How China’s Model of Dictated Economic Growth Blew Up, by Wolf Richter | STRAIGHT LINE LOGIC

https://straightlinelogic.com/2021/10/23/how-chinas-model-of-dictated-economic-growth-blew-up-by-wolf-richter/

The Chinese government steered prodigious amounts of debt towards real estate, and now China is paying the price. Perhaps a planned economy isn’t such a great idea after all. From Wolf Richter at wolfstreet.com:

The debt-fueled property & construction bubble that drove its growth turned into a huge explosive mess with an enormous amount of debt.

It’s mind-boggling just how important the residential property sector is to the Chinese economy, to what extent government-dictated economic growth was achieved by building more apartment towers, and it’s even more mind-boggling how much debt residential property developers have racked up, and how much household wealth is tied up in the property sector at multiple levels. Then there are the demographic headwinds the property sector has been facing for years, that are coming to the forefront. So now there is a property crisis in China that is making the US mortgage crisis of 2008 look like child’s play in terms of magnitude. The central government has been trying to deal with rampant real estate speculation and prevent it from going even more haywire and take down the financial system and the economy.Continue reading→

Biden’s America: Inflation Now at Highest Level in Over 10 Years – Nwo Report

https://nworeport.me/2021/10/22/bidens-america-inflation-now-at-highest-level-in-over-10-years/

Source: Daniel Newton

A key measure of the market’s inflation expectations has exploded amid concerns the Federal Reserve will not be able to bring rising prices back to its 2 percent target.

The gauge known at the 10-year break-even rate suggested that bond market investors expect the consumer-price index will soar by an annual average of 2.62 over the next decade, the highest since 2012.

The five-year break-even inflation jumped to 2.86, which is the highest since 2005.

There are now supply chain disruptions, port congestion, driver shortages, and labor shortages which are all contributing to the inflationary pressures…

Treasury confirms it knew government was paying out billions in JobKeeper to firms that ‘may not need support’ – ABC News

https://www.abc.net.au/news/2021-10-11/jobkeeper-treasury-report-firms-revenue-stimulus-josh-frydenberg/100529436

  • Treasury
    has defended its decision to advise the government to keep paying out
    JobKeeper after the first three months without imposing a test based on
    ‘actual’ turnover
  • Its report suggests that a different design of the scheme would have cost jobs and delayed economic recovery
  • Treasurer Josh Frydenberg says the scheme saved more than 700,000 jobs

The IMF Should Be Eliminated, not Expanded | International Liberty

https://danieljmitchell.wordpress.com/2021/10/11/the-imf-should-be-eliminated-not-expanded/
I’m not a fan of the International Monetary Fund (IMF). Since I work mostly on fiscal issues, I don’t like the factthat the bureaucracy is an avid cheerleader for ever-higher taxes (which is disgustingly hypocritical since IMF employees get lavish, tax-freesalaries). But the biggest problem with the IMF is that it promotes “moral hazard.” More specifically, it provides bailouts for irresponsible governments and for those who foolishly lend to those governments. The net result is that bad behavior is rewarded, which is a recipe for more bad behavior. All of which explains why some nations (and their foolish lenders) have received dozens of bailouts. Oh, and let’s not forget that these endless bailouts also lead to a misallocation of capital, thus reducing global growth. In an article for the New York Times, Patricia Cohen reports on discussions to expand the IMF’s powers...

Biden’s Absurd ‘Zero Cost’ Claim—$3.5 Trillion Is Real Money And It’s Coming Out Of Your Pocket | PA Pundits – International

https://papundits.wordpress.com/2021/10/02/bidens-absurd-zero-cost-claim-3-5-trillion-is-real-money-and-its-coming-out-of-your-pocket/

By David Ditch ~

Talk about a ludicrous advertising pitch! Speaking of the record-breaking tax-and-spend package currently being pushed through Congress, President Joe Biden last Friday said, “It is zero price tag on the debt. We’re going to pay for everything we spend.”

This is flatly wrong, and it isn’t even close.

President Joe Biden incorrectly claimed the $3.5 trillion spending bill will pay for itself and has no cost whatsoever.

While we don’t yet have a full accounting of the 2,465-page behemoth, it’s expected that the bill’s total amount of spending and tax credits will reach $3.5 trillion.

In contrast, the bill would increase taxes by about $2.3 trillion, leaving a gap of over $1 trillion. Democrats claim that the difference would be made up by imposing price controls on prescription drugs and through hoped-for economic growth—even though independent analysis says the bill would actually depress growth.

Yet rather than correct the record, Biden doubled down and then some.

In a tweet last Saturday, he said, “My Build Back Better Agenda costs zero dollars.”

It’s one thing to incorrectly claim that legislation pays for itself. It’s another thing to claim that possibly the most expensive piece of legislationin world history has no cost whatsoever.

Make no mistake: There is no free money. Every dollar the federal government spends must either be taken from taxpayers or borrowed.

Extra borrowing would be irresponsible. The federal debt currently stands at $28.4 trillion, or about $220,000 for every household in the country.

The problem is only getting worse, with tens of trillions in unfunded liabilities for programs like Social Security and Medicare. That’s bad for retirees and future generations alike, and Congress is refusing to address the coming crisis.

Tax hikes also have a real cost, and not just for high-income individuals.

Despite Biden’s promises that his plan wouldn’t increase taxes on people earning less than $400,000 per year, the official congressional scorekeepers show the tax burden will increase for families bringing home as little as $30,000 per year.

As for economic growth, a higher tax burden would kneecap the competitiveness of American businesses against foreign competitors. It would also discourage the private sector investment that creates jobs and drives wage growth for workers.

With the post-pandemic recovery still on shaky ground, this is an especially bad time to increase the tax load.

Unfortunately, Biden’s absurd talking point of a “zero dollar” cost is spreading. From Rep. Pramila Jayapal, D-Wash., head of the House Progressive Caucus, to mainstream media headlines about “zero” cost, there is now an active campaign to pretend that a radical big government agenda is free.

Since “trillion” is a nearly incomprehensible number, it’s vital to understand what the bill’s $3.5 trillion price tagactually means.

*The amount drained from the private sector works out to over $27,000 per U.S. household, which is more than the cost of five years of groceries for a typical family.

*Spending at $1,000 per second, it would take 111 years to reach $3.5 trillion. Yet because the bill would cram that spending into a single decade, it would spend an average of $11,000 per second for 10 years.

*At the time it was passed, [the Affordable Care Act] was one of the most expensive pieces of legislation ever. Adjusted for inflation, it cost $1.1 trillion—less than one-third the size of Biden’s tax-apalooza. Even the most ardent supporters of Obamacare never claimed it had a “zero” cost.

Concerns about the legislation go well beyond its incredible cost. The way those trillions would be spent is also riddled with problems.

Expanding the welfare state would discourage work for low- and middle-class families, creating dependency on government rather than creating wealth.

Doling out hundreds of billions to “green” businesses would have no measurable effect on global temperatures, but it would create a new left-wing political constituency using taxpayer dollars.

Democrats are also determined to try and force mass amnesty for illegal immigrants into the tax-and-spend bill.

At the end of the day, this legislation would further concentrate power and control in Washington, D.C. The idea that Congress and federal bureaucrats deserve more responsibility over our day-to-day lives should be a punchline regardless of one’s political leaning, yet that is exactly what the bill would do.

Instead of railroading through a piece of legislation that’s longer than the combined length of two King James Bibles, Congress ought to slow down and consider alternatives.

Reforms to already-existing benefit programs can encourage work and reduce long-term deficits. Maintaining a pro-growth tax code would do more for jobs and wages than any amount of federal meddling.

Taking a responsible approach to the nation’s finances would be a welcome surprise. Unfortunately, Biden seems intent on pretending that everything he wants is free.

He’s wrong. And if the legislative package passes, America will pay a very real price.

This article originally appeared in Fox News.

David Ditch is a research associate specializing in budget and transportation policy in the Grover M. Hermann Center for the Federal Budget at The Heritage Foundation . http://www.heritage.org/

Read more informative articles at The Daily Signal http://dailysignal.com/

Stocks Pressured After Fitch Warns Debt Ceiling “Brinksmanship” Threatens US AAA Rating

https://www.nationandstate.com/2021/10/01/stocks-pressured-after-fitch-warns-debt-ceiling-brinksmanship-threatens-us-aaa-rating/
Stocks Pressured After Fitch Warns Debt Ceiling “Brinksmanship” Threatens US AAA Rating Ready for a rerun of August 2011? As a reminder, just over 10 years ago, S&P downgraded the US after that year’s debt ceiling debacle prompted the rating agency to do the unthinkable and lob an A from the untouchable AAA US rating…

Can the US avoid another government shutdown? – BBC News

https://www.bbc.com/news/world-us-canada-58732793

… At the heart of this is a bitter row over lifting the debt ceiling – a

limit on the amount the US government can borrow…

There are also dire warnings of a catastrophic default on the national debt that could reverberate through the US and the global economy…

The U.S. Government Vows to “Fix” the Food System, by Bill Bonner | STRAIGHT LINE LOGIC

https://straightlinelogic.com/2021/09/27/the-u-s-government-vows-to-fix-the-food-system-by-bill-bonner/

Like they’ve fixed the educational and medical systems, and turned everything else they’ve touched into crap. From Bill Bonner at rogueeconomics.com:

BALTIMORE, MARYLAND – Things go wrong.

The Wall Street Journalpublished this alert last night:

Democratic leaders are trying to shepherd two complicated legislative packages: a roughly $1 trillion bipartisan infrastructure bill and a sprawling healthcare, education and climate package whose proposed $3.5 trillion price tag and contents are still under intense debate within the party.

At the same time, the government’s funding is set to expire at 12:01 a.m. on Friday, Oct. 1, which would partially shut down the government if Congress doesn’t act. Lawmakers also are feuding over who is responsible for raising the debt limit and avoiding a potentially catastrophic default. Absent swift action, Treasury Secretary Janet Yellen notified Congress this month that the Treasury may be unable to keep paying all of the government’s bills on time during October.

Reuters calls it a “moment of truth” for Congress.

Politicians grandstand. They argue and point the finger at each other.

But if the spending is interrupted, it won’t be interrupted for long. The real truth is that Democrats and Republicans agree on the important issue – that the rip-off of the American public must go on.

Borrow… spend… print… and borrow more.

Eventually, the end of the world as we have known itcomes. And then, things get serious. Painful. Chaotic. And disastrous.

Empty Stomachs

And today, we look at one of the most nightmarish features of the End of the World As We Have Known It: hunger.

It is hard to imagine widespread hunger in the U.S. The country is so rich, so big, so productive… food is so plentiful… and its people are so fat. What could possibly go so wrong as to cause people to go hungry?

The Eurozone Is Going down the Same Stagnating Road as Japan | Mises Wire | MCViewPoint

https://mcviewpoint.com/2021/09/20/the-eurozone-is-going-down-the-same-stagnating-road-as-japan-mises-wire/

Countries like Italy, Spain, Portugal, or Greece cannot survive stagnation due to elevated levels of unemployment and the small size of the business fabric. Therefore, the ECB seems to ignore the risks of perpetuating the perverse incentives to bloat government spending and debt.

https://mises.org/wire/eurozone-going-down-same-stagnating-road-japan

Daniel Lacalle

The European Central Bank announced a tapering of the repurchase program on September 9. One would imagine that this is a sensible idea given the recent rise in inflation in the eurozone to the highest level in a decade and the allegedly strong recovery of the economy. However, there is a big problem. The announcement is not really tapering, but simply adjusting to a lower net supply of bonds from sovereign issuers. In fact, considering the pace announced by the central bank, the ECB will continue to purchase 100 percent of all net issuance from sovereigns…