Fair and Balanced

Thursday, May 10, 2012 at 3:35 pm

I stumbled across this video today and thought it could serve as a basis for an interesting discussion.

Note that this presentation was made by a lady named Caroline, who is a self-described "federal government employee" and "member of the American Federation of Government Employees". Also note that, as I type this, it has a total of 80 views. (I hope that she has enabled Adsense as she is about to get a few hits!)

The first seven minutes or so are facts that we can all agree upon. The deficit is there and to cut it would require some significant changes to the federal structure. Then, at around the 7:00 mark, Caroline proposes her remedies. This is the crux of the matter and be sure to hear her out before you respond.

On one side of the argument, the deficit is not sustainable but government is vital, perhaps even too small, and it needs more funding through higher taxes. These extra taxes will close the deficit.

On the other side of the argument, the deficit is not sustainable and government spending needs to be trimmed and restructured. This slowing of government growth and outright reduction in spending will close the deficit.

My questions to you are:

  • How do we reconcile these two points of view?
  • Is it possible to achieve the level of political cooperation needed to make it happen? 
  • Can we discuss this in a civil manner here on TFMR? If not, how can we expect the politicians to do any better?

  • Bonus question: What is my point in starting this discussion?

TF

Comments

theskier's picture

Did anyone else notice

Submitted by theskier on May 10, 2012 - 9:45pm.

that she did not utter one peep about the federal debt?

Hmmmmmmmmmmm

artaud23's picture

JPM shorted?

Submitted by artaud23 on May 10, 2012 - 9:45pm.

I don't think they shorted, I think they sharted. cheeky

Big Buffalo's picture

In the words of 300....

Submitted by Big Buffalo on May 10, 2012 - 9:47pm.

What did the Silver say to the Turdites?

"This will not be over quickly. . .you will not enjoy this."

http://www.break.com/video-user-yt/07-31-2009/300-movies-seduction-by-th...

maravich44's picture

JPM. comment on ZeroHedge..

Submitted by maravich44 on May 10, 2012 - 9:50pm.

...*Jamie Dimon will threaten to have people sleeping with the fish (and not the ones in Blythes pants)*..

Daedalus Mugged's picture

OK, this is snarky rather than civil....

Submitted by Daedalus Mugged on May 10, 2012 - 9:53pm.

But given that the $1.3 trillion deficit seems to be paying for essentially everything (both important and unimportant), let's keep that stuff, and cut the OTHER $2.3 Trillion the feds are spending.  

Turd, in answer to your question about why you are posting this, it is to make the point that the politics are irreconcilable.  There is essentially no politically achievable solution.  And what cannot continue, will stop.  Prepare for the end of the Keynesian Experiment.  

kingboo's picture

Reconciliation & Solutions

Submitted by kingboo on May 10, 2012 - 9:55pm.

Not everything can be reconciled to everybody's satisfaction all the time....... the problems this country (and many others) is facing are of our own making.....and it took years to fuck it up this good.  It will take decades to repair.  There's an old saying...."5 miles into the woods...5 miles to get out of the woods"     Despite our human arrogance to the contrary, not all problems can be solved.........at least not without loss and dissatisfaction on a grand scale. There will be a lot of losers no matter what we decide....   This isn't T-Ball.......... Not everyone is a winner. 

Libertys Ghost's picture

Answers and info

Submitted by Libertys Ghost on May 10, 2012 - 10:03pm.

There is no middle ground in this question because giving the government more money (through income taxes since 1913) has only created a bigger and bigger government that creates more debt and war.  There is nothing in her proposition that changes that fact or even acknowledges it. 

I did a podcast recently with a Research Fellow at the Independent Institute (you inspired me TURD:-) where we discuss this nature of government issue along with many other things.  The sound quality is OK but I hope to get better over time.  First time mixing audio...thought I did alright.  I'd love to have you on as a guest some time TURD!  We could discuss things other than the metals.  Will be changing to a .com soon but you can find the podcast at jackyoung.siuc.me

Long time reader of yours Turd (back when you were just a poster on zerohedge)...just got on to the message boards though.  Been busy lately:-)

Lets see if we can imbed it here too (doubt this trick works though on the front end):

<iframe src="http://w.soundcloud.com/player/?url=http%3A%2F%2Fapi.soundcloud.com%2Ftracks%2F45664593&amp;show_artwork=true" frameborder="no" scrolling="no" width="100%" height="166"></iframe>
<h5><a href="http://creativecommons.org/weblog/entry/8267">Bumper music provided by NIN (The Slip: 1,000,000) under Creative Commons Licensing.</a></h5>

Keg's picture

Not worth commenting

Submitted by Keg on May 10, 2012 - 10:12pm.

A slick propaganda presentation,  financed and prepared by the public employee's union American Federation of Government Employees, AFL-CIO (AFGE.org) is not worthy of comment.

You cannot argue with propaganda.  Facts may be used but they are twisted.

Goebbels would be proud.

Bsong's picture

Not worth commenting

Submitted by Bsong on May 10, 2012 - 10:17pm.

Thanks Keg!  Another False presentation

Bsong's picture

(No subject)

Submitted by Bsong on May 10, 2012 - 10:17pm.

enlightened

Bobbejaan's picture

$592trillion Ponzi scheme is a ticking time bomb

Submitted by Bobbejaan on May 10, 2012 - 10:20pm.

Quote:
The debt crisis exploded in 2008, and its shock waves have lost none of their destructiveness.

The fault largely lies with governments whose frenzied borrowing and overheating printing presses turn currencies into Monopoly money.

This madness started in the run-up to the First World War, when most countries went off the gold standard enabling their governments to become players in the economic game, rather than its referees. The results were spectacular.

 + Bank: The JP Morgan building in Embankment, London. Early employees were among those who set up the Federal Reserve.

.

In the last 50 years of the nineteenth century the British pound underwent a total inflation of 10 percent.

The corresponding figure for the last 50 years of the twentieth century was an economy-busting, soul-destroying 2,200 percent.

That much is well known and understood. However, neither governments nor their quasi-independent central banks are the only culprits.

For they aren’t the only inflators of the money supply – private institutions do their fair share.

Various JP Morgan outfits take pride of place in this activity, which manifestly runs against the constitution of most Western states. ...

..... MORE :-

http://www.dailymail.co.uk/debate/article-2142429/JP-Morgan-The-592trill...

Fat Willie's picture

Off Topic - my own grid to live by

Submitted by Fat Willie on May 10, 2012 - 10:27pm.

Sorry I am off topic. As we watch yet another beat-down this evening, I thought I would add a little perspective on this correction. If we have not come out of the bull market, and, based on the fundamentals, I don't think we have, we should be able to compare this BS to past BS. BTW, who is selling into a major debt/currency crisis? Smells like a liquidity shakeout to me. But I digress. Here is my brutally half-assed grid that compares the most recent action to the past.

              From B/E      
        Time to    Gain From Time to       
  Interim Top Bottom Loss Breakeven Next Top Bottom Next Top   Cycle Time  
2004  $            8.42  $    5.43 -36% 18  $    15.23 180% 5 Apr-06 23  
2006  $         15.23  $    9.47 -38% 20  $    21.31 125% 4 Feb-08 24  
2008  $         21.31  $    8.43 -60% 18  $    49.84 491% 7 Apr-11 25  
2011  $         49.84  $  26.05 -48% 18  $    65.13 250% 6 Mar-13 24 Projected
        18=Oct 2012            

If the past is any indicator, we should be back in the high 40's in October, and once we pass there, look out.  Within a few months, 60+.   To be exact, 65.13 in March of 2013.

I am bullish.  Forgive me. 

This assumes we hold 26.05.  If not, I guess I will have to take another 20 minutes to update my projection.

Turd, as always, thanks for everything you do.

Fat Willie

El Gordo's picture

Voluntary or involuntary

Submitted by El Gordo on May 10, 2012 - 10:29pm.

The movie shows that the good old USA is completely unable to control its spending, and tries to make the point that even to attempt to do so is futile.  Therefore, a normal person might just assume that things will continue as normal until one day we wake up and it's over.  The European nations are getting some warning as to how critical their situations are, and whether or not their citizens decide to take any action to prevent catastrophic results is up to them.  After all, they have no reason the not expect good old Uncle Sam to step in at the last minute and take care of them as he has always done - at least since WWII.  Their entire generation knows life no other way.  Of course, the problem is that Uncle Sam has other pressing matters right now, although the current administration would probably welcome the opportunity to do more harm to our nation and bring us to our knees sooner by "investing" in the European debacle.  Anyway, the Chicoms have got to be watching, laughing, and printing up "Learn Chinese the Easy Way" pamphlets by the millions in anticipation of their takeover of the world's nations without ever firing a shot.

Groaner's picture

The system is crashing

Submitted by Groaner on May 10, 2012 - 10:36pm.

So let's sell the safest assets, gold and silver. Now stupid is this.

DrkPurpleHaze's picture

J.P. Morgan: Inspiration for the Federal Reserve

Submitted by DrkPurpleHaze on May 10, 2012 - 10:38pm.

Chris P. Bacon's picture

Stomp it Bitchez!

Submitted by Chris P. Bacon on May 10, 2012 - 11:00pm.

I hope they take it to $10, 'cause I brought a truck with a lift gate! Can't wait for the hand-off to London.

Turd Ferguson's picture

metals down again

Submitted by Turd Ferguson on May 10, 2012 - 11:16pm.
MODERATOR

Looks like Blythe is pissed off that her retirement is going up in smoke.

Anyway, if you haven't yet, please read this story from ZH. I must admit that I only understand about 25% of it. However, I do understand this:

"Of course, the situation is far worse because 1) any efforts to unwind such a huge position will lead to the market yawning wide and swallowing him in illiquid bid-ask spreads; and 2) the rest of the world knows their position - so why would the hedge funds not push their position. Perhaps this explains why JPMorgan's CDS has remained relatively wide while its exuberant stock price shot up on stress-test ebullience - only to plummet back to CDS reality this evening. Critically, JPM will need to use whatever method they can to hedge this now over-hedged and over-long position -  as the trader mispriced not just the basis risk (the volatility between the hedge and its underlying) but the attraction of running with a trend when you have a bottomless pit of money to cover it - until now."

Regardless, those fuckers are in deep shit!smileysmileysmileysmileysmileysmileysmileysmileysmileysmileySuck it you criminal sociopaths!

http://www.zerohedge.com/news/jpm-staring-another-3-billion-loss

Keg's picture

The thing that people don't want to admit

Submitted by Keg on May 10, 2012 - 11:22pm.

The thing that people don't want to admit is that most developed countries have been living beyond their means.  The biggest example is that in the US the level of benefits our seniors enjoy today are not sustainable.  They have been provided by stealing from younger generations.  Gen Xers are going to have to steal from their great great grandkids to maintain the same level of benefits.  While SS and Medicare are the big items, there are plenty of other government benefits and spending programs that we are borrowing to fund.  But all the babies scream when you take away their candy.

Several years ago I saw a program that compared a couple with no jobs living on welfare in WV to a medical doctor and his family living in Kenya.  Life in the US on welfare was considerably better compared to the doctor in Kenya.  

Number 47's picture

And the bloomberg banner is?

Submitted by Number 47 on May 10, 2012 - 11:27pm.

China’s Gold Demand Growth Seen Stagnating as Price Drops

By Bloomberg News - May 11, 2012 3:56 AM 
 

Gold demand growth in China, the second-largest consumer, may stagnate this year as declining prices put off investors and slower economic growth crimps sales, according to the mainland’s biggest gold-jewelry maker.

You'd imagine the JPM story to be fairly prevalent on their web page. Nope. It's a negative gold story. Well I never.

jrobb316's picture

That was a painful 13 minutes

Submitted by jrobb316 on May 10, 2012 - 11:35pm.

That was a painful 13 minutes to watch.

How do we reconcile these two points of view?
 
You don't.  And you can't sit there with a straight face and tell me the FDA is protecting my food.  You can't tell me OSHA makes my workplace safer and over regulation makes it profitable to do business.  You can't tell me nuclear power plants are safe.  You can't tell me that the borders are secure.  You can't tell me a diploma from school is worth anything more than to wipe your ass with.  Yet we need all these agencies, BS.  This is propaganda from some federal employee that doesn't want their gravy train to end.
 
Is it possible to achieve the level of political cooperation needed to make it happen? 
 
No.  Politicians speak out of both sides of their mouth.  They know whats going on is unsustainable, but telling people their free stuff will be cut sure isn't popular either.  Looking up to these idiots to solve our problems is the first mistake.
 
Can we discuss this in a civil manner here on TFMR? If not, how can we expect the politicians to do any better?
 
I think so.  But I think most of us lean toward one side, so I don't think you'll get the debate your looking for.
 
Bonus question: What is my point in starting this discussion?
 
Are things repairable?  Are the good times coming back?  If not, what do you do about about?  Prepare accordingly.
 
IMHO, the only way this will be potentially "fixed" is AFTER it burns to the ground. 
 
 
Lumpy's picture

The London Whale

Submitted by Lumpy on May 10, 2012 - 11:58pm.

TomMack's picture

good vid

Submitted by TomMack on May 10, 2012 - 11:59pm.

seems odd.   the politicians spend more than they take in by almost exactly the size ($$$) of the agencies operating the government.  great job (we need more of these guru's guiding our future) they spend more than we have and then cannot figure out how to pay for it.  since they cannot figure everything all at once they see no need to figure it out in pieces.  nothing to see here move along.  elect blah and blah they have really good TV commercials.

Lumpy's picture

JPM

Submitted by Lumpy on May 11, 2012 - 12:11am.

http://www.marketwatch.com/story/jp-morgans-losses-reveal-market-chaos-2012-05-10?reflink=MW_news_stmp

worldend666's picture

Re: JPM Morgan

Submitted by worldend666 on May 11, 2012 - 12:11am.

Anyone who wants to know more about the JP Morgan mess should watch this excellent and unknown film

: http://www.imdb.com/title/tt1615147/

LaMachinna's picture

Eeerie

Submitted by LaMachinna on May 11, 2012 - 12:11am.

surprise

indosil's picture

Short Covering

Submitted by indosil on May 11, 2012 - 12:16am.

JP can't pee forever.We are gonna reap the rewards both ways

1)this event might lead to overt QE.Precious metals rise

2)JP needs to cover their shorts for the collateral.Precious metals rise

3)the logical conclusion lies in the above two reasons.If these two fail to happen we can go fuck ourselves;join the morgue & become zombies........i.e. indifferent.

El Gordo's picture

Margin Call

Submitted by El Gordo on May 11, 2012 - 12:16am.

Excellent movie.  A must see for anyone considering doing business with the big boys, or as we like to say in Texas, anyone running with the big dogs.

Chris P. Bacon's picture

Anybody watching the DOW and

Submitted by Chris P. Bacon on May 11, 2012 - 12:17am.

Anybody watching the DOW and S&P futures right now? I can't get to them from my work comp.

Thanks in advance

Thorn

ReachWest's picture

Honesty

Submitted by ReachWest on May 11, 2012 - 12:28am.

The Turd wrote:
 Looks like Blythe is pissed off that her retirement is going up in smoke.

Anyway, if you haven't yet, please read this story from ZH. I must admit that I only understand about 25% of it. However, I dounderstand this:

Good gosh - one of the main reasons I love Turdville so much .. Turd calls it like the rest of us see it, or sometimes we don't - cause like Turd I only understand a bit of this. Either way - the natural laws of economics will prevail - good luck Mister Dimon and the rest of you JPM alumni - may you all enjoy the fruits of your efforts to live in ecstasy.

Driven81's picture

I don't see anyone in the US coming to a solution

Submitted by Driven81 on May 11, 2012 - 12:43am.

anymore than I the EU coming to a solution. Period. If they were in cooperation to do something about it, they would have done it. They're just interested in finishing their terms, pleasing the ones who pay them, and getting the eff out of their before they meet with the gallows. 

That being said, there have been a number of reasonable solutions that have been proposed which could have remedied our situation. 

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