Tuesday, June 30, 2009
He summarizes, "...there's a critical difference between currency inflation and credit inflation, and that as long as the monetary authorities, banks, and public are collectively optimistic and trusting, both currency and credit appear to have the same effects on prices, but that if credit builds up to a fantastic level as now, when pessimissm and distrust take over then a crucial difference between currency and credit is revealed."
He has a great point, and one that we must consider.
Monday, June 29, 2009
Friday, June 26, 2009
Part I, Part II, and Part III
The review is a summary and critique of Buchanan's thesis that the war was unnecessary and ultimately failed to accomplish the intended purpose--removing a totalitarian regime in Europe.
I hope to read the book some day (it's on the increasingly long list), but I recommend at least reading the review--you just might be persuaded that World War II was an unnecessary war that we all would have been better off not fighting.
The AP has done a story on these "rubber rooms" as they're called. Here is the intro:
"Hundreds of New York City public school teachers accused of offenses ranging from insubordination to sexual misconduct are being paid their full salaries to sit around all day playing Scrabble, surfing the Internet or just staring at the wall, if that's what they want to do.
Because their union contract makes it extremely difficult to fire them, the teachers have been banished by the school system to its "rubber rooms" — off-campus office space where they wait months, even years, for their disciplinary hearings."This is the sort of thing that might be "acceptable" during great economic times, but there is no excuse whatsoever to allow this practice to continue any longer. This is an outrageous waste of taxpayer money and ought to be eliminated immediately. But more than that, this makes it clear that the government has no place in educating our youth.
The other day I saw the president fielding a question about his health care deform, and he said the kind of glib thing that appears to be all the rage these days.
He said, in response to a question about his proposal putting private companies out of business, that he didn't understand what the fuss was all about. Wasn't the private sector supposed to be far more efficient? Wasn't it the government that was the entity that couldn't do anything right? Why, the president asked, his befuddlement apparently sincere, would this put any private companies out of business? Let the best man win, and all that.
But he left out of his calculation the nature of the inefficiencies. When two private companies go head to head for market share, the one that competes most effectively will come out on top. The inefficient one won't. The president was appealing to this well-known business fact to buttress his claim.
But he left out of the picture the one thing that government agencies are very effective at doing, and that is the task of increasing their budgets every year, and staying in business regardless of their inefficiencies in performing their appointed tasks.
If the post office had been subject to full-throated competition, they would have been out of business by now. But the post office does not solely rely, as private delivery companies do, on revenue from their business to fund future operations. They get to supplement their income by means of lots of money collected from the people by men with guns and big, block letters on the backs of their jackets. The issue is coercion.
So the private companies that are threatened by the coming government intrusion should take up the president's challenge, but with this proviso. "Deal. But leave the guns at home. Then bring it on."
Incidentaly, not to get sidetracked here, but the same thing applies to private companies that get government funds. Government control of private industry is fascism, not socialism -- to may to, to mah to. Do not judge free markets on the basis of what happens in unfree markets. Don't judge free markets by what happens in controlled markets. Every form of economic control from the center is coercive and violent in principle, and when it comes to the economic life of a nation, a Christian's desire ought to be keep coercion to a minimum.
The government is not bad at everything. As we parse it out, this is what we discover. The government is very, very bad at providing quality health care. The government is very, very good at forcing you to use and pay for it anyway.
Thursday, June 25, 2009
UPDATE 06/30/09 - A much more readable version of this article may be found here.
The article exposes how Goldman Sachs has been involved in creating bubbles and then profiting when they collapse. The article is an interesting read, and raises some very serious questions concerning the relationship between the federal government and Goldman Sachs.
The two most interesting pieces in the article revolve around Goldman Sachs' role in driving up the price of oil last summer and their heavy investment in cap and trade and renewable energy. This company is profiting from cronyism and must be investigated and punished if these allegations are true.
Did anyone else think that $4.00/gallon gasoline last summer was suspicious?
Wednesday, June 24, 2009
Mark Levin's latest book, Liberty and Tyranny, has received a lot of press and I've heard good things from others by word of mouth. As I began reading Liberty and Tyranny I was skeptical that Levin would consistently apply small government principles well, as I knew full well that he is part of the conservative establishment.
Having finished reading the book, I now know my skepticism was well founded, and that Levin is yet another conservative activist that is hopelessly committed to a political ideology that has proven to be thoroughly impotent.
Levin begins the book well, articulating the principles espoused by the founding fathers, defending the free market, decrying the welfare state, and exposing environmentalist extremists. Yet even in some of these arguments you can detect a measure of comfort with big government. Yes, he decries big government and laments its existence, but the careful reader will recognize his proposals are not as radical as his rhetoric.
Levin really began to lose me on his chapter on immigration. He finds fault with the government in creating legislation in the 1960's that made it easier for poor, uneducated immigrants to come to America, and eventually making it easier for illegal immigrants to come to America, which I don't dispute. Yet he doesn't find any fault with minimum wage laws that have grossly distorted the labor market such that a market for below minimum wage workers is created, and filled by illegal immigrants. Nor does he recognize the role the Federal Reserve played in creating a housing bubble which in turn led to a huge black market in labor to fuel the housing boom. Yet these are relatively minor criticisms compared to what follows.
Levin finds great fault with FDR's New Deal programs, as he should, and states that FDR effectively turned moved our government from being governed by Republicans to being governed by Democrats. He even goes as far as to say that only Ronald Reagan has articulated and governed with conservative principles. I agree with these assertions, however, he never criticizes Ronald Reagan for his role in delivering our nation further into the hands of statists. Reagan's massive budget deficits legitimized the notion that "deficits don't matter." For better or worse, he also strengthened America's military power across the globe—something that has cost us dearly and has its own role in the massive indebtedness of our nation.
Reagan left a mixed legacy, something that few conservatives will acknowledge. He surely did much good, but he also did much badly. Conservatives such as Levin lionize Reagan far more than may be legitimately done.
Levin's chapter "On Self-Preservation," focuses on defense and foreign policy. I was struck by a passage where he criticizes a speech by Barack Obama in 2007 on foreign policy that was essentially a messianic George W. Bush speech. By this I mean it was the kind of speech George W. Bush would give with the messianic spirit of an Obama speech. He then (rightly) ridicules Obama for being willing to do nation building in other countries, but not in Iraq—this after Levin argued that nation building is an illegitimate use of government!
Essentially Levin says we must not allow ourselves to become involved in nation building, except in Iraq, where it is acceptable because it serves a national interest. He tows the standard Bush line that Iraq was a legitimate pre-emptive war, and he even quotes a no-name founding father to attempt to legitimize this position. I was dumbstruck by how hypocritical this argument came off in the book.
Levin closes the book with his "manifesto," his short list of what is wrong and how to fix it. The list is the typical conservative laundry list, and wouldn't really surprise anyone familiar with the talking points of Rush Limbaugh, Sean Hannity, and so on. Yet what is missing from the list is glaring. Levin never argues for dismantling the federal government as it exists. In fact he leaves much of it alone, only making what is already there smaller. He doesn't even mention dismantling the most evil of all Washington institutions—the Federal Reserve.
One of Levin's most ludicrous ideas is to limit federal spending to 20 percent of GDP. Yet nowhere does Levin even address the manner in which the government cooks the books to overstate the GDP! If the government is the one calculating GDP, don't you think they'll make it as big as they need it to be to spend as much money as they can?
Levin criticizes by name George W. Bush, John McCain, Denny Hastert, and Newt Gingrich, but he doesn't level any criticism at any current "conservatives." He doesn't even discuss the statism of the Republican majority Congress during most of George W. Bush's presidency.
Levin recognizes that conservative principles are not being practiced in Washington, but he does not argue for the kind of mass conservative revolt that would have to occur to bring any real change to Washington. One only gets the sense that Levin desires a return to Reaganism. In my opinion conservatives look silly believing in the notion that this is even possible or desirable. The reality is that conservatives have desired another Reagan since he left office, yet nowhere is anyone like Reagan to be found.
Conservatives must realize that "their party" has moved on, and it isn't coming back. The Reagan revolution is dead, and has been dead for two decades. Republicans, and by association conservatives, have sold their heritage to the statists and there is nothing they can do to get it back. Reagan was an erratum, a short blip on the march toward statism.
Conservatives don't understand the magnitude of what has happened in the past decade, what is happening right now, and what is going to happen. They don't understand because they are part of the establishment—they are part of the problem. By towing the Republican line through thick and thin, they have lost sight of their principles and have become blinded by false disagreements with the liberal statists.
Our nation is massively indebted and is insolvent. Every president since Woodrow Wilson has contributed toward the demise of America—Ronald Reagan included. Once the legislative and executive branches of government sold the nation to the bankers by chartering the Federal Reserve Bank in 1913, America's demise became inevitable. The Fed made it easy for the government to grow, to go into debt, and to go to war. The Fed, Congress, and our presidents all found it politically expedient to inflate its way through wars and to enable the welfare state. No president has ever halted the slide toward statism—they've only shifted the largesse to favor their own constituencies rather than their opponents.
The deficit spending has finally caught up to us and things will never be the same again. Our politicians, liberal and conservative alike have brought us to the brink of disaster and it won't do to simply have the left point to the right and the right point to the left—they're both at fault and neither is going to be able to get us out of the mess they've made together. Levin doesn't recognize this, and probably won't until it is too late. Rather than believe we need more conservatives in government, I say we need a new government.
Monday, June 22, 2009
Mish has linked to and quoted the article. If you have not already sold all your shares in the market, you'd best do so before the sucker rally is over and you're left with stock and mutual fund values significantly below their present value.
If you don't believe me, take a look at Mish's analysis of the S&P 500 from May.
"Executives at U.S. companies are taking advantage of the biggest stock-market rally in 71 years to sell their shares at the fastest pace since credit markets started to seize up two years ago.
Insiders of Standard & Poor’s 500 Index companies were net sellers for 14 straight weeks as the gauge rose 36 percent, data compiled by InsiderScore.com show. Amgen Inc. Chairman and Chief Executive Officer Kevin Sharer and five other officials sold $8.2 million of stock. Christopher Donahue, the CEO of Federated Investors Inc., and his brother, Chief Financial Officer Thomas Donahue, offered the most in three years.
Sales by CEOs, directors and senior officers have accelerated to the highest level since June 2007, two months before credit markets froze, as the S&P 500 rebounded from its 12-year low in March. The increase is making investors more skittish because executives presumably have the best information about their companies’ prospects.
“If insiders are selling into the rally, that shows they don’t expect their business to be able to support current stock- price levels,” said Joseph Keating, the chief investment officer of Raleigh, North Carolina-based RBC Bank, the unit of Royal Bank of Canada that oversees $33 billion in client assets. “They’re taking advantage of this bounce and selling into it.”
Let's consider two cases. In the first case, a driver with an elevated blood-alcohol level accidentally strikes and kills a pedestrian who was jaywalking. The driver enters a guilty plea for manslaughter and receives a sentence of 30 days in jail, two years house arrest, 1,000 hours of community service, eight years probation, and permanent revocation of his driver's license. The driver also reaches a financial settlement with the victim's family.
In the second case, a driver is intentionally speeding well beyond the posted limit when he strikes another vehicle, killing two sisters inside of it. The driver here is acquitted of vehicular homicide and is only fined a few hundred dollars for minor traffic violations. Since the driver was using his employer's vehicle, the employer reaches a financial settlement with the victims' family.
Both cases receive media coverage. In the second case, coverage is muted and the press is generally sympathetic to the driver. In the first case, coverage is disproportionately higher and uniformly negative towards the driver. The coverage is so extensive that the first driver's employer suspends him without pay for an indefinite period – even though, unlike the second driver, the accident had no relation to the first driver's employment.
Read the rest of the article.
Friday, June 19, 2009
There is one important distinction to be made between the consequences of both deflation and inflation. Inflation benefits debtors, because debts diminish in size as the currency is inflated year to year. Consequently inflation harms savers because it is very difficult for those with savings to consistently find returns that exceed inflation each year.
On the other hand, deflation benefits savers with liquid assets. (Please see John Exeter's inverse liquidity pyramid at Gold Versus Paper for an explanation.) Savers benefit because their liquid assets--particularly cash and gold buy more during a deflationary period. Yet debtors are destroyed by deflation because their debts are in inflated dollars, while their income is in deflated dollars.
What this means for us now is that we must get out of debt and save as much money as we can to prepare for either inflation or deflation.
Wednesday, June 17, 2009
"...the civil government is capable of falling into thievery. Magistrates can steal, as Ahab stole Naboth's vineyard. Stealing is the unlawful taking of someone else's property. At the same, Scripture is also plain that magistrates can tax, and that such taxation is not thievery. Paul is plain that we should pay taxes to whom taxes are due (Rom. 13 7). Up to a point the magistrate is not stealing, and after that point he is. It appears to me that one of the responsibilities we have as Christians is to figure out where that line is."
Tuesday, June 16, 2009
Here is an excerpt that I found very helpful:
"A crime occurs when someone does something that the larger society disapproves of, and is willing to express that disapproval by making the person conform to the demand by main force, or to makes others conform to it by making this offending fellow an example for the sake of deterrence. This penalty might be flogging, fines, imprisonment, or execution -- whatever it takes to get the person to submit to the coercion, or to get others to submit to it in advance after they see what just happened to the guy we made a big example out of.
Because this is a weighty matter, no thinking Christian ought to put up with any forms of coercion for which there is not ample scriptural justification. We force lawless men to refrain from murder and rape, and we can justify this use of force easily from the pages of Scripture (1 Tim. 1:9). We do this because there are some for whom nothing but force will work.
But when a society starts treating everyone like this, far from restraining lawlessness, the government is in the process of creating it. No faster way to create widespread contempt for law exists than to create ubiquitous and silly laws."
I think Wilson has a great point that the law should serve the best interest of the people by restraining evil doers, rather than creating law breakers, as it does in so many ways. I don't want to put words into Wilson's mouth, but an arbitrary speed limit is an example of a law that creates law breakers. Men like Ron Paul that our "drug war" does the same thing, and I think he has a point.
This next quote distills Hazlitt's arguments and will hopefully entice others to read this wonderful book. Hazlitt refutes many economic fallacies that have brought economic ruin upon all those that have believed them. As Ecclesiastes says, "What has been is what will be, and what has been done is what will be done, and there is nothing new under the sun."
"Now few people recognize the necessary implications of the economic statements they are constantly making. When they say that the way to economic salvation is to increase credit, it is just as if they said that the way to economic salvation is to increase debt: these are different names for the same thing seen from opposite sides. When they say that the way to prosperity is to increase farm prices, it is like saying that the way to prosperity is to make food dearer for the city worker. When they say that the way to national wealth is to pay out government subsidies, they are in effect saying that the way to national wealth is to increase taxes. When they make it a main objective to increase exports, most of them do not realize that they necessarily make it a main objective ultimately to increase imports. When they say, under nearly all conditions, that the way to recovery is to increase wage rates, they have found only another way of saying that the way to recovery is to increase costs of production." Economics in One Lesson p. 193
"The advocates of government-guaranteed mortgages also forget that what is being lent is ultimately real capital, which is limited in supply, and that they are helping identified B at the expense of some unidentified A. Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is requird, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to "buy" houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in the long run they do not increase overall national production but encourage malinvestment." Economics in One Lesson, p. 47
"To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
This is precisely what men such as Peter Schiff tell us went wrong, and why this "recession" is going to be much, much worse than any previous recession. Yet the economists that the mainstream media parrot and the government listens to are the same ones that help cause this mess! Do you really think men like Krugman, Greenspan, and Bernanke should be trusted any longer? These men are either incompetent, insane, wicked, or all three--they are not trustworthy economic advisors by any stretch of the imagination.
Update 06/16/09 - In case you think this might be an isolated incident, please look here. This is clearly a pattern of his, though he has tried to deny it.
Friday, June 12, 2009
Read the rest of the article.
Thursday, June 11, 2009
"I wrote before that trusting the markets was simply another way of trusting God. This is what I mean. Compare the markets to driving on the highway, and the basic traffic regulations (like "drive on the right") are the laws that God has given us concerning our financial lives. Don't steal. Fulfill your contracts. Don't defraud. As long as someone is driving on the right, and is not careening down the road at ninety, it is absolutely none of my business where he is going, and what snacks he might be eating on the way.The economic control freaks don't want to agree on a few basic rules for the game; they want to determine the outcome of the game, and every move by every player during the course of the game. They are, in short, aspiring to deity, something which in another era would have excited more opposition from Christians than it has now."
Monday, June 08, 2009
Read the whole thing, but here is the conclusion:
"Now they’re creating the bailout bubble -- which will ultimately dwarf the real estate bubble. It will cause the implosion of the global economy world wide -- which will not be able to be repaired by creating yet another bubble. Every time the government fails, it tells a bigger lie and then a still bigger lie."
"These previous bubbles were not allowed to pop -- but they didn’t destroy the infrastructure of the country. This bailout bubble will."
"But this bubble will be the last one. After the final blowout of the bailout bubble, we are concerned that the government will take the nation into war. This is a historical precedent that’s been done over and over again."
"So, it’s not that the dollar that will survive. We may not even survive. Look at the German mess after WWI. It gave rise to Fascism and WWII. The next war will be fought with weapons of mass destruction."
Perhaps the most interesting fact in the article concerns the census' purpose and setting the number of representatives in the House of Representatives.
The federal government was given the power to complete a census in order to determine the number of representatives required by law based on population. The founders envisioned one representative for every 30,000 people.
But I did not realize that the number of representatives has been set at 435 for the past 100 years. So our representation is set for a population of approximately 13 million, yet our population is 300 million! We should have closer to 11,000 representatives in the House according to Barnett.
Think about the implications of this! It is astounding--the House has become an elite club largely because of the exclusivity of it. The founders clearly envisioned a legislative body well represented by the population of the country, and it has become an elite group by limiting access to it. Imagine if the money allotted to each campaign were distributed to twenty-five other campaigns! The House would be an attainable electoral goal for the average citizen, not an elitist club where millions of dollars are spent by each candidate. Imagine the gridlock in Washington with 11,000 representatives! A third party might be viable under such a system.
Barnett concludes that our current census serves no purpose and is unconstitutional as a result. Its purpose is no longer relevant to our government, yet it persists invading upon the privacy of all Americans and wastes billions of dollars. He argues that the answer is secession. He writes:
"This is serious business! It is important, it is imperative, and time is of the essence! Any secession from this tyrannical government, whether by states, portions of states, or regions, will require gargantuan efforts by individuals. This government will never be receptive of any plan to limit its power, and secession is a virtual elimination and negation of centralized government. No break from this behemoth can or will be achieved through government action or government process. That would be an exercise in futility and would fuel even more oppression. It will require that those involved, whether individuals, groups of individuals or entire states, not obey any unconstitutional or unjust federal law. As should be evident, this will be no easy task, but the rewards of victorious secession are freedom, liberty and prosperity."
Friday, June 05, 2009
"We flatter ourselves into believing that our central planning mechanisms are imposing not socialism but freedom itself, with Iraq as the most obvious example and the reductio ad absurdum, all in one. Here we have a country that the United States invaded to overthrow its government and replace it with martial law administered by tanks on the street and bombers in the air, a controlled economy complete with gasoline price controls, and handpicked political leaders, and what do we call it? We call it freedom.
And yet some 15 years ago, when Saddam invaded Kuwait, threw out its leaders, occupied the country and attempted to impose a new government, the US president called it an aggression that would not stand. He took us to war to send a message that the sovereignty of states must be considered inviolate. It seems that everyone got the message except the United States."
I supported the war in Iraq from the beginning until very recently. It is Rockwell's reasoning along with others of the same mind that have persuaded me. Take a look back, the record is still there for all to see.
But please consider Rockwell's words. If you don't think the government is capable, competent, or in the moral position to plan our own economy and state, why should we believe it is able to plan another?
"In 1930, six months after the initial storm front passed, world output was down about 15%. Today, it is down about 15%, too. Stock markets were only down about 20% in mid-1930. Today, they’re down about 35%. And world trade slipped about 15% in the six months following the onset of the Great Crash of ’29. Today, it is down 25%.
The other thing you notice is that this adjustment takes time…and takes the losses much further…much deeper…than anyone expects. The actual bottom in the ’30s didn’t come until 2 to 3 years after the crash. And it took stocks all over the planet down to about 65% below their peaks. World output eventually fell to only about 2/3rds of what it had been in the late ’20s."
Do not be lulled into thinking the worst is over--at best, we've bought ourselves a few years before the bigger, more catastrophic collapse hits. Interest rates are going to have to go up, and when that happens there will be another round of foreclosures over the next four years that will be much worse than what has already occurred. Combine that with a commercial real estate collapse, loose money policies from the Fed, huge federal and state budget deficits, and the prospect of social security insolvency within less than a decade. The trouble is far from over. Prepare for the worst, and hope for the best. It is going to be ugly.
Thursday, June 04, 2009
MarketWatch reports on his testimony, saying, "Bernanke stressed to the budget panel that it was important to begin planning for the restoration of fiscal balance. Financial markets must be convinced that the government is serious about deficit reduction, he said."
MarketWatch also reports on Bernanke's testimony regarding withdrawing the excess money from banks, which will be required to minimize the risk of massive inflation:
"But Bernanke expressed confidence that the central bank would be able to "remove accommodation" at the "appropriate time, and at the appropriate speed to ensure that we don't have inflation risks down the road."
"It is not going to be an easy call. We're going to have to balance the risks on both sides -- not going too soon and stunting the recovery and not going too late and having a bit of inflation, but we will get price stability after we get out of this recession," he said."
As I've been saying for some time, Bernanke is confident the Fed can exercise control over inflation, though he himself says, "It is not going to be an easy call." If they withdraw the funds too early they risk "stunting the recovery" and if they withdraw them too late they risk what he says would be a "bit of inflation." This assumes he actually has the ability to withdraw funds, which is something many doubt, as this would require selling the toxic assets on their books. This will not be an easy task--who would have interest in buying something worth nothing?
In a separate MarketWatch commentary, Bernanke is quoted at more length. He is quoted saying, "Crucially, whatever size of government is chosen, tax rates must ultimately be set at a level sufficient to achieve an appropriate balance of spending and revenues in the long run."
Bernanke recognizes that our government's deficits are unsustainable and that the Congress must act to reduce the deficits. This means taxes must be raised, or spending curtailed significantly. This of course, is obvious, but something that few, especially in Washington are ready to hear, let alone act upon.
These are dangerous times and we are about to witness our chickens coming home to roost. We've been living unsustainably for decades, and we're about to receive the bill for it. This means either massive inflation, massive tax increases, or both. Either way, we're in big trouble.
Tuesday, June 02, 2009
A hedge fund firm that reaped huge rewards betting against the market last year is about to open a fund premised on another wager: that the massive stimulus efforts of global governments will lead to hyperinflation.
The firm, Universa Investments L.P., is known for its ties to gloomy investor Nassim Nicholas Taleb, author of the 2007 bestseller "The Black Swan," which describes the impact of extreme events on the world and financial markets.
Funds run by Universa, which is managed and owned by Mr. Taleb's long-time collaborator Mark Spitznagel, last year gained more than 100% thanks to its bearish bets. Universa now runs about $6 billion, up from the $300 million it began with in January 2007. Earlier this year, Mr. Spitznagel closed several funds to new investors.
Read the whole article at the Wall Street Journal.
But the group of Chinese students were not so easily fooled. The Reuters article then states, "His answer drew loud laughter from his student audience." Of course these Chinese students know better than to trust an American bureaucrat doing everything in his power to destroy the dollar when he tells them the dollar is a safe investment. Geithner is a liar, a fool, or both. This is evident to at least this particular group of Chinese students.
But perhaps the best part of the article is the naivete of the Reuters writer who attributed the laughter to "... scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home."
Glenn Somerville, the writer, clearly has no understanding of the situation and why the Chinese would laugh at Geithner. It has nothing to do with the "wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home." The issue is that the dollar is becoming worthless before our eyes, yet it is only the Chinese that see this.
There were some useful tidbits in the rest of Geithner's speech that reflect a measure of truthful analysis. Reuters wrote, "In his speech, Geithner renewed pledges that the Obama administration would cut its huge fiscal deficits and promised "very disciplined" future spending, possibly including reintroduction of pay-as-you-go budget rules instead of nonstop borrowing."
Geithner also said, "We're committed to bring our fiscal deficits down over time to a sustainable level."
Geithner is right that our current spending is unsustainable, as I've been saying for a while now. He also recognizes, or so he says, that we must cut the deficit and restrain future spending. This of course echoes what Obama himself has been saying recently, but the "proof is in the pudding" as they say, but don't expect to see any meaningful fiscal restraint. Obama is a committed socialist and he's going to blow his wad regardless of what he or his shills say.