[ExI] Warren Buffett is worried too and thinks Republicans are "asinine"

spike spike66 at att.net
Wed Oct 16 17:40:26 UTC 2013



>. On Behalf Of Michael LaTorra
Subject: Re: [ExI] Warren Buffett is worried too and thinks Republicans are


>.The way to deal with the debt is to reduce it over time, through a
combination of decreased spending and increased taxes.


How much time?  The current debate is nowhere near reducing debt, not really
even in holding debt increase to zero, for even that is a far off goal by
everyone's estimation.  If we say we want to reduce the rate at which debt
increases over time, how much time?  If the debt goes too high, then as soon
as interest rates go up, we will not even be able to service the interest on
what has already been borrowed.  And this is the outfit which is clamoring
to borrow more and faster?



>.Seriously, the Tea Party is the problem here.


So what happens if we elect a bunch more of them next fall?


>. For them, taxes must only move in one direction: toward zero.


No.  The TEA in Tea party is for Taxed Enough Already.  The Tea Party goal
is to keep taxes at their current rate and decrease government spending to
match what the government takes in.  Is this really so insane?


>. The Tea Party is intransigent and, frankly, not too bright.


That's what we are told.  I can't see the overwhelming stupidity is keeping
taxes where they are now and cutting spending to where the taxes are now.


>. Their rigidity combined with their stupidity just could be the thing that
sinks their ship...and ours.


Alternately we could continue to overspend and sink their ship and ours.


>.And by ours, I don't mean only the American ship of state, or the nation.
I mean the global economy.


The global economy depends on the US government's overspending?  Indeed?



>. The dollar is the international reserve currency.


Why is that?  Should the international reserve currency be issued by a
government which has demonstrated that it cannot live with its own means?  


>. US government bonds and other Treasury securities are the investment of
choice for sovereign wealth funds and individual investors of means who seek
to preserve the portion of their capital that they choose not to risk on
dicier propositions.


I agree that it is, but I utterly fail to understand why it is.  Why are
other propositions dicier than the securities of a government which has been
spending way beyond its means for a long time, and defines as idiocy the act
of pointing out the obvious?



>.Those financial instruments are paying very low interest rates right now;
below the rate of inflation even.


Why do people keep investing in something in which the risk is rising and
the payoff is falling?



>. But they are still considered to be the best bet for safety because
payment is guaranteed by the "full faith and credit of the United States."
That means something in an uncertain world.


Why is the rest of the uncertain world uncertain?  I am certain: persistent
overspending and flat out admitting that we are borrowing money to pay debts
is as uncertain as any investment I can think of.


>. But it will mean nothing if the Tea Party fanatics don't get a f*@king


Indeed?  The world invests in the full faith and credit of a nation which
cannot pay its debts without borrowing massive piles of money from outside
its borders and incurring still more debt?  In what sense is that paying its
debts?  The world invests in a nations whose president comments that raising
the debt limit does not increase our debt?  How does that work?  Why do not
we rely instead on the full faith and credit of China?  They seem to have
plenty of money to lend the US, so we can keep buying their manufactured
goods.  Why don't we buy their securities?


Sometimes I get the feeling the world thinks that if the USA gets in trouble
it can nuke its way out of it.  We cannot nuke our way out of debt.  We have
maxed out the credit cards, just as we are clamoring for a waaay deeper line
of credit.  Now we must tighten the belt.  How crazy is that?






-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.extropy.org/pipermail/extropy-chat/attachments/20131016/0e0dd6af/attachment.html>

More information about the extropy-chat mailing list