patrick.net

The most important part of my post was the 4/65 fraction.

justme... take your 4B from schools, and another 506B on health for the illegals, and you're getting damn close to the $11B we're short by.

Here's the idea. We can't have everything. EVERYONE CAN NOT HAVE EVERYTHING THEY WANT. It's that simple.

The correct response to the CA budget problem is to cut any costs that can be cut. Raising taxes is NOT a solution. Raising taxes during the onset of a depression IS NOT A FUCKING SOLUTION!

There are a few cores we should be protective of... like education, and police. Everything else in my mind is a target for cutting. Health care is the primary.

It does no good to bankrupt people that have a little bit of money left to support the people who are already bankrupt.

woops, 506B should be 5-6B

I'm pleased that Bush finally managed to do one right thing (automaker rescue), and he did not even break the union in the process.

Of course, were it not for 8 years of Bush we would never have been in this predicament in the first place. California would have been allowed to set emissions standards, Detroit would have been forced into more efficient cars, just for starters.

Fuzzy,

You are thinking about this the wrong way. It is the police that is overpaid, not the teachers. And without schooling for the citizen children of immigrants, you will spend still more on police just to keep crime under control.

I’m pleased that Bush finally managed to do one right thing (automaker rescue), and he did not even break the union in the process.

For that, I finally hate him. He is a liberal!

“productive” is changed by the swing to deflation

Then you probably have a skewed definition of a productive endeavor. A business that does not rely on government subsidies or bailouts or overtly loose credit will most likely remain a viable business model in deflationary times.

Can you give an example of the contrary?

It is the police that is overpaid, not the teachers.

Unless schools can expel students at will it is useless to have good teachers. Since there are bad kids anyway we can only have an adequate police force to counter them.

It is absolutely, positively incorrect to think that good teachers can turn bad kids into good ones. As a society, we sometimes must simply cut the loss short.

Perhaps there are many wastes in the police infrastructure, but my father (as a lifetime policeman) was certainly not overpaid. If you think so, then perhaps you should try getting your finger bitten off or shot at during your normal work day.

I agree that teachers are underpaid.

Note that I do not believe police protection nor education are human rights. However, they provide a safe and productive breeding ground for future prosperity.

How does health care provide that?

I’m pleased that Bush finally managed to do one right thing (automaker rescue), and he did not even break the union in the process.

You can't say this is the right thing until the automakers turn around and become profitable again. This is highly unlikely as the bailout will not inspire people to buy cars nor will it resolve the fact the the companies are run by a bunch of idiots employing overpaid workers.

Look for more good money being thrown after bad next year as the automakers continue to fail.

I should add as well that I think pensions in general are a good thing. However, allowing the pension fund to gamble the money? Give me a fucking break.

Why don't we just take the rest of our coffers to Vegas, and put it all down on one hand of blackjack.

I do not think pensions are a good thing. People should plan for their own retirements. What is the difference between a pension plan and a ponzi scheme anyway?

Is this for real?

http://www.foxbusiness.com/story/markets/fox-business-sues-treasury-failure-respond-freedom-information-act-requests/

yup, it's for real. Bloomberg has also sued the Treasury for the same thing.

"What is the difference between a pension plan and a ponzi scheme anyway?"

can't really argue with that. They are certainly not designed to last through periods of contraction.

Social Security definitely looks like a ponzi scheme to me.

what isn't a ponzi scheme these days I wonder.

LOL! :)

Peter, do you ever get concerned that capitalism itself is a form of a ponzi scheme? I haven't put too much philosophical thought into it, but something about it nags at me. Namely, absent growth, the system seems to break down entirely.

Also, what growth is real? As the rug gets pulled out of the last 8 years, we are seeing alot of castles made of sand. How far back does this fake growth go I wonder? The early 80's? 60's? WWII?

Why should any retirement plan be a pension scheme financed by future company earnings? That is insane, one should see that the retiree expense will skyrocket over time, especially as people live longer and are able to retire early.

Why not set up a variation on the IRA that has no contribution limit and can be match funded? The contribution does not have to be deductable, but should accumulate interest tax free. Only allow contribution to Treasuries or insured CD/MMA. In essence, this is more an enhanced or employer aided savings plan for retirement rather than a pension. One can still use company stock in compensation, but keep it out of any retirement plan.

"Food prices are nasty-high right now and dont seem to be falling along with everything else." - mickrussom

Actually food prices have alot of pressure to fall. There is over-capacity and high inventory everywhere you look. (BTW, I am in the food industry and have first hand knowledge). It is just taking a long time, because quite frankly food prices were very low while all other assests were booming. In some cases the gains in prices of food were very justified and will not roll back, even during this deflation.

Food prices have been low for a long long time and now that they have gained, and food is a necessity, they are going to stay that way. The cost of transportation will be rolled back, but that is about it. People don't need a TV or a cell phone, but they have to eat. More cash is going to flow to food and less to "luxuries".

The saying in the food industry is: "When times are good, we do OK. When times are bad, we do OK."

Peter, do you ever get concerned that capitalism itself is a form of a ponzi scheme?

Not quite so. The weak hands always lose to the strong hands, through booms and busts. Capitalism is true to human nature and I believe it is sustainable.

Namely, absent growth, the system seems to break down entirely.

Growth and contraction come in cycles. The sooner we allow things to correct, the sooner we will see growth again. It is absolutely necessary that mal-investments be liquidated. Creative destruction is the life force of Free Market and I do not see any need to dampen its effects.

What growth is real? I do not know. I just see booms and busts as pendulum motions. There is no real growth in that sense. Things just move along.

BTW, I believe the mother-of-all-bubbles is not this credit bubble. It is the human population bubble. When that corrects, and it will, it is going to be scary. Hopefully, I will not see that in my lifetime.

exactly what I'm getting at.

Humans are ferocious in building the population base. Human nature, as well as capitalism both support this.

When a real limitation is put in the way of this, like lack of natural resources for sustenance, then both human nature and capitalism become detrimental to quality of life.

While this could just be an acceptable ugliness in the way things are, perhaps there is a better way.

Even without resource limitations, the internal dynamics of the population boom will tear it apart. Bubble is like a stable disequilibrium. Things all seem to be aligned and all right and then, suddenly...

While this could just be an acceptable ugliness in the way things are, perhaps there is a better way.

There are perceived "alternatives" to capitalism but there are no alternatives to human nature.

Honestly, the planet is better without us. Therefore, IMO, any form of philanthropic environmentalism is guilty of hypocrisy.

Capitalism ends up becoming stagnant with time. The rich stay rich and the poor will stay poor. I am talking about strict free market capitalism, with little to no taxes and no unions. The government ends up becoming a tool for the rich to swindle the poor, so no real democracies and no more middle class. Which causes a populist revolt and it starts over again.

What I am trying to say is, like deflation and inflation. Populism and Capitalism are also cycles that help breath new life into countries and peoples

I am talking about strict free market capitalism
followed by
The government ends up becoming a tool for the rich to swindle the poor, so no real democracies

Well which is it, a strict free market or not?

strict free market ends up becoming a tool for rich... It degrades over time.

You gotta see this. Sorry way off topic.

http://www.dailymail.co.uk/news/worldnews/article-1098125/Pictured-Desperate-Chinese-sailors-fight-Somali-pirates-beer-bottles-Molotov-cocktails.html

So strict free market becomes one where the government gets involved for the benefit of the rich. In other words, becomes not strictly free or free at all, like the one we have now. Is that a foregone conclusion for any free market? Hard to tell, because I don't think we've ever had a strictly free market any time or any place in history.

I think the gross malfeasance of the financial industry under Republican Rule (even though the actual bad behavior was decidely bipartisan) will usher in a cycle of regulation ad watchfulness that will make that sector, at lest, incapable of paying itself enormous sums while simultaneously stiffng the rest of the work force.
The Fulds of the world have slain that golden goose.

I completely agree with you Frank. We have never had a strict free market. That still does not take anything away from my argument. My argument just says that if we move closer to a free market the poor of the USA or whatever country will become more disenfranchised and it will lead to populism. eg USA, and most of S. America.

There is no such thing as a perfect free market just like there is no such thing as perfect communism. You have to add in the real world....

strict free market ends up becoming a tool for rich…

___ ends up becoming a tool for TPTB.

Capitalism is about men exploiting men. Socia!ism is exactly the other way around.

Stop blaming the financial industry for this mess. There will not be a willing seller of those toxic loans if there were no willing buyers.

This mess was caused by OVER-regulation and excessive government intervention of the housing market. Throw away mortgage interest deduction, Fanron, and 500K cap-gain exemption and we would have a freer market.

Peter P I agree. It's just that when the exploited become greater then the exploiters then we get populist backlashes. Like socialists in government.

I'm in moderation?
Well gotta go, no internet for a while.
Have a happy holiday.
Been fun.

slumlord, this is why civilizations tend to swing from one extreme to another.

Our so-called growth and advancement would only make such swing ever more violent and global in nature. At some point, humanity will self-destruct.

Peter P. Yeah, we are headed for a pretty bad end as a whole. Unless we all vote for me and let me be the supreme ruler of the world. LOL

Hey, you have a great weekend.

Have a great weekend too! Merry Christmas! God save us all.

My argument just says that if we move closer to a free market the poor of the USA or whatever country will become more disenfranchised and it will lead to populism.

So this is your argument to move to socialism instead? Or are you advocating something in between? If the latter, isn't that what we have and isn't the middle class being disenfranchised and the poor made poorer?

I would argue that perhaps we should try being a truly free market before we dismiss it for socialism or semi-socialism that have us and others now and in the past.