Economics and government are connected at the hip. If your economic model is screwed up then your government will end up being screwed up as well. The Bible talks about this several times, including in Leviticus, Proverbs, and Micah. However, the first time it shows up plainly is in Deuteronomy 25: 15-16 -
You must have accurate and honest weights and measures, so that you may live long in the land the God is giving you. God detests anyone who does these things, anyone who deals dishonestly.
Why is this important? Read the rest of this entry »
(it’ll be worse. Sorry.)
Here’s what bothers me – if (when) Eric deCarbonnel’s and the rest of the contrarian economists are proven right, they will continue to be ignored. How bad does it really need to get before people start to believe that we are in big trouble, that Obama will not be able to save us, that the worth of our money isn’t important, and that government isn’t the answer (but freedom, the market, and personal responsibility are)?
We’re following the same strategies that we followed the last time we were in this economic situation (that would be 1929 by the way). Mises.org hits on the head here:
They have looked at the history of the New Deal and completely misunderstood it, believing the civics-book claptrap about how FDR saved us from the Depression, whereas the fact is that FDR’s theories and policies lengthened and deepened it to the point that the only way out that the Roosevelt administration saw was war.
I found the term from a series of videos at Vimeo (via Coudal), but it seems to fit. In any case, welcome to The New Depression. I have to imagine that this is about what things looked like in 1929.
During the Senate discussions about the impending bailout of the banking system, Ron Paul questioned Bernanke’s authority to create money to purchase bad debt and take a gamble that they can get rid of it later. Bernanke’s response was that the Congress “is given the authority to coin money, and to regulate its value, and they delgated that to us [the Federal Reserve].” (in this video, at the 6:20 mark) Bernanke’s right, but he’s also very, very wrong. Here’s why. Read the rest of this entry »
via Wise Bread
Here’s the gist of it (well, a summary of a summary) – Ron Laszewski has created an economic model based on the Bureau of Economic Analysis’ definition of Peak Debt. When given data from 1925, when peak debt was last reached, Laszewski’s model correctly predicted the crash of 1929 and the subsequence decade long Great Depression. Bad news folks – we hit our peak debt in 2005. It seems to suggest that 2009 will be particularly rough, and the year following even worse.
Here’s my suggestion: don’t take on any more debt, pay off all the debt you can, and figure out how to cut your expenses to the bone. It’ll be much easier if you get to make those decisions under controlled circumstances than have them forced on you later.
Wise Bread is a great source to help get your finances under control.
Just a quick heads up, the banking situation here in the US is not getting any better. In fact, the FDIC just closed it’s eighth bank for the year. Now, that may not seem like many, but consider the banks that have closed:
Bank::FDIC Payout::Uninsured desposits
First Priority::$200 million::$13 million
IndyMac::$4 billion
Hume Bank::$12.5 million::$1.1 million
In all, eleven banks have failed between Feb 2007 and August 2008. To put things in perspective, before Feb 2007 the FDIC hadn’t closed a bank since 2004 (see sources). We’re gonna have big problems here.
Sources
Bank Failures, Should You Be Worried?
Coming Bank Failures
FDIC Bracing for Bank Failures
Now I know it’s getting bad. My favorite technology pundit is writing about the price of gasoline and the breakdown of society. Here’s an excerpt from the discussion in the comments:
During the Depression, when “ordinary decent people just like you and me” numbering in the millions were being utterly killed by the economy and DC was turned into a homeless encampment for war veterans and (ironically) being attacked by the National Guard…it was a time when people were seriously open to radical change. It was a time when the US could have taken an insane swerve towards Communism or national Socialism.
Right now, if I want to visit a friend of mine who lives just an hour’s drive away, I drive over there and see him. If gas went to six bucks a gallon, I’d first do some math and realize that okay, the visit will cost me about forty bucks. And instead of an evening of dinner and conversation and some Wii, I’d stay home instead and iChat him.
THAT is a major shift, and it’d make me re-think my views towards how the country is being run.
Go, therefore, and read the article.