David Walker, the former Comptroller of the United States from 1998 until 2008, has been warning politicians, the media, and the American public for over a decade that we are off course and headed for disaster. In August 2007, before the financial system meltdown of 2008, Mr. Walker declared:

The US government is on a “burning platform” of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon. There are striking similarities between America’s current situation and the factors that brought down Rome, including declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government. The fiscal imbalance meant the US was on a path toward an explosion of debt. With the looming retirement of baby boomers, spiraling healthcare costs, plummeting savings rates and increasing reliance on foreign lenders, we face unprecedented fiscal risks. Current US policy on education, energy, the environment, immigration and Iraq also was on an unsustainable path. Our very prosperity is placing greater demands on our physical infrastructure. Billions of dollars will be needed to modernize everything from highways and airports to water and sewage systems.

Three years have passed since Mr. Walker sounded the alarm and issued his dire warning. The National Debt in August 2007 was $8.9 trillion. Today it stands at $13.6 trillion, a 53% increase in just over 3 years. It took 205 years as a country to accumulate $4.7 trillion of debt. We’ve added $4.7 trillion in the last 38 months. It doesn’t appear that anyone in government heeded Mr. Walker’s warnings.

The perpetually optimistic pundits that occupy the positions of influence on CNBC and the other MSM networks try to paint a rosy picture of the American state of affairs day after day. They urge citizens to spend money they don’t have. They are sure that extending unemployment benefits to 99 weeks will improve the unemployment situation. They declare that Cash for Clunkers and the Home Buyer Tax Credit were successful government programs. They are sure that invading countries in the Middle East will make America safer. Nobel Prize winners in economics declare that the government should undertake another $8 to $10 trillion of money printing because the first $5 trillion wasn’t enough.

The Federal Reserve is pulling out all the stops in attempting to invigorate the American economy. The stock market is surging. Everything is surging. The optimists are crowing that all is well. Deficits don’t matter. We can borrow our way to prosperity. Cutting taxes will not add $4 trillion to the National Debt if not paid for with spending cuts. All is well. So, the question remains. Was David Walker wrong? Are we actually on a perfectly sturdy solid platform? Or, are we on the Deepwater Horizon as it burns and crumbles into the sea? Let’s examine both storylines and decide which is true.


  • The National Debt of $13.6 trillion is manageable because interest rates remain at historic low levels.
  • The addition of $1.6 trillion in debt per year is necessary because government must step in for the lack of spending in the private sector. This will jump start the economy. This is Keynesianism 101.
  • The debt to GDP ratio of 93% is not dangerous. Japan has a debt to GDP ratio of 200% and they are doing fine. This proves we have plenty of room to grow our debt.
  • The US dollar is the reserve currency for the entire world. We can systematically devalue the USD, which will reduce our foreign debt burden over time. The foreigners who leant us the money are on the hook and they have no way out.
  • A depreciating dollar will help our manufacturing industry by making American exports cheaper in foreign markets.
  • The $700 billion TARP plan saved the American financial system. The American taxpayer will end up making a profit in the long run from this program.
  • Cash for Clunkers was an astounding success. It increased demand for autos dramatically.
  • The Homebuyer Tax Credits resulted in a surge in home sales and stabilization of home prices.
  • The $800 billion Stimulus plan saved America from a 2nd Great Depression. Without it, we would have lost millions of jobs.
  • Consumer spending accounting for 70% of GDP is sustainable and desirable. If we can just get credit flowing again and encourage consumers that it is safe to use their credit cards to spend, the economy will come roaring back.
  • This is not the time to save. Nobel Prize winners in economics urge Americans to spend because of the Paradox of Thrift. It may be smart for one person to save more than they spend, but if everyone does it a consumer society will collapse. We can save later is the recommendation.
  • A QE2 of $8 to $10 trillion would surely increase the animal spirits of the dejected American people. The stock market would soar to 20,000 and everyone would feel rich. Spending would surge. All would be well again.
  • The Social Security Trust Fund is not broke. The money contributed by Americans over the decades is in a lockbox and the fund will be solvent for decades. A few tweaks and it will be solvent forever.
  • Medicare has been one of the best government programs ever conceived. It has sustained our senior citizens and delivered high quality care to all at a reasonable cost.
  • Baby Boomers are rational and realistic. The statistics that show they have not saved enough to sustain them in retirement is overblown. Social Security will suffice. If not, they’ll just work a little longer. No worries.
  • Obamacare will reduce healthcare costs, improve service, cover more people, and reduce the profits of insurance companies and drug companies.
  • We have the best educational system in the entire world. People from all over the world want to get into our best Universities. No Child Left Behind has been a huge success.
  • We are safer today than we were on September 11, 2001. We won the Iraq War and freed the Iraqis from the clutches of a madman. We are fighting them over there so we don’t have to fight them over here. The terrorists are in disarray and retreat.
  • The $1.1 trillion spent on the Middle East Wars, the trillions spent on the Dept of Homeland Security, and the expansion of government ability to protect its citizens through enhanced surveillance techniques and enhanced interrogation techniques on suspected terrorists has been beneficial to the safety and security of the American people.
  • A Defense budget of $900 billion per year is essential to our national security. We are surrounded by potential enemies.
  • It is a net positive for the US to allow illegal immigrants to stay in the country. Who else would we get to work in the fields picking lettuce and cutting our suburban lawns?
  • Gasoline is only $2.70 a gallon. We are awash in supplies of oil. Peak oil is a myth perpetuated by environmental nuts. We have centuries worth of oil in the Bakken Shale. If we would just open up Alaska to drilling, our troubles would be gone. Drill, Baby, Drill.
  • Our crumbling infrastructure is actually a fantastic opportunity. A 2nd Stimulus program to upgrade our infrastructure would create millions of high paying jobs.  


  • The National Debt is $13.6 trillion today. Interest expense for fiscal 2010 totaled $414 billion. Based upon the current spending path and assuming that the Bush tax cuts are extended, the National Debt will exceed $20 trillion by 2015. A reasonable expectation of 5% interest rates would result in annual interest expense of $1 trillion. The entire budgeted outlays of the US government are $3.5 trillion today.
  • Deficits exceeding $1 trillion per year are baked into the cake for the next decade. Non-Defense discretionary spending totals only $700 billion. Defense spending totals $900 billion. The remaining $1.9 trillion is on automatic pilot for Social Security, Medicare, Medicaid, and other entitlement programs. Politicians declaring they will freeze discretionary spending are treating you like fools. It will solve nothing.
  • Debt as a percentage of GDP will exceed 125% of GDP by 2015. Rogoff & Reinhart in their book This Time is Different point out the dangers once debt surpasses 90% of GDP: The relationship between government debt and real GDP growth is weak for debt/GDP ratios below 90% of GDP. Above the threshold of 90%, median growth rates fall by 1%, and average growth falls considerably more. The chances of bad things happening to a country increase dramatically after the 90% level is surpassed.
  • Japan began their 20 years of tears with a debt to GDP ratio of 52% and a National Savings rate of 15%. The Japanese people bought 90% of the debt that the government issued. Today, the debt to GDP ratio is 200% and the National Savings rate is 2%. The US entered this crisis with a debt to GDP ratio of 80% and a National Savings rate of 1%. We depend on foreigners to buy more than 50% of our new debt. We do not control our own destiny.
  • A depreciating US dollar is already creating inflation in many assets. Gold, silver, oil, and agricultural commodities are increasing in price faster than the stock market. The policy of the US government and Federal Reserve of devaluing the currency is being matched by similar efforts in countries across the globe. The result is a flood of liquidity creating bubbles which will pop. The American middle class will be squeezed harder as their wages stagnate, while their food, energy, and costs at Wal-Mart go higher.
  • TARP, the purchase of $1.5 trillion of Mortgage Backed Securities by the Federal Reserve, 0% interest rates, and accounting rule changes by the FASB have done nothing but paper over the fact that the biggest financial institutions in the US are insolvent. The assets on their books are worth 50% less than they are reporting. They are zombie banks. Their losses on residential real estate, commercial real estate and consumer credit continue to grow. The only beneficiaries of keeping zombie banks alive are the bankers who are receiving billions in compensation while the middle class dies a slow painful death.
  • Cash For Clunkers, Home Buyer Tax Credit and energy efficiency credits did nothing but shift demand forward and cost the American taxpayer $25 billion. The estimated cost to the tax payer per incremental home sold was $100,000. Auto sales and home sales plunged as soon as the credits ran out. Home prices are falling and used car prices have soared due to less supply, hurting the poor.
  • The borrowing of $800 billion from the Chinese to dole out to unions and political hacks all over the country has been a complete disaster. Unemployment has gone up by over 4 million since the stimulus was passed. Government spending has crowded out private spending. The economy hasn’t recovered because it was never allowed to bottom. Why look for a job when the government pays you for two years to watch Oprah in a house where you haven’t made a mortgage payment in 18 months?
  • Consumers’ spending money they don’t have, saving less than 5% of their disposable income, and putting away nothing for their retirement is unsustainable. The average credit card debt per household is about $15,700. In 1968, consumers’ total credit debt was $8 billion (in current dollars). Now the total exceeds $880 billion. Americans currently owe $917 billion on revolving credit lines and $80 billion of it is past due, according to the latest Federal Reserve statistics.
  • A scaling back of consumer spending to a sustainable 64% of GDP would reduce consumer spending by $500 billion per year. This would allow Americans to save and invest in the country. This is considered crazy talk in the Keynesian economic circles.
  • The anticipation of QE2 has already made the dollar drop 10% and gold, silver and oil jump 10%. Ben Bernanke and the Federal Reserve are conducting an experiment on the American people. What they are doing today has never been attempted in human history. It boils down to whether the authorities can cure a disease brought on by too much debt by doubling and tripling the dosage of debt. If this experiment fails, the dollar collapse and possible hyperinflation would lead to anarchy. Ben is confident it might work. Are you?
  • Social Security and Medicare have an unfunded liability exceeding $100 trillion. There is no money in a lockbox. Congress opened the lockbox and spent the money. Baby boomers are turning 50 years old at a rate of 10,000 per day. There is no possibility that the promises made to Americans by politicians can be honored. No politician of either party will tell the truth to the American public. A massive reduction in benefits or a massive increase in taxes would be required to deliver on this promise.
  • The 2,000 page Obamacare bill that no one in Congress read was sold to the American people as a cost saving, care enhancing package of goodies. The reality is that it will increase the national debt by hundreds of billions, ration care, drive more doctors into retirement, strangle small business with onerous regulations and enrich the insurance companies and drug companies. The unintended consequences will be devastating.
  • Total military expenditures for the entire world are $1.9 trillion annually. The US accounts for $900 billion of this expenditure. This is 7 times as much as the next largest spender – China.
  • The wars of choice in the Middle East since 2001 have cost unborn generations of Americans $1.1 trillion so far, with a final cost likely reaching $3 trillion. Just like Donald Rumsfeld estimated.  Over 5,700 Americans have lost their lives and another 39,000 have been wounded. The casualties in the countries that have been invaded number in the hundreds of thousands. Are we better off than we were on September 10, 2001?
  • Defense spending in 2000 was $359 billion or 3.6% of GDP. Today it is $900 billion or 6.1% of GDP. Every dime of these expenditures is borrowed. Are we safer today?
  • The Department of Energy was created in 1979 in order to create an energy policy that would reduce our dependence on foreign oil. The United States, which makes up 4% of the world’s population, consumes 25% of the world’s oil on a daily basis. In 1970 we imported 24% of our oil. Today we import 70% of our oil.
  • Over 50% of our oil imports come from countries whose populations hate the US. Mexico, which accounts for 9% of our current oil supply, will become a net importer by 2015.
  • The US has not built a new nuclear power plant or oil refinery since 1980.
  • The existing energy infrastructure is rusting away. 80% to 90% of the system must be rebuilt. The cost of rebuilding the infrastructure will be $50 – $100 trillion. We have no blueprints, few supplies and fewer trained engineers and construction workers.
  • Peak oil is a fact. World liquid oil production peaked at 86 million barrels per day in 2006. It has not reached that level since, even when prices soared to $145 per barrel. Demand will move relentlessly upward as China and India and the rest of the developing world march forward.
  • The US Military has concluded in a report put out a few months ago that by 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD. A severe energy crunch is inevitable without a massive expansion of production and refining capacity. While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds.


David Walker was in a ship well ahead of the US Titanic crossing the Atlantic. He saw the dangerous icebergs floating in the ocean. He sent a message to the Captains (Bush, Obama) and Executive Officers (Greenspan, Bernanke, Paulson, Geithner) of the US Titianic that there was danger ahead. They should have reduced speed and doubled the lookouts. Instead they listened to the Managing Director of the cruise line (Wall Street) and increased speed. The US Titanic was unsinkable. When the inevitable collision with the iceberg occurred, those in command chose to disbelieve the possibility that the mighty ship could sink. The nearest ship was four hours away. If the US Titanic had stopped immediately after striking the iceberg, it would have remained afloat until the rescue ship arrived. Instead, the masters of the ship chose to keep going as the compartments below the surface continued to fill with water. Reputation and hubris drove them to take these actions.

Those in command knew that there was only room on the lifeboats for 1,100 people. There were 2,200 people onboard. It is interesting to note that 60% of the First Class (the ruling elite) passengers survived the sinking, while less than 25% of the Third Class (working middle class) and crew survived.

David Walker has presented a case for inter-generational sacrifice. Are today’s generations willing to keep robbing future generations of Americans by being fiscally irresponsible today? Every borrowed dollar spent today is a tax on future generations. Are we selfish enough to leave our children and grandchildren with an un-payable burden so that we can live well today? Don’t the Wall Street bankers and Washington politicians have children and grandchildren? It is immoral and despicable that American leaders and its citizens aren’t willing or able to make the tough choices needed to save the ship of state. Every great empire withered away due to the accumulation of bad decisions. Ask yourself whether this country has made the right choices in the last 30 years. Are we making the right choices today? If you are honest, the answer is NO. We’ve hit the iceberg. The ending is unavoidable.

Sing us a song of the century
That’s louder than bombs and eternity
The era of static and contraband
That’s leading us into the promised land
Tell us a story that’s by candlelight
Waging a war and losing the fight

They’re playing the song of the century
of panic and promise and prosperity
Tell me a story into that goodnight

Sing us a song for me …

                            Green Day – Song of the Century

45 thoughts on “IS AMERICA ON A BURNING PLATFORM? (Featured Article)”

  1. I don’t know how Jim does it … writing one great piece after another. Amazing.

    There’s a lot of data there. Rather than go through it one by one, I would like to attempt to state what the bottom, Bottom line is …. as I see it, of course.

    What’s the first thing I think of when I see pics of Detroit or 30 blocks of squalor? Jobs and income. As in … why don’t those fuckers get a job and earn some money?

    What the first thing I think of when “3rd world country” is mentioned? Jobs and income.
    As in … they’re poor because they have no jobs, or crappy jobs.

    Look at it this way; if you fix every singe problem on Jim’s list but there are still no jobs, we will go down the crapper. It always has been and always will be producing … selling and buying .. and saving …. and to do that you need, J.O.B.S.

    Which we are losing by the millions. And I really don’t think the good jobs are coming back. Which is why we are headed towards 3rd world status. It can end no other way.

  2. I’m kind of with Stuck. Get rid of all the bad treaties that killed our manufacturing base. Return the statesmen to politics. True statesmen, like Jake Towne, Ron Paul, Chris Christie, Bobby Jindal. People who are there to do a job, not to become powerful, rich and famous. Root these people out, drag them kicking and screaming to run for office (like our Founders) and get behind them like you never have before. This needs to be done at all levels – city,state,federal. You will see an amazing amount of positive unintended consequences.

  3. When greed and corruption trump quality of life and moral values the result is the U.S. circa 2000-2010 and beyond. Thank heaven Mozilla only had to return half of the millions he stole, now that is true American justice. I hope all those i-pads and i-phones will work from cardboard boxes underneath the freeway overpass where the “new frontier” will be.

  4. This article is superb in every conceivable way and should be saved to be reread. Expect it to go viral on the internet in a HUGE way. This article ranks Numero Uno among many fine Quinn articles. WELL DONE!!!

    1. Thanks Smokey & Stuck

      But, I owe it all to Daniel. I couldn’t think of anything to write this week until I was inspired by Daniel. His perma-bullishness about America made me want to double check why I named this site The Burning Platform. Daniel said I was bitter. I think I’m realistic. I think I presented the bullish and bearish cases as well as I could.

      Which case seems more realistic?

  5. I forgot to mention this. California is ready to vote on and probably pass prop 19 which legalizes personal use of marijuana if you are 21 or older. The good news is that Eric Holder has stated that the federal government will not stand for this and will trump Ca. state law keeping pot possesion and usage a federal offense. I am so glad they are focused on prosecuting “real criminals” and are not worried about the little things like robbing taxpayers of billions of dollars.

  6. Matt, Let me help you with that armor, you may have just started a shitstorm. Don’t worry, I got your back. One thing I will say is all the weed in the world won’t help California…

  7. On the immigration issue, I think the only wrong thing to do is what we’ve done. Nothing. Amnesty or Deportation, we need to make a decision and commit. So long as it comes with a secure border and rock solid path to citizenship, either choice moves us forward. Our country will heal.

  8. Great article, Admin.

    If I may be permitted one nit-picking comment. You posted on the positive side of The Sturdy Platform, “It is a net positive for the US to allow illegal immigrants to stay in the country. Who else would we get to work in the fields picking lettuce and cutting our suburban lawns?” But there was no counter post to this statement on The Burning Platform.

    400,000 (lowest estimate) illegal immigrants cost the state of Arizona $2 billion a year. California has 6 times the number of illegals that Arizona has, and Texas has 3-4 times as many. Do the math, everyone. This shit is burying the southwestern U.S.

    1. SSS

      You’re right. I ran out of steam. I didn’t post a point on how bad our education system really is either.

  9. Matt

    I’m gonna let that marijuana comment pass just because I’ve already told you how fucked up California is. California residents – no, voters – have turned one of the most blessed places on Earth into a socialist, nihilistic, politically correct nightmare. So go ahead and pass a law that let’s you all cruise down the Mary Jane Highway. Enjoy the ride.

  10. Excellent, absolutely superb! I note once again that the first set of “facts” are all govt lies. The second are the truth and it ain’t a pretty picture. The deficit will never be cut. The national debt will never be paid off. Because of our(boomers) “me first, and I want it now” philosophy based on greed, our kids and grandkids will inherit a POS pure and simple.

  11. The Republicans have thrown away all of their principles 40 years ago. The Tea Party has no principles (at least, they have not articulated any plans for anything other than rage and undoing anything of the current POTUS). The Democrats just don’t understand their own stupidity (kind of like Rumsfield’s Leaves of Crass, but at least he knew he didn’t know…).

    While many aspects of Ron Paul statements are spot on, his following is not enough to accomplish much.

    Given that not one political reform is being floated that will help anything, what are we left with? Repealing Obama-care is not going to solve anything. The previous medical system was taking more and more money providing less and less service. All financial projections, including those of Mr. Walker showed that quite clearly. Republicans have just as many pork projects as Democrats (and that discretionary spending is a fraction of the pie). The fact is, and no one will talk about it, the basis of this form of government is a complete failure. That farmers are still subsidized not to grow. That low population states have disproportionate power. That California dumps so much tax revenue to the feds and get very little back… I just can’t believe they have not seceded. That presidential power is not checked. That a Supreme Court can be stuffed. That we still have an Electoral College truly represents a system of government that is not merely stagnant, but dead.

    Americans are obese for a reason, but over-consumption of food is no different from over-consumption of gas, housing, TVs, etc.

    That so many aspects of this problem have been so obvious for over 10 years, the party always continues. Even now, many people think housing has leveled off and it is time to get back in! Housing could drop another 40% and still not have reverted to its 100 year mean of 3%/year appreciation!

    I just can’t see anyone offers anything of any value. What to do? I mean really…. do we all buy guns, some farm land and learn how to do subsistence farming? Clearly farmland in NJ or GA would be a big mistake. The rioters will come and pick your vegetables for you. Or… do we simply move to Canada, Costa Rica or elsewhere? I wonder what happens when you try to cross the border with your 1,000 oz of gold or 10,000 oz of silver.

    In any case, I feel grateful to be living in Boston… for now. Compared to the mess of the rest of the country, things here are not so bad, yet…

    Ignorance may really be bliss…

  12. One more depressing fact: the average American is totally ignorant and prefers to stay that way. There might be a lot of anger in the country over the mess we’re in, but it’s been deliberately channeled away from the perpetrators. The news media is corporate controlled, so we don’t get the truth–we get sound bites or slogans.

    When the Tea Party first started, I had some hope. But they’ve been successfully manipulated by the right wing and unfortunately many of their candidates really are loony. I wonder if that’s part of the plan too?

    In any case, since the government can’t and won’t do anything about these problems, we are completely f*cked. I foresee a meltdown of society and the further rise of an underground economy.

    1. Laura

      I never said every disabled person is committing fraud. When you see that over 20% of the people in West Phila are classified as disabled compared to 10% of the total population, you know something is wrong.

      SS was created for widows, orphans, and the disabled. That is who it should help. It was an insurance program, not a retirement program. It was the politicians who grew it and convinced people to rely on it, rather than save for their retirement.

  13. Sharonsj—-“……the average American is totally ignorant and prefers to stay that way.”—–That is EXACTLY why this country has a rendezvous with a shitstorm. The average American WILL start giving a shit, at some point, too fucking late. The price of ignorance will be steep.

  14. Money is spreadshit – so paying intrest of 400 bln is just few clicks away – simple creation of deposits.
    Likewise there is no risk of default whatsoever.

  15. spc, I’m not sure if your being sarcastic… Do you really think we can click our way out of this smoldering crater?

  16. op59 “do we all buy guns, some farm land and learn how to do subsistence farming? Clearly farmland in NJ or GA would be a big mistake. The rioters will come and pick your vegetables for you. ”

    hey op, i’m a farmer in nj, there are maybe 5 (that i can find) other farms in nj that farm like we do. we raise small scale deef cattle, chickens & eggs, turkeys and pigs we’re working hard to get our own grains for (as close to) 100% in-house production as we can get. we’re near ft dix/mc guire. we’re nestled deep inside a farm comunity where all the other farmers grow only commodity corn and soy, although we do have the last 2 (as in 2) dairy farms in the county.

    we figure a few things: one we’re close to dense population centers so we will have customers. but with the military right near by we figure we’ll be inside the barb-wire prerimeter once the shtf. so we may be raising food for the marshal law boys. even if there is no wire strung we’re far from easy access as any mobs would have to cross a lot of farmland with nary a carrot to pick and what few our neighbors don’t pick off enroute we’ll disuade with our own people.

    actually i think we may have an ideal spot to ride out this storm, i figure all we have to really hold out thru is the big die-off. it might take a year to subside. after that most folks still alive and able will be putting nose to grind stone and settling in to a more involved way of living.

    at that point we’re looking good to supply our community with real food that itself was raised on real food, mostly grasses and grains we grow ourselves.

    i believe we’ll find we have more going for us here then we could find in remote places. we’ll see

    good luck to everyone here…


  17. # Clunkers was an astounding success. It increased demand for autos dramatically.
    # The Homebuyer Tax Credits resulted in a surge in home sales and stabilization of home prices.
    # The $800 billion Stimulus plan saved America from a 2nd Great Depression. Without it, we would have lost millions of jobs.
    # Consumer spending accounting for 70% of GDP is sustainable and desirable. If we can just get credit flowing again and encourage consumers that it is safe to use their credit cards to spend, the economy will come roaring back.
    # This is not the time to save. Nobel Prize winners in economics urge Americans to spend because of the Paradox

    Our paradox of Fort Knox

    Best way for Americans to be happy is for their elected official to tax away American’s money and give it to Congressional Cronies, Quants, Shills, and Tricks who can teach you how to impress your friends with water-boards and preemptive foreign invasions. Hey! By definition, when Congress does it, how can it be illegal? Congressional Immunity makes it all so American. Now you go back to sleep Senator McCarthy. All is well!

  18. Gemini and SSS,
    I agree completely, CA. is toast and weed won’t hurt or help any of it’s core problems. My point is the irony of the Attorney General announcing he will take a stand against pot smokers but not against banksters who are lining their pockets with our money. I will sleep better knowing he is watching out for us. And massive illegal immigration IS completely destroying the Southwest, no doubt about that.

  19. I thought what’s happening now was going to happen following the 1973-83 decade. The only reason I thought that was that by 1973 I was old enough and (self)educated enough to see a Ponzi scheme when I saw one. I was buying gold (purely numismatic, of course) and PM stocks early in the 1970’s and sold the stocks at $700 going up.

    We were just lucky to have Volcker back then who was big enough and ugly enough and independent enough to wring out the economy and put us in the dumper to reset the clock that go around.

    Right now, America is not on a burning platform. It is teetering on what’s left of the foundation posts that held up the platform that has already burned up. All that remains to be seen is if the posts upon which we perch are concrete or wooden and even if they’re concrete, we need to see what will break off and fall in between them. If they’re wooden then we may all assume the HUTA position for atomic attack.

    Great article. I wish there were something positive to counterbalance all the bad stuff but all I see everyday are idiots carrying more bad shit to the heavy side of the wreck. I think the MBS fraud will tip us off the posts and into the drink. (or, if you’re in CA, into the weed patch).

  20. The RE craze fueled by almost no loan standards and super low interest rates borrowed trillions of dollars of economic activity from the future, which we are living through now. People bought and spent money they did not have aside from digits appearing on a computer screen generated by loose regulation and monetary policy. How many people that now complain about the lack of jobs were cheer leading the artificially induced housing bubble? And how many people that complain about cash for clunkers, housing credits, stimulus, etc… were solidly behind the “free market” stimulus orchestrated by Greenspan and company. The government artificial stimulus being deployed now is PEANUTS compared to the stimulus that drove the bubble economy from 1998 to 2005. These tiny by comparison stimulus programs do cost a ton and are painful to see but they do serve a purpose. They are cushioning the blow that would have otherwise come from the radical economic backlash that was headed straight at the economy beginning in 2005. All the government stimulus programs do is borrow to a lesser degree from the future than the policies of Greenspan in order to soften the blow of an unwinding credit bubble. It’s funny how almost no one was complaining when the RE bubble was inflating. I studied it very in depth and told many people I know it was unsustainable and going to crash. This was in the 2000 to 2004 time frame. Nobody wanted to hear it. Everyone thought RE could go up forever. And now once again, everyone seems to be on the same page, following the herd, screaming at the top of their lungs about stimulus and the disastrous road we’re on, how government debt will destroy the US. Where were all these people when we were sowing the seeds of the mess we’re in now. Did you cheer lead the RE bubble and think it made perfect sense? I didn’t. Did you support our free trade agreements that shipped millions of jobs overseas? I didn’t. Did you see that the loss of manufacturing jobs would lead to an overemphasis on housing? I did. This stuff is so easy to see. Rather than everyone complaining and yelling about how it’s the end of the world, we should be breaking out of our ideological delusion and start demanding that the tie between Washington and International Corporations be severed. This marriage made in hell will take us all down the tubes. If we fixed this, the politicians would have to answer to US because we would hold the reigns of power. They would have to address social security, medicare, pentagon, and all of the other waste in the system. But that’s not going to happen when they no longer answer to the people. The corporations are their masters and the corporations want nothing more than for the federal govt. to bankrupt itself and collapse so they can come in and take over. That’s where we’re headed as long as we don’t assert our power and take back Washington. And not with some tea party movement or any other ideologically narrow movement. Until a broad swath of the middle get together and really address the problem of powerful international interests treating our politicians like puppets it’s just going to get worse. They hold the strings. They’re the puppeteers while the American people can only sit back and watch the show. People who identify themselves as conservative or republican cheer this for a time. Corporations and the profit driven agenda supports their agenda for a time. But mark my words, there will come a time when they are tossed aside as well and they will be left scratching their heads wondering what the hell happened. If we are to hand the governance of our society to the profit motive, oh my what a world, what a hellish nightmare we will wake up to find ourselves within. And that’s the way it seems to be going. Oh well, what can you do? Keep screaming….. The corporations get a good belly laugh out of all of it. Get the money out of politics and the politicians will once again hear you voice. Until the voice being boomed through a 30 ton megaphone is removed from the equation, you, I, and every other citizen will not be heard and we will be plowed under like last years fruitless crop. I sense we will come together and fix the problem. I sense that the populist rage will arise again and this time it will not be through some corporate funded movement designed to divert the people’s energy away from the true source of the problem. I have faith in us. We will fix this.

  21. Jim – you owe it all to me? Wonderful. That is quite a statement since I only peruse this website a few times a month. I must really get under your skin. Breath in…breath out.

    “Perma-Bullishness”? I’ve never insisted we don’t have massive, huge, colossal, problems to deal with. I’ve always said we are broke, but for 2 years I’ve been predicting a conservative resurgence in our nation. I’ve been here, trying to get disenfranchised libertarians to get involved and to help move the political process conservative. A few here mentioned they love Christie – well he was a RINO before he became a very popular conservative. It can be done.

    I think you are confusing my optimism and believe in America with some sort of belief in the status-quo. I’m not. I’m just at odds with the blood lust I see, cheering as America goes down the tubes. Many readers completely denigrate the intelligence, common sense, and moral compass of the American people – writing off their countrymen as “sheeple”. I protest it here, the same way I get infuriated when Obama or Kerry come out with similar elitist theories on America – scared, irrational, angry… to stupid to see the light. Bill Maher loves calling “Americans dumb like dogs”. I see the same nonsense on this site. I think its self-defeating, destructive, and un-American.

  22. Daniel

    Nice avatar. I’d love to bash your Yankees, but I’d get no joy out of it. You’ll probably sign Jason Werth and Cliff Lee in the off season.

  23. My wife had a baby girl last week (child #3) so I only saw the headline when the Yankees choked. The first thing that went through my mind was, “Shit, Jim and Rob are going to destroy me”. Turns out you guys crapped the bed too. A real shame. I was really looking forward to the match up.

    You see, you are on my mind as well. Maybe I’ll go by Colbert’s protest for fear and anger. Did you like that MoveOn woman who got stomped at the Rand Paul meeting? Whose side are you on in that case?

  24. Daniel

    Congrats on #3. It was the third one that pushed me over the edge into insanity.

    I think they should have kicked her in the head. She was the one inciting the confrontation. The MSM is desperately trying to crush Rand Paul. He will win by 10%. I can’t wait to see Bernanke have to be grilled on one day by Ron Paul and on the next by Rand.

    You’ll be happy to know that I will be voting for Toomey next week.

  25. Can I claim your house as my residence? Then I can vote for Toomey. Instead, my vote will be canceled out by some deadbeat dad, an illegal immigrant, or a stoop dweller living in HUD housing, collecting SSI, kicking it in NYC. You’re bothered by 30 blocks – come to this cesspool of state intervention. NYC wrote the book on dependency, gov’t cheese, and broken families.

    NRO is posting another view – a video that shows that woman trying to jam a sign into Rand’s face via the car window before they get her to the ground.

    Thanks for the wishes on #3. My 2 boys push me to insanity every day. The baby will make things interesting.

  26. Daniel

    What do you think of Christie telling everyone to stick The Tunnel up their asses?

    If the Republicans have the guts to pick him for Prez in 2012, you got me back in the fold.

  27. I love it! Ain’t it great when your guy is the Strong Horse? Watch the converts come out of the woodwork.

    Actually, I was eating lunch with a NJ buddy who told me he liked the idea of the tunnel and that the Federal Gov’t was supplying some of the money. I then asked him if he personally would take out a loan to pay for it. How about taking a loan out in the name of his daughter? You can guess the answer. Its easy to spend other people’s money isn’t it?

    I’m breaking this friend down and he is a new believer. He was previously a Dem who now believes in the conservative movement. The “WE ARE BROKE” point goes a long way. He is furious at his home tax bill and the busted schools, the unions, and the mess. These types of people are ‘low hanging fruit’ and are everywhere. Don’t give up on them!

  28. PS. The devil will be in the details. Come Wed the keys of the city will be with the GOP. A very young, new, and conservative GOP. All materialized within a few months. How wonderful is that?!?! Now we will need to start cutting. That will be the test..

    BTW – my pick is on Rubio. If he can win, I think he is a future POTUS.


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