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June 05, 2010 – Comments (8)

It is about time.

Mish has a post on the group of 20 nations and their recognition (finally) that the expansionary spending funded by debt is unsustainable.

A quote from one of the articles:

Finance ministers from the world’s leading economies ripped up their support for fiscal stimulus on Saturday, recognising that financial market concerns over sovereign debt had forced a much greater focus on deficit reduction.

I found Mish's position interesting, this concern did not arise out of genuine prudent fiscal management, but their hand was forced by increases in credit costs --> investors are concerned and are not willing to jump in and fund debt like they used to.

However it has come about, all I have to say is finally.  

8 Comments – Post Your Own

#1) On June 05, 2010 at 6:09 PM, dwot (29.17) wrote:

Here's a quote from Mish in that article:

The Keynesian clowns will be howling that reduced stimulus killed the recovery. However, the reality is there was no recovery in the first place, only an illusion caused by unsustainable stimulus.

 I can not agree more that this was not a "recovery."  

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#2) On June 05, 2010 at 6:11 PM, binve (< 20) wrote:

And I 'amen' your 'finally' :) Thanks!

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#3) On June 05, 2010 at 11:01 PM, catoismymotor (< 20) wrote:

+1 Rec!

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#4) On June 06, 2010 at 12:06 PM, cthomas1017 (98.79) wrote:

There is one fundamental truth not considered, dwot, and that is that what politicians say and what they do are two different things.

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#5) On June 06, 2010 at 1:39 PM, MegaEurope (< 20) wrote:

I expect gold will fall a bit in reaction and the Euro should see a bounce.  Banks and commodities could continue to slide but I would expect the rest of the market to react reasonably well.

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#6) On June 06, 2010 at 2:08 PM, patternpro (< 20) wrote:

about time.  After they just saw how the imf bailout had the floor drop from under it right away, they don't really have a choice. Maybe we can get some responsiblity, do the hard work and then get back to growth

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#7) On June 06, 2010 at 2:27 PM, dwot (29.17) wrote:

cthomas1017, I agreed, but I also tend to think Mish might be right in that they have gotten to the point that choices are limited.  Investors aren't jumping in to loan cheap money anymore.

Canada is in one of the stronger financial positions because we had Brian Mulroney.  He harped about how the debt would take away our choices and make tougher choices later if we did not make scarifices now.  I abhor Trudeau to the point I would cheer the desecration of all he represents for the damage he did to Canada.  We had $32 billion more in program spending then receipts when he left office and Mulroney took over, and that was in 1984.  That does not include the cost of debt servicing.  I have issues with the generation ahead of me who go on about how great Trudeau was and how great the economy was under him.  Well, all that moron did was steal from the future economy, much as what all governments have embraced as of late.  Trudeau transferred the cost of the good times of the 70s to my generation and I consider him the worst kind of thief.

 Mulroney's term is stained by accusations of taking money for something.  Who knows if it is true, but he remains unrecognized for the greatness he brought to Canada because of it.  But then of course, the generation above me did nothing but whine a complain about the amount of taxes they had to pay under Mulroney and they didn't under Trudeau, but they still had the good jobs, with the unsustainable benefits.  When I went back to school in my 30s the programs were full of 30 something people still trying to cut out a niche for themselves because of the price we paid for live-for-today-and screw-our-youth politics of the 70s.  Hmm, now there's a good name for this constant transferrance of costs to youth -- pedophile politics.

The US news today is full of stories about people not having the same kind of pension plans that just pay regardless of whether reciepients actually paid for them.  I think that system was being torn down in Canada starting in the 80s.  I know lots of people more qualified and trained then their parents who have always made less and had practically nothing in terms of benefits.

This trend has started in the US, but I think it started 10-15 years earlier in Canada.

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#8) On June 09, 2010 at 2:03 PM, chk999 (99.96) wrote:

How about Mish and Paul Krugman in a cage match?

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