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Comments
Ronald Nimmo
Nov. 28, 2011, 6:24 a.m.
Medicaid has a rule that it will not pay for assisted living, but only for nursing care. What this means in practice is that seniors who could get by with assisted living have to get nursing care when they run out of money. Nursing care is twice as expensive as assisted living. Most of the people in assisted living have enough disabilities to qualify for nursing care, but they can be provided for adequately without it (with dedicated employees). So it is a tremendous stupidity on the part of
Congress to allow this rule to continue to exist. Analysts have said that there is a limit to how much government money can be saved by cutting waste. I believe that that limit is much higher than some of our financial gurus have led us to believe. Never underestimate the amount of inefficiency and waste that can go on.
Jim Pope
Nov. 25, 2011, 4:41 p.m.
John, you have often mentioned one root problem for the financial crisis of European Union is that there is a common currency but no common fiscal authority. Perhaps the global financial problems trace to a similar situation where we have ‘integrated’ economies via globalization but have no global fiscal authority?
Michael Beaudin
Nov. 22, 2011, 4:43 p.m.
I have a common sense solution to the deficit problem. Start with freezing the budget at the 2011 spending levels. Then beginning with the 2012 budget, cut 10% per year for the next 4 years. Assuming no increase in revenues this would balance the budget by the end of the 2015 fiscal year. It only takes $1.233T in real cuts over 4 years (not these phony cuts in growth over 10 years) and would only add $2.67T in new debt (less than one third of what the Obama budget would add). Any additional revenues would only balance the budget sooner.
D. DEWITT
Nov. 21, 2011, 12:42 p.m.
As someone pointed out a long time ago, “Socialism works right up to the time it runs out of other people’s money.”
Bill Bradbrooke
Nov. 20, 2011, 11:49 a.m.
Excellent summary, John. You outline the German dilemma clearly. To support of EZ through monetization without trade and budget controls is a German blank check for continued welfarism. To insist on further “integration” will raise the ire of members ceding sovereignty to Brussels. To continue without a solution risks a credit crunch in the banking system. Meanwhile, the bond and CDS markets push the entire world toward the edge.
Question: Does Christine LaGarde command sufficient credibility that the IMF could (1.) administer the framework for fiscal discipline in EZ debtor nations, as it (2.) funds a rescue facility, so that (3.) the Germans could step out of the Euro in an orderly fashion?
Walter Bruno
Nov. 20, 2011, 8:37 a.m.
Congratulation, Mr. Mauldin, to a balanced and well written analysis. Hopefully, Nr. Friedman and collegues from Stratfor, perceived war mongers against their foe Germany- in your platform too often provided to them- will listen and learn from it rudimentary scientific impartiality.
Dr. Walter Stolber
Switzerland
Alan Harris
Nov. 20, 2011, 6:55 a.m.
Im with Dominic Pazzula Yesterday, 10:17 a.m. John does a great job of crunching the numbers to demonstrate the financial options/consequences, but someone needs to take a close look at the social consequences. How does mass economic migration play out across Europe?. Im beginning to think this is just the beginning game, not the end. Blood will flow.
Ultimately politicians follow public sentiment or risk unemployment. As John says the French (or Italians) will not take kindly to austerity, nor will the Germans risk falling exports. Merkle has two choices…print or look for a new career.
As for German laws…...a stroke of the pen and they’re toast. Its what politicians are good at.
Phillip guerra
Nov. 19, 2011, 10:18 p.m.
So I guess I’m going to tell my Spanish wife not to pay off her mortgage which is in Euros. I KNEW I should’ve shorted it the second time it got back up to 1.40 - but I don’t prefer to trade currencies if possible. We go to Spain often sometimes 3x / yr. Each time I notice more stores closing, taxi cab drivers getting more worried, and banks (cajas) closing down branches or merging.
It’s a mess. Honey, whatever you do, don’t pay off the mortgage for your piso en Spain!
Jan Czekajewski
Nov. 19, 2011, 9:42 p.m.
Hi John, Plese take a look at ths article from New Left Review which gives historical perspective on current situation
http://newleftreview.org/?view=2914
Jan Czekajewski
Larry Brown
Nov. 19, 2011, 6:46 p.m.
The FED (or ECB) can create all the dollars (or EUROs) they want, but they cannot create value (which is needed) because only God can create something of value out of nothing.