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

Eugen Leitl eugen at leitl.org
Thu Oct 17 06:03:43 UTC 2013

On Wed, Oct 16, 2013 at 11:12:36AM -0600, Michael LaTorra wrote:

> The way to deal with the debt is to reduce it over time, through a
> combination of decreased spending and increased taxes, not by default or

Many countries all over the world, but especially the US, are
addicted to growth by borrowing from the future. Nobody likes
the word austerity, but this is exactly what living within
your means means. There is no reasoning with drug addicts.

This is mirrored by overshoot, aka ecological debt. You
can live over the ecosystem carrying capacity, for a while,
but you then must pay that debt, and interest on it, too
(degradation of carrying capacity through overshoot).
The currency is flesh and bone.

> repudiation. The Tea Party is concerned about the debt like an abortionist
> is concerned about a fetus. Don't let those people anywhere near my baby!

I'm afraid it's already dead, Jim.
> Seriously, the Tea Party is the problem here. Many months ago, Boehner and

The Tea Party is a symptom. We have our own Tea Party over here, which went
from zero to (almost) hero at 4.9%. I predict that anti-EU parties
will be in the EU parliament at the next vote. 

> Obama reached an agreement for dealing with the debt that included just
> what I said above: decreased spending and increased taxes over the long

Too little, too late. 

> term. The Tea Party faction (which is the tail that wags the Republican dog
> these days) would have none of it. For them, taxes must only move in one
> direction: toward zero. Their mindless absolutism scuttled what could have
> been the solution. The Tea Party is intransigent and, frankly, not too
> bright. Their rigidity combined with their stupidity just could be the
> thing that sinks their ship...and ours.

They're just the trigger, the actual reason is cumulated bill for behavior
of decades past.
> And by ours, I don't mean only the American ship of state, or the nation. I
> mean the global economy. If America gets the flu, the rest of the world

The global economy is very, very sick. Read between the lines on
China's economy, for instance.  

> gets cancer. The dollar is the international reserve currency. US

The petrodollar status (backed by oil, which is backed by military and
economic warfare) has been slipping gradually. What's buoying it up
is that all that scared money has nowhere else to go. You might notice
that e.g. CFPB has started encouraging the banks to limit international money
transfers. Hold onto your Bitcoins, these might jump into orbit yet.

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

It's a self-supporting belief system. You can pay off your debt through
the printing press with your creditors paying the bill for only so long.

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


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