The President, the Economy, and the Jellyfish

Brainless Box Jellyfish Know Which Way Is Up. Thus reads a headline in the wonderful journal New Scientist.

Box jellyfish may lack a brain, but they still make use of two dozen eyes. Now it seems that some of these eyes serve a surprising purpose: helping the jellyfish to navigate using landmarks above the water.

Who says that science can't solve political problems? President Obama should replace his entire economic team with box jellyfish. They can't possibly be any squishier than he is and looking up to see where the Hell they are going, let alone knowing which way is up, are powers that the Administration is sorely lacking.

We have for more than two years been pursuing a simple policy: revive economic growth that we don't have by spending tens of trillions of dollars that we don't have. The result has been a mass of debt that requires scientific notation to describe but not so much economic growth. From CNN:

Economic growth slowed to a crawl in the first three months of the year as a spike in gasoline, higher overall inflation and continued weakness in the housing market all took a toll on the recovery.

Gross domestic product, the broadest measure of the nation's economic health, rose at an annual rate of 1.8%, the Commerce Department reported Thursday. That's a significant slowdown from the 3.1% growth rate in the final quarter of 2010.

For the most part, every Democrat has all twelve of his or her eyes focused on current spending and his or her brain (they do have them) is altogether fixed on making sure that the spending doesn't stop growing. The argument de jour is that you can't reduce spending during a down turn, as that would further depress economic growth.

The only problem with that argument is that we have been spending at unprecedented levels (excepting WWII as a precedent). If stimulus spending was going to work to revive the economy, wouldn't it be working by now? It isn't.

Maybe the problem is that, for the first time in history, confidence in the full faith and credit of these United States is failing. The U.S. budget is on a trajectory toward oblivion and the President has offered nothing whatsoever to fix it. Rep. Paul Ryan has offered a plan to restore solvency. The President seems to be bending all his power to demonize the Ryan plan.

Meanwhile China, the major holder of U.S. debt, is finally deciding that it might have to cut its losses. From CNS:

Mainland China has decreased its holdings of U.S. Treasury securities since last October, according to a report updated today by the U.S. Treasury Department.

This is big news, as evident from the fact that it has been scarcely reported by the MSM. It means that the U.S. Treasury will have a much less favorable market for future debt, which means that our debt will grow more precipitously than in previous scary projections.

We're in trouble. We desperately need to put our fiscal house in order. Our President doesn't know which way is up nor does he seem to have a clue how to navigate. Even a box jellyfish would be preferable.

Comments

[Stan Gibilisco]

Box jellies pack dangerous venom. An encounter with a single one, as small as your thumb, could kill you. Are you sure that you want to replace all of the people in the President's economic team with these critters? Or would it doing so constitute a meaningless exercise in the sense that it wouldn't make any difference?

[duggersd]

As a student of History, I am recalling one of the major problems the monarchies suffered. In several countries, the monarchy did not have enough money to pay for all of the things it wanted to do. At that time, there was a balance of power shared by the monarchy, aristocracy and the Church. The monarchies were forced to borrow money, often from the aristocracy. In the end, due to all of the borrowing, the monarchies were forced to give up more and more power.
In my opinion, it does not matter what form of government we have, debt is the number one contributor of loss of power and influence. We are beginning to see the beginnings of this today. We have a choice of keeping our collective heads in the sand or to do something about our spending problem. There are many programs that are very worthy, but that is not to say the government should be involved in all of them. Sometimes we get to the point where we just plain cannot afford to pay for some of the things people should be doing for themselves. There will be some very painful cuts. But it will be much better to make the cuts now while there is still time than to have to perform economic triage down the road.

[Donald Pay]

I've never seen more nonsense in my life. The economy is slowly recovering from the deep ditch it was driven in by the sorts of economic policies Paul Ryan and the Republican demagogues supported and voted for. If the way out of this mess is difficult it's because we've got people like Ryan and the Republicans are demanding policies that would put us back into the economic mess they created.

[duggersd]

Donald, I do not know what world you live in. The economy is slowly recovering. Much slower than past recessions. And while you blame the Republicans for the failure, and Republicans do have some responsibility here, it was after the Democrats took over Congress that you started seeing things going south. What is the correlation? It was after the Democrats took charge of the Congress when spending skyrocketed. You and your two friends protesting Ryan seem to have the idea you can just spend and not have money to pay for the programs. God save us from the ideas of you and President Obama!

[Ken Blanchard]

Like a stopped clock, Donald is occasionally right. The Republicans are to blame, if not so much as the Democrats. Obama policy is not, in economics as elsewhere, non-Bush. It is extra-Bush. The economy is slowly recovering, Donald says. I understand that he is a man of great faith. That faith is about to fail.

[Stan Gibilisco]

"The argument de jour is that you can't reduce spending during a down turn, as that would further depress economic growth."

The argument "behind the curtain" is that you can't scare the public into accepting a new value-added tax (in addition to all existing taxes) unless and until you can drive the debt and the deficit up to dangerous levels.

... And you can't impose a European-style "social democracy" on the American people, something most Americans do not want, without scaring them into accepting it as the "least bad alternative." The value-added tax is the cornerstone of this system. Once we have it, we'll never get rid of it, and, as Charles Krauthammer has said, the "triumph will be complete" ...

... Except that it will constitute a Pyhrric victory.

I got into this territory with Cory in his post about fraternities on his blog. One of his comments particularly disturbed me, for it insinuated that the Democratic Party actually has this agenda: "The social revolutionary urge you ascribe to my party is motivated by a desire for social welfare, not selfish indulgence" (2011.04.28 at 06:19).

I don't think very many Democrats, as a proportion of the whole party, have in mind the force-feeding of a Euro-style system onto the American populace. But I suspect that a dangerous minority does harbor this notion, and in the Obama administration, perhaps a majority of them do.

I'm not going to try to completely debunk Euro-socialism. The people in Denmark, Finland, Sweden, Norway, Germany, and The Netherlands are among the happiest on earth, so I've read. But the people in Greece, France, and Spain are having a harder time of it. Life ain't no picnic in England or Ireland either.

The danger in the "box-jelly people's" apparent position (as I see it in my O'Reillian- and Beckian-induced paranoia), aside from the fact that it could result in a "tyranny of the minority," lies in the real possibility that the radicals' course could drive us into economic meltdown, civil chaos, mass unemployment, hunger, freezing, death, and perhaps civil war.

I don't think the "box-jelly people" are stupid in terms of their theoretical mind power. I do think that they're incredibly cynical and amoral. I do think that they couldn't care less about the collateral human damage they might cause. And I do think that in terms of real-world intelligence, they are not only stupid but evil.

Down their path lie not only Denmark, not only Sweden, not only The Netherlands, but the Soviet Union, the People's Republic of China, and Communist Cuba. Social and cultural revolutions have a way of turning out differently than the original perpetrators expect or want.

In my opinion, it's incumbent upon the people of America to vote the current crop of "box-jelly people" out of power -- while we still have the right to vote at all.

[Donald Pay]

The economy is slowly recovering because the Republicans didn't just drive the economy into a normal recession. They buried it into something that was just nearly a depression, and the corporate and financial elite still have far too much control over economic policy. After decades of mismanagement of the economy broken only by some good Clinton policies (and some bad ones, too) the rule of the corporate elite still hasn't been broken. If Obama fails to bring the economy back from Republican failure, it will be because he listens to the corporatists and follows the Republican-corporatist line.

[William]

"Pimco (which has now dumped US Treasuries) estimated last month that, under QE2, 70 per cent of the US Government’s debt is being bought by the Federal Reserve.

In other words, under the 2011 budget, every hour of every day, the federal government spends $188 million it doesn’t have, $130 million of which is “borrowed” from itself."
Hitting the Real Debt Ceiling
http://www.nationalreview.com/corner/266107/hitting-real-debt-ceiling-mark-steyn

[larry kurtz]

Move the goalposts by inviting Mexico to join the United States: http://memory-alpha.org/wiki/Kobayashi_Maru_scenario

[William]

At this stage, nothing does more damage to our "full faith and credit" than business as usual.

[Ken Blanchard]

Donald: after two years of Democratic control over the White House, the Senate, and the House of Representatives, maybe its time to stop blaming the Republicans and take some responsibility. However, the Chinese don't care who is to blame. They only want to know what U.S. debt is going to be worth in the future. What is the President DOING about that? Nada.

[duggersd]

During the decade of the 1990's under President Clinton, the deficit came down after the 1994 change in control of Congress. President Clinton resided over an improved economy based mainly on the dot com bubble that actually burst around 2000. There is no denying there was a budget surplus in FY 2001. Who takes credit for it is interesting. Certain people will say President Clinton gets the credit even though he never presented a balanced budget to the Congress. Others say the Congress deserves credit as it was the Congress that actually balanced the budget. Still others say both as it could not have been balanced if the Congress had not presented it to the President and if the President had not signed it.
In late 2000 and early 2001, there was a recession that hit. As it was already in progress when W took office, that recession belongs to President Clinton. What caused the recession? Many people point to the bursting of the dot com companies. Regardless, this led to tax cuts for EVERYBODY and the economy was starting to respond. However 9/11 hit. This sent our economy into a tailspin. More tax cuts led to an improving economy and we had some very good years, in spite of what certain people around here seem to think. However there were some underlying problems. The Republican controlled Congress seemed to have forgotten just who put them in power. They spent money we did not have. In spite of this, the rising economy and the increasing revenues (despite the tax cuts) hid many of the underlying problems, not to mention things like NCLB and the Medicare prescription drug benefit. One of my biggest complaints with W was the fact he did not veto any of those bloated spending bills.
Most reasonable people, and this would leave certain people out here, agree the major causes of the current recession include over spending and the housing bubble bursting. The housing bubble had several warning signs that were overlooked. As early as 2003 the Administration was warning about Freddie and Fannie. However certain people who also had their hands in the pockets of influential mortgage providers refused to heed the warning AND the Administration did not follow up. We had (and according to someone in the business have) people who cannot possibly repay the loans receiving loans. This got packaged into junk securities. When the bottom fell out, a major recession hit. Was this Republican policies? Democrat policies? Or a combination of both?
The point we are at now, something has to be done. We do not have the funds to be able to continue on the way we are. We have car companies owned be the federal government and their unions. We have investors who had their investments stolen from them and given to unions to help pay for a bankruptcy under the federal government and a certain President. Our revenues dropped from $2.52 trillion in

[duggersd]

pushed wrong button, sorry. Con't.
Our revenues dropped from $2.52 trillion in 2008 to $2.11 trillion in 2009. However spending went from $2.98 trillion in 2008 to $3.57 trillion in 2009. And it has not gone down since, even though the revenues have remained pretty stable. In fact, spending is expected to go to $3.8 trillion in 2011.
Tax cuts did not cause the recession. Tax cuts did not cause a reduction in revenue. Tax cuts actually improved the economy which increased revenue. Even the two wars being fought do not cost more than the deficit, so one cannot blame a major part of the deficit on those. I submit to you the spending on everything else contributed more than the two wars by a long shot.
So, whose policies are the reasons for our continued malaise? Why it is Republican policies of course! And it is Republican policies that continue to spend us into oblivion. And it is Republican policies that continue to add things like health insurance to our deficit. And it is Republican polices that continue to do things that contribute to the depression of the desire to business' to expand and hire more people. And it is Republican polices that continue to over-regulate. Oh, I am sure there are some policies by the Democrats that can be pointed to that contribute, but any idiot can see it is the Republicans that had and currently cause our troubles. Right, Donald?

[Jimi]

Donald,

"driven in by the sorts of economic policies Paul Ryan and the Republican demagogues supported and voted for"

B.S.-Prove It!

[Jimi]

Donald,

"Ryan and the Republicans are demanding policies that would put us back into the economic mess they created."

B.S.-Prove It!