Relevant and even prescient commentary on news, politics and the economy.

Greenspan promoting “Entitlement” cuts as the necessary solution to the economy. 25% worth!

From an interview on NPR’s Here and Now comes:

“The official actuaries of the Social Security system say in order to get our Social Security and retirement funds in balance, they’d have to cut benefits by 25 percent indefinitely into the future,” he says. “Do I think it’s going to happen? Well I don’t know, but this is one of the reasons why inflation is the major problem out there. So long as you don’t do it, you’re going to cause the debt overall — the total government debt — to rise indefinitely, and that is an unstable situation.”

He adds: “In the book … discussing what the long-term outlook is all about, we say that the issue of the aging of the population and its consequences on entitlements is having a significant negative deterioration over the long run. The reason for that is what the data unequivocally show is that entitlements — which are mandated by law — are gradually and inexorably driving our gross domestic savings, and the economy, dollar for dollar. And so long as that happens, we have to borrow from abroad, which is our current account deficit.”

He also said:

“When you deal with fear, it is very difficult to classify,” he tells Here & Now‘s Jeremy Hobson. “But you can look at the consequences of it, and the consequence is basically a suppressed level of innovation and therefore of capital investment and a disinclination to take risks.”

I agree with this, but not just as it relates to “ a suppressed level of innovation…” but instead as it relates to the 2005 World Bank report on what produces wealth in a developed economy like ours. It comes down to trust.  Trust in your judicial system and trust in your education system.   I discuss this in the following 3 posts: 2007, 2009, 2011

Human capital is where it’s at!

This election at it’s core is about trust.  Destroy that, and we have no democracy, we have no economy.  It’s that simple.   That McConnell et al has decided he will not abide by the rules agreed to in conducting the business of the Senate means we have no currently functioning democracy.  That is how fragile democracy in the US is.  Our democracy comes down to two people, the leaders of each party in the Senate agreeing to the rules.  When one decides not to, there is nothing that can be done other than vote.

You can hear the full interview here:

 

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Men with beards respond…

I’m posting this here as a topical subject.  It may not seem economics related, but to me it is as it speaks to trust.  There is no way a nation can continue to produce $16 trillion dollars a year and not have trust as a basic position to starting all conversations.  No nation built on mistrust survives long as an economic growth machine  compared to humanity’s existence.

In response to all the intentional distortion regarding Bob Bergdhal’s appearance for the sole purpose of creating another path to discredit President Obama as part of a strategy for winning elections via the promotion of generic societal distrust, I present these men with beards and their response to tragedy which few have or will experience.  It is a tragedy that is not debated as to being the most powerful force for destroying ones sprit and will.

Amish men leaving trial

Men such as these did the following:

Charles Roberts wasn’t Amish, but Amish families knew him as the milk truck driver who made deliveries. Last month, it was announced that the Amish community had donated money to the killer’s widow and her three young children.

It was one more gesture of forgiveness, gestures that began soon after the shooting.

“I think the most powerful demonstration of the depth of Amish forgiveness was when members of the Amish community went to the killer’s burial service at the cemetery,” Kraybill says. “Several families, Amish families who had buried their own daughters just the day before were in attendance and they hugged the widow, and hugged other members of the killer’s family.”

But the above picture is not of those particular men.  It is a picture of men who were attending a trial for a hate crime that manifested in a man’s beard being cut off.   Sixteen men went to jail for that hate crime against a group of people who are capable of forgiving what the nation could not believe was forgivable.

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