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Investors.com
Brokest
Nation In History On Edge Of
Armageddon
By Mark Steyn
Posted 08/05/2011
On
Thursday, in honor of Barack
Obama’s 50th birthday, the Dow dropped 10 points for every year he has
walked
among us. It was the ninth-largest drop in history. We should be
relieved he
wasn’t turning 80.
The
markets are apparently concerned
that the entire global economy might be “stalling.” You don’t say?
Observant
fellows, these market chappies.
And
yet, in a certain sense, these are
still the good times. At the end of the week, U.S. Treasury yields
plunged to
Eisenhower-era rates. America, explained Ethan Harris of Bank of
America
Merrill Lynch, “still gets the safe haven money.”
That’s
to say, as crazy as Washington
is, Europe is perceived to be crazier.
In
confirmation of the point, over in
Italy, which is (believe it or not) a G7 economy, police raided Moody’s
and
Standard & Poor’s over allegations that all the meanie things
that the
rating agencies have been saying about the Italian economy were having
an
impact on Italian stock prices. Apparently that’s a crime in Italy.
They’re
not yet shooting the
messenger. But they are dragging him through the streets in chains pour
encourager les autres. Good luck with that.
But
I wonder if “the safe haven money”
is quite as safe as its investors assume. Under the “historic”
“resolution” of
the debt crisis (and don’t those very words “debt crisis” already feel
so last
week?), America will be cutting federal spending by $900 billion over
10 years.
“Cutting
federal spending by $900
billion over 10 years” is Washington-speak for increasing federal
spending by
$7 trillion over 10 years. And, as Washington had originally planned to
increase it by $8 trillion, that counts as a cut. If they’d planned to
increase
it by $20 trillion and then settled for merely $15 trillion, they could
have
saved five trillion.
See
how easy this is?
As
part of this historic “cut,” we’ve
now raised the “debt ceiling” — or, more accurately, lowered the debt
abyss. Do
you ever discuss the debt with your neighbor? Do you think he has any
serious
intention to repay the $15 trillion racked up in his and your name?Does
your
congressman? Does your senator?
Look
into their eyes. You can see the
answer.
And,
if none of these parties seems
inclined to pay down the debt now, what are the chances they’ll feel
like doing
so by 2020 when, under these historic “cuts,” it’s up to $23
trillion-$25
trillion?
Read
it at Investors.com
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