“the welfare systems that evolved in the mid-20th century are unaffordable under the demographic and economic circumstances of the 21st century”

Thanks to the historian, cum reportage of Niall Ferguson.

The financial crisis has merely exacerbated what was already a severe structural crisis of public finance, boosting deficits while slowing growth.

The scale of the challenge ranges from the really, really hard to the absolutely impossible. According to the Organization for Economic Cooperation and Development, just to stabilize its debt the U.S. government needs to turn its current primary deficit of 7 percent of gross domestic product into a primary surplus of 1.4 percent. That’s roughly double the fiscal squeeze Greece needs to make.

Reuters:

No big budget deal? Blame Obama, not Boehner

President Barack Obama could have done two things that might have saved his Mother of All Budget Deals.

First, he could have embraced market-centered, consumer -focused reforms to Medicare. That was about as likely as him accepting an Obamacare rollback. Second, he could have agreed — as House Speaker John Boehner and Republicans suggested — to sharply reduce tax rates in return for fewer special tax deductions/breaks/loopholes/subsidies. Recall that is what his own debt commission recommended.

Let’s not stop there

The disappearing black middle class

Growing up black in the segregated 1960s, Deborah Goldring slept two to a bed, got evicted from apartment after apartment, and watched her stepfather climb utility poles to turn their disconnected lights back on. Yet Goldring pulled herself out of poverty and earned a middle-class life — until the Great Recession.

First, Goldring’s husband fell ill, and they drained savings to pay for nursing homes before he died. Then Goldring lost her executive assistant job in the Baltimore hospital where she had worked for 17 years. The cruelest blow was a letter from the bank, intending to foreclose on her home of almost three decades.

Millions of Americans endured similar financial calamities in the recession. But for Goldring and many others in the black community, where unemployment has risen since the end of the recession, job loss has knocked them out of the middle class and back into poverty. Some even see a historic reversal of hard-won economic gains that took black people decades to achieve.

We cannot, in the end cut, borrow, and tax hike out of this.

As Niall Ferguson points out, we have to reverse the -7% to a plus 1.4%, that means MAKING STUFF. It doesn’t matter if it’s stuff we download created in the minds of men. It doesn’t matter if it’s a car, a boat, a dryer, a flip flop.

Since the mid 20th century this ENTIRE PLANET has been supported by the disposable income, the assets of, the equity in, and finally the bubble surrounding the AMERICAN CONSUMER. The American Consumer’s discretionary buying power has been extended by the narcotic of, for instance, Indonesian workers living in cardboard boxes outside of Djakarta in the 1990’s who would work for single digit %’s of the american worker’s pay. The American Consumer created the export economies which LIFTED INTO EXISTENCE A NEW WORLDWIDE MIDDLE CLASS.

The party’s over.

As Sarah Palin (the OTHER stupid bitch, right Mr. Mathews?) has just elucidated, the sugar daddy has run out of sugar. No matter what you think of Sarah Palin, the accuracy of the observation is right on.

I am sure that, given this, they are not just wondering how to protect the wealth that they HAVE EARNED in Zhongnanhai, but if the USA is going to not only correct the debt, but the situation which TRULY created it, EXPORTING CREATION TO THE LOWEST WAGE ON EARTH WHICH CAN SUPPORT MANUFACTURING AT ALL.

We cannot ‘shovel ready job’ our way back. We cannot throw people into the street our way back. We cannot raise the retirement age our way back. We cannot borrow our way back, stimulate our way back, or print $ our way back.

Only the growth of industries, businesses, and the jobs, careers, research, engineering, services, teaching, insurance sales, and every other minute benefit of of that growth, HERE in the USA can alter the state of the world.

AS IT DID.

As the export to the US consumer economies grew so dramatically, just what do you think is going to happen as this slow motion train wreck intensifies as the USA decelerates?

If a 5-8% change in mortgages paid, foreclosures, and home inventories in the USA has triggered this worldwide scenario, what happens as the black middle class disappears? As men and women over 45 find a CAREER IMPOSSIBLE once they have lost a job (a headhunter just remarked Saturday on national TV that at least in NY, the job market was NOW virtually closed to anyone over 30!!!!) , and temporary tightening becomes softly and daily a PERMANENT HARD TIMES MIND SET? As unemployment in the USA at 9.2% belies both the people who haven fallen off the long edge of 99 months, and all those now PERMANENTLY UNDEREMPLOYED AND WITH NO DISPOSABLE, DISCRETIONARY INCOME?

Who are they going to be making those IPODs in Shenzen for?

Their countrymen living in the Gobi? The folks around Lake Baikal? The oil workers in Lagos?

Only the ‘golden mountain’ can change the world gestalt, and to do it, we are going to have BEGIN by reversing the geographical manufacturing, invention, and engineering trends since the 1960’s. That means this has to be the place where the force of nature known as capital finds the least resistance.

If we don’t act on this, things won’t change. If things won’t change SOONER OR LATER the USA WILL DEFAULT BADLY, and to it’s own promises to it’s own retirees and sick people, never mind bonds held in Beijing. At that point there will be millions in the street in the USA, revolution will be in the air, and no one will care if we don’t pay on US Treasuries to Beijing.

So who is outlining this scenario so we avoid it?

Where is the leadership?

Are they AFRAID OF THE TRUTH?