Can’t stand to see FAIL? Let’s approve another $290 billion of short term rescue instead of a systemic fix
OUR OVER LEVERAGED ECONOMY
“Any healthy system needs a way to correct error and remove waste. Nature has extinction, the economy has loss, bankruptcy, liquidation. Interfering in this process lengthens feedback loops. Error and waste are allowed to accumulate, and you ultimately get a massive collapse.
Capitalism is primarily attacked by two groups: utopians who wish to impose a more “compassionate” system, and political capitalists who want to enjoy the fruits of success without bearing the pain of failure. They use the coercion of the state to gain privileges, at the expense of everyone else.
As a country we’ve become less tolerant of economic failure. The result has been a series of interventions, such as meddling in the credit markets, promoting homeownership and creating a variety of safety nets for investors. Each crisis leads to an even greater crisis. The solution is always greater doses of intervention. So the system becomes increasingly unstable. The interventionists never see the bust coming, then blame it on “capitalism.”
-Kevin Duffy, Bearing Asset Management. (highlights are SchizoAmerica’s)
What has Congress SNUCK BY US this time?
A $290 billion increase in the federal debt ceiling narrowly cleared Congress on Thursday, giving Treasury just enough leeway to pay the government’s bills into February and setting the stage for a showdown over fiscal policy early next year.
Senate Republicans insisted that 60 votes be required for passage and then held back their own members in order to force as many Democrats as possible to walk the plank on what has never been a popular or easily explained decision back home.
The same issue returns with a vengeance Jan. 20th when senators will be asked to vote on a still larger, long-term debt increase within days of President Barack Obama’s new budget and State of the Union address.
Treasury’s daily statements this week indicate it is still about $65 billion under its current $12.1 trillion ceiling, and conservatives argued that special measures could be invoked still to avert default over New Year’s. But with Congress leaving for the holidays, Senate Banking Committee Chairman Chris Dodd (D-Conn.) said that failure to act would have been “catastrophic” for the U.S. internationally. And Senate Finance Committee Chairman Max Baucus (D-Mont.) said that payments to Social Security recipients were also at risk.
“The bottom line is we have no choice,” Baucus told his colleagues. “We have to approve it.”
So 2010 begins, much farther down the rabbit hole…
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