Bonddad has a diary today popular enough to make the recommended list: News Flash: WE'RE BROKE
I’m not disputing that we as a nation are broke. We are. We have been for a number of years.
But when Bonddad writes that
we can't afford a single new spending plan and we can't afford more tax cuts until we bring the national debt under control.
He’s just plain wrong. He’s promulgating nothing more or less than more Rubinomics.
Bringing the national debt under control is what President Bill Clinton and Treasury Secretary Robert Rubin did. The goal is to restore the confidence of investors. Bonddad writes that explicitly in a comment responding to Jerome a Paris:
The primary benefit from lowering the growth of public debt is confidence, which encourages people to take chances and grow the economy. This was the primary benefit of the 1990s.
So, what’s wrong with that? Consider the case of Formation Capital, LLC, a private equity firm that specializes in "securitization programs for senior housing and care." What that means is that Formation Capital, LLC buys out and assumes control of nursing homes.
Then they start to "enhance profitability." That usually means cutting costs.
At one nursing home in Tampa, Fla., the number of clinical registered nurses at the home was cut in half within one year. Over three years, 15 at Habana died from what their families contend was negligent care in lawsuits filed in state court. Regulators repeatedly warned the home that staff levels were below mandatory minimums. When regulators visited, they found malfunctioning fire doors, unhygienic kitchens and a resident using a leg brace that was broken.
"They’ve created a hellhole," said Vivian Hewitt, who sued Habana in 2004 when her mother died after a large bedsore became infected by feces.
Why should we worry about whether or not Formation Capital, LLC and the people behind it -- the investing class -- should have confidence in the market? If the market is so corrupt and evil that senior citizens have to die for lack of care in order for investors to show a profit, then I don’t give a damn if investors have confidence in the market.
As far as I’m concerned, the only thing these investors should be confident of is our government’s ability to provide three square meals a day in a penitentiary.
Now, you can go along with Bonddad and just try to twiddle with the system, and hope the investing class will have enough confidence to stick around and play nice.
Or, you can accept the fact that the whole stinking financial system itself is actually the problem.
Everyone here wails on about how justice and fairness are missing in the U.S. economy. Well, justice and fairness, it seems to me, would demand that the people behind firms like Formation Capital, LLC be arrested and tried for murder. Do you really think doing THAT is going to make investors confident in the U.S. economy? You know damn well that the investing class will be falling all over themselves to get out of the United States and flee to their gated estates in the Bahamas and Cayman Islands.
I am a radical. I know that. I am not a Marxist, or a socialist, but I believe that the government, our government, can be a positive force for good. I believe in free enterprise, and I believe in free markets that are tightly and fairly regulated. But I certainly am not a peasant. And a peasant is what the present financial system is making of all of us.
And if you don’t understand that, then you really have no idea of the brutal, bloody fight that lies ahead of us.