Should Auld Aquaintance Be Forgot…

January 8, 2010 at 12:38 am (Banking Crisis, National Debt)

Well, it’s 2010.  I didn’t post much in 2009 because this blog is about doom only.  It’s not my personal life blog.  It’s not a blog about inventions or neat stories.  It’s solely about doom, and 2009 was the greatest year of doom-hiding fakery I’ve ever seen and plan to ever see in my life.

In short, 2009 was one big sham, and it was boring to write about.  I think 2010 will be more interesting.

While the Dow is at 15 month highs and everywhere you turn there are green shoots sprouting and growing and multiplying like a chia pet on time-elapsed camera, I still remain a pessimist about the whole thing, and here are some reasons why.

1) AIG.  Remember the big news that all the major banks had paid back their bailout loans (with interest)?  What if I said they paid it back because in addition to the original loan, the government simply gave them cash in secret to pay it off?  That’s essentially what happened.  Banks that should have lost money on their speculative investments were paid in full by AIG, which means paid in full by the taxpayer, who assumed AIG’s debt obligations.  Oh yeah, and our treasury secretary, purposely didn’t want us to know this fact.  Check it out.

2) Fanny Mae and Freddy Mac.  In addition to the backdoor bailout mentioned above, the government has been covering banks’ losses on crappy real estate bets by buying up “toxic mortgages” through Fanny Mae and Freddy Mac.  And apparently $400 billion is not enough.  Over Christmas, Obama apparently quietly lifted the limit from $400 billion to infinity going forward as the government once again lets banks make trillions during boom times and then sticks taxpayers with losses during the other times.  It’s called privitizing gains and socializing losses, folks.  The banks win and you lose.

3) Public pensions.  They are trillions in debt.  People in the public sector have been promised money and there is no money left.  Unions fight cuts, and taxpayers fight taxes.  Politicians sit with their thumbs in their asses.  And the problem spreads.  Case in point: Illinios.  Apparently those politicians never heard the schoolyard song that that went “…sitting on a fence, trying to make a dollar out of fifteen cents.  You miss.  You miss…” 

4) California, and states in general.  California’s much publicized “budget balancing” last summer was, in the vein of 2009, a charade.  Now it wants $8 billion from the Federal Government because politicians there also won’t cut and won’t tax.  And it’s not just California.  New York is bankrupt too.  Eventually, all states are going to go hat in hand to the Federal Government with the magical money-making machine that can print prosperity.  Amazing, that prosperity machine.  Why don’t we just print quadrillions of dollars?  We’ll be so rich!

5) Emergency Benefits.  The government likes to talk about how the unemployment rate is dropping.  What they mean is the number of new people signing up for unemployment benefits is dropping, and the amount of people receiving state unemployment benefits is dropping, the latter almost exclusively due to peoples’ benefit time limit running out and them still not having a job.  This is easily provable because of a humongous jump in so-called “emergency unemployment benefits” which, conveniently, fall into a different category and aren’t reflected in the official unemployment numbers.  For details, read here.

All of these stories individually are bad enough, but cumulatively, paint a completely different picture than the silly news networks spin.  But then, what can you expect from media, who instead of reporting on the Health Care Debate as a government debt obligation issue (the government has $80 trillion in MediCare and Social Security benefits that are not reflected in the National Debt and knows it can’t afford and is therefore looking at ways to renege on their debts) reports it as a ridiculous philosophical argument between Demublicans.


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