Charlie Rose

robdverity  02/22/2010 06:09 AM Report

The deficit is merely deferred penalties for defying natural laws with the bailout of the big bankers. It merely kicked the can down the road to our children and theirs. The financial collapse forecast by Paulson, Bernanke et al wasn't deterred all that much, with it's main tsunami effect still looming. We aren't smart enough to curtail the MI oligarchs and their unquenchable thirst for arms-for-profit, nor the moral hazard from the financial oligarchs for their excesses, nor that of the health insurance oligarchs pillaging of the poor. A plutocracy corrupts with it's own wealth, putrefying from the top down. Legislation and legislators for sale have led to the corrosion we have earned. Eight year single term limits might help but doubtful. Third parties are being broached. Might diffuse the putrefaction, but it will still prevail. Constant anarchy may be the only answer. Then at least the plutocrats will have to be at a state of perpetual unease. Maybe the Romans felt it at the end. One can hope.

doodahdaze  02/21/2010 09:59 AM Report

The old world left-brain mentality, that there's a race to be the world's number 1 super power is a misnomer. China is not the same Communism as the Soviet Union was, in obvious economic ways, but also in their power strategy. They operate more like a third world dictatorship. In that, they maintain their power solely through historical, tradition psychological intimidate their people, while just playing antagonist to outside their borders to demonstrate their strong defense, but no desire to add to their maintenance load; better to leave that to their competition, 'the super power'. As opposed to the Soviet Union, who had to mindlessly accumulate (much like the Nazis) to validate their dominance over their own people. Which was doomed to fail, especially with American power in their way. The Chinese are smarter than that, in the tradition Judo they use their competitors own weight to their own advantage. But a human-rights governed Democracy is quick to learn that ancient Chinese secret and them the old HI-YAH right back at em.

ShalomFreedman  02/21/2010 04:08 AM Report

I think the discussion should have contained a consideration of the strategies of those countries which hold a great deal of U.S. debt. Isn't it possible after all that those with hostile ideology, would if given the opportunity, make a financial sacrifice in the hope of driving the U.S. under? We are already see China playing double- games in various ways including the critical effort to stop Iran from becoming a nuclear- power. A China which would replace the U.S. as number one world- power does not seem the ideal party to hold twenty-five percent of U.S. debt. A Saudi Arabia which funds anti- American Wahabi mosques throughout the world does not seem too a ideal partner for American democracy.

permabear  02/20/2010 08:28 PM Report

The trade deficit was not discussed on this show, as the emphasis was on the budget deficit. But the two deficits go hand in hand as U.S. budget deficits are funded by foreign purchases of U.S. treasury bonds. Foreign nations, like China, get the dollars to purchase U.S. treasury bonds through running up trade surpluses with the U.S. It's all a massive ponzi scheme that can only end badly. Free trade is only a term. It doesn't happen in the real world. China has been playing the U.S. for fools for years, by manipulating their currency low, subsidizing their exports and controlling imports (think high tech software and media). The world economic system is currently unsustainable as it is currently functioning. Optimists like Krugman are fooling themselves if they think we can just spend our way back to prosperity. The entire economic system and ways that countries trade with each other need to be restructured in order to produce a healthy global economy in the longer term. As my "permabear" moniker indicates I am not at all optimistic about how we get there.

CarolJ  02/20/2010 04:10 PM Report

First to doodadaze, if you were retired and on limited income you would know what "Health Care" was all about!

Now Charlie Rose what happen to your yearly interview inre

the Westminister Dog Show

doodahdaze  02/20/2010 03:22 PM Report

Without America to buy their products (crap) and occasionally pat them on the back , China would be nothing. In fact, if America were wiped off the face of the earth. China would cannibalize themselves. On the other hand, if China were wiped off the face of the earth, it would just create jobs for America and lighten some their defense needs; a double boost for the economy and deficit/debt situation.

charlizecourriers  02/20/2010 01:56 PM Report

Let's say you need to do three things-a,b,and c. A sophist like Krugman would insist you must do 'a' first. But that is, of course, the Ordinal Fallacy. It is perfectly permissible to do b and c at the same time, or even before a. Poorly educated 'lawyers' like Charlie don't have a clue.Sophists know how to stack the deck!

permabear  02/20/2010 12:10 PM Report

A hodgepodge of observations:

-I was surprised that David Walker supported the idea of increasing the deficit in the short term to stimulate economic growth. I thought he would take a much harder line on short-term deficits, similar to Niall Ferguson, who wrote a recent piece warning about the dangers of even short term deficit spending.

-All the participants agreed that interest rates are low. They seemed to concur that the market was easily absorbing the massive debt levels and that the low interest rates proved that debt was not a big problem at least in the short term. What they didn't mention was the Fed's active intervention in the interest rate markets, through their Quantitative Easing program (aka monetization). The Fed has been actively buying both treasuries and mortgaged backed securities in a way that is artificially keeping interest rates low. The Fed says that they will be pulling back these programs, but that remains to be seen. Also the Fed has been providing easy money to the big banks, who in turn have been recycling the money back into treasury securities, in an effort both to beef up the balance sheets of the banks and to keep the market for treasuries flowing. In short, the "market" is not keeping interest rates low, the Fed is keeping interest rates low. Left only to the market, I can only imagine where interest rates would be today. With China pulling back on their treasury purchases lately, it remains to be seen high high deficits are going to be funded, both in the short term and the long term.

-Regarding another post earlier. I think the person mentioning the military made an excellent point. It's not just about entitlements, namely Medicare. The U.S. is spending beyond its means in all areas. One big area of defense and national security. The U.S. can no longer afford to spend on defense what every other country in the world spends combined. The U.S. can no longer play policeman to the world. We just cannot afford it. The downsizing has to occur everywhere. The days of U.S. sole superpower status are over. The days of the American empire are over.

doodahdaze  02/20/2010 07:33 AM Report

This may sound counter-intuitive, but it's because China and the rest of the world would stop funding our debt. The world is a very unstable place, and the world, NOW, expects America to contain the most disruptive bullys. Despite their rhetoric to the contrary, America and Britain are the adults (America the husband and Britain the wife) and the rest of the world is their kids. And they need to be brought up right; and protected.

BJMmay  02/19/2010 10:00 PM Report

Why does military spending get little or no discussion on the topic of deficit reduction?

EPatrickMosman  02/19/2010 03:13 PM Report

Good high paying jobs could have been created immediately by allowing energy companies to begin exploration, drilling for oil onshore and offshore, coal companies and power companies to construct clean coal facilities and coal to fuel plants as SASOL has in South Africa and allow power companies to start planning for nuclear powered plants as the lead times for containment vessels is over five years, issuing the contract to build the much needed Air Force tankers in the US, build more F-22s, contract with GM, Ford,Chrysler, Caterpillar etc to reopen their closed plants to repair, rehab and or build new tanks, trucks and other vehicles. Many of these would have been funded by the companies and the financial markets without any involvement of government provided taxpayer monies other than that already allocated by Congress. This is a real plan for jobs.

Next the corporate tax rate should have been reduced to a world-wide competitive level to rebuild our manufacturing industries and increase exports, other than agricultural goods.

What is needed really is a complete change of thinking,

-term limits are an absolute necessity for Congress.

-understand and enact a binding resolution that states "The federal government is not responsible for taking care of every social, economic, education and day-to -day living condition of each and every citizen."

-enact legislation that states "the federal government is forbidden to own, manage or operate a private incorporated company or to bind today's and future taxpayers by guaranteeing the debt of private, incorporated companies.

-the federal government's duties and responsibilities are spelled out in the US Constitution and they don't call for building airports for Murtha(God rest his soul) or the billions spent on similar earmarks and make-work projects

- as almost 50% of wage earners pay no federal income tax and most receive welfare in the form of tax credits or other benefits everyone should be required to provide financial support to the government as they have no interest in holding down spending. Everyone must understand there is no free lunch or government entitlement, everyone must pay.

-There is no record of any governmental run program that has created jobs in the private sector but burdensome regulatory powers have swollen the taxpayer funded bureaucrats on the public sector payrolls at an unprecedented rate. This must stop.

REMant  02/19/2010 12:54 PM Report

Very good, but this is the same debate we've been having since the fall of 2008. The question is whether there's a greater benefit to more spending and/or lower interest rates (which amount to the same thing) than to taking on the indebtedness caused by it. Aside from strategic implications, the arguments against it are that it deters saving and investment and that easy money encourages easy ways generally. Rabid spending advocates, however, deny the importance of first and pooh-pooh the latter, while maintaining that the credit expansion will stimulate general economic activity, which they view as a matter of credit expansion in the first place. More sensible spending advocates believe that the government's investments are worth the cost because they will improve productivity and increase efficiency neglected in free markets. It is argued that spending for alternative energy and healthcare will pay back no only their cost but produce a return. However, taking on debt by the govt or by the Fed (usually meaning banks and the public at large) causes inflation if there is no such increase in productivity, because debt is always money creation, either increasing prices (and of commodities and services such as healthcare more than than groceries and manufactures) thus effecting a reduction in income, or requiring taxes, which do the same, the distributional effects of the latter tho being much more favorable to the public in this country, and much less likely to be catastrophic. These considerations apply to all who use our currency, and it can be argued that such productivity increase as we have seen for the past decade or more has come at the expense of people in places like China, who have been prime contributors to both our budget deficits and unwise speculative activity, not mention our foreign adventures. As a practical matter, however, I think it is fair to say that we have yet to see much stimulative effect from the past two years of rate- and tax-cutting and direct spending despite the influx of money from abroad, and the effect of it has been like insurance, to spread the cost of the accident. Too, this camp often fails to understand that while mortgage-backed securities are someone's assets, they are also someone else's liability, and act like loan sharks.

On the issue of easy ways, the predilections of democracy should come as no surprise to anyone. Tocqueville: "As the great majority of those who create the laws have no taxable property, all the money that is spent for the community appears to be spent to their advantage, at no cost of their own; and those who have some little property readily find means of so regulating the taxes that they weigh upon the wealthy and profit the poor...In countries in which the poor have the exclusive power of making the laws, no great economy of public expenditure ought to be expected...In other words, the government of a democracy is the only one under which the power that votes the taxes escapes the payment of them...When...the people are invested with the supreme authority, they are perpetually seeking for something better...The thirst for improvment extends to a thousand different objects; it descends to the most trivial details, and especially to those changes which are accompanied with considerable expense, since the object is to improve the condition of the poor, who cannot pay for the improvment. Moreover, all democratic communities are agitated by an ill-defined excitment and a kind of feverish impatience that creates a multitude of innovations, almost all of which are expensive...As it frequently changes its purposes, and still more frequently its agents, its undertakings are often ill-conducted or left unfinished...." A government that would avoid tyranny or anarchy, must rely on self-government, and that means earning what is spent no matter who does either.

doodahdaze  02/19/2010 12:36 PM Report

I cannot understand how 'health care' is more important than getting the economy back rolling, reforming the financial sector bi-partisan fraud-machine from undermining the foundation of American motivation should be first and foremost; otherwise, what health care?. 'Health Care'.?, what the hell is that anyway? Most of the time they're yelling about 'that', they're not even referring to the same thing. Is it getting medicine for a cold? or any other relatively simple 'health' issue, Or is it getting a heart transplant by a competent surgeon? This is even a relatively recent LUXURY, there was a time, not too long ago, when if you got sick, you died; it's just that simple. In fact, I and most people would rather be dead than have to see the 'medical' bill. Why should it cost $2000 to remove a simple non-malignant cyst like bump on the skin, that you could have removed for $10 in Mexico? It's because the rich (the upper-enclave)(the financial-services chummy-chum-chums) wants what's left of the middle-class to fund the research for their technological cutting edge longevity and well-being. Basicly, the health-care industry (like the financial industry) doesn't have to bend over backwards to get customers. EVERYBODY needs what they have. They're just like a government, and they want you serve them, and that's what we have to do, because we don't have a choice. But don't dare regulate them, or we'll get 'bad customer service'. Especially if you're not already worried about it.