DOOM: The New Normal


See, here's the problem: a spending limit isn't a limit unless it actually functions as a bar to further spending. As Abraham Lincoln himself once said about the proverbial five-legged dog: calling a tail a leg doesn't make it one. In short, reality will assert itself.

Yes, Mister President, we are a nation of takers. And the makers are getting pretty fed up.

Remember back when people were ashamed to be layabouts and leeches? My advice to the slackers: enjoy the easy life while you can, because the gravy train is just about to run out of track. And you may find life in the aftermath of the crash extremely unpleasant, because your fellow citizens are going to remember who was pulling the cart and who was just sitting on it.

Why 30-year-olds need to start saving now. Actually, if you're 30 or over, should have been saving for awhile already. That goes double if you're married. That goes triple if you have kids. Yes, it's difficult to save much when you're young because you don't make much, but every little bit helps, and even twenty or thirty bucks a month adds up after a while. In fact, the poorer you are, the more vital saving your own money becomes because you live on a much thinner cushion.

Scenes from the terminal phase of the welfare state. Somehow, when I hear welfare-state advocates talking about concepts like "dignity" and "self-respect", I don't think this is the kind of thing they're thinking about. Yet it is the inevitable outcome. First on the small scale, then on the large.

My government spent $180 Billion on this program and all I got was traumatic memories of some mean little girl named Kendra wiping a booger on my new corduroy pants. You ever try to get snot out of corduroy? You can't do it, man.

Some scary chart-fu from the fun-loving guys at ZeroHedge. Just remember that when politicians use the word "recovery", they're using it in a way that not many people in the real economy would recognize.

Obamacare: The gift that keeps on giving, even when you wish to God it would stop. Even the most ardent partisans of ObamaCare are beginning to feel the sting of regret.

Remember that wonderful boost in housing everybody was rhapsodizing about a week or two ago? Yeah, about that....

Unemployment -- in real terms -- at 14.4%, four years after Obama first took office. Forward!

Japanese Finance Ministar Taro Aso urges elderly people to show their patriotic spirit by dying more quickly. They're costing the government a fortune, apparently, and Minister Aso finds this the easiest and fairest solution.

Unions versus our kids. This whole "war of the old against the young" is going to get hotter as time goes by and public spending becomes ever more constrained.

"Staying the Course" from the inimitable Steyn. Our culture is incubating the virus that will end up killing us.

Japanese banks and the central government will start "coordinating policy". For all the vaunted benefits of an independent central bank, sovereign imperative will always trump economics. This is just another step in Japan's descent into fiscal chaos; it was as inevitable as the tides. The Japanese saw that Teh Bernank pulled off QE in the United States with no runaway inflation, but we have two advantages the Japanese don't: 1) We issue the world's reserve currency; and 2) we have a positive (if only slightly so) growth profile. But the Japanese will inflate, and reap the whirlwind. (On another note, I've never been sold on the so-called "independence" of central banks, mainly because these so-called "iindependent" banks have proven to be just as prone to political pressure as any other government entity.)

As it turns out, Minnesota is boned as well.

I've said it many times: the Federal fiscal cirsis is bad, but rather abstract. The real fiscal crisis -- the one you're going to feel, the one that will affect your daily life, the one that will probably preciptate the final reckoning, whatever that is -- is the one confronting cities and states. The major driver of that crisis -- as always -- is the skyrocketing costs of employee and retiree benefits: pensions and healthcare.

How do you measure economic growth in the modern economy?

Next on "Hedge Fund Gladiators", the in-your-face new reality series from CNBC: Carl "The Yankee Doodle Dandy" Icahn vs Bill "The Hit-man" Ackman! Two men enter, one man leaves!

We really didn't need more proof that the traditional defined-benefit pension plan is dying out, but here's more data from the BLS that underscores the point. In the private sector, defined-benefit pensions have been on the way out since the late 1980's, and the public sector is increasingly moving that way as pension benefits threaten to eat city and state governments alive.

The pension bomb already exploded. Once a bomb has exploded, all you can do is scramble for cover, try to contain the blast, and then clean up the mess as best you can when it's all over.

Taggart should tell the boys to work up a number six on them: California landowners won't sell the land for the new high-speed rail line, which by the way is supposed to start in July.

my cat is retarded

Posted by: Monty at 08:00 AM


1 Hey guys, comments are back!

(waits, hears echo)

Well, dammit. Who is going to entertain me, then?

Posted by: bad cat robot at January 28, 2013 11:04 AM (65lpa)

2 Taggart...intentional or unintentional Atlas Shrugged reference? Or just Slim Pickens?

Posted by: Lt. York at January 28, 2013 11:15 AM (39Xyc)

3 Monty the Republic is doomed.

I think we would be better served asking the German capitalist how to survive worker's paradise.

Posted by: sven10077 at January 28, 2013 11:15 AM (LRFds)

4 It is past time that we demand legislation that will assure non-boned states that bailouts to the boned states will come with harsh strings attached.

Austerity measures. Right-to-Work measures. A swift kick to the pants.

Posted by: Manti Te'o at January 28, 2013 11:46 AM (T/L2Z)

5 I like the use of "aftermath." As in "after the math, le deluge."

Posted by: simpleton at January 28, 2013 12:25 PM (i3pKT)

Between Feb. 15 and March 15 I believe Treasury has to rollover $500 Billion beside new issues.
The 10-year nuzzled 2.00% this AM.

Posted by: gary gulrud at January 28, 2013 12:26 PM (uv0Aw)

Poor Recovery?
Lagging growth in GDP?

State pension funds in trouble due to poor returns on investments in Stock Market?

Erectile Dysfunction? Wait, scratch that.

What could be the connection? Can we have a compromise on the answer here?

Posted by: Reader C.J. Burch writes.... at January 28, 2013 01:12 PM (RFeQD)

8 Megan McArdle (yeah, I know, I know) liked to specifically call out Head Start as an example of a program that doesn't scale. During the pilot, you've got a small group of kids, and very smart true-believers who are working with them. Of course they're going to show improvement! But when you try and scale that out, you're not going to get 1 PhD for every four kids -- you're getting someone who might have some college, and you're going to get kids with parents that don't give a rip.

Posted by: Topper Harley at January 28, 2013 04:20 PM (Z9zAg)

9 That stupid train is gonna be a fun thing to watch fail. Too bad my pension is dependent on those choads. I'll be there to protest it's first run...if that ever happens.

Posted by: torabora at January 28, 2013 09:39 PM (VJeJd)

10 Thanks for the update. I always appreciate your take on the modern disaster we call the economy. You shine a light into the nooks and crannies that I am not likely to visit.


In my humble opinion, most of the problems you shine the light upon are problems of demographics. There are just fewer workers now in proportion to non-working old people. This one fact is driving investment out of the first world and into the rest of the world. Yet even there, the number of actual workers is proportionately dropping fast.

What you are revealing is the transition from an economy that grows exponentially, driven by population, to one that grows geometrically, driven by productivity.

To restate, we are all boned, and older people, who have been led to believe that there is an exponentially sized pot of gold waiting for them in their sixth decade, are more boned than the rest.

Posted by: rammer at January 28, 2013 09:46 PM (uAWfo)

11 RE: Layabouts leeches
I see a bumper sticker en-route to work once in a while: "You are not what you have." Perhaps the takers need lessons in gratitude.
I do just fine. HGTV, Travel Channel, Food TV and even some run of the mill tv shows couldstart to pile up in my head and affect me. All the stuff I don't have, don't eat, don't do and don't contribute to society couldflash before my face in an endless stream of "wow, my life sucks" if I didn't know better.Imaginepeople thathave no responsibilities whatsoever and nothing, absolutely nothing to consider as an accomplishments other than achieving an eighth grade education cheating the system measuring themselve by what they have.
Has Maslow's Hierarchy of Needs changed? Food - check. Shelter - check. Clothing - check. WTF else do these people expect? They get Facebook, so they can edit their lives and delude themselves into Love, Acceptance Self Actualization, don't they?

Posted by: i like anchors 2012 at January 29, 2013 09:29 AM (nBE5A)



Posted by: This Really Is Only A Test at January 30, 2013 02:44 PM (1FLBb)

13 SUCCESS. Now, Nobody Steal It.

Posted by: This Really Is Only A Test at January 30, 2013 02:44 PM (1FLBb)

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