money that is? It would represent twenty million ( 20,000,000 ) $50,000 packages. Where the hell is that kind of money supposed to come from? The stuff doesn't grow on trees and it cannot simply be runoff on a printing press without producing the direst of consequences.

The economic illiteracy and innumeracy that abounds in this country is appalling and it will eventually be ruinous. The gargantuan amounts of money that has been thrown willy-nilly into education has had no discernible effect on the general population's ability to distinguish the something-for-nothing schemes of demagoguery. The looting of the public treasury continues unabated.


http://icecap.us/images/uploads/Poster-ScaleofPowerGeneration.pdf


________________________________

"First rate men will not canvass mobs and, if they did, the mobs would not elect the first rate man."

-Lord Robert Cecil, Third Marquess of Salisbury