David Stockman Says US Has Run Out Of Runway On Debt, Compares The Treasury Market To A Roach Hotel

Run time: 06:33 https://www.youtube.com/watch?v=yBtfktG3T2U   Posted on YouTube: May 18, 2011 By YouTube Member: BloombergTvBest Views on YouTube: 327   Posted on DU: May 19, 2011 By DU Member: stockholmer Views on DU: 756

 
http://www.zerohedge.com/article/david-stockman-says-us-has-run-out-runway-when-it-comes-raising-debt-ceiling-endorses-tobin-


"David Stockman has become every major news organization's (and CNBC) go to critic when it comes to bashing each stupid idea currently preoccupying the DC C-grade soap opera artists. Obviously, at the current time this would mean the budget deficit and the debt ceiling. On both those issues, Stockman's position is well-known. Today, when asked by Bloomberg's Tom Keene to compare the current deficit with that of Reagan's, Stockman spares no praise: "The essential distinction is that we had a clean balance sheet then - $1 trillion of national debt. Today we have $14 trillion in national debt.

We have used up all the runway, so to speak. We have piled our national balance sheet with so much debt that the government is at the very edge of a huge solvency crisis that isn't going to be addressed unless both parties dramatically change their position, and I see no sign of it. So we're going to have a gong show." Stockman also opines on the Monetary Roach Hotel that the US debt has become: "We have not had a two-way bond market. We have had a rigged market that has been dominated by not just the Fed, but all the central banks. Today over half of the $9 trillion in publicly-held debt is in central bank vaults.

I call it the 'Monetary Roach Hotel.'" Lastly, on a proposal endorsed by Zero Hedge back in the summer of 2009, namely the introduction of a Tobin tax for Wall Street's high-frequency casino: "Wall Street needs to have a transaction tax. I know they won't like it. A tax on every trade, a small amount, would go a long way to putting money in the coffers." As usual: absolutely spot on recommendations, which have little to no chance of occurring before the final bond crash finally takes away the multiple-use heroin needle from both DC and Wall Street.

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"I think the more important thing is the annual deficit to GDP. It should be a balance over the cycle, but we have not had any balance over the cycle for decades…We were petrified in 1982 when the deficit went to 6%, the highest ever seen. Reagan, although he is known as a great tax cutter, signed a huge tax increase bill in 1982 at the bottom of the worst recession that we'd had up until then and raised taxes by the tune of 1.5% of GDP.".............................................

the end of the runway in a mere 8 years of Neo-Con and two years of neo-lib rule?

see the roaches scatter.

big tax cuts. Why? Because war and tax cuts are the central Republican theme. Revenue was supposed to increase when they cut taxes. It didn't. It won't. It never has. Republican solution? Bigger tax cuts. Ramped up stupid, even some Democrats have adopted it.

If Reagan wasn't right what do the Republicans have? I'll tell you what they have, they have Lincoln. That's it. If the Reagan myth is torn down, the Republican Party is clear dead. This is why today's Republicans insist, in the face of all contrary evidence, that supply-side economics is the answer.

However, Mr. Stockman while knowledgeable was also the initial architect of the supply side thing. Granted he did refute the theory as he left the Reagan Administration, but had he done enough due diligence perhaps we would not be where we are today.