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The Forum > Article Comments > The US Federal Government is sabotaging a genuine recovery > Comments

The US Federal Government is sabotaging a genuine recovery : Comments

By Bill Bonner, published 14/10/2009

The United States is a capitalist economy in which the capitalists have no capital.

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While the US government looks like a bunch of radical lefty loonies that only know how to spend on big social programs there is a wee bit of logic to their madness.

Much as Rude and co. timed their cash splashes to coincide with the annual Christmas and Easter spendups (to befuddle those that would try to separate out the normal spend from the effects of the splash), Obama and his minions have targeted the main emphases of their "stimulus package" to have effect just before the next round of congressional elections in Nov 2010.

It is all political gamesmanship to buy the votes of those less able to distinguish the games from what is really happening. And it usually works.

Half the population has an IQ below normal. Sometimes I think it is greater.
Posted by Bruce, Wednesday, 14 October 2009 11:01:32 AM
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Good article. About time Greenspan and the other money printers were put in their place. It is easy to be an irresponsible lender/spender if you don't stick around to face the music. Clearly pyramid schemes (fractional reserve lending is exactly that) must eventually come to an end.
Although we seemed to have dodged the US financial crisis, in fact we have just delayed it by borrowing a bit more and propping up the banks with taxpayer funds. Losers are taxpayers, winners are "profitable" banks and insurance companies.
Private profits, public losses. What a disgusting way to run an economy!
It will be interesting to see which political party is in power when the bubble bursts. Each will blame the other: Truth is Keating set us up for growth. Howard squandered it. Rudd tried to extend the squandering and pretend the Howard decade didn't occur...this makes him as complicit as Howard economically. At least he isn't trashing our culture and bringing us into international disrepute though...
Anyone who thinks 30% of an economy should be "financial services" and allow unlimited profiteering is an idiot.
Posted by Ozandy, Wednesday, 14 October 2009 1:12:26 PM
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It is the US Federal Reserve a private group of 12 banks who own the US cuuency and control the US economy.This is why Dr Ron Paul the congressman for Texas has now a Bill HR 1207 to audit the Fed.Over 66% of congress support it. $1.2 trillion of public money is unaccounted for by the Fed,and presently Congress have no right to investigate.

I think the author should have researched his topic a bit better, since the US Govt has very little power over the economy.
Posted by Arjay, Thursday, 15 October 2009 6:37:41 AM
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The author's ignorance of the actual basic functioning of modern monetary economies is starkly apparent.

The private sector cannot net save unless the government sector (federal budget) is in deficit. This is why historically, deficits not surpluses tend to be the norm.

He obviously believes that US citizens are able to get US denominated financial assets from elsewhere even if the government is causing a net drain of them from the system by attempting to return to surplus. Surpluses in the private sector (net savings) are the result of deficits in the government sector (putting in more through their spending than they remove in taxation).

As long as the US government is the monopoly issuer of US dollars, this remains a basic fact of national accounting. Denying it will not by itself alter the reality.
Posted by Fozz, Thursday, 15 October 2009 8:57:23 PM
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its sad that the experts all got it wrong...im talking about them pretent experts on tv/etc...there were those who warned of this bust..industry insiders knew was inevitable

the world has effectivly been looted by the banking cartels/who run everything from the solid base of being able to make fiat at whim...that they use to buy assets/resource/inmdustry/govts..

name anything money cant buy
they had total control over money..yet still took ours via undue threats to govt...recall it was to be a finantial meltdown...great..

it would be the best thing...an overnight collapse..and govt nationalisng the banks back under elected supervision...over night industry stop consuming fossil fuels...and no carbontax needed...

yet now their resque plan is carbon trading to attempt to suck up the last assets they havnt plundered...but it gets worse...recall the debate about a u shape or a w...

well guess what

http://blogs.ft.com/economistsforum/2009/10/a-second-great-depression-is-still-possible/
Posted by one under god, Thursday, 15 October 2009 11:49:56 PM
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Sadly I think that Thomas Palley is right.They have tried to solve a debt probelm by creating more debt and inflation.

They see the monetary system being more important than the real economy.Nothing has changed.They are pursuing solutions that created the problems in the first place.The real indicator of the health of an economy is not the share market,but the rate of unemployment.Employment in a free market means real productivity.
Posted by Arjay, Friday, 16 October 2009 7:34:23 AM
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