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(Washington Post)   IMF: "Did we say austerity would help Greece? We meant hurt Greece, badly. Sorry for the confusion"   (washingtonpost.com) divider line 106
    More: Obvious, International Monetary Fund, Greece, Greek economy, bond markets, scientific journals, advanced economies  
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8206 clicks; posted to Main » on 04 Jan 2013 at 9:08 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-01-04 10:18:21 AM

NewportBarGuy: I think that's 13,783rd time the Republican Economic Model has been blown out of the water.


Of course it didn't help. They should just keep getting into more and more debt. There are obviously no consequences for a country to have billions and trillion in debt like the US does. We should give everyone in the world $1,000,000 and all our problems would be solved.
 
2013-01-04 10:18:55 AM

whither_apophis: Oh that wasn't their goal? The IMF does that to every other country they deal with, they have it down to an art.


Bears repeating.
 
2013-01-04 10:21:34 AM
Just like everyone else they should have just defaulted, taken the pain for a few years and moved on.

But like idiots they listened to the bankers and now they're economic slaves for the foreseeable future.
 
2013-01-04 10:22:03 AM

Grand_Moff_Joseph: In other words, Krugman was right again?


Well no...

http://krugman.blogs.nytimes.com/2012/05/13/eurodammerung-2/

May 13, 2012,

"Some of us have been talking it over, and here's what we think the end game looks like:

1. Greek euro exit, very possibly next month.

2. Huge withdrawals from Spanish and Italian banks, as depositors try to move their money to Germany.

3a. Maybe, just possibly, de facto controls, with banks forbidden to transfer deposits out of country and limits on cash withdrawals.

3b. Alternatively, or maybe in tandem, huge draws on ECB credit to keep the banks from collapsing.

4a. Germany has a choice. Accept huge indirect public claims on Italy and Spain, plus a drastic revision of strategy - basically, to give Spain in particular any hope you need both guarantees on its debt to hold borrowing costs down and a higher eurozone inflation target to make relative price adjustment possible; or:

4b. End of the euro.

And we're talking about months, not years, for this to play out."
 
2013-01-04 10:29:10 AM
Uhhh, Greece needed to be hurt because they were living above their means... Rainbows and Unicorns for all would not have solved their issues.
 
2013-01-04 10:32:44 AM
TIKIMAN87 Good lord, but you're dumb. I'm guessing the 87 is when you were born, which makes sense.
 
2013-01-04 10:35:04 AM
It's possible that both the Greek system needed significant overhauls and changes and the IMF austerity policies were overly draconian and poorly targeted.
 
2013-01-04 10:35:36 AM

Elzar: . Greece just hasn't lowered their taxes and cut spending far enough


Austerity means spending cuts coupled with (painful) tax increases. It's the tax increases that hurt the economy. And if you're economy is structured to where it's dependent on government spending because economic mobility is stifled, then the spending cuts hurt too.
 
2013-01-04 10:39:46 AM

Red_Fox: Just like everyone else they should have just defaulted, taken the pain for a few years and moved on.

But like idiots they listened to the bankers and now they're economic slaves for the foreseeable future.


Do what Iceland did and tell the bankers to fark themselves.
 
2013-01-04 10:41:11 AM
Irving Maimway
But haven't Fark IndependentsTM been telling us all year that we're going to end up like Greece? I had said you couldn't compare us because unlike Greece we issue our own currency but was told that was not the case at all and I was really confused and uneducated


I know you think you are being cute by calling republicans "fark independents" but there are some of us that really do pride ourselves on independent thought, we kindly ask you to stop using "independent" in a derogatory way. We struggle as it is to get people to think outside of their party lines, we don't need people mocking free thought
 
2013-01-04 10:58:17 AM

jigger: Do what Iceland did and tell the bankers to fark themselves.


Everybody said Iceland was doomed when they did that, but they've recovered better than the vast majority of Europe.  The severity of the problems in Europe and elsewhere are caused in large part by banks refusing to take losses on bad investments, or at the very least, provide a reasonable degree of debt forgiveness to give indebted countries a chance to get their houses in order.
 
2013-01-04 11:08:13 AM
Apparently we're not allowed to call a wall of stupid a wall of stupid anymore according to the Fark Mods.
 
2013-01-04 11:11:42 AM

m1ke: Uhhh, Greece needed to be hurt because they were living above their means... Rainbows and Unicorns for all would not have solved their issues.


Maybe you should research it more. their spending per person was about average for the EU....so they werent spending beyond their means...they just werent collecting enough taxes.
 
2013-01-04 11:22:05 AM

Blink: Dadoody: Here's a little secret: THERE NEVER WAS REAL AUSTERITY IN GREECE.

There is a flawed assumption in your reasoning. Pretty much everything you wrote boils down to "spend within your means" -- which makes perfect sense. But you assume that private companies having more money equates to benefits for all (cheaper/better projects).

There's been 100's (1000's?) of examples throughout history (1) of private companies that don't behave well, hurt the environment, mistreat their workers (child labor, anyone?), intentionally lie, price gouge, monopolize, etc, etc, etc. The notion that capitalism will eventually weed out these many many bad apples is heinously naive.

Government's job (if done correctly) is to level the playing field. (2) Austerity will result in the playing field being far more uneven. (3) I'm not saying that the solution is to continue government overspending -- as you said, that doesn't make sense -- but we need to remove ourselves from the notion that putting money in the hands of the richest corporations will somehow solve all our problems. It won't.

(4) What really needs to happen in government is that spending related to leveling the playing field needs to either stay the same or increase (education, safety regulations, scientific research, labor laws, etc). Everything else should be cut (corporate welfare, tax breaks for the wealthy, etc). Rich people and rich corporations don't need government assistance -- they can and will take care of themselves. The fact that soooo much of our governmental spending is tied to them is really the core of nearly every problem we're experiencing right now.


While I am an engineer, an analyzer and developer of system interactions, and therefore not well educated on financial matters (an MBA will be pursued eventually I think, though), here's my thoughts based on your comments...

(1) society's acceptance of these conditions has changed drastically - it took laws to get it going (spurred by the common people's rejection of unfettered capitalism), and laws to keep reminding some people (corporations are run by people) of their importance... but that work is done. Nobody (sane) is suggesting unfettered capitalism a la the 1890s, that's a straw man. Capitalism doesn't weed out these attempts, current established societal norms (backed by laws) now do. None of that would go away.

(2) We as a society do the levelling, directing the government what to provide support for or not. Therefore, how will austerity result in the field being more unlevel? How will people/corporations somehow take advantage of less government burden to oppress and monopolize workers or the economy? Why will our societal rejection of harsh worker treatment be removed?

(3) Money in the hands of the richest corporations isn't the issue, it's allowing the smaller, growing and innovating corporations to keep more of their money to grow and innovate more with. As you said, the rich can pay their taxes. They are, also, the minority. The small businesses that provide unique products and skilled services to those large, rich corporations are what need the boost to grow our economy, and who would benefit most from austerity measures from what I can tell, through less tax burden on them.

(4) Agree nearly completely... don't have time to type more on this unfortunately, maybe later.

/sorry, talk amongst yourselves, I'll give you a topic:
 
2013-01-04 11:25:25 AM

Greywar: m1ke: Uhhh, Greece needed to be hurt because they were living above their means... Rainbows and Unicorns for all would not have solved their issues.

Maybe you should research it more. their spending per person was about average for the EU....so they werent spending beyond their means...they just werent collecting enough taxes.


If they cannot afford to spend per EU average then they were spending beyond their means. An average means some spend more some spend less. Greece should be on the less side of that.
 
2013-01-04 11:26:48 AM

Grand_Moff_Joseph: In other words, Krugman was right again?



Define right:

UNEMPLOYMENT UP TO 7.8%
DEBT HITS $16,432,706,000,000.00
 
2013-01-04 11:35:19 AM
You mean withdrawing medical care from a sick patient doesn't work?
 
2013-01-04 11:41:37 AM

Carth: hasty ambush: NewportBarGuy: I think that's 13,783rd time the Republican Economic Model has been blown out of the water.

Yup, because massive government spending has been so successful in Japan. Well if by successful you mean continuing recessions and a National debt exceeding 200% of their GDP then yes successful.

You mean Japan the country that recently topped the healthiest country list with the highest life expectancy, Japan the third largest economy in the world with an unemployment rate of 4.1%... that Japan?


Yes. The only reason unemployment is low is they have a shrinking labor pool.

The Japan Center for Economic Research projected GDP to flat-line for the next 40 years.

japan is currently facing a myriad of intractable and unprecedented challenges -- from a demographic crisis to border conflicts to a strong yen. The population is aging quickly. The energy sector is still reeling from the March 2011 Tohoku earthquake, tsunami and nuclear disaster. The younger generation, having grown up amid deflation and economic stagnation, is loath to take career risks. Students are studying abroad in fewer numbers. Tepid economic growth, combined with massive public sector debt and continued deficits, will likely produce a fiscal crisis in the near future -- despite the fact that more than 90% of the debt is held domestically. Gross public debt to GDP now stands at nearly 250%.

Link
 
2013-01-04 11:43:46 AM

hasty ambush: Grand_Moff_Joseph: In other words, Krugman was right again?


Define right:

UNEMPLOYMENT UP TO 7.8%
DEBT HITS $16,432,706,000,000.00


t3.gstatic.com

t1.gstatic.com

t1.gstatic.com
 
2013-01-04 11:54:33 AM
NewportBarGuy: "I think that's 13,783rd time the Republican Economic Model has been blown out of the water."

Supply-side policies cannot fail. They can only *be* failed.
 
2013-01-04 11:58:42 AM
mrlewish: "You mean withdrawing medical care from a sick patient doesn't work?"

Well, it works for the lenders who get a little more of their bad bet paid off before the guy dies.
I mean, extending *more* debt so they guy can live and maybe pay it all back?
That means expenditures on this quarter's numbers, acting as a drag on my bonus, in return for revenue *years* down the line, after I've long since left that position and only makes some other random yahoo look good if it pays off. Why the hell would I sign off on that?
 
2013-01-04 12:02:34 PM

Dadoody: Conclusion

Public austerity is a necessary condition for private flourishing and a rapid recovery. The problem of Europe (and the United States) is not too much but too little austerity - or its complete absence. A fall of GDP can be an indicator that the necessary and healthy restructuring of the economy is underway.


Unfortunately your x + y calculation and anecdotes of austerity don't take into account that these are real life breathing people who have to eat, make rent or house payments, pay for healthcare and necessities. No people are going to allow those same bureaucrats and politicians that you rail against to impoverish them while they bring the governments financial house in order. They will change the government through their votes, they will riot, they will revolt.

Austerity cause pain for the poor and reduces the middle class. If you are rich then surviving austerity will allow you to put your remaining capital to work in a boom economy, if you are poor you starve, if you are middle class you become poor.
 
2013-01-04 12:15:59 PM

mrlewish: You mean withdrawing medical care from a sick patient doesn't work?


Depends on your goal. If you are a health person and don't want to pay for the sick person's care out of your pocked then withdrawing medical care and the cost incurred does work. Sadly the sick person dies, but hey fark them you got yours.
 
2013-01-04 12:18:08 PM

stratagos: I'm still unclear where the Fark Economist Posse thinks Greece should have gotten funds - they were (and are) spending more than they take in. Is the magical Euro fairy just going to sprinkle money into the treasury?

Of *course* the economy slows when you take a huge chunk of money out of it, duh.


Exactly. That's what really nailed Greece--their economy was no longer being propped up by outside money. It was obvious it was going to be horribly painful, the austerity measures were about trying to control the crash.

whither_apophis: Oh that wasn't their goal? The IMF does that to every other country they deal with, they have it down to an art.


By the time the IMF gets involved a country is really messed up--the result is inevitably going to be bad for the country and the IMF shouldn't be blamed for that. The IMFs job is to try to bring things down in a controlled fashion so they don't fall any harder than is necessary.
 
2013-01-04 12:22:52 PM

hasty ambush: Carth: hasty ambush: NewportBarGuy: I think that's 13,783rd time the Republican Economic Model has been blown out of the water.

Yup, because massive government spending has been so successful in Japan. Well if by successful you mean continuing recessions and a National debt exceeding 200% of their GDP then yes successful.

You mean Japan the country that recently topped the healthiest country list with the highest life expectancy, Japan the third largest economy in the world with an unemployment rate of 4.1%... that Japan?

Yes. The only reason unemployment is low is they have a shrinking labor pool.

The Japan Center for Economic Research projected GDP to flat-line for the next 40 years.

japan is currently facing a myriad of intractable and unprecedented challenges -- from a demographic crisis to border conflicts to a strong yen. The population is aging quickly. The energy sector is still reeling from the March 2011 Tohoku earthquake, tsunami and nuclear disaster. The younger generation, having grown up amid deflation and economic stagnation, is loath to take career risks. Students are studying abroad in fewer numbers. Tepid economic growth, combined with massive public sector debt and continued deficits, will likely produce a fiscal crisis in the near future -- despite the fact that more than 90% of the debt is held domestically. Gross public debt to GDP now stands at nearly 250%.

Link


So with a shrinking labor pool they are expected to maintain their GDP meaning worker productivity and median income will rise while unemployment will remain low. Since they aren't studying as much in the US they won't be burdened with $200,000 in student loan debt and will still enjoy longer life expectancy and quality of life.... Yea, i'm sure Japanese citizens are really worried about their debt to GDP ratio.
 
2013-01-04 12:44:37 PM

wingnut396: Cdr.Murdock: So, while the industrious & notoriously penny pinching Germans (much to their credit ha ha a pun, Germans don't like to buy things on credit)

You know who else is stereotyped as being notoriously penny pinching...


It's TRUE! We tend to hate others because we see something of ourselves in them that makes us uneasy.

I use "ourselves" out of context. I'm not of Germanic decent. My people got shuffled around by the Nazi's & the Soviets during the last WW, and by the English since the middle ages....
 
2013-01-04 01:11:25 PM

Slaves2Darkness: Unfortunately your x + y calculation and anecdotes of austerity don't take into account that these are real life breathing people


Economics works better with caricatures of people, not actual people.
 
2013-01-04 01:40:22 PM
Iceland

\That is all
\\Fark the Private Central Banking Cartel
 
2013-01-04 02:16:45 PM

doczoidberg: Elzar: Typical liberal farking lies  - austerity is actually working in Greece, but no one wants to see it through properly to its happy ending. A little financial pain and the libs start whining... Greece just hasn't lowered their taxes and cut spending far enough... I mean have you actually seen how many restaraunts and coffee shops they have over there? Half of the people unemployed are on the doles because they like to sip their lattes in some trendy bistro rather then put their back into a little honest work.


Libs, libs, ibs, libs....


Meanwhile down on Wall St. The Masters of the Universe crunch numbers tirelessly and really earn their 6 figure salaries and 7-8 figure bonuses that are siphoned from our investments and accounts in fees and on every single financial transaction made.
 
2013-01-04 02:25:49 PM

Carth: So with a shrinking labor pool they are expected to maintain their GDP meaning worker productivity and median income will rise while unemployment will remain low.


Gross, yes.
Net, no.

They have to pay for their exploding golden population somehow.
 
2013-01-04 03:05:19 PM
Right wingers ALWAYS trot out an argument which deep down has a major fallacy due to an aspect of the argument they conveniently forget.

"A government budget is just like a household budget, as each entity only has so much money and will get into trouble if they spend more than they earn. Therefore austerity and budget cuts are essential." [my quote]

This is like comparing apples and oranges. You try, as an individual, to print cash money and see how far you get before the law catches up with and imprisons you. However, governments and central banks have the power and authority to create money. This ability is often referred to as "quantitative easing." http://en.wikipedia.org/wiki/Quantitative_easing

///Funny how right-wingers ignore the one piece of evidence which utterly demolishes their argument on this.

///Not the first time they have argued in this fashion either

///Not by a LONG shot!
 
2013-01-04 03:37:22 PM

Dadoody: Public austerity is a necessary condition for private flourishing and a rapid recovery. The problem of Europe (and the United States) is not too much but too little austerity - or its complete absence. A fall of GDP can be an indicator that the necessary and healthy restructuring of the economy is underway.


How come all evidence seems to prove the contrary and proves to be nothing but a disappointment?
 
2013-01-04 03:38:25 PM
So, if you don't take care of your people, they become non-productive. If you don't water your crops and livestock they fail and die. AND the capitalistic wet dream of a zero-maintenance cash cow is only a dream.

/The IMF should spend more time playing Farmville.
 
2013-01-04 03:41:10 PM

FlippityFlap: TIKIMAN87 Good lord, but you're dumb. I'm guessing the 87 is when you were born, which makes sense.


Hey, I was born in 1987 too and even I don't believe in that BS.

/give us some credit here
 
2013-01-04 03:55:59 PM
>>>Thinking that Greece won't be farked either way

Dohohoho.

Their model was never sustainable. You'll just move the pain around depending on what strategy you use.
 
2013-01-04 04:23:29 PM

Dadoody: Public austerity is a necessary condition for private flourishing and a rapid recovery.


Human well being is more important than a spreadsheet cell.
 
2013-01-04 04:26:30 PM

flynn80: Iceland

\That is all
\\Fark the Private Central Banking Cartel


Yep. All this suffering over funny money that, if it all vanished tomorrow, would have no impact on the actual material possessions or resources available to the planet. It's like all of humanity has psyched itself out into thinking we're somehow reliant on play currency.
 
2013-01-04 04:28:02 PM

SacriliciousBeerSwiller: flynn80: Iceland

\That is all
\\Fark the Private Central Banking Cartel

Yep. All this suffering over funny money that, if it all vanished tomorrow, would have no impact on the actual material possessions or resources available to the planet. It's like all of humanity has psyched itself out into thinking we're somehow reliant on play currency.


(of course, to fix this, everyone would have to pull their head out of their ass at the same time)
(debt should be reset/forgiven in one fell swoop...which is what ancient societies did all the time)
 
2013-01-04 05:30:15 PM

hasty ambush: Greywar: m1ke: Uhhh, Greece needed to be hurt because they were living above their means... Rainbows and Unicorns for all would not have solved their issues.

Maybe you should research it more. their spending per person was about average for the EU....so they werent spending beyond their means...they just werent collecting enough taxes.

If they cannot afford to spend per EU average then they were spending beyond their means. An average means some spend more some spend less. Greece should be on the less side of that.


Your seeming ability to comment as if you are an authority, while displaying zero understanding of the issue, is pretty damn funny.
 
2013-01-04 05:33:11 PM

Greywar: m1ke: Uhhh, Greece needed to be hurt because they were living above their means... Rainbows and Unicorns for all would not have solved their issues.

Maybe you should research it more. their spending per person was about average for the EU....so they werent spending beyond their means...they just werent collecting enough taxes.


Umm...doesn't that mean they were spending beyond their means?
 
2013-01-04 05:48:57 PM

hasty ambush: NewportBarGuy: I think that's 13,783rd time the Republican Economic Model has been blown out of the water.

Yup, because massive government spending has been so successful in Japan. Well if by successful you mean continuing recessions and a National debt exceeding 200% of their GDP then yes successful.


I thought I already educated you about this in another thread. Go away.
 
2013-01-04 05:59:05 PM

Gdalescrboz: Irving Maimway
But haven't Fark IndependentsTM been telling us all year that we're going to end up like Greece? I had said you couldn't compare us because unlike Greece we issue our own currency but was told that was not the case at all and I was really confused and uneducated

I know you think you are being cute by calling republicans "fark independents" but there are some of us that really do pride ourselves on independent thought, we kindly ask you to stop using "independent" in a derogatory way. We struggle as it is to get people to think outside of their party lines, we don't need people mocking free thought


Been off the politics tab for a while, huh?
 
2013-01-04 06:00:46 PM

Gdalescrboz: Irving Maimway
But haven't Fark IndependentsTM been telling us all year that we're going to end up like Greece? I had said you couldn't compare us because unlike Greece we issue our own currency but was told that was not the case at all and I was really confused and uneducated

I know you think you are being cute by calling republicans "fark independents" but there are some of us that really do pride ourselves on independent thought, we kindly ask you to stop using "independent" in a derogatory way. We struggle as it is to get people to think outside of their party lines, we don't need people mocking free thought


I know I feel sorry for you guys but its much too late. Disaffected Republicans are joining your ranks like flies. Youre going to have to find your self a new party. This one has been crashed. Sorry for your loss.
 
2013-01-04 11:22:47 PM

stratagos: I'm still unclear where the Fark Economist Posse thinks Greece should have gotten funds - they were (and are) spending more than they take in. Is the magical Euro fairy just going to sprinkle money into the treasury?

Of *course* the economy slows when you take a huge chunk of money out of it, duh. Same thing will happen in the US eventually - whether spending is tightened / taxes increased now or in fifty years, there comes a point where you can't keep spending an extra trillion bucks a year.

Difference of course being people will still loan us cash, because we're still good for it - and people won't loan to Greece, because they're not

The theory is that we can just create currency to prop up a receding economy and then soak the currency back up later on, after the economy is thriving. The problem with that theory is that it only works halfway. We can certainly stimulate an economy by injecting currency, we all know this.

The second half never worked, though. There is no will to remove the currency from the economy.

The propensity is for politicians and money masters to stimulate and stimulate. This is why we are so far in debt. Because there is no political will to stop spending.

What the math says is that it works, but the math ignores the fact that markets are driven by humans, and humans are not driven by mathematical models.

The economy is far more complicated than this model takes into account. (no pun intended)
 
2013-01-05 01:13:52 AM

thrgd456: stratagos: I'm still unclear where the Fark Economist Posse thinks Greece should have gotten funds - they were (and are) spending more than they take in. Is the magical Euro fairy just going to sprinkle money into the treasury?

Of *course* the economy slows when you take a huge chunk of money out of it, duh. Same thing will happen in the US eventually - whether spending is tightened / taxes increased now or in fifty years, there comes a point where you can't keep spending an extra trillion bucks a year.

Difference of course being people will still loan us cash, because we're still good for it - and people won't loan to Greece, because they're not
The theory is that we can just create currency to prop up a receding economy and then soak the currency back up later on, after the economy is thriving. The problem with that theory is that it only works halfway. We can certainly stimulate an economy by injecting currency, we all know this.

The second half never worked, though. There is no will to remove the currency from the economy.

The propensity is for politicians and money masters to stimulate and stimulate. This is why we are so far in debt. Because there is no political will to stop spending.

What the math says is that it works, but the math ignores the fact that markets are driven by humans, and humans are not driven by mathematical models.

The economy is far more complicated than this model takes into account. (no pun intended)


We're so far in debt because Bush put trillions on the credit card while cutting taxes at the same time. CBO projection when Clinton's second term was finishing up was that the debt would be retired by the end of the decade. Projections are rarely right that far out, but at least Clinton had the trajectory going in the right direction.
 
2013-01-05 01:33:53 AM
I didn't understand any of that...is this kind of like the laffer curve but with austerity?
 
2013-01-05 06:35:38 AM
The United States Of Delusion

The irony is that clinging to delusion rather than face the necessity of deep cuts in borrow-and-squander budgets will lead to the involuntary reset of the entire system, depriving every vested interest of their share of the swag.

We are living in the United States of Delusion. The delusion has four key sources:
1. We can borrow-print-and-spend our way to prosperity when debt and fiscal/monetary stimulus are yielding ever more marginal returns:

The Dangerous Blindspots of Clueless Keynesians (January 2, 2013) The Keynesian model is a Cargo Cult, mired in a distant, romanticized past where Central Planning, intervention and manipulation were solutions rather than the root of the economy's fatal disease.

2. The risks of this fatal fiscal delusion are masked by a complicit Mainstream Media and a perception-management, manipulation-dependent Central State and Federal Reserve.

Spoiled Teenager Syndrome (January 3, 2013) Masking risk, cost and consequence creates an illusory world that eventually crashes on the unforgiving rocks of reality.

Is masking risk, cost and consequence a strategy that leads to success? No; it is a pathway to repeated catastrophic failure. What is the Central Planning strategy being pursued by our Central State and the Federal Reserve? Masking risk, cost and consequence.
3. The true costs of the Neoliberal Cartel State are cloaked, massaged and distorted by bogus budgets and wildly unrealistic projections.

Sickcare Will Bankrupt the Nation--And Soon (March 21, 2011)

Sickcare is fundamentally a system of interlinked politically powerful cartels.Insiders who refuse to speak on the record for fear of antagonizing the powers that be, exorbitant price increases, confidential agreements and a tug-of-war between warring tribes. Is this the Mafia we're talking about?
From the point of view of investigative journalism, it could al
so describe America's health care industry. Stated truthfully, the industry is a highly profitable and politically powerful group of companies which operate in cartel-like fashion: that is, they use their clout to limit competition and establish highly profitable pricing.
Western Pennsylvania has about 140 MRI machines, while the 32 million residents of Canada share 151 MRI machines. And the U.S. machines are getting a lot of use: the number of CT and MRI scans (scans other than old-fashioned X rays) tripled from 85 to 234 per thousand insured people since 1999.
While proponents are quick to note that scans are cheaper than the alternative diagnostic procedures, one firm's research found that a doctor who owns his own machine is four times as likely to order a scan as a doctor who doesn't.
As if that wasn't enough to highlight the self-serving nature of "fee for service" cartels, MRI scanner manufacturer General Electric waged a two-year lobbying campaign to roll back cuts in Medicare reimbursements for scans. While the effort proved unsuccessful due to the intense political pressure to reduce soaring Medicare costs, critics observed that providers simply made up the reduced reimbursements by increasing the number of tests administered.
The only solution that actually addresses the systemic problem is to get rid of the entire fee-for-service structure and break up the cartels.Healthcare must be reconnected to diet, nutrition, fitness, lifestyle and community, and to education and emotional well-being.
If You Want Solutions, First Pin Down Where the Money Is Going (May 23, 2011)

If you really want a solution, then start by pinning down exactly who's getting all the money. Then find out if they're accountable for how it's spent. Nobody wants to admit the reality: our nation is dominated by cartels and fiefdoms serving entrenched constituencies whose budgets are simply not sustainable.Please consider this chart of the University of California system's employment of professors and administration. If we extrapolate the lines, then soon there will be more highly-compensated seat-warmers in administration than there will be professors teaching in the classrooms.

www.oftwominds.com

It seems that some members of the Education Cartel and Fiefdom came to do good but stayed to do well--as in triple the national median earnings of full-time workers:
(Source: www.championnews.net/ftf_teacher.php?tid=78195&year=2010)
Salary: $172,163
Position: High School Teacher
Full/Part Time: Fulltime
Percent Time Employed: 100%
Assignment: Physics (Grades 9-12 Only)
Years Teaching: 30.5
Degree: Master's
Salary: $163,526
Position: High School Teacher
Full/Part Time: Fulltime
Percent Time Employed: 100%
Assignment: Driver Education
Years Teaching: 32
Degree: Master's
And how about those pension and retirement costs? We have an answer for New York City, and it is sobering. NYC budget - pension costs skyrocketing:
Over the past decade, New York City hasn't really grown its population but has increased expenses from $28.8 billion to $49.7 billion. The vast majority of that $20.9 billion increase has been in the form of more dollars to fewer employees. Pension costs are killing us most: this has grown from $1.3 billion in 2002 to $8.3 billion in 2012.
That's a 638% increase in pension costs in one decade, while the city budget leaped 72% despite a stable population. The share of the budget devoted to pensions jumped from 4.5% in 2002 to 16.7% in 2012.
I have addressed these issues many times, for example in The Devolution of the Consumer Economy, Part II: Rising Costs, Declining Wages (April 8, 2011) and Complexity: Bureaucratic (Death Spiral) and Self-Organizing (Sustainable) (February 17, 2011).

I have highlighted the Education and Sickcare Cartels, but there are many others with exploding costs and zero alignment with accountability or performance. The Department of Defense, famous for routinely losing track of hundreds of billions of dollars (and does anyone lose their job over that gross mismanagement? No, everyone gets a promotion and raise for doing such a swell job), manages to triple the cost of every weapons system, regardless of the actual performance benefits (increasingly marginal, perhaps?)

The new F-35 fighter aircraft cost $150 million each, once we add in the overruns, replacing the Super Hornet F-18 E/F that cost $57 million each. (Once lifetime costs are included, the F-35 will cost upwards of $300 million each.) Is the F-35 really three times better than the F-18? Which would a commander facing 100 bogeys rather have, 30 F-35s or 90 F-18s? (I suspect they'd take the 90 F-18s, as long as they were loaded with the latest Sidewinder and long-range air-to-air missiles. As has been famously pointed out, at some point quantity becomes a winning quality.)

Will 100 F-35s prevail over 1,000 dirt-cheap drones? How about 10,000 drones? If the future of warfare is increasingly powerful unmanned networked drones (and it clearly is), why are we spending $1 trillion+ on hyper-costly aircraft that are essentially designed for a previous era?

4. The consequence of substituting delusion for reality is ignored or hidden from view, with the complicity of all the self-serving, entrenched vested-interests.

Is there any evidence that continuing to borrow and squander money on diminishing returns will magically cause a sudden return to productive investment? Of course there isn't; the magical belief that doing more of what has failed will eventually evade causality is delusional.

Does anyone seriously think that counterproductive "investments" in diminishing returns will "grow our way out of debt"? Of course not; everyone with a vested interest in the crumbling Status Quo is terrified that their share of the borrowed/printed swag will be cut. So the only alternative is to cling to a delusional state where belief in the impossible replaces a realistic assessment of risk, cost and consequence.

The irony is that this strategy of clinging to delusion rather than face the necessity of deep cuts in borrow-and-squander budgets will lead to the involuntary reset of the entire system, depriving every vested interest of their share of the swag. Is delusion a sustainable state? No. Thus we can confidently predict that causality, factuality and karma will eventually sweep aside delusion and all those who cling to it.

http://charleshughsmith.blogspot.com/2013/01/the-united-states-of-del u sion.html
 
2013-01-05 06:45:11 AM

NewportBarGuy: I think that's 13,783rd time the Republican Economic Model has been blown out of the water.


No, it's the 13,783rd time that idiots in the press (and repeated here) don't understand the purpose of cutting government spending and/or lie about it. Of course it's going to throw people out of work, but those people weren't producing anything for the economy in the first place. This ignorance goes hand-in-hand with not understanding that GNP and GDP are horrible (and misleading) ways of measuring an economy.
 
2013-01-05 06:50:20 AM
Anyways, all those articles aside, we're living in a time of delusion. We really are.

The country continues to spend massive massive amounts that currently never look like it'll ever be paid back, our debt to GDP ratio is now about 103%, by far the highest debt we've ever had during peace time, and will probably never get paid back except through a complete system reset, probably involving massive conflicts and war.

Food prices are spiking this year due to drought; however, remember that we've been at a food deficit the last 6 of 11 years. Its like watching a train wreck in slow motion, where anyone with half a brain can see it coming except for the naive retards watching from the sideline who are completely disconnected with reality. Many of them people who post here.
 
2013-01-05 06:52:57 AM

Grand_Moff_Joseph: In other words, Krugman was right again?


As were all the Austrians. Where Krugman was wrong, and the Austrians correct, was that Krugman didn't see, for the last few decades, that this would have to be done, eventually, or that, if it had been done decades ago, it would have been a lot less painful. He didn't see the falling brick until it landed on his head. The Austrians have been watching it fall for a long time, and Krugman's been laughing at them and calling them ignorant. There's just no way to look at the situation honestly and say, "Krugman was right."
 
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