CONTRA EL PINGALISMO CASTRISTA/
"Se que no existe el consuelo
que no existe
la anhelada tierrra de mis suenos
ni la desgarrada vision de nuestros heroes.
Pero
te seguimos buscando, patria,..." - Reinaldo Arenas
China, the largest foreign buyer of U.S. Treasury debt, increased its holdings by $12.2 billion in November. This represents almost a 1% increase in its total debt holdings to $1.32 trillion, a record level.
The second largest foreign holder of treasury debt is Japan, which increased its holdings by 1% to $1.19 trillion, also a record. Overall, foreign holdings of U.S. treasury bonds increased by 1.1% in November to 5.72 trillion. Some are unsure about the consequences of China and Japan owning such a large amount of U.S. treasuries. However, this huge investment in America ties both countries' fortunes with the success of the U.S. economy.
According to Forbes contributor Kenneth Rapoza, foreign investors owning debt is not a threat to the United States. Rapoza points out that of the $16 trillion in outstanding U.S. debt, most of it is held by large banks here in America: Goldman Sachs, JP Morgan, Citibank, and Bank of America. China holds about 7.5% of U.S. debt. “One of the reasons why China has so much Treasury holdings is because of trade. Companies put money in short term Treasury notes and bills to settle trade payments,” Rapoza asserts.
Forbes also noted that the Pentagon did an assessment on the risks posed by China’s ownership of U.S. treasuries in July and came to the same conclusion: “Attempting to use U.S. Treasury securities as a coercive tool would have limited effect and likely would do more harm to China than to the United States.”
Most people would agree that when a government borrows money, it should be used to fund projects today that will provide positive benefits to the community for years to come. That mainly means things like investing in physical infrastructure to support not just projects that have high costs to create, such as roads, bridges, water treatment facilities, airports or schools, but also that will also last for decades while providing a positive return on investment through increased economic activity.
Under no circumstances however should governments borrow large amounts of money for the sake of sustaining their day-to-day operations that they cannot pay off with their direct tax collections within the course of a single year. These are not just expenses like the wages, salaries, and benefits of government employees and the office supplies they consume, but also for things that have relatively short life spans, which means that they will need to be replaced within in much less than ten years time. Things like library books, computer software, mobile phones, police cars, trash bins, et cetera.
The reason why it is such a bad thing to begin using large amounts of debt to finance short-term operational expenses is because of the mismatch it creates between the life span of the expense and the term of the debt. It makes absolutely no sense to pay principal and interest payments for a government-issued bond for thirty years for the sake of buying something like police cars today that will most likely be decommissioned in less than five years time. By the time the debt that supported these kinds of expenses will be paid off, the benefits provided to the public will have been long forgotten.
When that kind of mismatch develops between the term of government-issued debt and the lifespan of the things it funds or sustains, it is a clear indication that the government has crossed the event horizon for its debt, which can now spiral out of control and become a debt death trap. In this situation, a government must issue ever-increasing amounts of debt to sustain the excessive spending ambitions of its politicians, who often will be long gone or perhaps even in prison by the time the bills they racked up through their fiscal malfeasance might fully be paid.
Unfortunately, that is the story of many local governments and municipalities around the United States, which are increasingly turning to bankruptcy proceedings to escape the fiscal recklessness of their civic leaders. And while it has not yet reached that point, it is today's developing story for the City of Chicago. The Chicago Tribune's Jason Grotto, Heather Gillers, Patricia Callahan and Alex Richards report:
When municipal officials want to build for the future, they have a powerful financial tool at their disposal: general obligation bonds that yield millions of borrowed dollars. The money is meant to let cities move forward on costly projects that will serve the community for decades.
But in an unprecedented analysis of Chicago’s finances, a Tribune investigation found that city officials have long abused their borrowing privileges, spending funds meant for long-term initiatives on problematic short-term expenses from library books to legal settlements.
Residents know little about it, as Illinois law doesn’t require Chicago to ask voters’ permission before issuing bonds. And when the city can’t pay what it owes, it uses yet more borrowed money as leverage to push off payments on old bonds.
This pattern of fiscal recklessness, which started under former Mayor Richard M. Daley, created a mountain of debt that threatens the financial future of the city. Now Rahm Emanuel is groping for ways to deal with the problem along with a looming pension crisis and chronic budget deficits.
Once a debt death trap begins, an ever-increasing portion of a government's spending must go to support its debt obligations. The interest rates that the increasingly fiscally-distressed government must pay to its lenders for new debt to sustain its spending also increase at the same time, because the lenders recognize that the government is less capable of making its debt payments from its available tax collections, so they must protect themselves from an increased risk of default by charging a higher price for the money they lend.
That vicious cycle then repeats and becomes amplified over time, which makes it more and more difficult to escape from that situation as the government's debt situation spirals out of control and it becomes stuck in a debt trap of the politicians' own making.
Faced with that situation, many politicians increasingly turn to tax hikes to try to balance their government's books, but these measures invariably fail because of how adversely they affect the local economy that supplies the tax revenue that supports the government's operations. The negative impact of these tax hikes create a massive fiscal drag that far outstrips the impact of what simply cutting their government's unsustainable amount of spending to more fiscally-responsible levels would have been, if only they had been willing to reduce their spending.
So why don't the politicians do the fiscally-responsible thing and reduce the amount of their spending to a more sustainable level long before it even puts the government at risk of a debt crisis?
In many cases, the unsustainable level of spending that puts their government at risk is really what the politicians promised to deliver to their political backers in exchange for the endorsements and campaign contributions that help put them in power, which is why they resist taking that responsible action so strongly. It is far more important to them to meet their backers' needs than those of regular citizens, and particularly so when their political backers gain so much from the government's spending.
In the end, the only way out is to make the political sacrifice and cut government spending to sustainable levels, while at the same time defaulting on their debt obligations and seeking relief through bankruptcy. The people who get hurt the most as that process plays out are the regular citizens whose real interests were being ignored by the politicians all along.
And how that process will play out is the real story that is developing in Chicago today.
Evo Morales y Nicolás Maduro, en un reciente encuentro en La Paz. Foto: Efe
Bolivia tiene una deuda comercial con Venezuela por un poco más de 145 millones de dólares.
El presidente de Bolivia, Evo Morales, reveló que su país compró nueve aviones de entrenamiento militar con fondos del programa ‘Bolivia cambia, Evo cumple’, que en el período 2006-2011 recibió donaciones de dinero de Venezuela.
En su discurso, Morales se refirió al asunto en un acto del Colegio Militar de Aviación de la ciudad de Santa Cruz (este), en medio de una polémica entre su gobierno y la oposición sobre el uso dado a los fondos de ese programa gubernamental en Bolivia.
Relató que en 2006, cuando llegó a la presidencia, encontró una Fuerza Aérea Boliviana (FAB) con “oficiales desmoralizados” y a sus familiares solicitando a gritos en los actos públicos que se compren los aviones de entrenamiento. “Para información de nuestro comandante, de nuestro oficial de la Fuerza Aérea Venezolana, y (con) parte del programa ‘Bolivia cambia’, compramos nueve aviones de entrenamiento. Muchas gracias hermano general, muchas gracias al pueblo venezolano”, sostuvo Morales, sin detallar la identidad de ese oficial.
Morales pidió en el acto, al que asistió dicho militar venezolano, “un aplauso como justo homenaje a esta cooperación incondicional, que lamentablemente algunos opositores, algunos políticos empresarios cuestionan”.
El mandatario no precisó si hubo fondos venezolanos usados de forma directa en la compra de las naves, aunque el plan ‘Bolivia cambia, Evo cumple’ recibió donaciones de ese país hasta 2011.
Morales se refirió al tema en medio de una polémica que hay en Bolivia sobre el uso otorgado a ese programa, tras la publicación de un estudio hecho por el opositor y empresario Samuel Doria Medina, que habló de una supuesta falta de transparencia en el plan.
El Gobierno ha rechazado las denuncias de Doria Medina y ha defendido que el plan se enfocó en obras para combatir la pobreza. Según el estudio de Doria Medina, en ese programa se gastó en seis años una suma de 438,7 millones de dólares, mientras que el gobierno, según el matutino La Razón, ha emitido informes en el sentido de que en el período 2007-2012 se gastaron 402 millones de dólares.
El gobierno boliviano también ha insistido estos días en aclarar que se trataron de donaciones y no de créditos de Venezuela, por lo que no hay deuda acumulada por los fondos del citado programa.
El único contrato de préstamo contraído con Venezuela data de 2008 y fue de 300 millones de dólares para la construcción de una carretera, pero de los que el Gobierno venezolano solo desembolsó 20 millones invertidos en el comienzo de las obras.
Aparte, Bolivia tiene una deuda comercial con Venezuela por la compra de gasóleo por un poco más de 145 millones de dólares.
El País / Sandro Pozzi.- Cuando la deuda de un país supera el 90% del PIB, el crecimiento de la economía es inviable. El aserto, nacido de dos cerebros de Harvard y sobre el que se asientan las políticas de austeridad que están a punto de dinamitar los pilares del Estado de bienestar en medio mundo, ha resultado tan falaz como las armas de destrucción masiva que sirvieron para justificar la invasión de Irak.
“Es exagerado hacer la comparación, pero acepto la analogía porque es cierto que se están adoptando políticas a partir de premisas que son falsas”. Quien habla es Thomas Herndon, el estudiante de 28 años que, en su camino para sacarse un doctorado en Economía en la Universidad de Massachusetts, ha desenmascarado la mentira macroeconómica más significativa de los últimos años, y sobre la que EE UU y Europa se han apoyado en su campaña por la austeridad fiscal y el recorte drástico del gasto.
Herndon cuenta que se frotaba los ojos al cruzar los datos de su trabajo ordinario de carrera con los del hipercitado informe de los profesores de la prestigiosa Universidad de Harvard Carmen Reinhart y Kenneth Rogoff. Los errores eran básicos. De hecho, al principio pensó que el equivocado era él. No podía ser que dos reputadas eminencias hubieran podido pasar por alto cosas así.
El estudio que está en el centro de la controversia global lo publicaron Reinhart y Rogoff en la American Economic Review en 2010. Ahí defienden cómo el crecimiento cae de golpe cuando la deuda pública de un país supera el 90% del PIB. Reinhart, nacida en La Habana (Cuba) hace 57 años, fue economista jefa durante tres años del difunto Bear Stearns, la primera víctima de la crisis financiera. Eso fue en los años 1980, antes de ocupar varios cargos en el Fondo Monetario Internacional (FMI), donde llegó a ser la número dos en el departamento de investigación antes de llegar a Harvard. Rogoff, de 60 años, fue su jefe en el FMI, donde tuvo un sonado encontronazo con Joseph Stiglitz a cuenta de la crítica que el premio Nobel hizo de esa institución en su libro El malestar en la globalización (2002).
Su novia, una socióloga acostumbrada a cruzar números, fue la primera en apoyarle: “No creo que estés equivocado”, le dijo
No fueron pocos los políticos que echaron mano del trabajo para defender que se pase la podadora al gasto para volver a la senda de un crecimiento sano y robusto. Entre ellos, Paul Ryan, el candidato republicano a la vicepresidencia de EE UU. También el comisario europeo de Asuntos Económicos, Olli Rehn, y el expresidente del Banco Central Europeo Jean-Claude Trichet. Ninguno cuestionó la metodología del trabajo, ni sus datos, como hizo el joven Herndon.
“Estaba convencido desde el principio de que algo iba realmente mal con el estudio. Y cuando me llegaron los datos [los autores le mandaron las tablas de Excel que utilizaron, a petición del estudiante], se confirmaron mis sospechas”, relata Herndon. El joven estudiante, criado en Austin (Texas), de padre texano y madre de Hong Kong, al que le gusta tocar el bajo, le pasó las tablas a su novia, Kyla Walters. Ella tiene un doctorado en Sociología y gracias a su trabajo de investigación está muy acostumbrada a cruzar números. “No creo que te estés equivocando”, le respondió.
El siguiente paso fue acudir a Michael Ash y Robert Pollin, dos de sus profesores, que ahora le cubren las espaldas, pero que en un primer momento se mostraron más bien incrédulos. Lo que no logró anticipar Herndon, ni tampoco Ash y Pollin, es lo que venía a continuación. Hay economistas que les han llamado para emprender con ellos una batalla contra la idea de que el alto endeudamiento frena el crecimiento.
Pero hasta ahora ni un solo dirigente político se ha puesto en contacto con el trío para conocer su teoría. Aun así, el estudiante señala que el trabajo “está empezando a marcar la diferencia en los círculos de decisión política”. Cita, por ejemplo, el blog de John Taylor. El reputado economista por Stanford asegura que el error puesto en evidencia por el joven influyó en la decisión de los ministros de Finanzas del G-20 para omitir en su comunicado de la semana pasada una referencia al nivel de endeudamiento.
En el origen del fiasco está un encargo convencional de los profesores. Pidieron a los alumnos que emularan resultados estadísticos de estudios ya publicados. Él eligió el estudio de Reinhart y Rogoff porque, “aunque era poco atractivo”, le pareció oportuno vistas las dificultades que tienen Europa y EE UU para salir del agujero de la recesión y del impacto de las políticas que se están adoptando en los países.
Los profesores de Harvard ahora cuestionados le facilitaron en enero todo el material que necesitaba para descifrar el estudio y le dieron libertad para publicar lo que quisiera. “Vi el error muy rápido”, dice Herndon. A comienzos de abril, Reinhart y Rogoff admitieron que habían cometido algunos fallos a la hora de codificar las cifras. Pero siguen defendiendo su metodología e insisten en que existe una clara correlación entre alto endeudamiento y lento crecimiento. “Este lamentable desliz no afecta al mensaje central”, dicen en una nota.
Herndon, que habla siempre en plural, admite que criticar el trabajo de los dos profesores de Harvard “es lo más fácil” y no cree que hubiera una intencionalidad cuando omitieron ciertos datos, como el hecho de que Australia, Canadá y Nueva Zelanda crecieran en periodos de alto endeudamiento, o se equivocaran en alguna suma al introducir mal las órdenes en la celdilla de Excel. Pero está convencido también de que la teoría no puede replicarse, porque está mal planteada. Y apoya que se adopten políticas de estímulo para salir de la recesión. “La austeridad es contraproducente, crea sufrimiento”.
El joven no se declara ni conservador ni liberal; dice que no le gustan las etiquetas. Pero sí parece tener muy claro que “es falso decir que el alto endeudamiento es malo”. Por eso cree que lo que deben hacer los dirigentes es ver las circunstancias específicas en las que la deuda puede ser efectiva en un escenario de recesión. Su prioridad ahora, comenta, es terminar el segundo semestre y recopilar ideas para su tesis final.
De momento se está dedicando con sus profesores a publicar los primeros hallazgos para después seguir desarrollando el trabajo a lo largo del verano, integrando mejoras estadísticas. Y entre clase y clase busca tiempo para conceder entrevistas e incluso acercarse a Nueva York para verse con Stephen Colbert, el conductor del programa satírico The Colbert report. Colbert le dedicó esta semana dos espacios a su trabajo, lo que muestra hasta qué punto está caliente el debate. En el primero se dedicó a mofarse de los profesores de Harvard y de los que se apoyaron en su estudio para aventurar “una nueva crisis económica alimentada por la deuda”. “¿Sabes que has enfadado a mucha gente en el campo de la austeridad, importantes y muy poderosos?”, le preguntó después. “La Universidad me cuida mucho”, le respondió. Herndon admite no estar preparado para la avalancha mediática. “Ni siquiera tenía una buena foto”, comenta. Y las siglas con las que los tres autores firman el trabajo, HAP, tomada de la inicial de sus apellidos, ha inspirado ya una expresión entre los estudiantes: “To get happed”, que alguien te señale los errores.
El joven cree que su experiencia hará que los estudiantes presten mucha más atención a la hora de comprobar una y otra vez los resultados de sus trabajos. “Serán mucho más cuidadosos”. Como le dijo Colbert, la pareja de Harvard no se dio cuenta de los errores porque no hay nadie por encima de ellos que les revise sus estudios. Ahora, como señala Kyla, su chico tendrá menos tiempo para practicar música, pero sus perspectivas de trabajo han mejorado.
How exponentially has the national debt grown under Barack Obama? Since he took office, the annual amount of debt per household in the United States is greater than the annual median household income.
Since Obama took office, the federal debt has climbed $6,167,472,778,984.22 (at the time of this writing). Divided by the 115,031,000 households in the country, that means Obama has borrowed $53,616 for each household, compared to the latest recorded median household income of $50,502 (for 2011).
The federal debt on Jan. 20, 2009, was $10,626,877,048,913.08. On April 25, 2013, it was $16,794,349,827,897.30.
WHEN the world financial system collapsed in 2007, triggering a global recession, Canada recovered faster than any of the other members of the G7 group of large developed countries. Its banks remained solid, while low interest rates encouraged consumers to borrow and spend. But five years on, consumers are showing signs of flagging. The economy is set to expand by a paltry 1.6% this year. So the authorities are casting around for another source of growth. The trouble is they cannot seem to find one.
Government, both federal and provincial, is trying to curb deficits swollen by stimulus spending. Companies are restrained by uncertainty prompted by Europe’s woes and the stand-off over fiscal policy in the United States, Canada’s main trading partner. Exports have still not returned to their pre-recession peak.
As for consumers, after 11 consecutive years in which household spending has exceeded disposable income, they are deeply in hock. Just over a year ago, Craig Alexander, chief economist at Toronto-Dominion Bank, predicted the debt build-up “is going to end in tears”. The ratio of household debt to disposable income has continued to edge up (see chart 1). An increase in unemployment (from 7% at the moment) or a rise in interest rates could push some households into bankruptcy and puncture a housing bubble inflating in several Canadian cities.
Jim Flaherty, Canada’s finance minister, has repeatedly warned of the threat household debt poses to the economy. He has made it harder for risky borrowers to get mortgages; he publicly upbraided two banks that recently dropped their rate for five-year, fixed mortgages below 3%.
Yet in his budget on March 21st, Mr Flaherty did little to encourage business investment or exports to take the place of consumers in supporting growth. Rather, his focus was on eliminating the federal budget deficit—currently at 1.4% of GDP, low compared with most G7 economies—before the next general election in 2015. His plan, which relies on spending restraint and unusually high revenue growth, is seen by many as wishful thinking.
Mark Carney, the outgoing governor of the Bank of Canada, has also been ringing the alarm on household debt. Yet the bank has kept its benchmark rate at just 1% since September 2010. This month it signalled that the rate is likely to remain there.
House prices are still rising everywhere except Vancouver, but housing sales and housing starts have dropped. Analysts are divided on whether this signals the beginning of a crash, or just a pause before a new burst of activity in the coming months, which are traditionally the housing market’s busiest.
Rather than a housing bubble, what is needed is a rebound in business investment and an increase in exports. Neither is taking shape. Canadian firms have been piling up cash faster even than their counterparts south of the border. Investment is expected to rise by just 1.7% this year. When Mr Carney and Mr Flaherty tried to jawbone businesses into investing some of this money last year—Mr Carney called it dead money—they were met with angry retorts. The budget extended a scheme letting manufacturers write off purchases of machinery and equipment more quickly. But this might not have much impact until the world economy looks more settled.
The disappointing export performance owes more to problems of Canada’s own making. They will take time to fix. The United States took 73% of the country’s exports (and provided 62% of its imports) last year; Canada sells relatively little to faster-growing markets in Asia and Latin America (see chart 2). The government is trying to redress this with several sets of trade talks. But the deal closest to fruition is one with the hardly booming European Union.
Sales of oil and gas, Canada’s biggest single export, are especially tied to the United States. Frantic lobbying by Canadian politicians of the Obama administration in the lead-up to a decision on whether to allow Keystone XL, a cross-border pipeline, is testament to this dependency. Building pipelines to the west coast, to carry exports to Asia, or to the east to supply consumers in Ontario and Quebec (home to 62% of Canada’s 35m people) will take years, even if planning battles are won. Meanwhile, Canadian energy exporters face falling prices because of the boom in shale gas and oil in the American Midwest.
So the Canadian consumer remains the main hope for the economy. It is an odd situation where both government and business have decided to be excessively prudent in their spending, but are hoping that consumers will not follow suit just yet.
Today, we're taking a preliminary look at just who owns all the debt issued by the U.S. federal government through 30 September 2012 - the end of the U.S. government's fiscal year. Our chart below visualizes what we found:
The information presented in our chart above is preliminary, as the U.S. Treasury typically revises its foreign entity debt ownership data in March of each year.
Overall, U.S. entities own just 65.8% of all debt issued by the U.S. federal government. Ranking the major U.S. entities from low to high, we find that:
The U.S. government's military retirement fund owns 2.4% of the national debt.
The U.S. government's civilian employee retirement fund accounts for another 5.6% of the nation's debt.
The U.S. Federal Reserve, thanks to its quantitative easing programs of recent years, has racked up holdings equal to 10.8% of the total U.S. national debt.
The U.S. Social Security Trust Fund claims 16.7%.
U.S. individuals and institutions, which includes regular Americans, banks, insurance companies and other government entities, own 30.4% of the nation's debt.
Meanwhile, foreign entities own 34.2% of all U.S. government-issued debt, with the following nations' individuals and institutions representing the five biggest holders of that debt, again ranked from low to high:
United Kingdom: 0.9%
Brazil: 1.6%
"Oil Exporters", which includes Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait,Oman, Qatar, Saudi Arabia, Algeria, Gabon, Libya, Nigeria and the United Arab Emirates: 1.7%
Japan: 7.0%
China (including Hong Kong): 8.1%
All other nations hold approximately 15% of the U.S. outstanding national debt.
The Role of Quantitative Easing in Offsetting Foreign Ownership of the U.S. National Debt
The Federal Reserve's various quantitative easing programs of recent years, where the U.S. government-chartered central bank has purchased large quantities of U.S. government-issued debt in its attempts to keep the U.S. government's spending elevated and the U.S. economy stimulated by lowering long-term interest rates, are especially interesting in the degree to which they've succeeded in offsetting the share of the U.S. national debt owned by foreign interests.
Here, the Fed boosted its holdings of U.S. Treasury securities from a low of $474 billion on 18 March 2009 when it launched QE 1.0 to a peak of $1.684 trillion on 21 December 2011, which fell back to $1.676 trillion by 26 September 2012 - just before the end of the U.S. government's 2012 fiscal year.
The Fed also boosted its holdings of other federal agency debt securities from $48 billion on 18 March 2009 to a peak value of $169 billion on 10 March 2010, which has slowly declined to $83 billion as of 26 September 2012. All told, the Federal Reserve held an additional $1.21 trillion of the U.S. national debt compared to what it did before it began its quantitative easing programs.
As a result, the U.S. Federal Reserve has gone from holding 4.7% of all U.S. government-issued debt as of 18 March 2009 to holding 10.8% of it as of the end of the U.S. government's Fiscal Year 2012. During the peak of the program, the Federal Reserve crowded out almost every other purchaser of U.S. government-issued debt.
Assuming that other U.S. entities would have been unable to accumulate more of the U.S. national debt than they did during this period and that the U.S. government would have spent as much money as it did, if not for the Federal Reserve's quantitative easing programs, the share of the U.S. national debt held by foreign entities would have increased to 41.7%, with the bulk of the foreign acquisitions going to China.
As it stands, a little over 1 out of every 3 dollars borrowed by the U.S. federal government is now owned by foreign interests.
NEW YORK – Could real estate on American soil owned by China be set
up as “development zones” in which the communist nation could establish
Chinese-owned businesses and bring in its citizens to the U.S. to work?
That’s part of an evolving proposal Beijing has been developing
quietly since 2009 to convert more than $1 trillion of U.S debt it owns
into equity.
Under the plan, China would own U.S. businesses, U.S. infrastructure
and U.S. high-value land, all with a U.S. government guarantee against
loss.
WND has reliable information that the Bank of China, China’s central
bank, has continued to advance the plan to convert China’s holdings of
U.S. debt into equity owned by China in the U.S.
The Obama administration, under the plan, would grant a financial
guarantee as an inducement for China to convert U.S. debt into Chinese
direct equity investment. China would take ownership of successful U.S.
corporations, potentially profitable infrastructure projects and
high-value U.S. real estate.
The plan would be designed to induce China to resume lending to the U.S. on a nearly zero-interest basis.
However, converting Chinese debt to equity investments in the United
States could easily add another $1 trillion to outstanding Obama
administration guarantees issued in the current economic crisis.
Treasury bills are short-term debt that matures in one year or less,
sold to finance U.S. debt. Holdings of Treasury bills are included in
the $1.17 trillion of total Treasury securities owned by China as of
November 2012.
In addition to a national debt in excess of $16 trillion, the U.S. government in 2010 faced over $70 trillion in unfunded obligations,
including Social Security and Medicare benefits scheduled to be paid
retiring baby boomer retirees in the coming decades, with unfunded
obligations showing no sign of being reduced with Congress at a deadlock
over reducing federal government spending.
Yu Qiao observed that if the U.S. dollar collapsed under the weight
of proposed Obama administration trillion-dollar budget deficits into
the foreseeable future, holders of U.S. debt would face substantial
losses that the Financial Times estimated “would devastate Asians’
hard-earned wealth and terminate economic globalization.”
“The basic idea is to turn Asian savings, China’s in particular, into
real business interests rather than let them be used to support U.S.
over-consumption,” Yu Qiao wrote, reflecting themes commonly suggested
by Chinese government officials. “While fixed-income securities are
vulnerable to any fall in the value of the dollar, equity claims on
sound corporations and infrastructure projects are at less risk from a
currency default,” he continued.
The problem is that, in a struggling U.S. economy, China does not
want to trade its investment in U.S. Treasury debt securities, with
their inherent risk of dollar devaluation, for equally risky investments
in U.S. corporations and infrastructure projects.
“But Asians do not want to bear the risk of this investment because
of market turbulence and a lack of knowledge of cultural, legal and
regulatory issues in U.S. businesses,” he stressed. “However if a
guarantee scheme were created, Asian savers could be willing to invest
directly in capital-hungry U.S. industries.”
Yu Qiao’s plan included four components:
China would negotiate with the U.S. government to create a “crisis
relief facility,” or CRF. The CRF “would be used alongside U.S. federal
efforts to stabilize the banking system and to invest in
capital-intensive infrastructure projects such as high-speed railroad
from Boston to Washington, D.C.
China would pool a portion of its holdings of Treasury bonds under
the CFR umbrella to convert sovereign debt into equity. Any CFR funds
that were designated for investment in U.S. corporations would still be
owned and managed by U.S. equity holders, with the Asians holding
minority equity shares “that would, like preferred stock, be
convertible.”
The U.S. government would act as a guarantor, “providing a sovereign
guarantee scheme to assure the investment principal of the CRF against
possible default of targeted companies or projects”.
The Federal Reserve would set up a special account to supply the
liquidity the CRF would require to swap sovereign debt into industrial
investment in the United States.
“The CRF would lessen Asians’ concern about implicit default of
sovereign debts caused by a collapsing dollar,” Yu Qiao concluded. “It
would cost little and help the U.S. by channeling funds to business
investment.”
This morning on CBS’ Face the Nation, House Minority Leader Nancy Pelosi (D-CA) blithely announced that if she were President Obama, she would simply invoke the 14th Amendment to the Constitution and unilaterally raise the debt ceiling:
Well, you ask the Republicans, because we always passed the debt ceiling. When President Bush was president, as he was incurring these massive debts, and the Republicans weren't saying 'boo' at the time. There should be, this is a conversation where there should be no doubt. In fact, if I were president, I'd use the 14th Amendment, which says that the debt of the United States will always be paid.
Just in case Americans missed it, Pelosi left no room for doubt. When host Bob Schieffer asked, “You would just go ahead and do it, you wouldn’t wait for Congress?” she answered, “I would just go do it.”
There is no legal argument that the 14th Amendment allows the President to ignore Congress’ power of the purse strings on incurring debt. The relevant text reads:
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
The text of this amendment is clear: no law can be passed which questions the validity of the public debt. But, of course, the debt ceiling does not do that. It merely prevents the government from borrowing more money to pay that debt. Government still carries the debt, and still has to pay it. It just can’t take out a second credit card to do so if the debt ceiling is not increased. (Incidentally, the purpose of the amendment was to prevent Southern states from voting to negate debts incurred by the Union in waging the Civil War against the Confederacy.)
This is even a bridge too far for the Obama administration, which says that the 14th Amendment does not “give the president the power to ignore the debt ceiling – period,” according to White House spokesperson Jay Carney. But Democrat dreams of executive branch tyranny under Obama continue. And why not? So far, Obama hasn’t been disinclined to ignore the Constitution.
Crack cocaine is one of the most addictive substances on earth. It chemically alters part of the brain called the “reward system.” The drug traps dopamine in the synapses between nerve cells in the brain, reproducing the feelings of pleasure we get while eating or having sex — a euphoric high lasting anywhere from five to fifteen minutes. But then the drug wears off, leaving the person feeling let-down and depressed, and creating a desire to smoke more crack in order to feel good again.
Research has shown that monkeys addicted to crack will press a bar more than 12,000 times to get a single dose, and the second they get it they start pressing the bar for more. On New Year’s Day, America inhaled deeply on something far more dangerous and addictive than crack cocaine — government spending.
The House finally gave in to peer pressure Tuesday night and voted to approve a Senate “fiscal cliff” bill to be signed by America’s biggest drug dealer, Barack Obama. The deal increases taxes $41 for every $1 in spending cuts.
On November 6, 2012, a plurality of uninformed voters stumbled into the voting booths and despite the worst economy since the Depression, pressed the bar 59.8 million times in order to get another dose. The 57.1 million Americans who tried to remove the drug dealer from the neighborhood and the 13 million people (including 3 million Republicans) who voted in 2008 but closed their curtains and stayed home in 2012, watched on early Tuesday morning in stunned amazement as Senate Republicans, with pupils dilated and a light blue cloud of smoke following them, appeared nervously before the cameras and with straight faces denied smoking anything. The House — with a majority of Republicans voting against it — went along with the Senate on the deal.
The “fiscal cliff” Republicans “avoided” was the harsh terms of the Budget Control Act of 2011 which were scheduled to go into effect January 1. This included a 2% tax increase for workers as temporary payroll tax cuts expired, the end of certain business tax breaks, a rollback of the Bush tax cuts from 2001-2003, and the onset of massive tax increases that come with Obamacare. The payroll tax holiday was allowed to lapse, but the rest of the tax cuts survive — except for the top tax rate on the rich which moved up to 39.6%.
This would not have been good for the economy, but the cliff was not all bad. According to Barron’s, last year’s failure to agree on a plan to cut the budget deficit by at least $1.2 trillion over 10 years would also have automatically resulted in precisely the sort of behavioral modification treatment America needs — deep automatic spending cuts (known as “sequestration“) to over 1,000 government programs, including the defense budget and Medicare payments to doctors. Sequestration would have substantially reduced but not eliminated the federal budget deficit (from 7.6% of GDP to 3.8%). But it would have been a step in the right direction.
Congress’ fiscal cliff deal calls for $620 billion in new taxes while coming up with only $15 billion in spending cuts. Only a crack addict will fail to admit that the real cause of our long-term deficits is government spending, not low revenue. While revenue will surpass its historical average of 18.1 percent of GDP by 2018, spending remains above its historical average of 20.2 percent and would have reached 22.1 percent by 2022, even if the $2.1 trillion in spending cuts in the Budget Control Act had occurred. But then again, addicts always deny they have a problem. Ask a Democrat. They believe we are not spending enough. After 50 years of the War on Poverty, we are further away from victory than when we started. Yet America’s addicts justify firing up the crack pipe again by reciting the worn-out anti-poverty narrative – help the poor by spending more. Start another federal program.
America’s drug-dealer-in-chief has overseen a 50% increase in our national debt, which currently is at $15,355,838,921,022.16. This is more than the gross domestic product of the entire country and more than the GDP of China, Japan, and the UK combined. In less than four years the Obama adminstration has added $6 trillion to that number. Publicly held debt has increased by 80%. Instead of admitting its problem and checking into rehab, Congress simply keeps raising the debt ceiling. Each U.S. taxpayer now owes $111,414 — and counting. The budget deficit has now topped $1 trillion for four straight years. In a few short years we will be spending more on interest payments on the debt than on the entire defense budget.
US budget debts/ceilings Succinctly explained..
This puts things into a much better perspective. J
Lesson # 1:
* U.S. Tax revenue: $2,170,000,000,000
* Fed budget: $3,820,000,000,000
* New debt: $ 1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cuts: $ 38,500,000,000
Let's now remove 8 zeros and pretend it's a household budget:
* Annual family income: $21,700
* Money the family spent: $38,200
* New debt on the credit card: $16,500
* Outstanding balance on the credit card: $142,710
* Total budget cuts so far: $38.50
Got It ?
OK now......
Lesson # 2:
Here's another way to look at the Debt Ceiling:
Let's say, You come home from work and find
there has been a sewer backup in your neighborhood....
and your home has sewage all the way up to your ceilings.
What do you think you should do ......
Raise the ceilings, or remove the sh!t?
We're always hearing from politicians about the urgency of the
nation's fiscal situation. The debt is over $16 trillion. Deficits --
the annual shortfall -- are persistently north of $1 trillion.
Those figures are constantly in the background, reminding both
parties that whatever the solutions, they need to find and act on them
quickly. And the solutions will have to be big -- because the problem is
massive.
Experts agree that drastic changes are needed to return America to a
fiscally sustainable path. But it's a long road to get there -- in the
face of $1 trillion deficits, closing the gap will be done one million,
one billion, at a time.
Here are a few ideas:
Shutting down the post office on Saturdays would help save about $3 billion.
Changing Medicare eligibility from 65 to 67 would bring back $6 billion, according to one estimate.
A plan proposed by Sen. Tom Coburn that cuts non-essential defense programs would save $7 billion.
Capping tax deductions at $25,000 would retain $68 billion.
And proposed additional taxes on the top 2 percent of earners would bring in $82 billion.
Hypothetically, if all these proposed solutions were to be enacted,
the U.S. would spend $166 billion a year less than it does today.
That's a lot. But not when it's compared with how much is spent in a
year -- $3.5 trillion in 2012. And it's even less when compared with the
total national debt.
Economist John Taylor, who wrote the book "First Principles: Five
Keys to Restoring America's Prosperity," said lawmakers could solve the
problem by focusing on a few key areas.
"The problem was created in Washington. It can be fixed in
Washington," he said. "I have to think in terms of economics what the
best thing to do (is) and for me that's to gradually reduce spending as a
share of GDP, that means reduce the growth rate."
He continued: "That's what a family would be doing if they were
borrowing too much, they'd just go back to where they were before the
problems began. ... Number two, we have an opportunity now for, to
reform our tax code, that will also stimulate economic growth and work
on this high unemployment rate. And longer term, there are some reforms
in Social Security, Medicare in particular, that can reduce really what
is expected to be an explosion of spending into something that's more
sensible, more sustainable."
Former Democratic Sen. Evan Bayh narrowed the solutions down to two categories.
"Number one, getting our future rates of entitlement spending under
control, particularly in the health care arena. Those are the big
numbers," he said. "Secondly, even modest increases in the rate of
growth in the economy, even .5 percent more per year."
He said that over a decade or more, that growth "generates huge money
which makes it so much easier to solve this problem in a way that's
politically palatable."
Alice Rivlin, Bill Clinton's budget director and one of the only
people to serve on both of the most prominent deficit-reduction
commissions in Washington, agreed that the growth in health care
entitlements must be slowed.
She added: "You have to put Social Security back on a firm foundation
and you have to raise more revenues through a reformed tax code.
Everybody who's looked at it comes out that way. ... But (lawmakers) are
caught in this political game of blaming each other."
Economists urged lawmakers not to squander the opportunity to correct course.
"I'm actually convinced that now is a better time than ever," Arthur
Brooks, president of the American Enterprise Institute, said. "We have a
golden opportunity to do some of the things that we should have done a
really long time ago. We have an opportunity to actually shape the
entitlement crisis. ... The key thing that we have to remember is not to
let this slip away."
Congressional lawmakers met last week to try to hammer out a deal to avert the fiscal cliff. Democrats insist on revenue increases as part of such a deal, saying new revenue is the only way to significantly reduce the national debt. However, it is not a lack of revenue that is driving U.S. debt; it is unrestrained federal spending. American lawmakers looking to solve America’s looming fiscal crisis need not look further than Canada.
Highlighted at a recent Cato Institute conference, our neighbor—and competitor—to the north serves as a good example of what it takes to return to a strong economy. The Great White North has turned around its fiscal situation and is now experiencing financial stability and economic growth.
In Canada, federal spending has been trending downward since 1993, according to Cato’s Chris Edwards. Canadians have cut spending in virtually every area except health care. The federal government now accounts for only 38 percent of total government spending. In the U.S., by contrast, the federal government accounts for 71 percent of total government spending.
The Canadian government, among other changes, altered benefit schedules for the Canadian Pension Plan to reduce the total amount of benefits paid.
In a similar vein, The Heritage Foundation suggests a variety of benefit changes to Social Security that would strengthen the program’s finances, for example, by raising the eligibility age slightly and replacing cost of living adjustments with the Chained Consumer Price Index for a more targeted measure of inflation in consumer goods. Bolder changes include gradually introducing a flat benefit that targets scarce resources to those seniors who need them the most and provides all seniors with protection from poverty in retirement.
Canada also cut corporate income tax rates. The U.S. has the highest rate among its competitors in the industrialized world. The combined federal and state corporate rate in the U.S. is over 39 percent. Canada now has a combined rate of only 25 percent.
Contrary to popular expectations, lower corporate tax rates have not resulted in significantly reduced corporate tax revenue in Canada. Instead, corporations based in Canada have reported more income since lower tax rates went into place. And Canada is experiencing low unemployment and a strong Canadian dollar.
The Heritage Foundation’s New Flat Tax would replace today’s complex tax system for individuals and business with a simple, neutral, and transparent tax system that would allow America to achieve its full economic potential.
Europe has not followed Canada’s example, and the resulting severe debt crises are sending people to the streets in an outbreak of violent protests. Out-of-control government spending and deficits have resulted in massive borrowing, which has led to bailouts for many European countries.
Here in the United States, we have all the ingredients necessary to create a similar debt crisis in the not-so-distant future. Over the past four decades, federal spending has increased 288 percent, nearly quadrupling in real terms. Thirty-two cents out of every dollar spent was borrowed in 2012. Debt held by the public is a staggering 73 percent of GDP, and our government has run trillion-dollar budget deficits four years in a row.
In less than 10 years, the U.S.’s publicly held debt will surpass the size of the entire U.S. economy and is projected to continue skyrocketing from there. (continues below chart)
To make matters worse, there is a dark demographic cloud on the horizon. In all Western nations, the proportion of older people as a share of the population is increasing. In the U.S., baby boomers are increasingly reaching retirement age, and in Europe, fertility rates are well below replacement level. As the populations of these countries age, entitlements will eat up an ever-increasing share of federal spending and place a greater strain on a smaller share of working-age taxpayers.
Solving America’s spending and debt challenges is possible. Canada’s example illustrates some of the steps this will take—including major cuts to federal spending, tax reform, and entitlement reform. If our leaders can find the courage to pursue this path, we can avoid an economic collapse and Save the American Dream.
--------------------------- Paul Bremmer is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm.
In spite of years of harsh spending cuts and tax increases, Europe's debt problems are getting worse.
Figures from the EU's statistics office Wednesday showed that, at the end of the second quarter, the total government debt of the 17 countries that use the single currency was worth 90 per cent of the group's total economic output for the year — the highest level since the euro was launched in 1999.
The rise from the previous quarter's debt to gross domestic product ratio of 88.2 per cent, and the previous year's equivalent of 87.1 per cent, is a result of the eurozone's economic problems — which are making it harder for countries to handle their debts.
"The euro area economy remains stuck in a rut," said James Ashley, senior European economist at RBC Capital Markets.
According to Eurostat five of the countries that use the euro are in recession — Greece, Spain, Italy, Portugal, and Cyprus. Many analysts expect the eurozone to slip back into recession in the third quarter of the year when official figures are published next month. A recession is technically defined as two quarters of negative growth in a row.
Other figures Wednesday pointed to a deepening economic crisis in the eurozone. The purchasing managers' index — a gauge of business activity — from financial information company Markit fell from the previous month's 46.1 to 45.8 in October — its lowest level in more than three years. Any figure below 50 indicates a contraction in activity.
German business confidence slips
Meanwhile, a closely watched survey from the Ifo Institute found business confidence in Germany, Europe's biggest economy, confounded expectations of a modest increase and dropped for the sixth month in a row. Ifo's key figure for October dropped to 100 from 101.4 in September.
Germany has been the main reason why the eurozone has not fallen into recession. The country's powerhouse exporters, such as Volkswagen and BMW, have taken a slice of rising trade volumes around the world while its consumers have shown an increasing appetite to spend. However, the country's economy has recently lost its momentum as the debt troubles on its doorstep have weighed on economic confidence. More on CBC >>
You do not need to be a god to wonder how Greece is going to get out of
trouble if the Financial and Economic Crimes Unit can lose a list of
2000 alleged Swiss bank account holders.
The parliament has
ordered a full inquiry into how the list slipped through their fingers.
It was supplied two years ago by the-then French finance minister
Christine Lagarde who, as IMF boss today, is one of Greece's lead
creditors.
Add to that a second list that has emerged naming 30
fprmer and present politicans it is alleged took bribes and dodged
taxes, and it is clear corruption is a many-headed hydra that will need a
lot of killing.
It goes deep into Greek society. In fact, everyone's at it.
"We
have reached a level which is not supportable for any civil society
like our own, and we see that in a lot of areas, we see that in what we
call the petty corruption which is the 'fakelaki,' which is not going
down," claims the Greek president of lobbyists Transparency
International Konstantinos Bakouris.
"Fakelaki", or little brown
envelopes, change hands at every level of society, from tax and planning
inspectors to doctors and businessmen.
"The elimination of such
parameters is the basis for a new step, because if we stay in this
situation, there is no way out," says New Democracy member of the
European parliament Marieta Giannakou.
More than 23 billion euros
in tax escapes Greece every year. For example, 20% of Greek petrol is
thought to sell on the black market. And now illegal gold buyers are
cashing in on people selling the family jewels and smuggling the metal
out of the country.
Two years after eurozone began its downward financial spiral, the European Central Bank is about to unveil a widely-anticipated plan to pump more money into the system to stem a wider collapse.
But the plan, similar to the massive bond-buying undertaken by U.S. central bankers four years ago, may be too little, too late.
“It’s going to take a lot more than a few rate cuts here and there to give us a lift,” said Peter Dixon, a senior economist at Commerzbank Securities. “Monetary policy is effectively running out of options.”
Europe is also running out of time. Manufacturing across the continent contracted faster than previously thought last month, according to the latest data released Monday. The recession sparked by a crushing debt hangover in a few smaller members of the 17-nation bloc is now sweeping through Germany and France. The financial turmoil that sank Greece as investors and depositors fled now threatens the much larger economies of Spain and Italy.
European Central Bank President Mario Draghi bought some time last month, calming markets somewhat with a pledge to do "whatever it takes" to save the euro. Now, he has to deliver. On Thursday, the ECB is set to unveil details of a new bond-buying plan that has re-opened long-standing fault lines in Europe’s experiment with a common currency.
“You have the troubled nations -- Portugal, Italy Spain, Greece -- all lined up in one corner and you have the funding nations with capital -- Germany, Austria, Finland, the Netherlands -- lined up in the other corner,” said Mark Grant, an investment banker at Southwest Securities. “It’s going to be a very bloody battle on who gets what capital and in what form and how much.”
In today’s Daily Reckoning, we’ll do something we can barely stand
to do: we’re going to write one more time about Greece. If you can
stand to read it, you may come to the same conclusion we reached.
That conclusion is simple: what’s going on Europe has nothing to do
with solving a debt crisis and everything to do with preserving a
corrupt system based on limitless debt and growing government power.
The sooner you understand that fact, the sooner you’ll be able to
prepare for what happens next. There are two options for what
happens next, and we’ll get to those shortly.
First, though, doesn’t it strike you as strange that all of Europe
can be brought to its knees by tiny little Greece? Greek GDP is just
2.4% of Europe’s GDP. In economic terms, Greece doesn’t matter. Its
lack of growth or economic competitiveness shouldn’t be factors that
can destroy Europe’s 13-year single currency experiment. Yet, Greece
obviously does matter; otherwise the European financial markets
wouldn’t be celebrating the latest €130 billion bailout that’s on
its way to Athens.
So here’s our question: Why do Greek finances matter to anyone
outside of Greece? If you rule out the obvious things that don’t
matter, that leaves everything else. Or as Sherlock Holmes was fond
of saying, “when you have eliminated the impossible, whatever
remains, however improbable, must be the truth.”
First, let’s see why the possible explanations for Greece’s
importance to the world are actually impossible. Take the issue of
debt reduction. As we wrote last week, the deal before Europe would
reduce Greek debt to 120% of GDP by 2020. The IMF says that level is
sustainable.
Back in a universe where common sense prevails, you can see that the
plan is a joke, at least in terms of debt reduction. A plan to
reduce Greek’s debt to 120% of GDP...EIGHT YEARS FROM NOW...is not a
serious plan about debt. Therefore, the plan cannot be about debt
reduction.
Will the plan make Greece more competitive in the long run? Well,
probably not. In order to get more money by March 20th, the Greek
Parliament had to agree to certain structural reforms. Some of those
reforms might even be a good idea. But cutting the minimum wage
isn’t going to be popular. And with Greek GDP shrinking by 7% in the
fourth quarter, years of austerity won’t make Greece more
competitive. The lifestyle of the Greeks will be destroyed and the
debt will remain. Therefore, the plan cannot be about making Greece
more competitive.
Does saving Greece save the euro? Not at all. The euro would be
better off without Greece and Greece would be better off without the
euro. The Germans are even planning for a euro that doesn’t include
Greece. With its own currency, Greece could default, devalue,
inflate and start over. Argentina did it in the last 10 years. It’s
not rocket science. Therefore, saving Greece is not about saving the
euro.
If saving Greece is not about saving the euro, and if it’s not about
reducing Greek debt, and if it’s not about making Greece a more
competitive economy...then just what IS it about? Well, now that
we’ve rule out what’s impossible, let’s look at what’s left.
Saving Greece means preventing a technical default...even though
Greece has already defaulted in a real-world sense. So why is
avoiding a technical default so important to the European Central
Bank (ECB) and the International Monetary Fund (IMF)? The current
plan certainly looks like a default. Under the plan, €100 billion
worth of Greek debt would disappear, thanks to a debt swap agreement
with private sector investors. The ECB has twisted enough arms to
get creditors to accept a 70% haircut on their current Greek debt
without actually calling it a default.
And yet, bizarrely, Greece’s creditors could be forced to accept
this not-a-default default losses recourse to the credit default
insurance they purchased. That’s right; they might lose 70% of their
capital and still be denied a payout on the default insurance they
purchased. That would be like an insurance company refusing to honor
a fire insurance policy because only 70% of your house burned to the
ground.
It gets kind of wonky here. But really, it’s about who gets to make
the rules. To you and me and everyone else in the universe where
common sense prevails, a non-voluntary 70% loss on your government
bonds is a default. But you and I don’t get to decide what
constitutes a credit default. That honour belongs to the
International Swaps Derivatives Association (ISDA). The important
thing to keep in mind here is that the ISDA is a trade group made up
of banks and financial firms. Those are the firms that have the most
to lose if Greek bonds default. It’s in the interest of the members
of the ISDA that a non-voluntary credit event in Greece NOT be
called a default.
It gets even murkier here. The ISDA essentially represents the
global banking system. In Europe, the banking system is full of
government bonds. Those bonds are nominally assets. If Greece
defaults, it sets a precedent for how other countries might deal
with unsustainable debt levels. This imperils the collateral of
Europe’s entire banking system. More >>
By Bill Wilson — At more than $49,000 per person using the most recent data from the U.S. Treasury and Census,
we have a higher debt per capita than any of the PIIGS nations. Elected
officials and other central planners attempt to comfort themselves with
the false notion that the debt never needs to be repaid. That this $15.4 trillion debt can continually be absorbed by an ever-expanding global financial system. So why worry?
The larger the debt gets, because it is not being repaid and has actually increased every single year since 1957,
the more of it needs to be refinanced over time. That eats a larger and
larger share of the economy every year, diverting resources away from
more productive facilities and into a useless paper trade. As bloated as
international financial institutions have become, there will come a
point when not even they can afford to lend us more money, as is already
happening in Europe.
While it is hard to say where that tipping point is, when it
comes—not if, but when—we will be left with two choices: to repay the
debt, or to default. To avoid a default, the only solution is to balance
the budget now and begin paying the debt down.
This will be a difficult transition for the economy, and to cope with
it, it must be accompanied by measures to reduce the cost of doing
business in America to attract investment and create jobs. That includes
slashing the highest corporate tax rate in the developed world, undoing
the burdensome regulatory regime in energy, the environment, health
care, and labor, lifting restrictions on capital creation, and
strengthening the dollar.
As hard as it will be, at the end of that process, we will be more
competitive globally, unemployment will be lower, government will be
more limited, and we will be more prosperous.
¨Saturno jugando con sus hijos¨/ Pedro Pablo Oliva
Seguidores
Carta desde la carcel de Fidel Castro Ruz
“…después de todo, para mí la cárcel es un buen descanso, que sólo tiene de malo el que es obligatorio. Leo mucho y estudio mucho. Parece increíble, las horas pasan como si fuesen minutos y yo, que soy de temperamento intranquilo, me paso el día leyendo, apenas sin moverme para nada. La correspondencia llega normalmente…”
“…Como soy cocinero, de vez en cuando me entretengo preparando algún pisto. Hace poco me mandó mi hermana desde Oriente un pequeño jamón y preparé un bisté con jalea de guayaba. También preparo spaghettis de vez en cuando, de distintas formas, inventadas todas por mí; o bien tortilla de queso. ¡Ah! ¡Qué bien me quedan! por supuesto, que el repertorio no se queda ahí. Cuelo también café que me queda muy sabroso”. “…En cuanto a fumar, en estos días pasados he estado rico: una caja de tabacos H. Upman del doctor Miró Cardona, dos cajas muy buenas de mi hermano Ramón….”. “Me voy a cenar: spaghettis con calamares, bombones italianos de postre, café acabadito de colar y después un H. Upman #4. ¿No me envidias?”. “…Me cuidan, me cuidan un poquito entre todos. No le hacen caso a uno, siempre estoy peleando para que no me manden nada. Cuando cojo el sol por la mañana en shorts y siento el aire de mar, me parece que estoy en una playa… ¡Me van a hacer creer que estoy de vacaciones! ¿Qué diría Carlos Marx de semejantes revolucionarios?”.
Quotes
¨La patria es dicha de todos, y dolor de todos, y cielo para todos, y no feudo ni capellanía de nadie¨ - Marti
"No temas ni a la prision, ni a la pobreza, ni a la muerte. Teme al miedo" - Giacomo Leopardi
¨Por eso es muy importante, Vicky, hijo mío, que recuerdes siempre para qué sirve la cabeza: para atravesar paredes¨– Halvar de Flake[El vikingo]
"Como no me he preocupado de nacer, no me preocupo de morir"- Lorca
"Al final, no os preguntarán qué habéis sabido, sino qué habéis hecho" - Jean de Gerson
"Si queremos que todo siga como está, es necesario que todo cambie" - Giuseppe Tomasi di Lampedusa
"Todo hombre paga su grandeza con muchas pequeñeces, su victoria con muchas derrotas, su riqueza con múltiples quiebras" - Giovanni Papini
"Life is what happens while you are busy making other plans" - John Lennon
"Habla bajo, lleva siempre un gran palo y llegarás lejos" - Proverbio Africano
"No hay medicina para el miedo"-Proverbio escoces "El supremo arte de la guerra es doblegar al enemigo sin luchar" -Sun Tzu
"You do not really understand something unless you can explain it to your grandmother" - Albert Einstein
"It is inaccurate to say I hate everything. I am strongly in favor of common sense, common honesty, and common decency. This makes me forever ineligible for public office" - H. L. Menken
"I swore never to be silent whenever and wherever human beings endure suffering and humiliation. We must always take sides. Neutrality helps the oppressor, never the victim. Silence encourages the tormentor, never the tormented" -Elie Wiesel
"Stay hungry, stay foolish" - Steve Jobs
"If you put the federal government in charge of the Sahara Desert , in five years ther'ed be a shortage of sand" - Milton Friedman
"The tragedy of modern man is not that he knows less and less about the meaning of his own life, but that it bothers him less and less" - Vaclav Havel
"No se puede controlar el resultado, pero si lo que uno haga para alcanzarlo" - Vitor Belfort [MMA Fighter]
Liborio
A la puerta de la gloria está San Pedro sentado y ve llegar a su lado a un hombre de cierta historia. No consigue hacer memoria y le pregunta con celo: ¿Quién eras allá en el suelo? Era Liborio mi nombre. Has sufrido mucho, hombre, entra, te has ganado el cielo.
Para Raul Castro
Cuba ocupa el penultimo lugar en el mundo en libertad economica solo superada por Corea del Norte.
Cuba ocupa el lugar 147 entre 153 paises evaluados en "Democracia, Mercado y Transparencia 2007"
Cuando vinieron a buscar a los comunistas, Callé: yo no soy comunista. Cuando vinieron a buscar a los sindicalistas, Callé: yo no soy sindicalista. Cuando vinieron a buscar a los judíos, Callé: yo no soy judío. Cuando vinieron a buscar a los católicos, Callé: yo no soy “tan católico”. Cuando vinieron a buscarme a mí, Callé: no había quien me escuchara.
Un sitio donde los hechos y sus huellas nos conmueven o cautivan
CUBA LLORA Y EL MUNDO Y NOSOTROS NO ESCUCHAMOS
Donde esta el Mundo, donde los Democratas, donde los Liberales? El pueblo de Cuba llora y nadie escucha. Donde estan los Green, los Socialdemocratas, los Ricos y los Pobres, los Con Voz y Sin Voz? Cuba llora y nadie escucha. Donde estan el Jet Set, los Reyes y Principes, Patricios y Plebeyos? Cuba desesperada clama por solidaridad. Donde Bob Dylan, donde Martin Luther King, donde Hollywood y sus estrellas? Donde la Middle Class democrata y conservadora, o acaso tambien liberal a ratos? Y Gandhi? Y el Dios de Todos? Donde los Santos y Virgenes; los Dioses de Cristianos, Protestantes, Musulmanes, Budistas, Testigos de Jehova y Adventistas del Septimo Dia. Donde estan Ochun y todas las deidades del Panteon Yoruba que no acuden a nuestro llanto? Donde Juan Pablo II que no exige mas que Cuba se abra al Mundo y que el Mundo se abra a Cuba? Que hacen ahora mismo Alberto de Monaco y el Principe Felipe que no los escuchamos? Donde Madonna, donde Angelina Jolie y sus adoptados around de world; o nos hara falta un Brando erguido en un Oscar por Cuba? Donde Sean Penn? Donde esta la Aristocracia Obrera y los Obreros menos Aristocraticos, donde los Working Class que no estan junto a un pueblo que lanquidece, sufre y llora por la ignominia? Que hacen ahora mismo Zapatero y Rajoy que no los escuchamos, y Harper y Dion, e Hillary y Obama; donde McCain que no los escuchamos? Y los muertos? Y los que estan muriendo? Y los que van a morir? Y los que se lanzan desesperados al mar? Donde estan el minero cantabrico o el pescador de percebes gijonese? Los Canarios donde estan? A los africanos no los oimos, y a los australianos con su acento de hombres duros tampoco. Y aquellos chinos milenarios de Canton que fundaron raices eternas en la Isla? Y que de la Queen Elizabeth y los Lords y Gentlemen? Que hace ahora mismo el combativo Principe Harry que no lo escuchamos? Donde los Rockefellers? Donde los Duponts? Donde Kate Moss? Donde el Presidente de la ONU? Y Solana donde esta? Y los Generales y Doctores? Y los Lam y los Fabelo, y los Sivio y los Fito Paez? Y que de Canseco y Miñoso? Y de los veteranos de Bahia de Cochinos y de los balseros y de los recien llegados? Y Carlos Otero y Susana Perez? Y el Bola, y Pancho Cespedes? Y YO y TU? Y todos nosotros que estamos aqui y alla rumiando frustaciones y resquemores, envidias y sinsabores; autoelogios y nostalgias, en tanto Louis Michel comulga con Perez Roque mientras Biscet y una NACION lanquidecen? Donde Maceo, donde Marti; donde aquel Villena con su carga para matar bribones? Cuba llora y clama y el Mundo NO ESCUCHA!!!
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