Dallas Federal Reserve Chair Fisher: US Approaching Insolvency, Fix To Be 'Painful'

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    Mar 22, 2011 6:49 PM GMT
    Delightful.

    http://www.cnbc.com/id/42209447

    The United States is on a fiscal path towards insolvency and policymakers are at a "tipping point," a Federal Reserve official said on Tuesday.

    "If we continue down on the path on which the fiscal authorities put us, we will become insolvent, the question is when," Dallas Federal Reserve Bank President Richard Fisher said in a question and answer session after delivering a speech at the University of Frankfurt.

    "The short-term negotiations are very important, I look at this as a tipping point."

    But he added he was confident in the Americans' ability to take the right decisions and said the country would avoid insolvency.

    "I think we are at the beginning of the process and it's going to be very painful," he added.

    Fisher earlier said the US economic recovery is gathering momentum, adding that he personally was extremely vigilant on inflation pressures.
  • GQjock

    Posts: 11649

    Mar 22, 2011 10:56 PM GMT
    Fix to be Painful ...................................

    So remind me why we had to extend the Bush Tax Cuts Again?

    So Once Again the GOP hands the top 2% a pass while the rest of America gets it taken out of their collective asses

    and right this very minute every republican governor is doing the very same thing giving billions of dollars in tax cuts ADDING TO THEIR DEFICITS
    and at the same time telling people they will have to expect less



    Wabbit out of the hat icon_cool.gif
    taxcutscbpp-thumb-450x367-23079.jpg




  • conservativej...

    Posts: 2465

    Mar 22, 2011 10:56 PM GMT
    Thanks gentlemen (Riddler, SouthBeach) for focus on reality. Things must change and the pain is going to be great.
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    Mar 22, 2011 11:29 PM GMT
    southbeach1500 said
    GQjock saidFix to be Painful ...................................

    So remind me why we had to extend the Bush Tax Cuts Again?


    Because higher taxes on the people who already pay 80% of the Federal income taxes would harm the economy and not do a thing to deal with the problem.

    The problem is a spending problem, not a revenue problem.


    bullshit

    Ladies and Gentleman, let's all thank the kind chairman for playing his part in the ongoing economic shocks being used to terrify the US population while the banksters get richer! icon_rolleyes.gif
  • GQjock

    Posts: 11649

    Mar 22, 2011 11:42 PM GMT
    southbeach1500 said
    GQjock saidFix to be Painful ...................................

    So remind me why we had to extend the Bush Tax Cuts Again?


    Because higher taxes on the people who already pay 80% of the Federal income taxes would harm the economy and not do a thing to deal with the problem.

    The problem is a spending problem, not a revenue problem.


    Give me a Freakin' Break
    Harm the ECONOMY??????
    We had a near global ECONOMIC meltdown because these people played monopoly money on a global scale
    ....... and we've had THIRTY years of Ronnie-nomics and look where it's gotten us

    sorry bub ....... look around you
    Like Madge said .................. you're soaking in it

    You're a member of this fitness site right?
    So you're familiar with the term calories in calories out?

    You republicans are going to have a Major PR problem when these cuts come down the pike
    People are just starting to wake up
    They're going to say ................... why is MY KID on an austerity budget in school when they just gave billions in tax cuts to wealthy people ?

    The recall Conga line is GONNA be a LONG ONE icon_cool.gif
    images?q=tbn:ANd9GcRhUW7lfQV9nvj2zBWaOqv
  • GQjock

    Posts: 11649

    Mar 23, 2011 12:02 AM GMT
    Just keep repeating that if it helps you to sleep well at night.

    Nuthin to repeat .............. Once was enuf

    Conga - Conga - BOOM - Cha ! icon_cool.gif



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    Mar 23, 2011 12:19 AM GMT
    As an outsider I struggle to remain optimistic about the US politicians coming to a rational plan that tackles the budgetary mess. Frankly I thought the Deficit Commission's report in late 2010 was a good start with a balance of spending cuts and revenue increases, but nothing has come of that so far.

    I used to think the probability of a crisis in the US treasuries market was 50-50, now I think it is 60-40 or 70-30 (with bond crisis being the higher #), and probably within 10 years.
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    Mar 23, 2011 1:29 AM GMT
    surreallife saidAs an outsider I struggle to remain optimistic about the US politicians coming to a rational plan that tackles the budgetary mess. Frankly I thought the Deficit Commission's report in late 2010 was a good start with a balance of spending cuts and revenue increases, but nothing has come of that so far.

    I used to think the probability of a crisis in the US treasuries market was 50-50, now I think it is 60-40 or 70-30 (with bond crisis being the higher #), and probably within 10 years.


    Make that more like 95-5 within the next 4 years, given the way Congress has to keep punting the remaining budget of FY 2011 every two weeks...

    What probably needs to happen as a short term fix is to raise the top marginal tax rate to 65% or higher and slash spending in all federal departments including the military in half for the next four years...

    But more likely instead:

    We will hyperinflate our way "out of the mess" and when things get to the point of food riots and near public insurrection, the Amero our some other essentially worthless fiat currency will replace the USD$.

    If that scenario unfolds... and we are very lucky, the Republic might survive on in name only as a dictatorship, as a third rate power run by the World Bank.
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    Mar 23, 2011 1:48 AM GMT
    southbeach1500 said
    surreallife saidAs an outsider I struggle to remain optimistic about the US politicians coming to a rational plan that tackles the budgetary mess. Frankly I thought the Deficit Commission's report in late 2010 was a good start with a balance of spending cuts and revenue increases, but nothing has come of that so far.

    I used to think the probability of a crisis in the US treasuries market was 50-50, now I think it is 60-40 or 70-30 (with bond crisis being the higher #), and probably within 10 years.



    I wish you were here in the USA... We need more people like you to spread the word about this looming catastrophe.


    You're so fucking disingenuous. Check the bolded part of surreallife's post and see if you still agree with it?

    Can we grow or tax our way out of the debt? Probably not. But we need to cut smartly, increase revenues and renegotiate some longstanding obligations.

    The Simpson/Bowels report was a non-starter because the Democrats won't just (rightly) and the Republicans won't raise taxes at all.

    The problem is all the Tea Baggers you love are ideologues, not legislators. So they can't negotiate in good faith to solve real problems.
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    Mar 23, 2011 1:57 AM GMT
    southbeach1500 saidYou can't tax your way out of this.

    Tell that to the 20-some Republican-led States that are raising taxes on the people, while giving tax breaks to corporations. Does that make sense? Georgia is trying to impose a tax on satellite TV users. Nothing that a wealthy person would even notice, but what about a person of limited income?

    As you look across the US, Republican State legislatures are raising taxes everywhere. No doubt they'll claim the Democrats did it. At the same time Republicans are firing teachers, and other public service workers. In order to fund tax cuts for their wealthy campaign contributors. There hasn't been such widespread corruption in government since the days of Tammany Hall.
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    Mar 23, 2011 1:00 PM GMT
    southbeach1500 said
    Christian73 saidThe problem is all the Tea Baggers you love are ideologues, not legislators. So they can't negotiate in good faith to solve real problems.



    A "negotiation?"

    When the Democrats propose $10 Billion in cuts over the next 7 months and we are adding $4 Billion to the debt each day?

    Clearly the Democrats don't grasp the gravity of the situation, so what's the point of "negotiating" with them?



    The Democrats are only half the problem, actually probably less than half.
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    Mar 23, 2011 1:18 PM GMT
    Just do what Germany did from 1919 to 1923, after the heavily industrialized Ruhr area went on a government authorized strike to protest French occupation, and the government pledged to keep paying their wages, albeit with paper money. A loaf of rye bread was M 247,000,000 at one point, until in 1923 a new currency was introduced, which exchanged M 1,000,000,000 for 1 Rentenmark. People lost everthing, savings, stocks, bonds, all became worthless overnight. You will face the same if you don't stop spending those wads of money. Sad thing is, most of it goes to interest on what's already been borrowed. If the US were a private person or company, it would have filed bankruptcy a long time ago.
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    Mar 23, 2011 3:02 PM GMT
    Andreas73 saidIf the US were a private person or company, it would have filed bankruptcy a long time ago.
    If it were only that simple.
    'Countries' are not private persons nor corporations. They never will be nor can be.
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    Mar 23, 2011 10:42 PM GMT
    Countries may not be, but other political entities have in the past, such as Campbell and Milton Co.'s, GA.

    But that's why I said "if."

    What does happen if a country becomes insolvent?

    I guess that's a question first world nations never had to deal with. We were always on the giving end, when it came to debt forgiveness to poorer nations.

    When is China going to cash in her I.O.U.'s?
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    Mar 23, 2011 11:23 PM GMT
    Andreas73 saidCountries may not be, but other political entities have in the past, such as Campbell and Milton Co.'s, GA.

    But that's why I said "if."

    What does happen if a country becomes insolvent?

    I guess that's a question first world nations never had to deal with. We were always on the giving end, when it came to debt forgiveness to poorer nations.

    When is China going to cash in her I.O.U.'s?


    This is (one of) the problem with viewing political entities through the lens of business. You forget little details like America being one of, if not the, major market for Chinese exports. If they cash in their I.O.U.s too quickly, the rebound is likely to harm their economy nearly as much as our own.

    As you even pointed to, countries can become sort of insolvent, but I wonder if our present-day interconnectedness actually makes that less likely than it was in the historical situations you cited.

    A run on American currency would have global implications. So I think that while it's certainly not impossible, but it's unlikely. None of that is to say that we don't need to get our fiscal house in order. We do. But it does mean that the American people need to impress upon our elected "leaders" that we want it done in a smart, sustainable way, free of corporate ideologues who are looking out for the masters and not the citizenry.
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    Mar 24, 2011 7:18 AM GMT
    riddler78 saidDelightful.


    Methinks Canada boi has an inferiority complex and loves to post on the southern neighbor's difficulties.

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    Mar 24, 2011 4:08 PM GMT
    tomk7 said
    riddler78 saidDelightful.


    Methinks Canada boi has an inferiority complex and loves to post on the southern neighbor's difficulties.


    If that's a reference to me, then quite the opposite. The US has some serious budget issues to deal with - and they aren't dealing with them. I think it's pretty important to the world that the US remains the dominant economic and political power. The alternatives are far worse. It's also in my financial interest (and that of a gazillion others) that this is the case).
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    Mar 24, 2011 8:07 PM GMT
    southbeach1500 said
    Andreas73 said
    What does happen if a country becomes insolvent?


    Look at Germany in the 1920s. It's not pretty.


    Quod erat demonstrandum. See my first post on the issue. However, after the tough choices were made in 1923, Germany boomed just as much as the US at the time, but of course the crash of 1929 put a stop to all of that.

    The 6 years from 23 to 29 were phenomenal. So much that gays (even though sodomy laws from the Empire days were still in effect) started a quite noticeable subculture in Berlin (and perhaps other cities.)