50 Replies to “Day Of Reckoning”

  1. Don’t worry! America’s first third world president will save the day!!!
    All it takes is a little hopeychanginess!

  2. Okay, I have to admit I’m getting kind of frightened by all this. Yes, we’re not them, but our economies are pretty tightly linked and all.
    To any of the older SDA regulars: has it ever been this bad? I’m too young to remember the Carter years, but the commentaries talk a lot about “malaise”. What we’ve got today seems to fall under the definition of “existential crisis”. Is this all just scaremongering?

  3. This is the result of selecting a government based upon a whim…..and the notion that government and mega business resources are infinite……too big to fail…….
    Studebaker collapsed in the ’50’s.
    Most are unaware that Studebaker’s South Bend, Indiana auto plant was the biggest building in the world until Ford Built Willowrun in the early ’40’s. Studebaker produced most of the US Army’s tactical trucks (deuce and a half 2X8).
    Studebaker is now only a vague memory at best.

  5. @ Daniel Ream – If only it was scaremongering. The US Federal government estimates say that the Feds will run $1+ trillion deficits for the foreseeable future. They will borrow this money until an explosion of inflation, or a Greek style debt crisis engulfs the US. At that point, the government will bring the budget deficit down, but they will do it through new taxes, not spending cuts. The taxes will be levied -directly and indirectly – on US corporate profits, which average around $1.5 trillion a year. Take away 1 trillion from that figure, and the percentage return on money invested in corporate shares goes down by a factor 1/1.5, or 67%. Will any fool dare put his retirement into US equities, if the medium term outlook is a loss of 67% of their wealth and income? A follow on to this coming flight of capital will be chronic US unemployment in the double digits and a continuing decline in median income, as more and more people become underemployed.
    Obama – the self professed innumerate – fiddles as the economy burns. As this ugly future unfolds, people will look back at the recent economic hardships as ( comparatively ) good times.

  6. They can have our pennies.
    Seriously though, Mr.Christie is the first politician that I’ve heard cut to the chase, and said that “he can’t afford it” and that public sector jobs will be lost.
    Conversely, here in Canada where things aren’t so bad YET, Mr.Harper hedges his bets by ensuring nobody would lose a job if the LGR was abolished. After all, the governments #1 job is to ensure people have jobs, right Mr.Harper?

  7. As a Canadian I take little comfort in the idea that we are better off than the USA. Quite frankly I don’t believe that. The two accounting systems do not add the same numbers. On a daily basis I see government and citizens making absolutely foolish spending decisions. I don’t believe that anyone in control really knows what a real budget is or how to live by one. Spending exceeds revenue all the time and ev everyone shrugs.
    The feds brought in RRSPs in the ’70s and now it is a shook by government when they discover that the majority of Canadians haven’t contributed. There are millions of Canadians who will be retiring on CPP and Old Age Pension. The concept is outrageous to liberals who cannot comprehend the reality. The solution is change the rules. Isn’t it always their simplified solution.
    As Governor Christie said ‘we simply don’t have the money’. We are headed in the same direction as the Euros but instead of the Germans telling us how it will be, it will be the Chinese.

  9. Sasquatch….Studebaker Corporation went away but the cars live on…..over 13,000 active members world wide in 2010….many of Studebakers products live on…STP,Onan Generators, Paxton Superchargers, Gravely lawn care tractors, Clarke forklifts….and many more.
    The point I’m trying to make is that market forces will correct bad business decissions, government has no business playing in a market place they no nothing about. Government does very little well, they give us examples of this regularly.
    And by the way..I have 2 Studebakers
    Cappy

  10. What is the reaction of California’s government to the known shortfall? They plan on shutting off streetlights.
    Really. Headline at Drudge right now.
    No plan to curtail state employee hires, no plan to cut bureaucracy. They will shut off the street lights. Next to go will no doubt be police and fire, then water.
    But no cuts at the management level, no pension reorganization, no layoffs of city workers. And please, no reduction in expensive regulations on the private sector, that would be silly!
    If Al Capone ran California, this is what he would do. “Nice city ya got here friends. Shame if anything would …happen… to it.”
    Complete breakdown of civil order with wide spread riots by this summer, my friends. Arizona national guard call-outs to the -California- border to keep order.

  11. Bunker down…Don’t get in debt…Be frugal with everything. The western world is running on fumes now.
    A collapse is imminent, we all kind of know that.
    Since globalization is among us and the US Federal Reserve along with the IMF and other world banks and financial institutions have been printing money and creating derivatives to soak up debt with pyramid type schemes, my question is:
    What is the master plan, if there is one? Again, if the mega financial institutions are involved in some sort of worldwide engineering, I can’t believe there is not some kind of design because it seems were are no longer separate Sovereignties meaning I have a hard time thinking we are just flying by the seat of our pants and just buying time.
    If you haven’t seen this, maybe it’s time you do:
    http://www.youtube.com/watch?v=VebOTc-7shU

  13. On the upside, this failure of prosperity may help put an end to that attack of the climate changers who desperately want our money and obedience.
    Regarding the over-stuffed government workers and especially the teachers unions … My schadenfreude will be showing as I watch many of your fall back down to the real world.

  15. Daniel, I was pretty young but here’s what I remember about the Carter years:
    Something happened that my textbooks said was impossible WHILE I WAS READING THEM (very eerie), that is: unemployment, interest rates AND inflation were really high all at the same time.
    And I mean all were double digits.
    Yes, people lined up around the block to save money on gas — but today the gas stations have actual GAS and not possibly empty when you finally got to the pump.
    I can’t speak on the level of high finance banks and budgets and stuff that is going on now that is over my head. But I can assure you that the “malaise” thing was very real, and life in the 70s was very very weird and creepy, with this pall of existential dread/resignation hanging over everything.
    Even as a kid I picked up on it and it certainly imprinted on my personality.

  16. Too bad 60 Minutes didn’t do a series of shows 20 years ago showing what was going to happen if governments went down the path they chose.
    We are going down the same path up here. If the MSM had pointed out how unsustainable all these Liberal pipe dreams were we would be far better off today. But no, they backed green energy, multiculturalism, wide open immigration, all day kindergarten, gun registry, etc etc etc. They more than anyone screwed our country by not doing their job of informing people of the facts.

  17. oh neat. a Katie Couric commercial. she’s cute.
    I’ve known this was coming back in the 70s when I started working out of high school for the stunning sum of $3600 a YEAR. somehow I got by. still am.
    has to do with something else I saw coming. ever met those folks that do the ‘shoulda coulda bought Microsoft’? well guess what; I DID.

  18. OUCH. Although this is happening in the US, we are in the same boat. We have the same intitlement mindset,and we have had it for years. I wonder if the feds and the provinces have two sets of books. One for them,and one for us.

  19. Canada is different how? Look at Quebec, Ontario, the Maritimes, BC Manitoba, all the major cities and of course the feds. The only oasis may be Alberta and Saskatchewan, but we will get to pay for all the others. This all comes from spineless politicians giving people what they can’t afford in order to win their vote. Democracy works until people learn they can vote themselves money from the treasury.

  20. And since Ontario is doing the Eco Hari Kari thingy right now with the Dulton Windmill Ponzi Scheme flushing tens of $billions down the toilet, where will Ottawa get the tens of $billions to fund Quebec and the Maritimes?
    Hang on to your wallet Saskatchewan, Alberta and BC, Ottawa wants you to bend over and take one for the confederation. Just so the have not provinces can pretend that they are doing just fine.
    Or in Quebec’s case, feel they are superior & progressive.

  21. and another thing, you right wingers should be ecstatic at this trend because it provides the biggest opportunity of privatization in the history of civilization.
    sell all assets to the private sector to pay off the debt and forever be free of any further such obligations. federal govt reverts to its original mandate of defending the nation (with a bunch of mercenaries).
    prob. solved.
    m gets it with this: “This all comes from spineless politicians giving people what they can’t afford in order to win their vote”
    and thus correctly ascribes ultimate responsibility with the voters for putting said invertebrates in office. and thus the 2nd step of total privatization; the abolition of democrapcy to prevent a relapse.
    p.s., how is the privatization of the prison cystem going? ah, what’s that you say? in californicate it necessitated gutting education, health, infrastructure maintenance budgets?
    heh heh heh !!!

  23. I’ve heard that a politician’s #1 priority once they get elected is to do whatever they can to get re-elected. Unless or until we hire a policitian who doesn’t have that mindset, politics is just a popularity contest. It remains to be seen if Mr. Christie can hold the line for long enough to do some good. If he can, he’s a shining example of what a politician should be. Don’t be surprised if he get doesn’t get voted in for another term.

  24. @Kathy, thanks for the snapshot. I guess what I’m wondering is if the West went through this before, at least there was a “before”, right? The US elected Reagan, and things got better. Right now I can’t tell if I should be stockpiling foreign currency or stockpiling canned goods and ammunition.
    If it took Carter to get Reagan, at this rate in 2012 the US will be electing the reanimated zombie corpse of Barry Goldwater…

  25. Did you all notice what the financial analyst, Meredith Whitney, said near the end? She commented that she had never before seen such a lack of transparency as that exhibited by the public sector institutions she was trying to analyze.
    Does that remind you of anything north of the 49th Parallel? Okay kidz, let’s all sing those famous 3 letters in unison: “C-B-C”

  26. Funny that – a CBS video on monetary irresponsibility with an ad featuring $15 Million dollar Katie Couric.

  27. Western fiscal incontinence has had a pretty good run (pun intended) and the day of reckoning is fast approaching. If that doesn’t get too violent and war-like and we want to maintain civil society, get use to the idea of an over-regulated entitlement culture evolving into means testing, user fees, indigent-stigmatization, deregulation, privatization, union breaking, downloaded culture where remaining public employees return to civil servant status. Hell, the Video Professor may have to commit suicide after the provinces start charging user fees at emergency rooms. That’s the optimistic picture. Canada’s relatively better fiscal condition may be offset by its reliance on commodities (higher highs and lower lows).

  28. The politicians are only partly to blame.
    The lion’s share of blame rests with voters who have, during my lifetime, been so thoroughly disengaged from the political process(hey! how about that hockey/football game last night?) and uninformed about economics and the consequences of allowing socialism to invade every level of society.
    The politicians only served up what the voters were clamoring for.(Bread & Circuses)
    The proof of this is the appalling levels of household debt.
    Eat, drink, and be merry, for tommorrow we die.

  29. Related – The Europe of North America
    Posted by Kate at 9:08 AM|
    Nothing that another 4 years of McGuinty won’t fix…

  30. What is different this time is the Latte Liberal/Ruling Class is now totally! blind to Moral Hazard.
    Housing sub prime and now unfunded public pension liability. What? them worried? Nope – they fully expect to get bailed out.
    The Ruling Class is in it for the ruling class. You are either part of the ruling class or you are not – just like in the Kings&Queens&Clergy days.
    Their “solution” for financial collapse will be more ruling class. aka more government motors.

  31. Oz makes an excellent point. I would estimate that about 60% of citizens are either partially or completely tuned out of anything political. Of the 40% remaining, there’s an almost equal split of those who understand fiscal responsibility and want a bright future for the nation versus those who have their snouts deeply up the rear cheeks of government and/or are so blinded by their emotions to only be capable of what Thomas Sowell calls “First Stage Thinking”.
    Understanding this, it’s actually quite amazing that any democracy successfully makes its way out of harbour.

  33. Benevolent Dictator. That is what I am now hearing from the public sector types as a “cure” for failed democracy. “Benevolent” to whom? Benevolent for how long?
    Their argument being – in a democracy, politicians do crazy things because they are desperate to be reelected.
    I maintain it is that essential part of the ruling class, the media, that is responsible for the electorate falling for the con-artists line (aka politicians).
    I say that, given the facts, 75% of the voters would vote for the un-crazy ones to rule them.

  34. I say that, given the facts, 75% of the voters would vote for the un-crazy ones to rule them.
    ~ron in kelowna
    The truth is out there.
    ~Fox Mulder
    What isn’t ‘out there’?
    Motivation to know the truth.
    When reality bites, then there will be motivation.
    Not before.
    What we are seeing now is the re-enactment of Easter Island played out on a global scale.
    -And it was fun, fun, fun ’til her Daddy took her VISA awaay-eyay!
    /apologies to the Beach Boys

  35. One of the ‘means tests’ mentioned above should be to see if one has the intellectual means to make a rational, informed decision at the voting booth.

  36. Its not a hole but a black hole thats sucking the life out of America. Thank the professional politicians with their Union backing for this collapse. For that is the future. No money ,no toys.
    Seems half the money given was to create jobs for a Hot clime economy. The environmental lobby has eaten till their so fat, they can’t walk ,but waddle with hands outstretched like a money eating Zombie. Producing nothing but cold air.
    The entitlement culture of Government meets reality.
    JMO

  37. @ct
    I disagree with the whole lot of you i was speaking with a gentleman who took a job at my company ..he is from texas.
    He explained to me that there was enacted during the carter years the land act or something similar to that i will get the name for you and give it to you sorry it slipped my mind .
    Anyway this act was made but never enforced …thankfully ,well until mr.clinton got into office and blew the dust off of it and forced bank’s and enabled greedy fat cat’s on wall street to give mortgages to illigal and unemployed people who at the end of the day just walked away scratch free .
    Not just illigals but people who just would never qualify for such a loan ever but were given one anyway . Talk about corruption, and bush just picked up where clinton left off .
    This is bad and yes i jokingly asked the guy if he had alot of guns and ammo and food he said “we started stalking up in 97”
    I stopped laughing and he was not smiling either you know it and i kow it the good hard working people are going to be the target’s and so the good hard working people have been preparing .
    It’s coming i pray we can work through this civiliy .
    He also strongly advised me that this whole mess was the result of carter/clinton/bush/obama.
    Not grabbing the riens and having the nub’s to stopp this run away train and now the bar is closing and people don’t want to go home they are getting irritable and edgy they want to party not work ,and damn it if they have to miss one minute of party time everyone will pay !!!
    This is more or less what he has explained to me .
    who is he ? just and average hard working american with three kids who has used his skill to land a job in canada as there is no work in texas for him ….get ready folks casue this is gonna hurt.
    silver ,gold,ammo,food ,fuel,water,medical supplies,and guns …lot’s and lot’s of guns.

  38. I actually kinda agree with beagle alittle on this ..i also agree with OZ .
    It is not all the politicians fault but thereh ands are dirty to as in order for them to get there paws all smelling like money they had to allow this party to start.
    But yes auserity is on the way folks !!!

  39. @ Brian M – One of the ‘means tests’ mentioned above should be to see if one has the intellectual means to make a rational, informed decision at the voting booth.
    Maybe it is time to review the concept of universal sufferage. Maybe only those who have paid income tax in the year before an election should be allowed to vote. I know there are lots of other taxes that could be considered in the suffrage test, but income tax is the most personal.
    When those who foot the bill are the only ones who can vote, you will see much more responsible government.

  40. STOP SPENDING! STOP SPENDING! STOP SPENDING! STOP SPENDING! STOP SPENDING!
    I see that has as little effect here as it does yelled from the floor of the Chicago Exchange.
    Somebody up above there wrote —

    get use[d] to the idea of an over-regulated entitlement culture evolving into means testing, user fees, indigent-stigmatization, deregulation, privatization, union breaking, downloaded culture where remaining public employees return to civil servant status

    Let’s look at those one-by one:
    means testing: No problem. If you want welfare, you have to actually need it. Weeding out the freeloaders who choose it but don’t actually need it will do much to reduce spending in this area.
    user fees: No problem, as long as income taxes are reduced. Pay for the services you use — what a concept.
    indigent-stigmatization: No problem. Shame can be a wonderful motivator, and we’ve forgotten that. Instead, we’ve pathologized bad decisions and turned them into badges of honour — one is no longer a lazy drunk, one instead “battles an addictive personality in a dysfunctional disease process.” Again, those who really need the assistance should have assistance and help, but the freeloaders need to be unloaded.
    deregulationL: No problem. Just get government completely out of the deregulated markets.
    privatization: Yes!
    union breaking: Oh G*d, yes! Teacher unions first, please.
    downloaded culture where remaining public employees return to civil servant status: W.T.F. does that even mean? “Downloaded culture”?
    If by that you mean that we have to download current nanny state responsibilities to individuals, then what’s the problem? If by that you mean that government has to relinquish all cultural programming roles, such as national broadcasting and arts funding, when that’s the problem? Culture is made by individuals going about their daily lives and pursuing their own interests — culture is not government’s domain.
    As for public employees returning to civil servant status: faster, please. Pay neeed employees fairly at rates comparable to the same functions in the private sector, but de-unionize them and renegotiate the unsustainable gold-plated pensions. As Christie in New Jersey said, we can either renegotiate the pensions and you get less in 10 years, or leave them as they are and you’ll get nothing in 10 years.
    Humph.

  41. A classic example of our over-arching spending problem in my local paper today. The local ‘multi-cultural association’ ran a FULL PAGE advert in our daily, trolling for new ‘clients’ for ‘job training for new immigrants’.
    Two points: here on Vancouver Island, we don’t have a whole lot of ‘new immigrants. My second point is that I suspect this association is nearing their fiscal year end and they have some unused tax dollars to spend – which they fear they might lose, if not spent.
    So why not use those tax dollars to advertise for ‘new customers’ and if/when they appear at the door, you can take their numbers back to the gov’t to plead their case for increased funding.
    What a great ‘business model’ – I wish I could get the gov’t to give me money for both advertising and in turn, the ‘profits’ needed to service the clients created by the initial infusion of cash.

  42. It didn’t take an economic genius to figure out that you can’t spend money you don’t have without getting into BIG TROUBLE. Our ancestors knew that … heck, my mom knew that and I know that.
    Watching my friends and neighbours living high off the hog, with beneficent benefits, two or more properties, retiring early, while my family and I live within our means and talk about Freedom-85, rather clarifies reality, if you ask me. We don’t owe any money, we don’t have very much, and we know that if we don’t have it, we can’t spend it.
    As I say, it doesn’t take a genius to figure this out, but our politicians avoided dealing with it because they liked their lifestyles and they wanted to keep being elected.
    There’s been a huge disconnect going on for years and, sadly, all of us are going to pay the price, not just the profligate spenders.

  43. Lickmuffin
    By “downloading”, I mean responsibilities that higher governments have taken on will be downloaded to lower levels. For example, DFO is a federal bureaucracy with 4000 employees in Ottawa and regulates activities affecting fish and their habitat anywhere if they migrate into salt water. Each Province has their own bureaucracy doing the same thing for fish that normally don’t migrate into the oceans (Steelhead an exception) but use the same habitat. Why not download to the provinces their additional species responsibilities and disappear.
    This concept could be applied to many federal functions that provinces can deal with or hopefully ignore such as Culture, Women’s affairs, etc. It provides an “out” for Federal Politicians who don’t have enough backbone to come clean. At least half of federal Ministries fit this bill.

  44. James carville had it right:
    “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.”
    Just as happened to Paul Martin a decade ago several provinces are about to hit the debt wall and will be unable to issue bonds at a reasonable coupon rate and thus will be unable to pay their current entitlement obligations – and drastic, painful cutting will have to be done.
    Unlike PM they will not be able to download thepain by cutting transfers and taxes are already too high (and the bond boys will see that as a negative rather than a positive). That will be McGinty and willams and charest’ et al’s legacy.

  45. “By the way, USA, how’s that war on drugs thing working out?”
    Somewhat more successful than the war on poverty.

  46. Oh-oh, if 60 minutes has suddenly “discovered” this, it MUST be serious.
    In the intro, that guy saif that one million state employees may lose their jobs – as if that were a bad thing!
    (OK bad for them but good for everyone else, your salaries, payrolls and pensions are obscene)

  47. Governments have a spending problem and need to drastically cut back. We should also implement a flat tax policy whereby everyone’s income is taxed at the same rate. When everyone has some “skin” in the game perhaps voters will make better choices.

  48. @Lorenzo – right now we have a situation where not only are some people not paying any taxes, they are in fact negative tax payers, i.e. net recipients. Naturally, they tend to vote for politicians who promise to keep things this way. Completely untenable isn’t it?
    .
    .
    .
    @Daniel Ream – “Right now I can’t tell if I should be stockpiling foreign currency or stockpiling canned goods and ammunition.”
    If things continue along their current path, that stockpiled ammunition will be currency.

  49. This is a real eye-opener (I hope!). Maybe it is time to seize pensions like the Ontario Teacher’s pension investments and put it into general funds, and get the government out of education and charities and hospitals. Privatize everything and lower taxes so that those who want to can support what they want. Let’s face it, most public service pensions were paid for by the taxpayers, and they belong to us.

  50. Daniel Beam,
    I have clear memories back to Roosevelt. The situation then, for average citizens was much, much worse than it is now because there was almost no safety net. Currently, the net still works. However, the overriding menace of a vast federal debt didn’t exist in the 1930s. If the economic system fails and the safety net ceases to exist, millions of people, with no experience at overcoming adversity, will find themselves in a desperate state. They won’t take it quietly,
    Financial collapse will lead to political collapse and blood will run like water.
    Better pray that the U.S. Govt. will somehow muddle through by continuing to devalue the currency. If that doesn’t succeed and the shit hits the fan, the entire Western World, including Canada, will go down too. Welcome to China’s century.

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