Here is an article which arrived in my email this morning.

I copied the chart he refers to and posted it at

http://stevemoyer.us/images/debtchart.jpg

As the author of this piece notes, the presumption
is that interest rates will remain where they are, at a historically low level.  If they rebound to higher levels the chart gets much worse much faster.

Basically, there is a structural deficit which leads to government bankrupcy or, in simple terms, economic collapse.

There are things we could do to avoid this fiasco.
For example, we could import a lot of people from other countries ( immigrants ) who would further expand our economy.  But the direction of the econmy is destined towards disaster unless there is a rapid expansion of it to increase the GDP and therefore the tax base. 

This curve also means that things like universal health care are being taken off of the table by the Republicans.  There simply isn’t the money for  it in the current system.

Please read the article which follows and add your own thoughts.  I’d like to know how you view this.

Steve

Government Debt: Termites in the House
By Bud Conrad

Recently I had the pleasure of having lunch with the Comptroller General of the United States, David M. Walker. He heads up the U.S. Government Accountability Office (GAO), the government’s internal watchdog. As he was about to give a talk on out-of-control government deficits, he had in his briefcase a chart on the size of the government’s obligations over time. Our discussion about those obligations over lunch was followed by an email exchange, and Walker kindly helped me source additional GAO data, all of which allowed me to confirm my analysis of the budget with projections from the Congressional Budget Office (CBO).

I have also met with Douglas Holtz-Eakin, head of CBO, who can competently recite the situation of six different budget projections without notes. The combined scenarios of the GAO and CBO provided me with the basis to create the following projection of the U.S. budget:

A clear picture emerges of a government completely out of control. The blue line is the history of the U.S. Federal Government debt. The green line shows the path we are now on, with debt soaring to impossible levels against projected GDP. Importantly, the source isn’t some crazy hand-waving blogger: these are the government’s own projections–and we all know they have every incentive to accent the positive. If this is the best they can do at this point, then you know things are not just bad, they are calamitous.

This glimpse at the future clearly shows that the debt of the U.S. will, in the foreseeable future, go from being a troubling yet manageable fraction of the economy to being several times the size of economy. That can’t happen without serious repercussions.

The government will be spending money they don’t have, which means creating more of it out of thin air and diluting the value of all the dollars that came before. It doesn’t take a Harvard MBA to know that the kind of deficits projected above guarantee a persistently weak dollar, higher inflation and higher interest rates going forward.

You may be right to criticize this analysis as only one of many scenarios being developed all the time and that there are other assumptions that lead to other estimates, and you would be right.

But I’ve looked at the assumptions, as has David Walker, and it is more likely that the assumptions have underestimated how serious the situation could become, maybe by a significant margin. For example, in the projections above, the interest rate paid by the government stays flat. Interest rates fell for 23 years and have only just recently bounced off of 45-year lows. The odds of interest rates staying at these low levels for decades into the future are, in my opinion, nil. I have analyzed the scenario of the impact of higher interest rates. The problem can get out of hand because it feeds on itself: higher interest rates lead to higher interest on debt, which leads to higher debt, which leads to greater loss in confidence in the dollar, which leads to higher interest rates… and the loop makes itself worse.

The Blame

Who is responsible for this sin of profligate spending? You could start by pointing a finger at the House of Representatives as they are constitutionally charged with holding the purse strings of the U.S. government. They voted for the spending and programs we are now saddled with, they pass tax programs, and vote in the big supplemental bills that fund the wars.

Entrusted with allocating the biggest sums of funding in the world, they clamor for more and, in the process, act like termites chewing away at the fiscal underpinnings of the economy, assuring the future bankruptcy of the nation. And it is not just the modern politicos that are responsible, but a failure to pursue sound monetary policies that extends back decades. Why do they do it? That answer is easy and reflective of human nature… they do it to curry favor with their constituents in order to get reelected.

Which further points the finger at us, the American public, who instead of voting the bums out for wasting our money and handing a legacy of debt to our grandchildren’s grandchildren, happily pocket the pork belly doled out and reward the most prolific spenders with our votes.

The bottom line is that debt and deficits are baked into the cake, exacerbated by the demographics of retiring baby boomers and a government that not only shows no intention of slowing its spending, but quite the opposite. In fact, like a penniless smoker breaking a child’s piggy bank to buy a pack, the debt-addicted government has already spent the supposed “Trust Funds” of Social Security and Medicare.

The government is closer to bankruptcy than anyone who has not studied the situation can guess. You will hear government apologists claim that the government can’t go bankrupt because they are the government, and along with a complicit Federal Reserve, they can meet any debt obligation because they have the printing press. That is precisely the problem. They can print any amount of money they want. That has been theoretically possible since we went off the gold standard in 1971.

It is this loss of any constraint on government spending that has let the genie out of the bottle. The track is now laid. The long-term future of the dollar is not in question. And to the extent that it is the basis of all other currencies, the reserve currency of the world’s central banks, all currencies are doomed.

Gold and the quality companies that produce or competently explore for it (our focus in the International Speculator) should no longer be viewed as entertaining speculations, but as portfolio requisites.

Reference: http://www.caseyresearch.com

In this current installment of Darren Allen SnarkWatch (OK, this is the first – and, who knows – maybe the last), I’d like to address two items that he is SHOCKED, SHOCKED to learn about…

One, he finds the Welch campaign’s response to learning of $21,000, spent on Martha Rainville’s behalf, to be whiny and insincere. And speculates that when the next quarterly reports come out, we’ll be sure to see that “the Democrat money machine in Washington is spreading its largesse to Welch.”

But, PoliticsVT is reporting a somewhat different story (my emphasis):

According to reports, the Republican’s national US House campaign spent over $21,000 on Vermont’s US House race further dividing a possible clean campaign pledge between Democrat Peter Welch and Republican Martha Rainville.

Rainville, according to the press, was shocked [SHOCKED, SHOCKED] when she learned that the national GOP had done a poll in Vermont. Rainville said that she would call the GOP in Washington and ask them what questions were being asked and if it was a “push poll.”

Wow, that’s a little different scenario, isn’t it?

And second, he’s troubled by the Sanders campaign’s response to learning of Tarrant staffers videotaping his campaign stops. He writes (my emphasis)…

Sanders and Welch and Tarrant and Rainville and James Douglas and Scudder Parker and every other major candidate always send emissaries to their opponents [sic] events. It’s as old a trick as they come…

But, uh oh, Peter Freyne has this to say (my emphasis)…

P.S. Yes, confirmed Lennon, that was the “Tarrant for Senate” campaign’s office manager Layla Gray grilling Bernie about his sugar contribution at the spaghetti dinner Sanders’ campaign held on Saturday in Swanton. Eyewitnesses say the Tarrant staffer did not tell the crowd who she worked for, and kept interrupting Sanders when he attempted to answer her question.

Lennon told “Inside Track” Ms. Gray had every right to be there and ask questions as a private citizen.

Technically, yes. But it is in rather poor taste, Ol’ Tim, for a campaign staffer. At least in Vermont. Can’t remember it ever happening before in the Green Mountains.

Maybe it’s kosher in your native New Hampshire, but in Vermont, the paid-staff doesn’t play “average citizen” at an opponent’s campaign event.

OK, so who’s right? (And I recognize that they are commenting on two slightly separate topics: Allen adds the videotape angle).

Odum was nice enough to say at the Political BBQ last Sunday that it was good that I don’t have any real inside knowledge of Vermont pol’s proclivities; that I might be able to report from the perspective of the average Vermonter’s media-generated perspective of the political climate.

So, I say again, who’s right, here?

Is Darren Allen correct when he says that “Politics, as most observers know by now, is a dirty game that has only one acceptable outcome — to win.”

Or is Peter Freyne accurately positing a much rosier portrait of the traditions of the Great State of Vermont?

(By the way, it appears that the reference to the BBQ and Odum are missing from the print edition of Freyne’s Inside Track. I’m sure (hope?) this was just edited down for space concerns, but…

Does the Inside Track blog Freyne says is looking for sponsors – read: Seven Days is trying to find funding to pay Peter for a few more hours a week – not want to highlight the consistent work being done by the future competition?

Who knows? But, fun to speculate about, eh?)

[Crossposted at What’s the Point?]

Take a look at the latest poll at:

http://www.pollingreport.com/2006.htm

This is the poll to watch.  Are the Democrats going to take back the House of Reps?  If not, then we are on a Republican course.  It’s much less likely that they can take back the Senate.

I’ve sent out the following email far and wide:

———————–  email message  ———

What’s good about Republicans?

From: nodesnetwork@gmail.com
Date: Jul 12, 2006 4:50 PM
Subject: What’s good about Republicans?

I want to be fair to Republicans. I’ve been harshly critical of them for over a year now. What’s good about Republicans? I want to know so I can share a balanced view with the people this election season. Let’s paint a “fair and balanced” picture so that we can make a correct judgment in November.

What do you think? Search your mind for answers. There is good and evil in all of us, right?

What’s good about Republicans? Send me your answers and I’ll compile them with those from others and send them back to you. You can go back in history if you wish, but I’m particularly interested in what’s good about Republicans today.

Thank you for your participation in this research endeavor.

Sincerely,

Steve Moyer
Candidate for U.S. Senate
http://stevemoyer.us

Shouldn’t Clinton realize that Bush’s low poll ratings are linked to illegal, out-of-control invasions with spiraling costs?  Hillary stood by her man when it counted; now he’s standing by her.  We’ll get no help on that issue from him!

Clinton addresses nation’s newest problems

Troy Hooper – Aspen Daily News Staff Writer
http://www.aspendailynews.com/archive_14886
Fri 07/07/2006 10:01PM MST

Back in Aspen, former President Bill Clinton sounded off on a multitude of problems confronting the nation Friday that included disease, destruction and Karl Rove.

As for Rove, who is scheduled to speak at the Aspen Institute on Sunday, Clinton didn’t hold back when Atlantic Monthly national correspondent James Fallows asked him what one question he would ask President Bush’s highly controversial political operative.

Always the overachiever, Clinton didn’t invent just one question he would ask Rove, he came up with three. The 42nd president said he most wanted to know what Rove would do had Clinton’s senior advisor blown the cover of a CIA agent who happened to be married to the man who refused to falsify findings about nuclear transactions taking place between Niger and Iraq (see Valerie Plame). And he openly wondered whether Rove would instruct Republican congressmen to call a White House official who would do such a thing a traitor. Lastly, Clinton wanted to know why it is that, if the Bush administration is as concerned with national security as it claims, why it would spend 20 times the amount of money it would take to shore up gaps in port security to repeal the estate tax for the nation’s elite, which consists of less than one percent of the population.

Speaking to the first question he’d ask Rove, Clinton said; “I wouldn’t be the least bit surprised if he’d say that’s exactly what I’d ask (Congress) to do, and I don’t know why they didn’t. I mean this guy is good. You don’t understand this strip of the Republican party that controls everything basically,” Clinton said. “These people are all white Protestant males. They don’t do anything that surprises me. I’ve seen this my whole life.”

Clinton, who routinely makes trips to Aspen for a blend of business and pleasure, also offered up ideas on the potential threats posed by North Korea and Iran. The former, he described as “a perplexing country because they can’t make rice but they can make missiles and bombs and things. When they do these things, they want someone to notice them. They don’t get noticed unless they disobey (authority like children),” he said. “I don’t want to minimize this. It’s a bad thing they have reached this level of technology. But I don’t think we should reward their misconduct. I think we ought to not overreact to this. I don’t think we need to freak out.” Iran is harder. “If they develop nuclear capacity and whether or not by accident or by design some of the material is given to terrorists groups, (they could make) smaller explosives that could kill lots and lots of people. There is no option but to negotiate.”

He added: “This whole thing that there are some people we shouldn’t talk to because they’re bad is nuts. I don’t think Americans should put too many preconditions on talks with the Iranians. We shouldn’t try to cook it too much in advance. I also think it would be a matter of serious consequence to think we can attack them militarily.”

Clinton also said there should be no set date on when to withdraw troops from Iraq, and he cautioned Democrats from fighting with each other over the topic. “We ought to be whipped if we allow our differences over what to do now over Iraq divide us,” he said, saying that the Republicans, via Rove’s advice, are trying to win offices with stale but emotionally driven issues such as flag burning and gay marriage.

The former president also said that the problems of AIDS and global warming have, in his view, changed since he left office. He credited the Bush administration for financing efforts to stomp out AIDS, saying his nonprofit organization, the Clinton Foundation, has worked hand-in-hand with some of the president’s program.

Clinton also saw his former Vice President Al Gore’s new film about global warming, “An Inconvenient Truth,” and “thought it was terrific. I loved it. But I don’t think it would be nearly as compelling if we didn’t have $70 (barrels) of oil, do you?” He went on to say that global warming is “a lot worse than I thought it was when I was in office” and that there are many opportunities, which Britain has embraced, to use environmental sustainability to drive up wages, lower unemployment and increase the nation’s quality of life.

“They (Britain) took climate change seriously and because of that they created hundreds of thousands of jobs by creating new clean energy in the future. This decade’s new jobs are in clean energy and we haven’t seized them,” he said.

hoop@aspendailynews.com

Well, shut my mouth (update): Freyne says he didn’t make the blogger BBQ, not because it wasn’t worthy, but because the World Cup finals were on. Fair enough! I rescind my yellow card.

Over at the Dorian Grays, Tarrant earns himself a new blemish with his latest web-based attack that calls Bernie a “liar” in particularly desperate fashion. This guy’s internal polling must just be in the toilet to be going so sleazy so fast. In any event, at this rate his picture will be unrecognizable by Election Day.

An excellent op-ed reprinted in the Rutland Herald by Thomas Mann and Norman Ornstein about Bush’s unlimited grab for power, focusing on the Hamdan case – while Kagro X’s diary at dKos brings us crashing back to Earth reflecting on the continued impotence of every other civil institution to rein him in, regardless of a simple Supreme Court decision.

The definitive blogger BBQ post is at Vermont Daily Briefing, although a lot of the major Vermont blogs have good stuff about it (I like Haik’s fun-house style pix). Lots of folks got pictures and have posted them, but I was too much of a loser to bring a camera. A participant (Anita) was kind enough to cc me the three pics she sent to Philip, but just reprinting them here as my own would be tacky. I’ve tried to spice them up to make them my own, though. Click on the link if your curious, but don’t expect much…

Here’s Philip of Vermont Daily Briefing:

Now, here’s Philip holding a severed head:

And here’s Philip holding a severed head on the Ice Planet of Hoth:

…and so on…

Comment (or don’t), and consider this an open thread.

This is what it’s come to. It’s now a good day when we can claw back to a break-even point on some of our civil liberties. From Cut to the Chase:

VPR reports this morning that Vermont has ruled that despite the U.S. Supreme Court’s decision last month saying police did not have to knock before entering a private home to search it, the Vermont state constitution offers increased protections that demand at least a knock before such search can be conducted and still have anything seized in a search (person, evidence, etc.) be used in a criminal investigation/court proceeding.

Here’s a link to the Freeps piece on the issue.

But then on the other hand, we have this news from Brattleboro via the Vermont Guardian:

About a dozen residents of the Clark-Canal neighborhood appeared last night before the Civilian Police Communication Committee regarding a July 7 complaint filed by the ALANA Community Organization.

According to the complaint, Clark-Canal resident Paul Canon told his neighbors that he is paid $30 per tape to record the activities of African Americans and Latinos. The residents said Police Officer William Davies picks up the videotapes at least twice a week from Canon’s house.

One resident of the house, Freemona Roundtree, who is black, said police came to her home at 5:30 on a Sunday morning, handcuffed her and her 22-year-old son and kept them on the porch in their nightclothes for four hours while they searched the house without a warrant. She said they found nothing, and produced a warrant hours after the search.

“I came from upstate New York to this little town to get away from what was going on. … My son has been arrested four times since we moved here,” said Roundtree.

There’d better be some serious hell to pay for this stuff. Any public employee – police or otherwise – complicit in this should be fired immediately unless there’s a damn good explanation.

I put the good news first so you’d – you know – have a second or so to celebrate. Not to sound glum, but I’m seriously looking forward to some victories, myself. We need more good news.

Mark July 30th on your calendar. Phase 2 of the grassroots impeachment movement is about to be formally launched. From the Times Argus:

Sheehan is scheduled to speak at rallies in Brattleboro and Montpelier on July 30 as part of a push for municipalities in Vermont and neighboring states to pass impeachment resolutions against the president.

Dan DeWalt, a Newfane selectman who organized a Town Meeting Day impeachment resolution, said Sheehan’s appearance at the rallies will be a “call to arms” for the movement to remove Bush from office.

“What we saw a few months ago was the embryonic beginning of a revolution,” DeWalt said. “Vermont is now part of the national stage on the issue of impeachment and the votes at our town meetings have been inspiring others across the country.”

DeWalt has been tireless about this, even when the rest of us have been, well…tired. Thanks for keeping this going Dan, while the rest of us mere mortals catch our breath. Keep watching this space, as GMD will keep updates a-flowin’…

Quick update on Leahy’s strong words regarding Sen Liberman’s decision to bolt the Democratic Party if reformer candidate Ned Lamont bests him in the primary: VPR has the transcript of their report from last week online:

(Leahy) “I’m disappointed that he’s talking about running as an independent. He’s always run as a Democrat. He has a special responsibility as the Democrat’s nominee for vice president. He’s always had the support of the Democratic party. He ought to be willing to run as a Democrat. He’ll either win or lose the nomination, but if he doesn’t win the nomination then I would fully expect the Democratic party to support whoever does win it.”

Straightforward, clear, and not too patient with Joe. When asked if announcing his intention to run as an Independent if he loses the primary has hurt him with Democrats:

(Leahy) “I think it did and I think it should. I mean, I’ve had people running against me in primaries and I was proud to run as a Democrat.”

But most interesting of all:

Leahy says he’ll support the winner of the Democratic primary and he plans to raise funds to help that candidate win election in November.

If Lieberman loses the primary, follows through with his threat, and can manage to actively engage the support of folks like Salazar who’ve indicated they will support Lieberman regardless, we could see this boil over into a real caucus schism played out on the Connecticut campaign trail.

Ouch. And all because Joe wants to have it all at any cost. The Republicans can have him as far as I’m concerned.

Democracy for Vermont, the local group that emerged from Howard Dean’s Presidential campaign (and not directly associated with Democracy for America, although the organizations are virtually indistinguishable at most of the Vermont meet-ups outside the Burlington DFA office), has endorsed Windsor Senator Matt Dunne in the Democratic primary for Lieutenant Governor against Burlington Representative John Tracy. This comes as no real surprise as Dunne has been courting the attentions of DFV for some time, and reportedly Tracy has shown little interest.

DFV had been pushing (and will continue to push in January) action on impeachment from the state legislature, and while Dunne had gone to some lengths to avoid the issue completely, Tracy had shown willingness to engage (albeit, not in the way impeachment proponents would have liked). But if Tracy had created an opening for himself with DFV by virtue of his presence, he did little to follow through afterwards.

As a distinct entity from DFA, DFV represents a small, but very committed and geographically diverse population of activists that, though largely Dems, include many self-identified Progressives and Independents. The endorsement clearly has the potential to further enhance Dunne’s apparent advantage over Tracy in the field.

When in Vermont could you have a Burlington event of around 100 people in a very public location (immediately surrounded by hundreds more) a mere three months before Election Day, where participants include the Democratic candidates for Governor and US House, as well as both Primary candidates for Lieutenant Governor, two sitting state Representatives and a Dem candidate for Chittenden County State’s Attorney, also – the Communications Director and Field Organizer for the Republican Candidate for US House, and a slew of activists (Democratic, Republican, Progressive and Independent), all mixing together over food and drinks (and football) — and yet not see a single reporter from the quote-unquote “major” Traditional Media outlets (e.g. the AP, Vermont News Bureau, Free Press, Rutland Herald, Times Argus, etc)?…

Click for the answer…

…why, when it’s a gathering of bloggers, of course!!!!

That’s right, with the exception of Shay Totten of the Vermont Guardian (who is busily putting the nontraditional back into the Traditional Media, god bless him), they all missed the wildly successful spectacle that was the 1st Annual VDB/GMD Hamburger Summit. Not even Freyne of Seven Days could be bothered to wander over. Many there were rather surprised.

Me? I would’ve been shocked if any had showed. The TM guys really really really have little use for bloggers. Buncha amateurs steppin on their toes.

But then, that’s what makes us so darn special.

So, I got no pictures, ’cause I’m a loser, but there will be shots a plenty on What’s the Point, iBrattleboro, and VDB, and I will link like crazy (especially to the big group blogger picture. What a hoot!)

Thanks to all who came. It was a blast meeting folks, and we’ll see you next year…