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A budget deficit of 13% of GDP?

Barry is spending your future with Italian standards of financial management; and with the GIVE Act, the Obama Youth, the Komosomol, he is expropriating your present.

America, Land of the Free.

Yeah, sure.

It took the British years to understand the horror of the Blair/Brown governments; under Barrys tutulage America is learning the truth in just weeks. You voted for a fascist, an honest to God real McCoy? You got what you voted for.

Welcome to the Brave New World of New Labours America.


  1. NickM says:

    13%. That’s bigger than our deficit. That’s huge.

  2. CountingCats says:

    As the article says, that is one eighth of the US economy, just as the deficit.

    Italian? Even the Italians didn’t do anything like this.

  3. Nick M says:

    Sounds like Spanish practises to me. Whatever they are.

    Who the hell are these people borrowing from? The figures I’ve seen… God doesn’t have that much money.

  4. Ian B says:

    I’ve got that stupid Welsh binta’s singing stuck in my head. I’ve even tried listening to the Alex Harvey version in the hope of nudging her out, but as soon as Alex had finished, “Why why why vote Tory?” came straight back. It’s driving me mad. You think I care about the Americans? I’ve got far bigger problems to deal with!

    How the hell am I going to sleep with my head full of bad Welsh singing? This is serious!

  5. Ian B says:

    “Binta”? See, it’s even ruined my typing.

  6. john in cheshire says:

    I’m pleased it isn’t just me who is beginning to think that America now has its own NuLabour regime. I am yet undecided, though, who are the individual equivalents, because I am not too familiar with the detail. Who, for example is their Mandelson, and who is their Alistair Campbell?
    Of course, it is possible that America will have to suffer only 4 years of lies, bullying and deliberate destruction of the nation. But then I thought we’d only have to endure one term of this lot who ‘govern’ us, and here we are 12 years later.

  7. CountingCats says:


    Individual comparisons aren’t all that relevant. What matters is that we have the political values, honesty and competence of the Junior Common Room actually running the nations.

  8. Plamus says:

    “Who the hell are these people borrowing from? The figures I’ve seen… God doesn’t have that much money.”

    Ugh, ladies and gentlemen… I have huge respect for all of you, and thus my next statement is not meant in any way to sound condescending.

    If folks with no formal background in economics and finance see the craziness of it all, can you imagine what the people who can make sense of the numbers see? I am crying bloody tears. Economically, it seems, Gordon is Mussolini and Obama is Hitler. Roughly, Mussolini needed 3 years to take power, and 15 years to consolidate into almost absolute power. Hitler needed 15 years to take power, and not even 3 years to consolidate it. I shudder at the thought that Obama may be just as expedient outside the economic realm as well.

    And you thought you were screwed in the UK. Here’s my recent post on the PPIP (put the links at the end, marked in text by *, too drunk to html them – apologies)

    Are you an American? Or maybe you just live and work in the USA? Or maybe you live elsewhere, but hold US dollar-denominated assets? If you answered yes to any of these, follow-up question: have you been feeling optimistic lately? Yeah, well, snap out of it now. Timmy and the Lords of the Underworld* – Tim Geithner, Ben “Helicopter” Bernanke, and our glorious POTUS Obama – have just pillaged and raped you in a manner and to an extent that would make flagellum dei Atilla the Hun and Genghis Khan look like benevolent amateurs, and Bernie Madoff like a harmless two-bit hustler. John P. Hussman describes the PPIP – Public-Private Investment Program (I am not even gonna try to ponder what genius came up with the “public-private” oxymoron) well here*. The key number from his excellent analysis: $10-14 trillion – the amount for which US taxpayers have been put on the hook for. Feel raped yet? And no lubrication is forthcoming, mind you. This is a pretty conservative estimate, which, somewhat implicitly, assumes that housing prices have bottomed out. Is that so? Subprime mortgages have by and large already reset, and it is believable that we have seen the worst of the foreclosures from those. However, the option ARM’s and Alt-A tsunami* is about to hit, and hit hard, and that’s not even giving a thought to commercial real estate.

    In Retard Timmy’s parallel universe:
    1) The banks are not lending.
    2) They are not lending because they are stuffed up their eyeballs with bad assets.
    3) The assets are bad because the market does not appreciate that they are actually good.
    4) Ergo, if the banks are helped to unload those assets, they will lend again, and the economy will recover.

    In our universe, meanwhile, the banks are lending, just not quite as much as before, mostly because they have come to the realization that lending to borrower who are unlikely to repay is not all that smart. What is not “lending” is the securitization markets, which at the peak of the craze provided more funding to the economy than the banking system. Good luck reviving that charred corpse. Also in our universe, the bad assets are really pretty damn bad.

    Oh, wait, you do not feel royally screwed yet? Here’s an example of how the PPIP will work, with made up, but plausible numbers. Bank X holds a boatload of bonds that the market values at 25 cents on the dollar. The Fed and the FDIC give investor Y (not you or me, there are requirements* to qualify – $500 mln in private capital and $10 bln in eligible assets under management) non-recourse loans so Y can leverage 6:1. It may actually be 12:1, since the rules are a bit unclear, but let’s assume 6:1 – that’s horrible enough. Thus, if Y buys the junk for 70 cents on the dollar, he/she puts up 10 cents, and the taxpayer is shafted for the rest. The 10 cents is Y’s maximum loss, and that’s if the asset goes down to zero in value. There is very little to prevent X from lending Y the money for this – in fact about the only protection is “Asset managers may not purchase eligible assets from sellers which are affiliates of such asset manager or of any private investor which has committed at least 10% or more of the aggregate private capital in the PPIF.” Some protection. Thus, if the market’s current valuation of 25 cents on the dollar is correct, 45 cents of loss is realized, and the US taxpayer eats about 38.5 cents of that.

    I do not know about you, but I want to see Timmy and the Lords of the Underworld swinging from the nearest lightpole, although I would compromise and travel to Washington, DC to watch.

    Timmy and the Lords of the Underworld:
    Hussman’s piece:
    Mortgage reset rates:
    PPIP summary:

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