FEB 1918 SIT EC y POL
ND denounce Global-neoliberal debacle y propone State-Social
+ Capit-compet in Econ
ZERO HEDGE ECONOMICS
Neoliberal globalization is over. Financiers know it, they
documented with graphics
But in the long run.. meanwhile you can continue spending
& accumulating debt, is the messag-here
"...the
continued growth of public debt raises eventual sustainability questions iF
left unchecked."
What has so spooked Goldman, which rhetorically asks "what's wrong with Fiscal Policy?" is that "US fiscal policy is on an unusual course. As shown in the left panel of Exhibit 1, we expect the budget deficit to widen over
the next few years, as a result of prior imbalances and recently
enacted policies, which should
lead to a federal debt/GDP ratio of around 85% of GDP by 2021."
See charts
For the non-fiscal conservatives, Goldman conveniently
highlight the following: the
US deficit should be small and shrinking, not large and growing.
See chart:
The reason for this is that while
revenues look likely to remain at the lower end of their historical range (over
the last 50 years, revenues have fluctuated between around 15% and 20% of GDP,
averaging about 17.5%), mandatory spending continues to
grow. According to Goldman, and as shown in Exhibit
3, federal primary spending is at the higher end of the historical
range, but looks likely to continue to increase as a
share of GDP absent further policy changes.
See chart:
Projected
increases in mandatory spending—this includes Social Security, Medicare,
Medicaid, and income support programs—are primarily responsible for this rise. Additionally, "health spending has continued to
rise. While health care price inflation has remained
subdued for several years, enrollment in federally subsidized health benefits
has increased and recently released estimates by the Centers for
Medicare & Medicaid Services Actuary anticipate an increase in spending
growth in 2018-2020 due to an expected increase in the volume of care and an
uptick in healthcare inflation."
Then there is the biggest
wildcard of all: interest
expense, which is set to surge, surpassing $1 trillion in the next few years. Here's Goldman:
We expect rising interest rates and a rising debt level
to lead to a meaningful increase in interest expense. On
our current projections, federal interest expense will rise to 2.3% of GDP by
2021. Extending our budget projections using CBO’s June 2017 baseline
combined with recently enacted policy changes and an assumed extension of those and other policies through 2027 suggests
interest expense will reach around 3.5% of GDP by that year (Exhibit
6).
See chart
As long as the Treasury
can borrow at a nominal interest rate below the rate of nominal GDP growth, which we will be the case
for several more years, the US can run a small primary deficit while
maintaining a roughly stable debt-to-GDP ratio.
The US has historically benefited
from a negative rate-growth differential, which has allowed the federal
government to run a modest primary deficit on average without increasing the
debt/GDP ratio (Exhibit 7). Assuming trend growth of 1.75% and a real interest rate of
1.5% over the long-term, the US should continue to enjoy some benefit from this
differential. More importantly in the near-term, the Treasury’s average
borrowing rate should remain well below the growth rate for the next few years,
even with a rise in spot interest rates, in light of the nearly 6-year
average maturity on outstanding debt
See Chart:
…
See more chart at:
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My submission
title was "Fed’s
Inflation Policy Destroys the Median Wage Earner".
Some claim
that a rising tide lifts all boats but,
the median wage earner is falling further and further behind...
Every month, pundits comment on
average wages. But
median wages best explain how the Fed's policies crucify workers.
The meme of the day is wage growth
is accelerating.
I disputed that notion on February 7,
in Acceleration
in Wage Growth is a Statistical Mirage.
On February 16, I reported Congratulations
Workers! You Make One Penny More Than a Year Ago.
That
penny more a year is by hour, in "real" inflation-adjusted terms. The
calculation is from the BLS.
Nonetheless, the Fed is not happy with wage destruction. Various
Fed presidents seek still higher inflation.
See chart:
Who Can Afford a Home?
See chart:
Rising Tide Lifts All Boats?
Some claim that a rising tide lifts all boats but, the median wage earner is falling further and further behind. This
contributes to asset price chasing and “better buy now” philosophies as happened in the housing bubble years.
Inflation-adjusted charts show THE SITUATION IS EVEN WORSE.
“Real” Year-Over-Year Percentage Increases
See Chart:
Blame the Fed, Congress, Nixon
- Blame Nixon for closing the gold window in 1972 that allowed Congressional deficit spending at will.
- Blame the Fed for insisting on 2% inflation in a technological price-deflationary world.
- Blame Congress for massive fiscal deficits every year.
History Lesson
The Fed bailed out the banks in
2000. At that time banks were troubled by soured dotcom bubble loans and loans
to foreign countries like Argentina.
…
The result was a housing bubble as
Greenspan kept interest rates too low, too long.
…
In 2009, the Fed bailed out the
banks when the housing bubble burst.
…
Since then, the Fed’s inflationary
policies benefited the asset holders, the banks, and the top 90% of wage
earners at the expense of everyone else.
Current Account Balance
See Chart
Credit Explosion
See chart:
Discussion Needed
The Fed’s inflation policies are contrary to BIS findings,
contrary to common sense, and contrary to the real-life results of median-wage
earners falling further and further behind.
Please, let’s have a genuine discussion regarding the Fed’s
inflation policies.
That discussion needs to incorporate
ideas outside the Fed’s “group-think” box of more inflation, secular
stagnation, and savings glut theories, all of which are easily proven
wrong.
Discussion Rejected
The Wall Street Journal rejected this Op-Ed submission via a
robot or a non-thinking person imitating a robot.
I know this because I sent in an inquiry to Editorial
Features Editor, James Taranto, asking to speak with him about the rejection,
and guess what.
My short Email request to speak to
Taranto, not a submission, received the identical rejection notice. Thank you
WSJ!
My submission title was "Fed’s
Inflation Policy Destroys the Median Wage Earner". It
started with the discussion of inflation targeting. The wage acceleration
mirage and the BLS penny admission happened after my op-ed submission.
Mainstream
media does not want to discuss what's happening and why. They already
"know". Nearly everyone but the Austrians believes "SECULAR STAGNATION" IS CAUSED BY "SAVINGS
GLUTS".
…
Source : https://www.zerohedge.com/news/2018-02-19/how-feds-inflation-policies-crucify-workers-pictures
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"We project that federal debt
will slightly exceed 100% of GDP and interest expense will rise to around 3.5%
of GDP, putting the US in a worse fiscal position than the experience of the
1940s or 1990s."
See chart:
This is
how Goldman puts it:
The US appears to
be headed into uncharted territory—at least for US fiscal policy—regarding the relationship between interest expense and the debt level.
As shown in Exhibit 11, interest expense considerably
exceeded the current level during the late 1980s and early 1990s, though the
debt level was moderate. By contrast, the debt level was slightly higher during
and just after World War II than it is today, while the level of interest
expense was similar.
However, we project that, if Congress continues to extend existing
policies, including the recently enacted tax and spending legislation, federal
debt will slightly exceed 100% of GDP and interest expense will rise to around
3.5% of GDP, putting the US in a worse fiscal position than the experience of
the 1940s or 1990s.
…
Source: https://www.zerohedge.com/news/2018-02-19/goldmans-chart-showing-us-headed-banana-republic-status
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'Dumb' humans never told Johnny 5 that the market's shut today...
See chart:
And there
are still people out there that believe we have stock 'markets' and that
'humans' are involved?
See Chart:
Volume is not tiny either.
We suspect the modest strength in the Dollar did not
help maintain any risk-on bounce in stocks.
See chart:
…
Source: https://www.zerohedge.com/news/2018-02-19/someone-forgot-tell-machines-us-markets-are-closed
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POLITICS
Seudo democ y sist
duopolico in US is obsolete; it’s
full of frauds & corruption. Urge cambiarlo
"The beauty in
Robert Mueller’s indictment of thirteen Russian Facebook trolls is that they’ll
never face trial, so Mr.
Mueller will never have to prove his case. In
the new misrule of law made popular by the #Me Too movement,accusations suffice
to convict the target of an investigation."
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"Social media could be just the start of a
slippery slope leading to an Orwellian worldcontrolled by Big Data
Brother...the mere possibility of
manipulation fuels conspiracy theories and undermines faith in democracy and
elections at a time when public trust is already low."
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WORLD ISSUES and M-East
Global depression is on…China, RU, Iran search for State
socialis+K- compet. D rest in limbo
The drip-drip-drip
death spiral of what was once the world's
most systemically dangerous bank continues as Bloomberg
reports Deutsche Bank has started cutting at least another 250
jobs at its corporate and investment bank units.
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Russian Foreign Minister Sergei Lavrov warned the Trump
administration not to “play with fire”
as he lashed out at the U.S. over what he described as its “provocative”
support for Kurds in Syria, while urging US troops in
the area of Al-Tanf to "leave immediately."
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DEMOCRACY NOW
US politics crisis: Trump captured by Deep state to
reproduce old cronyism without alter-plan
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to more
business-wars: its profiteers US-NATO
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INFORMATION CLEARING HOUSE
Deep on the US political crisis, their internal conflicts n
chances of WW3
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Mapping Trump’s
Empire: Assets and Liabilities By James Petras
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CBS Contradicts Itself On Mueller’s Report By Paul Craig Roberts
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Nunes: FBI and DOJ Perps Could Be Put on
Trial By Ray McGovern
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Thirteen Russians and a Ham Sandwich By James Howard Kunstler
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"Let Me Assure You, The DNC Hack Wasn’t
Even A Hack" By Tyler
Durden
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SPUTNIK and RT SHOWS
Geopolitics & the nasty business of US-NATO-Global-wars
uncovered ..
RELATED:
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Her name: Annegret Kramp.
She is head of the state of Saarland.
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RT SHOWS
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NOTICIAS IN SPANISH
Latino America looking for alternatives to neoliberalism to
break with Empire:
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-Ent a Miriam E: Grupo Tarea:Internet en Cuba: La agresión
continúa
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TRUMP
RUMBO A PERÚ
Comentario
a:
"DÉJAME QUE TE CUENTE
LIMEÑA" de Iroel Sánchez
Por Hugo Adan Feb
19-18
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Mund -continua
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PRESS TV
Global situation described by Iranian observers..
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