Where is the US economy headed?

http://www.ncpa.org/sub/dpd/index.php?Article_ID=19018&utm_source=newsletter&utm_medium=email&utm_campaign=DPD
FINANCIAL CRISIS: LESSONS LEARNED
The federal government responded aggressively -- at a huge cost -- to the financial crisis that began in the fall of 2008, says Laurence J. Kotlikoff, a professor of economics at Boston University and a senior fellow with the National Center for Policy Analysis. But nearly two years later little progress has been seen in the country's economic health.

In his forthcoming book, "Jimmy Stewart Is Dead: Ending the World's Ongoing Financial Plague with Limited Purpose Banking," Kotlikoff discusses the problems with the explicit and implicit guarantees the federal government has made:

* Around $12.5 trillion has been pledged by the federal government ($2.5 trillion in direct expenditures and roughly $10 trillion in contingent commitments) to keep the financial sector afloat.

* The fiscal gap in the United States (the difference between the government's official debt plus its discretionary spending and the amount of taxes current and future citizens will pay) is currently estimated by Jagadeesh Gokhale of the Cato Institute and Kent Smetters of the University of Pennsylvania at $77 trillion.

* This is more than five times the United States' present gross domestic product.

However, the U.S. economy is still in trouble and people are still losing jobs. There is increasing concern that the Bush-Obama economic rescue effort has failed and will instead spell massive tax hikes, hyperinflation and high interest rates.

The U.S. economy is down because distrust is high, says Kotlikoff. The underlying cause of crises in our financial system is not people taking risks. It is people risking other people's money without their knowledge, understanding and consent -- in investments that are backed by implicit government guarantees. In the latest crisis, bankers invested depositors' and other creditors' money in risky instruments, including collateralized debt obligations, many of which were, themselves, invested in fundamentally fraudulent securities. When the investments failed, financial institutions and corporations that were too large to fail were propped up, bailed out or bought out by the federal government.

The way to avoid these recurring crises and restore trust is to return the financial system to its principal function: bringing together suppliers and demanders of funds. This could be done by requiring all financial corporations, including insurance companies, to adopt the pass-through model of asset ownership used by mutual funds.

This would eliminate the need for government guarantees and a host of regulatory agencies. The federal government would create transparency by certifying and disclosing all the financial statements in all financial securities purchased by the mutual funds and also by arranging for independent ratings and appraisals of these securities. It would not tell anyone how much they could borrow or how much risk they could take. Individuals would decide what mutual funds to buy, but they would do so knowing, to the maximum extent possible, what it is they are buying.

Source: Laurence J. Kotlikoff, "Financial Crisis: Lessons Learned," National Center for Policy Analysis, Brief Analysis No. 693, February 22, 2010.

Three of Obama's mentors in Chicago were trained by Saul Alinsky. Obama was hired in 1986 by the Alinsky team to organize residents on the South Side. The proposed solution to every problem on the South Side was distribution of government funds.

According to Alinsky:

Radicals should be "political relativists." They should take an agnostic view of means and ends;

The radical is not a reformer of the system but its would-be destroyer;

The radical is building his own kingdom, a kingdom of heaven on earth;

The revolutionary’s purpose is to undermine the system by taking from the HAVES and giving it to the HAVENOTS and then see what happens;

We should not forget to acknowledge the very first radical known to man who rebelled against the establishment and did it so effectively that he at least won his own kingdom"Lucifer;

We are not virtuous by not wanting power. We are really cowards for not wanting power, because power is good and powerlessness is evil;

The most basic principle for radicals is lie to opponents and disarm them by pretending to be moderates and liberals;

"The issue is never the issue. The issue is always the revolution."The stated cause is never the real cause, but only an occasion to advance the real cause which is accumulation of power to make the revolution;

The standard of the revolution is democracy--a democracy which upends all social hierarchies, including those based on merit;

Alinsky built his initial power base among the underclass and the urban poor by calling to make the last ones first and the first ones also last ones.

Good evening to yall. There really is no need to "scream," Okie, with bold and red posts. I may be stupid but I am not visually impaired. Leave that **** to Ican.

I am curious, Okie, as to what - if anything - you think the government should do. What would be the expected consequence of doing "something." What would be the outcome of doing "nothing."

Thank yall for thinking about this.

The best the government can do under the circumstances is to muddle along with the current losers in office, until a new group of people can be elected.

What we really need ultimately to help fix our problems is a new group of people in Congress and the administration that believe in freedom, liberty, and capitalism

We must pass a public option so ican can get the mental health care he needs.

Radicals should be political relativists. They should take an agnostic view of means and ends;
The radical is not a reformer of the system but its would-be destroyer;
The radical is building his own kingdom, a kingdom of heaven on earth;
The revolutionary’s purpose is to undermine the system by taking from the haves and giving it to the have-nots, and then see what happens;
The most basic principle for radicals is lie to opponents and disarm them by pretending to be moderates and liberals;
The radical organizer does not have a fixed truth"truth to him is relative and changing; everything to him is relative and changing; He is a political relativist.