OpEdNews » Is the "...unthinkable, thinkable"?

By now the finance term "credit default swaps" (CDS) is familiar, even if murky, to many Americans. The term is from the derivatives business and CDS have been used by Wall Street financiers to gamble on everything: from your mortgage to Lehmans Brothers.

Because of the unregulated nature of this business, the global markets are in disarray. Every financial sector has been touched.

The US government today announced it is using more taxpayer money to guarantee mutual funds: using, in other words, your money to guarantee your life savings.

Now is an appropriate time to ask: could the United States of America go bankrupt?

You may be surprised at the answers.

In fact, people have already asked this question:

Laurence J. Kotlikoff addressed this very question in the Federal Reserve Bank of St. Louis Review (July/August 2006), Is the United States Bankrupt?

Here's what Mr. Kotlikoff told the St. Louis Federal Reserve Bank last year:

http://research.stlouisfed.org/publications/review/06/07/Kotlikoff.pdf

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5 comments

Geery lived off the grid for 15 years in an earth-sheltered, solar heated home, while his kids learned in school that solar energy isn't feasible. NAPTA hosts a page on Geery's foibles in education, and explains how he got his butt fired from a tenured teaching position. Here's a short clip of his most recent solar contraption; for more on that project, and Geery's contention that the Wright Brothers took a wrong turn, please visit his airship page (hyperblimp.com). Apparently, Geery is the only...

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Daniel GeeryGeery lived off the grid for 15 years in an earth-sheltered, solar heated home, while his kids learned in school that solar energy isn't feasible. NAPTA hosts a page on Geery's foibles in education, and explains how he got his butt fired from a tenured teaching position. Here's a short clip of his most recent solar contraption; for more on that project, and Geery's contention that the Wright Brothers took a wrong turn, please visit his airship page (hyperblimp.com). Apparently, Geery is the only...

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The U.S. has been mentally,

spiritually, and financially bankrupt for a long time. It's been a bogus outfit since we snuffed the Native Americans, and then later printed money with no connection to physical reality.

Our species is now bankrupting the planet, in a mad rush towards extinction. Until we are aware of this, we are not likely to change--and we may obviously be too late already.

As usual, I hope I'm wrong.

by Daniel Geery (26 articles, 81 quicklinks, 125 diaries, 775 comments) on Friday, September 19, 2008 at 10:42:45 AM

Currently I'm a cartoonist and contributing writer for The New Orleans Levee. For those wishing to view my work you can see my latest at: nolevee.com
Mr MCurrently I'm a cartoonist and contributing writer for The New Orleans Levee. For those wishing to view my work you can see my latest at: nolevee.com

You're not wrong ...

unfortunately.

by Mr M (4 articles, 0 quicklinks, 51 diaries, 2028 comments) on Friday, September 19, 2008 at 3:51:48 PM

57 years on this jumpin' green sphere. Musician. Own and operate a music store to help kids find a possible life long friend. I believe in the soul and the search. Happily married w/ 2 boys. Published songwriter. play bass, piano and gut string guitar. there are no solutions..only alternatives. Ask questions. Listen. Be fair and don't expect. Baseball is a mirror. Don't ask....unless you have time and a sense of humor. Peace is never easy, but worth it. Always.
mikel paul57 years on this jumpin' green sphere. Musician. Own and operate a music store to help kids find a possible life long friend. I believe in the soul and the search. Happily married w/ 2 boys. Published songwriter. play bass, piano and gut string guitar. there are no solutions..only alternatives. Ask questions. Listen. Be fair and don't expect. Baseball is a mirror. Don't ask....unless you have time and a sense of humor. Peace is never easy, but worth it. Always.

Going (?) bankrupt

Gone.

Time to pay. We are learning again. The hard way.

"In order to know what it means to have nothing, you must have NOTHING.....in spades".......Lord Buckley

peace

by mikel paul (11 articles, 1 quicklinks, 11 diaries, 489 comments) on Friday, September 19, 2008 at 12:16:53 PM

Male, 50, Texas. White with white hair (for 20 years)
Write, read, and draw.
Topics include science, art, history, language, philisophy, the odd and unusual. SiFi/Goth/Lovecraft
Recovering from a medical episode that nearly killed me in 2006. Still being treated.
An autodidact and graduated High School but not college.
Not good with people. I have poor emotional intelligence.
nightgauntMale, 50, Texas. White with white hair (for 20 years)
Write, read, and draw.
Topics include science, art, history, language, philisophy, the odd and unusual. SiFi/Goth/Lovecraft
Recovering from a medical episode that nearly killed me in 2006. Still being treated.
An autodidact and graduated High School but not college.
Not good with people. I have poor emotional intelligence.

Interesting but I see glarying omissions in the monograph.

Like any reevaluation of the national security/war state costs that have ballooned into the trillions. Also no indication they even looked at the idea of a nationalized health care system. A voucher system is still too restrictive and doesn't account for the unforeseen happening with one's health in this turbulent world. The rich need to pay their fair share and the corporations need to pony up at least the 60% they use to pay back in 1960 or even more during World War II. Make sure they aren't allowed to offshore all kinds of jobs including high tech, high paying jobs that were also not addressed. Right now both off shoring and in shoring of workers despite the high and unrecorded amount of unemployed (and under employed) middle class and below losing out to workers who are promoted to come in and steal out jobs for less money! Still not addressed.

How about cutting back on military spending to 1% of the expenditures as of right now and with all costs and black budget numbers? Again ignored in their calculations.

I would have liked to see the quantitative break down of the $65.9 trillion (an unimaginable number in this context) would have helped in believing their initial thesis.

I wonder how different Kolikoff's assessment would have been if it included all of these numbers included in his thesis? [By the way 47 million un-ensured is an old number. Try maybe 100 million as a modern starter on health care. Ours is the worse for an 1st world industrial nation!]

by nightgaunt (0 articles, 0 quicklinks, 0 diaries, 322 comments) on Friday, September 19, 2008 at 4:16:03 PM

Robert Singer is a retired information technology professional and an environmental activist living in southern California.

In 1995 he and his cousin Adam D. Singer founded IPC The Hospitalist Company, Inc., where he served as chief technology officer. Today the company manages more than 130 practice groups, providing care in some 300 medical facilities in 18 states. Prior to that he was president of Useful Software, a developer and publisher of business and consumer software for th...

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Robert SingerRobert Singer is a retired information technology professional and an environmental activist living in southern California.

In 1995 he and his cousin Adam D. Singer founded IPC The Hospitalist Company, Inc., where he served as chief technology officer. Today the company manages more than 130 practice groups, providing care in some 300 medical facilities in 18 states. Prior to that he was president of Useful Software, a developer and publisher of business and consumer software for th...

to see more of bio, click on member name

"Give Us AIG and Keep Shopping"-keep your eyes on the Mall

Melt Up, Melt Down it’s the same Story of Stuff, Robert Singer

Kevin G. Hall in the McClatchy Newspapers writes:
Why would the government bail out a company like AIG but let Lehman Brothers file for Chapter 11 bankruptcy protection?
Kevin answer: Speaking frankly, the world can do without another investment firm. If an investment bank fails, any remaining investment bank can hire more people and take their jobs. AIG is not an investment bank. As a principal insurer, it insures consumers, it insures businesses and it insures business ventures, so it's not just that your corner store needs insurance.
The best analogy I've been able to come up with is to use an automaker. When you think about putting an automaker out of business, you put tire makers out of business, you put seat makers out of business, you put all sorts of things out of business. It's the same thing with AIG. There are tentacles. They're just so connected to so many other parts of the economy that the government deemed it more dangerous and potentially more expensive to the economy to have it fail than to give them this loan.

Story of Stuff answer: Lehman will not affect shopping, AIG will!

Number of employees AIG = 116,00, Number of employees Lehman = 25,000
The Bank for International Settlements recently reported that total derivatives trades exceeded one quadrillion dollars – that’s 1,000 trillion dollars, cost of bailout 85 billion.

Do the Math and Read my September 14, 2008 OpEdNews article
"Give Us the ANWAR and Keep Shopping"-They Found They Can't Have Both

And watch a 20-minute documentary www.storyofstuff.com that lays this all out in a manner that even a child could understand and shows the path to saving the planet is no more complicated than controlling our addiction to all that "stuff."

by Robert Singer (22 articles, 0 quicklinks, 1 diaries, 65 comments) on Friday, September 19, 2008 at 10:19:08 PM