From Meccania to Atlantis - Part 13 (4): Harpo, Gekko, Barko, Sarko
The systemic faults created by the gross incompetence and corruption of governments (1) have been exploited by the bankers to raid the bank. When reality check came and real estate values crashed, governments bailed out the malefactors and fanned the flames of fear to implement “solutions.” Such solutions took two forms: “bailout,” i.e. the transfer of toxic debt from the banks’ balance sheets to the governments’ balance sheets, or “stimulus,” i.e. throwing easy money at the hoi polloi and further inflating the governments’ balance sheets.
All that was merely another instance of the Western model of misgovernance, based on rolling over the consequences of wickedness and folly onto future generations. That protects the perpetrators but worsens the ultimate consequences for the rest.
The moral hazard and future consequences of bailing the banksters out were known. The Telegraph’s 11 February 2009 headline said it all: “European banks' toxic debts risk overwhelming EU governments.” Furthermore, the monetary/fiscal plague afflicting the world now erupted not in 2007 but in 1998. Its course was predicted and warnings were sounded fromthe outset by several Cassandras unwelcome in the corridors of power (2).
It started when Russia defaulted on its sovereign debt in 1998, precipitating the collapse of Long Term Capital Management and the subsequent near-collapse of stock markets worldwide. Central banks, particularly the U.S. Fed, responded by what money pros call “opening the spigot.” All that easy money created the Tech Bubble of 1998-1999, and the inevitable crash of 2000-2002. And that opened the central banks’ spigots much more than the first time – particularly the American spigots that were controlled by the hugely misguided Alan Greenspan.
Torrents of cheap money looking for a harbor found their way to the real estate market as of 2000. Real estate price doubled and tripled, particularly in places that had a sunny climate and beaches (e.g. Greece, Spain, Portugal, Italy, Florida, Coastal California) or a boomtown location (e.g. London, New York, Las Vegas). Thus, the worldwide housing bubble and its subsequent and, again, inevitable, crash. According to Martin Weiss of Weiss Research, just the American investors’ losses were $6.6 trillion from the Tech Wreck and $15.5 trillion from the burst Housing Bubble, a total of $22.1 trillion.
Central banks, however, read from the same book that has only one paragraph. With the third crash precipitated by exactly the same policies of cheap credit and too much money sloshing about, they just tore off the spigots completely, set interest rates at near zero, and let it rip. Hence “bailout,” “stimulus” and the resulting fourth bubble: the bubble of sovereign debt.
Between 15 September 2008 and 1 July 2009, for instance, the central banks of England, U.S., Switzerland and EU expanded their balance sheets (i.e. printed more paper money) by 127%, 119%, 80% and 39%, respectively (3). It’s the biggest bubble of them all. And now, this inflatable Mickey too is collapsing with a hiss.
They who inflated all these liquidity monsters in the first place, cannot but create “solutions” that are worse than the problems. The only problem that they have solved is the problem of governments’ lust for more power. Now they have much more such power.
With Ben Bernanke on the cover of Times Magazine, and Martin Wolf declaring at Financial Times that economists saved civilization, it’s worth reasserting that this has been just a classical Club of Crooks and Loons swindle: transform a Wall Street bankruptcy into a sovereign debt bankruptcy. Print money in a dozen underhanded ways to postpone a deflationary depression on your watch, even if that entails hyperinflation some years down the road. Or, to paraphrase the financial publisher Bill Bonner, Japan first, Zimbabwe later.
The rollover process underlies all of Western society. Evolving since 1945, it’s an unsustainable socialist-utopian model of government munificence in bountiful welfare, generous retirement privileges, socialized health care, heavily subsidized immigration, social engineering, streaming torrents of money and other unilateral favors onto Third World peoples and, in the tragic case of America’s unique madness, fighting costly wars for them too. This, coupled with socialist legislation, coddling labor unions, restricting and perverting employers’ hiring standards and practices, subverting meritocracy for the sake of a soothing race-and-gender fancy, and robbing at gunpoint the productive half of the state’s subjects in order to finance the chimera for the unproductive half.
This socio-economic model, entailing the state’s outlay of 40-50% of GDP annually, mostly for social transfers, had been leading the West to bankruptcy even before the earthquake of 2007-2009. The good intentions have been so vast and decoupled from reality, so conducive to financial rot and corruption that no possible tax-grabs could pay for them. The consumer plenty and coddling of minorities in America and the thick social safety net of Europe had to be based on government debts and government schemes to roll them over onto future generations.
Now, when the severe global recession has resulted in stalled business and wide unemployment everywhere, the tax revenues of the redistributive state with an aging population are going steeply down, while its social outlays would be going steeply up even without bailout and stimulus. With those two instruments of fiscal destruction added, the neo-socialist model is facing fiscal and social catastrophe. It’s kept alive with money printing, fleecing the last possible ducat from the working serfs, and fudging government accounting books -- but that cannot last.
What is needed is dismantling the utopian/corrupt model of Snatcher State (4) – the fiefdom of the Club of Crooks and Loons. This would entail reducing drastically the areas that are subject to counterproductive government meddling (5), letting go the people benefiting from such meddling as paid dispensers or beneficiaries, and reducing government outlays accordingly. That, however, is no longer possible due to the Looters Coalition in the 50-50 State – both concepts elaborated in previous chapters. In a democracy, when those in power engineer a 50%+ electoral majority whose self-interest demands the perpetuation of the status quo, change is not possible except after society has ruined itself.
Democracy depends on virtue and self-restraint. As Benjamin Franklin stated, “When the people find they can vote themselves money, that will herald the end of the republic.” But even Franklin could not have foreseen that through demographic engineering and multicultural indoctrination, social capital in the West will so diminish that people don’t care anymore if their grabbing precipitates the end of what used to be their republic.
The Western neo-socialist welfare state therefore finds itself unable to curb the social privileges and entitlements that it has been dispensing with such abandon. The tax-eating half, inured to the easy life, is unwilling to let go of the teat of state. The lavish payrolls, privileges and retirement benefits won by public sector unions from corrupt politicians drive all levels of governments into guaranteed future bankruptcy, despite the rollover tricks. Private sector labor unions do the same to their employers. The latter don’t have the luxury of the accounting fraud that proliferates in government, so they move their manufacturing to Asia or go bankrupt. They can’t even go bankrupt in peace anymore, for the government shows up with a potful of taxpayers’ money, as it did with General Motors.
A year ago, Newsweek ran a cover proclaiming “We are all socialist now” and showing two hands shaking: a blue one symbolizing the Left and the red one symbolizing the Right. But these two colors actually relate as per this icon:
At any rate, these debates are now obsolete. We are all pigs now.
PIIGS JAUK, BABEL FR US may be read as “Pigs trifle, Babel for us” (6). But it may also be read as Portugal, Italy, Ireland, Greece, Spain, Japan, United Kingdom, Baltics, Belgium, France, United States. And that’s not including teetering Eastern Europe, and China that may blow up for its own unique reasons. All are pigs that have been trifling with basic rules of common sense reality, bequeathing a crumbling global Babel to their subjects jointly and severally.
The acronym initially contained Portugal, Ireland, Greece and Spain, later added Italy, but that is not nearly enough. 16 countries in the Eurozone have deficits more than twice the allowed 3% limit, with heavy debt burdens and limited ability to sell more debt paper. Wherever one looks in the global economy, one sees nothing but a trail of erroneous premises and fraudulent promises – 45 years of rule by the criminals and the utopians, the crooks and the Body Snatchers (7), all in a pile in that Western jalopy careening toward the immutable majesty of Reality.
All the PIIGS JAUK BABEL FR US are propping their near-bankrupt financial systems. While Greece occupies the headlines now, we are in a Twilight Zone here where every shadow has a penumbra, every word may mean its opposite, and every agency has its own agenda. While most worry about the budget deficit of Italy, Deutsche Bank estimates that Italys’ 2010 deficit of 5.4% of GDP will be lower than Germany’s 6.3%. While media are astir with speculations of Greece’s bankruptcy, insiders talk about a “Greek-style budget crisis” in the UK, and American pundits ask “Will California go Greek?”
The index of global Sovereign Debt illness is in these metrics (8):
Iceland almost went under through the gross malfeasance of its banksters and their government cronies. Iceland’s banks had €100 billion-worth of dubious assets on their books when its central bank had €2 billion in foreign currency reserves. The three largest banks, Landsbanki, Kaupthing and Glitnir had a balance sheet total ten times the size of Iceland's Gross Domestic Product. In September 2008, three weeks after the collapse of Lehman Brothers, they had all been nationalized.
Iceland had converted the imminent bankruptcy of its banks into a near-bankruptcy for itself. “All of a sudden,” relays Der Spiegel, “Iceland was Europe's crash-test lab, for it seemed that what it was experiencing would sooner or later befall the rest of the world: a huge national debt, economic crisis, unemployment and inflation.”
Just to honor the claims of British and Dutch depositors in Icesave, which Iceland must do as per guarantees of its government, comes to €12,000 per each of Iceland’s nearly 320,000 residents. The ruling elite of this nice country of fire and ice has effectively deep-frozen it for the next 15 years.
"Will sovereign debt be the next sub-prime?” asked the Financial Times in November 2009. Yes, answered a sovereign debtor, Dubai World, seeking to “restructure” a major part of its $59-billion debt in loans from Western (primary British) banks. Apparently, the world does not need a sail-shaped 7-star hotel and a palm-shaped artificial island for artificial kitsch homes in the middle of nowhere, after all. But Dubai’s $59 billion is not even the appetizer in this giant feast of gargantuan debt gluttons.
The engines were still warm in the Ferraris and Porsches abandoned in panic at the Dubai International Airport by fleeing expat deadbeats, when European stock markets dropped 3%. Soon thereafter, the PIGS contagion erupted.
Greece, where the loons are few but the crooks abound, is leading the bacchanal vanguard, as may be expected of any warm Mediterranean hard-socialist plutocrat oligarchy powered by corruption and retsina. There is an interesting parallel inchardonnay-fuelled California, except there the loons far outnumber the crooks, the socialist corruption is more genteel, and government budget deficit is a paltry $41.6 billion versus Greece’s $50 billion, if incurred for similar reasons.
That Greece is even a part of the euro-zone demonstrates how defenseless the pigment-challenged Northerners are against the fanciful poetry (from the Greek poiēsis) of people with thousands of years of practice. With $420 billion government debt at 124% of GDP – twice the official Eurozone limit and nearly three times what Russia owned when it defaulted in 1998– Greece would lead the PIIGS the way of bacon even if its deficit were not over four times the official limit of 3% of GDP. For years, the Greek government hid this situation by accounting gimmicks and complex derivative swaps.
The hedge vultures are betting that Greece will default on its sovereign debt, the Greek government repeats the windup promise of austerity, and Germany is mumbling, "We give you cash, you give us Corfu". But fifty thousand rampaging Che Guevarra wannabes on Syntagma Square in Athens, a few Molotov cocktails on Ermou Street, a blockade of the major roads by farmers inured to handouts, and the promised tight belt and the tight purse will both come undone.
No one knows how the bitter Greek socialist satire will end. But some hint may again be deduced by observing where the vultures perch. Hedge funds currently have the largest short position against the euro ever: €11.5 billion, with €4.4 billion long euro leaving the net at €7.1 billion (9). And George Soros recently opined, “The euro will face bigger tests than Greece”.
It’s not coincidental that German banks carry $43 billion in Greek debt. Germany’s economy is famously strong, but it’s in jeopardy. By the end of 2008, Germany’s bank bailout program had committed €480 billion of taxpayers’ money and had become a “Bottomless Pit”. Mimicking the American model it derided, the German government approved this bonfire, whipped it through the upper and lower houses of the parliament and enacted it — all in the space of five days. Hypo Real Estate alone, Europe’s largest mortgage bank, received €52 billion in guarantees from Germany's bank rescue fund. It will not be enough, as Hypo has billions more in unrealized losses.
Germany’s economy contracted by 5% in 2009, despite its stimulus schemes like the copycat of the American “cash for clunkers” program, and increasing the public deficit to over 6% of GDP. And that’s before considering the de factodevaluation of the euro it may have to accept in order to save the far worse sovereign debtors in the Eurozone. What Germany is not considering is overhauling its tax-and-redistribute fiscal premises that must derail it eventually.
Germany can at least semi-afford its socialism, for now. But countries like Greece, Spain and Portugal that do not possess Germany’s industrial might but play in the socialist sandlot have been brought to their knees by Reality. The model relying on the coddling of workers unions and shafting employers, slack work ethic, generous unemployment and retirement benefits, public health care, high taxation, a crushing burden of bureaucracy and disincentives to entrepreneurship is the same old rollover chimera of Western neo-socialism, waiting for history’s inevitable spike.
All you had to know about the future of Portugal’s economy you could have predicted when its Maoist-Trotskyist Block won 10% of the vote in 2009. All you needed to predict the future of Spain’s sovereign debt transpired when in 2004 a utopian Socialist, José Luis Zapatero, was elected by popular vote as Spain’s Prime Minister.
The multiculti neo-socialist state does have a penchant for spending on foreign aid when its own people need aid, decreasing incentives to work via its “social welfare,” and increasing in perpetuity spending to counter declines in education results and rises in terrorism while continuing to import the people who cause such declines and rises. Not to speak of its anathema on such bits of simple “extreme right” wisdom like, Immigration or Welfare; choose one.
Ratings agencies are probably going to downgrade the sovereign debt of both Spain and Portugal, their financing costs will rise even more steeply than their steep rises in taxes, but the Socialist model will stand fast until it crashes.
Poor Ireland, the erstwhile European Tiger, had a better model for running a country, and it earned what it was spending. But it also had its Gekkos that blew the bank. Lenders covered by state guarantees had tens of billions euros in speculative property loans on their books. They were hammered by falling local property prices as badly as American banks were in the bigger frog pond. According to Bloomberg, Irish property prices have fallen by half over the last two years.
Anglo Irish Bank, the most aggressive mortgage lender, was nationalized after discovery of over 100 million euros in sweetheart credit it had extended to its own chairman. The Irish government has pumped €3 billions into Anglo-Irish, and pledged to inject €3.5 billion each into Allied Irish Bank and Bank of Ireland. As well, the government is eating up a staggering total of €77 billions of reckless loans made by all Irish financial institutions. That reads like a script written in Lower Manhattan.
Ireland at least seems to be able to squeeze itself with austerity measures enough to pull trough. The problem is that contagion spreads. While you may be worrying about Ireland’s debt, Morgan Stanley is already preparing for a UK sovereign debt crisis in 2010. British citizens will soon be paying a 20% VAT, and the yield on 10-year British debt notes is now 4.06% -- higher than Spain’s. But it won’t be enough.
Cool Britannia is like a nightmare virtual reality prophecy for the United States, on display ten years before the due date for the larger doppelgänger financially and in every other way. Its deficits are not the result of just a banking crash and a cyclical recession, but of decades of mismanagement and consuming the seed stock of future harvests per the game rules of a debauched democracy.
The Bank of International Settlements has disclosed that European banks have $2.1 trillion in exposure to sovereign debt of the PIGS alone, with French and German banks carrying almost half of that. In news lingo, “PIGS Exposure Explains ‘Shotgun Greek Wedding.” To show that its economists read the same books as the keepers of open spigots do at the U.S. Fed, the European Central Bank (ECB) had loaned €442 billion (then $622 billion) at an easy 1% to European banks. They promptly spent it on buying the high-yield sovereign debt of the fiscally weak EU members. Not only is this a camouflaged “quantitative easing,” i.e. American-style money printing, but it has added to the tremendous overhang of risky debt in Europe too, like in the United States.
And even that is just the surface. EU, Swiss and Swedish banks hold $1.5 trillion in mortgage and consumer loans from Eastern Europe. “Ur All Pigs From Hell!”, states an American financier, Gordon T. Long who shows that Eastern Europe is the banking industry’s ultimate subprime pit, with investors short the region’s debt more than that of the PIGS. On top of that, per the IMF, European and British banks have ¾ as much exposure to US toxic debt as American banks do. The reckoning is far from completed.
What is clear is that eventually, in one way or another, the ECB will have to open the euro spigots far more, to avoid the collapse of this debt tower. Not the debts of banks any longer, but the debts of nations. Euro pashas will shrug-off their serfs’ plaints in the more disciplined Eurozone countries with tales of how higher inflation rates are the cost they have to pay to prevent a break-up of the European Monetary Union, which would be even more expensive. In other words, like all the calamities the ruling Crooks & Loons have visited on their peoples since the 1960s, “The terrible mess we have unleashed upon you is now so deep that digging yourselves out will be more expensive than adding onto the pile.”
The IMF forecast in November that U.S. debt will be 99.5% percent of GDP in 2011. The U.K.’s will reach 94.1%. The Obama wrecking crew has proposed a $3.8 trillion budget for fiscal 2011, to “spur the recovery”. Total US government (fed, state, local) outlay in 2010 will be 44.5% of GDP -- coasting toward a perch in the “50-50 Club” from which there is no exit but through social catastrophe. In the entire history of the United States, this level was breached only during three years of World War 2, and otherwise not approximated even remotely, until 2008.
These are the strangest of times. If would take a Gibbon to paint the whole picture, and the sagas of even the smaller players like Belgium’s Dexia and Fortis Bank could make Thomas Mann proud. How then, to deal with the wily octopus, Goldman Sachs, that straddles Wall Street, the U.S. Government, the U.S. Federal Reserve, and may bag the European Central Bank too? How to deal in a paragraph with its lucrative currency swaps engineering that hid Greece’s debt then, and its shorting of Greece’s debt now? Moreover, according to ongoing revelations, e.g. here, Goldman was not the only bank, and Greece not the only country to have engaged in debt-hiding swap transactions. There is a whole family of cephalopods to deal with, and many more shoes will drop relative to the eight-legged banksters.
Athens too signifies more than meets the eye. While the corruption and spending promiscuousness of the Greek state occupies the news as this is being written, it’s Athens, New York, and Athens, Illinois where the ruin is just as compelling. There are towns named Athens in 15 American states, and some of those states are at a greater risk of bankruptcy than Greece. 48 of the 50 of them have budget deficits, the worst being in California (-49%), Illinois (-47%) Arizona (-41%), Nevada (-38%) and New York (-32%). Some may go bankrupt, as will some American cities.
California, the world’s eighth-largest economy, has a hole of $41.6 billion in an $82.9 billion budget (10). It has a bottomless well in education, as over 50% of its students are largely uneducable “Hispanic” immigrants, legal and illegal. The state has a bottomless well in healthcare, transportation, justice and prison systems, for the same reason. All this grows the size of state bureaucracy too, and Public Employee Unions are bleeding California dry. Repair is not possible, except for temporary Band-Aids, because it is now a 55% - 45% society with the tax-eaters in the majority. The tax-payers, mostly white, are leaving and raising the tax-eaters’ proportion even more. California voters rejected a bill called, The California Live Within Our Means Act, and will continue draining from the state everything they can, until they leave it a decayed husk.
“California is a greater risk than Greece,” warns JP Morgan chief Jamie Dimon. The title “California Is Dying—And It’s The Canary In America’s Immigration Coal Mine” phrased it more boldly.
Illinois has a $13 billion hole in a $28 billion budget and is “in utter crisis” (hat-tip, Ambrose Evans-Pritchard). New York's budget deficit is $8.2 billion and the state, per The Wall Street Journal, has become “a carnival of spendthrifts, sexual miscreants and the all-purpose ethically challenged." Even Oklahoma has an 18.5% shortfall, making it No. 1 in the U.S, asboasts, incorrectly, a Tulsa newspaper.
Basically, America is finished, says Charles Munger, Warren Buffett’s partner in Berkshire Hathaway. Mr. Munger excoriates the same illusory elements of greedy financial capitalism that we have limned in the last few chapters. But as a left-liberal, he only sees Gekko and Sarko (i.e. Wall Street and war-happy Republicans) as culpable, whereas Harpo and Barko, which is to say Big Government incompetence, socialist corruption and unions’ greed (11), plus the bi-partisan mega-sabotage through Third World immigration, have much to do with it too.
Essentially, in every Western nation, government has grown beyond the capacity of taxpayers to bear, the tax base is diminishing through declining birth rates, and the outlays are growing exponentially through immigration acting upon the welfare state and unions’ pressure acting upon socialist politicians.
The texture of the Rock of Reality that the West will meet entails the end of a 90–year, gradually intensifying experiment in fiat money, fake prosperity based on growing debt, statist stifling of liberty through excessive taxation and unwarranted redistribution, and nutty economic theories. This hodgepodge has rested on two theoretic pillars. The first is the grafting of Bismarckian social safety nets that protected hard-working people with an average life expectancy of 46, onto a whole range of fruity freeloaders whose life expectancy is 76 (German male). The second is Keynesianism, specious already 90 years ago and currently breaking the back of the world’s economic system through “bailout” and “stimulus.” To this, one must add such awful and particularly Anglo-Saxon cripples like the Efficient Markets Theory, Supply-side Economics, and self-hollowing through “free trade” (12) and globalization. To top it all is the quaint notion that the way to prosperity is via consumption of imports on credit rather than through the production of exportable goods on savings.
Let us think again about the phrase that encapsulates the sentiment of “Austrian” economists or just people with a hand calculator and no PhD: Japan now, Zimbabwe later. That obviously refers to a prolonged deflationary recession that the ruling elite tries to beat back by means that do not take out the power-sharing malefactors who have caused it, but instead ensure future sovereign defaults or hyperinflation for all. But that phrase is apposite in another way, for the West is slowly turning from resembling Japan, i.e. an ordered society of high-intelligence people largely sharing the norms and nourishing content of their evolved civilization, into a miserable Babel of breakdown, chaos, social cacophony, crime, terror, fraud, incompetence, and inferiority to societies not run according to the same insane formula, most notably China and the former Soviet satellites in Central Europe (13). It’s no longer just about very big financial problems. It’s about this:
The progressive transformation into Zimbabwe may take another five years or forty, and it won’t be the same everywhere. But the time to start preparing is now. The time to start acting toward regaining what has been lost is now. To this, the rest of this cogitation will be devoted.
Previous articles in this series can be read here.
(1) As an example of both in America one might adduce the Community Reinvestment Act of 1977 (a.k.a. The U.S. Taxpayers’ Rape Act); the Housing and Economic Recovery Act of 2008 (a.k.a. The Extended U.S. Taxpayers’ Rape Act); the 1999 U.S. Congress repeal of the Glass-Steagall Act that since 1933 had kept deposit banking separate from “investment”, i.e. casino, banking; the numerous failures by the same body to enact controls on margin and derivatives trading. Books may be filled with such stupid or evil legislation in every Western country.
(2) A quick sampling of the Americans would include Karl Denninger, Mish Shedlock, Bill Bonner, Richard Doughty, Martin Weiss, Michael Hodges.
(3) Data compiled by Agorafinancial.
(4) Snatcher State, Body Snatcher, Pod, all relate to the central metaphor of this series. The basic analogy reverts to Part 1, where we cited the film Invasion of the Body Snatchers. In the film, alien “Body Snatchers” produce giant legume Pods in hothouses and other hatcheries. The developed Pods become Body Snatchers who replace living people while appearing to be identical to them. The new Body Snatchers then grow new Pods from which new Body Snatchers develop – until the whole population has been “snatched.”
(5) While increasing government activity in areas which it was originally constituted to handle and in which its activity has been conspicuously absent or deficient. Those include the control of borders and admission to residency and citizenship, control of instruments of greed and recklessness such as fractional banking, derivatives, stock manipulations etc.
(8) The most recent data sources were selected as indicated below. Note that these metrics are published by various credible institutions, yet they differ widely. For instance, the widely quoted Nov. 2009 OECD deficit estimates differ significantly from the ones in the table here, most of which are from January 2010.
DB - Deutsche Bank 15 January 2010 forecast
EC - European Commission as reported in Business Week, 15 January 2010
FR - French government estimate as reported by AP and Reuters on 20 January 2010.
IMF - IMF June 2009 paper, p.27
IR - Ireland deficit estimate per Economist Dermot O'Leary in Dublin, reported 16 February 2010
P - Portuguese government estimate reported by AP on 27 January 2010
P1 - Portugal deficit ratio as per 20 January 2010 IMF pronoucement.
UK - Every source gives a different estimate. Deutsche Bank estimates 11.5%, UK’s Alistair Darling projects 12.6%, Business Week, 13.2%. We chose the 13% estimate of EconomyWatch.com.
US – Debt to GDP per US Government Spending.com. The ratio here is the one used in all the major sources: Federal debt to GDP. But the overspending being as outrageous in many American states as it is at the Federal level, it makes sense to look at the aggregate debt level too. With states’ and local authorities’ debt added, the aggregate 2010 debt level changes from $13.786 trillion to $16.984 trillion. With the 2010 GDP at $14,623.9 billion, it changes the Debt-to-GDP metric from 94.27% to 116.14%. US Government (Federal only) deficit ratio estimate per US Government Spending.com here. This is only the Federal deficit metric.
(9) Per Société Générale, monthly hedge fund report, posted here.
(10) Accurate numbers are impossible to ascertain. There are as many numbers as there are reputable sources, not even counting those less so. This ratio therefore, $41.6 / $82.9 is slightly higher than the 49% deficit relayed in the preceding paragraph.
(11) According to The Sunshine Review, total states’ expenditures exceeded $2.2 trillion last year, of which wages and benefits amounted to $1.1 trillion. Which means that 50% of all state budgets are driven by the unsustainable contracts that civil service unions squeezed from corrupt politicians in exchange for votes.
(12) See Ian Fletcher and Edward Luttwak, Free Trade Doesn't Work: What Should Replace it and Why, U.S. Business & Industry Council, 2010.
(13) We are not glossing over China’s own faults and problems, many of which are endemic, very serious, and would take pages to describe; it’s just that China has chosen to banish most of the particular depravity that is destroying the West.
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