Subprime Nation

PITBOSS · 01-16-2008, 12:27 PM

Good Article on the financial mess our country is in.

http://buchanan.org/blog/?p=919

by Patrick J. Buchanan

Since it began to give credit ratings to nations in 1917, Moody’s has rated the United States triple-A. U.S. Treasury bonds have been seen as the most secure investment on earth. When crises erupt, nervous money seeks out the world’s great safe harbor, the United States. That reputation is now in peril.

Last week, Moody’s warned that if the United States fails to rein in the soaring cost of Social Security, Medicare and Medicaid, the nation’s credit rating will be down-graded within a decade.

Our political parties seem oblivious. Republicans, save Ron Paul, are all promising to expand the U.S. military and maintain all of our worldwide commitments to defend and subsidize scores of nations.

Democrats, with entitlement costs drowning the federal budget in red ink, are proposing a new entitlement – universal health coverage for the near 50 million who do not have it – another magnet for illegal aliens. Moody’s is telling America it needs a time of austerity, while the U.S. government is behaving like the governments we used to bail out.

California has already hit the wall. With an economy as large as a G-8 nation, the Golden State is looking at a $14 billion deficit in 2009 and a $3 billion shortfall in 2008. Gov. Schwarzenegger has called for slashing prison staff by 6,000, including 2,000 guards, early release of 22,000 inmates, closing four dozen state parks and a 10 percent across-the-board cut in all state agencies. The Democratic legislature is demanding tax hikes, which would drive more taxpayers back over the mountains whence their fathers came.

Meanwhile, Washington drifts mindlessly toward the maelstrom. With the dollar sinking, oil surging to $100 a barrel, the Dow having its worst January in memory, foreclosures mounting, credit card debt going rotten, and consumers and businesses unable or unwilling to borrow, we appear headed into recession.

If so, tax revenue will fall and spending on unemployment will surge. The price of the stimulus packages both parties are preparing will further add to the deficit and further imperil the U.S. credit rating. This all comes in the year that the first of the baby boomers, born in 1946, reach early retirement and eligibility for Social Security.

To stave off recession, the Fed appears anxious to slash interest rates another half-point, if not more. That will further weaken the dollar and raise the costs of the imports to which we have become addicted. While all this is bad news for the Republicans, it is worse news for the republic. As we save nothing, we must borrow both to pay for the imported oil and foreign manufactures upon which we have become dependent.

We are thus in the position of having to borrow from Europe to defend Europe, of having to borrow from China and Japan to defend Chinese and Japanese access to Gulf oil, and of having to borrow from Arab emirs, sultans and monarchs to make Iraq safe for democracy.

We borrow from the nations we defend so that we may continue to defend them. To question this is an unpardonable heresy called “isolationism.”

And the chickens of globalism are coming home to roost.

We let Europe to get away with imposing value-added taxes averaging 15 percent on our exports to them, while they rebate that value-added tax on their exports to us. Thus, the euro has almost doubled in value against the dollar in the Bush years, as NATO Europe begins to bail out on Iraq and Afghanistan.

We sat still as Japan protected her markets and dumped high quality goods into ours and China undervalued its currency to suck jobs, technology and factories out of the United States. Now, China and Japan have $2 trillion in cash reserves. The Arabs have an equal amount of petrodollars. Both are headed here to spend their depreciating dollars snapping up U.S. assets – banks, ports, highways, defense contractors.

America, to pay her bills, has begun to sell herself to the world.

Its balance sheet gutted by the subprime mortgage crisis, Citicorp got a $7.5 billion injection from Abu Dhabi and is now fishing for $1 billion from Kuwait and $9 billion from China. Beijing has put $5 billion into Morgan Stanley and bought heavily into Barclays Bank.

Merrill-Lynch, ravaged by subprime mortgage losses, sold part of itself to Singapore for $7.5 billion and is seeking another $3 billion to $4 billion from the Arabs. Swiss-based UBS, taking a near $15 billion write-down in subprime mortgages, has gotten an infusion of $10 billion from Singapore.

Bain Capital is partnering with China’s Huawei Technologies in a buyout of 3Com, the U.S. company that provides the technology that protects Pentagon computers from Chinese hackers.

This self-indulgent generation has borrowed itself into unpayable debt. Now the folks from whom we borrowed to buy all that oil and all those cars, electronics and clothes are coming to buy the country we inherited. We are prodigal sons, and the day of reckoning approaches.

wilthrill · 01-21-2008, 08:39 AM

So it turns out that the free trade our leaders (Repub and Dem alike) have been selling us for the last thirty years isn't so FREE after all.

You know you look at the so-called free trade deals and you find things like the article above mentioned. Is it FREE trade when the Euro subsidize their exports to us while TAXING our exports to them? Is it free trade when for the last forty years our auto market has been wide open to the Japanese while their auto market has been virtually SHUT to us? Is it free trade when we allow the chinese to use SLAVE LABOR meanwhile back in the states we regulate the shit out of domestic manufacturers?

You know I try to steer clear of conspiracy theories but there is NO WAY you will ever convince me that our "trade negotiators" didn't KNOW the disastrous nature of the agreements they were pushing. Ah, but wilthrill THEIR BOSSES made out like bandits even if they did screw the rest of us.

We have problems that are ALL OUR OWN to solve (immigration, spending,taxes, unfunded liabilities like Social Security etc). We also have problems, global in scale, created by our IDIOTIC trade policy (best summed up as "I bend over you fuck me") that also need solutions.

And we have a bunch of so-called leaders who won't solve them!!!

01-16-2008, 12:27 PM	#1 (permalink)
PITBOSS Band Whore Join Date: May 2005 Location: Grand Bay Age: 33 Posts: 281 Rep Power: 38	Subprime Nation Good Article on the financial mess our country is in. http://buchanan.org/blog/?p=919 by Patrick J. Buchanan Since it began to give credit ratings to nations in 1917, Moody’s has rated the United States triple-A. U.S. Treasury bonds have been seen as the most secure investment on earth. When crises erupt, nervous money seeks out the world’s great safe harbor, the United States. That reputation is now in peril. Last week, Moody’s warned that if the United States fails to rein in the soaring cost of Social Security, Medicare and Medicaid, the nation’s credit rating will be down-graded within a decade. Our political parties seem oblivious. Republicans, save Ron Paul, are all promising to expand the U.S. military and maintain all of our worldwide commitments to defend and subsidize scores of nations. Democrats, with entitlement costs drowning the federal budget in red ink, are proposing a new entitlement – universal health coverage for the near 50 million who do not have it – another magnet for illegal aliens. Moody’s is telling America it needs a time of austerity, while the U.S. government is behaving like the governments we used to bail out. California has already hit the wall. With an economy as large as a G-8 nation, the Golden State is looking at a $14 billion deficit in 2009 and a $3 billion shortfall in 2008. Gov. Schwarzenegger has called for slashing prison staff by 6,000, including 2,000 guards, early release of 22,000 inmates, closing four dozen state parks and a 10 percent across-the-board cut in all state agencies. The Democratic legislature is demanding tax hikes, which would drive more taxpayers back over the mountains whence their fathers came. Meanwhile, Washington drifts mindlessly toward the maelstrom. With the dollar sinking, oil surging to $100 a barrel, the Dow having its worst January in memory, foreclosures mounting, credit card debt going rotten, and consumers and businesses unable or unwilling to borrow, we appear headed into recession. If so, tax revenue will fall and spending on unemployment will surge. The price of the stimulus packages both parties are preparing will further add to the deficit and further imperil the U.S. credit rating. This all comes in the year that the first of the baby boomers, born in 1946, reach early retirement and eligibility for Social Security. To stave off recession, the Fed appears anxious to slash interest rates another half-point, if not more. That will further weaken the dollar and raise the costs of the imports to which we have become addicted. While all this is bad news for the Republicans, it is worse news for the republic. As we save nothing, we must borrow both to pay for the imported oil and foreign manufactures upon which we have become dependent. We are thus in the position of having to borrow from Europe to defend Europe, of having to borrow from China and Japan to defend Chinese and Japanese access to Gulf oil, and of having to borrow from Arab emirs, sultans and monarchs to make Iraq safe for democracy. We borrow from the nations we defend so that we may continue to defend them. To question this is an unpardonable heresy called “isolationism.” And the chickens of globalism are coming home to roost. We let Europe to get away with imposing value-added taxes averaging 15 percent on our exports to them, while they rebate that value-added tax on their exports to us. Thus, the euro has almost doubled in value against the dollar in the Bush years, as NATO Europe begins to bail out on Iraq and Afghanistan. We sat still as Japan protected her markets and dumped high quality goods into ours and China undervalued its currency to suck jobs, technology and factories out of the United States. Now, China and Japan have $2 trillion in cash reserves. The Arabs have an equal amount of petrodollars. Both are headed here to spend their depreciating dollars snapping up U.S. assets – banks, ports, highways, defense contractors. America, to pay her bills, has begun to sell herself to the world. Its balance sheet gutted by the subprime mortgage crisis, Citicorp got a $7.5 billion injection from Abu Dhabi and is now fishing for $1 billion from Kuwait and $9 billion from China. Beijing has put $5 billion into Morgan Stanley and bought heavily into Barclays Bank. Merrill-Lynch, ravaged by subprime mortgage losses, sold part of itself to Singapore for $7.5 billion and is seeking another $3 billion to $4 billion from the Arabs. Swiss-based UBS, taking a near $15 billion write-down in subprime mortgages, has gotten an infusion of $10 billion from Singapore. Bain Capital is partnering with China’s Huawei Technologies in a buyout of 3Com, the U.S. company that provides the technology that protects Pentagon computers from Chinese hackers. This self-indulgent generation has borrowed itself into unpayable debt. Now the folks from whom we borrowed to buy all that oil and all those cars, electronics and clothes are coming to buy the country we inherited. We are prodigal sons, and the day of reckoning approaches.

01-21-2008, 08:39 AM	#2 (permalink)
wilthrill Band Whore Join Date: Dec 2004 Posts: 818 Rep Power: 44	So it turns out that the free trade our leaders (Repub and Dem alike) have been selling us for the last thirty years isn't so FREE after all. You know you look at the so-called free trade deals and you find things like the article above mentioned. Is it FREE trade when the Euro subsidize their exports to us while TAXING our exports to them? Is it free trade when for the last forty years our auto market has been wide open to the Japanese while their auto market has been virtually SHUT to us? Is it free trade when we allow the chinese to use SLAVE LABOR meanwhile back in the states we regulate the shit out of domestic manufacturers? You know I try to steer clear of conspiracy theories but there is NO WAY you will ever convince me that our "trade negotiators" didn't KNOW the disastrous nature of the agreements they were pushing. Ah, but wilthrill THEIR BOSSES made out like bandits even if they did screw the rest of us. We have problems that are ALL OUR OWN to solve (immigration, spending,taxes, unfunded liabilities like Social Security etc). We also have problems, global in scale, created by our IDIOTIC trade policy (best summed up as "I bend over you fuck me") that also need solutions. And we have a bunch of so-called leaders who won't solve them!!!