Druckenmiller: WWII debt was paid for by suppressing yields, causing double-digit inflation which was paid for by the people, and it's still a bad idea

Druckenmiller understands our predicament very well, but even he won't call for raising taxes, which we must. 

How much government spends is NOT the only variable. 

That is the Big Lie of our time.

  

Commentary: Let the Bond Market Speak By Stanley F. Druckenmiller (Wall Street Journal) -- Aug. 24, 2026 05:27 PM

 

The Treasury Department announced on Aug. 19 that it would double the size of its long-dated bond buybacks, from $2 billion to at least $4 billion per operation, aimed at the 10- to 30-year sector and running from Sept. 9 through Nov. 4.

The announcement came after the 30-year yield touched a 19-year high.

Yields fell within minutes.

By the next afternoon they had round-tripped to levels above where they started.

The market's verdict was swift and correct: This wasn't liquidity management, it was price management-and a mistake far larger than $4 billion suggests.

Treasury's announcement gave the game away.

It justified the larger operations as liquidity support in sectors with "consistent strong sponsorship from market participants," but strong sponsorship is the definition of a healthy, working market. 

There were no failed auctions, no dealer balance-sheet seizure, no forced unwinds, nothing resembling Treasurys in March 2020 or U.K. gilts in September 2022, the sort of genuine dysfunctional episodes that justify official action.

Volatility was contained, and trading was orderly-not a malfunction but the machine doing its job.

Consider what the machine was pricing.

Inflation is 3% to 4% and has been above the Fed's target since 2021.

Unemployment is 4.1%, full employment by any definition.

The deficit is running near 6% of gross domestic product, a number America has never before produced in peacetime at full employment.

The national debt crossed $40 trillion the same week Treasury intervened.

Net interest will exceed $1.1 trillion this fiscal year, more than the defense budget.

The 10-year yield, even after the summer selloff, sits at or below the economy's nominal growth rate.

That means a borrower (federal government) running 6% deficits at full employment, with above-target inflation, still funds itself at roughly the rate its economy grows.

Historically, that configuration is accommodative, not restrictive, of financial conditions.

The bond market wasn't being a vigilante, as some would argue.

It was being a pushover that had finally begun to clear its throat, and Treasury moved to quiet even that.

I have spent five decades trading on a simple premise: Markets aggregate information no committee possesses, and prices are how that information reaches decision makers.

The long-term Treasury yield is the most important price in the world.

It is also the only fiscal disciplinarian the U.S. has left.

Neither party will run on entitlement reform.

Both have spent the past decade expanding commitments while ignoring arithmetic.

Democracies don't repair their finances because a budget office publishes a table.

They repair them only when the cost of inaction becomes visible and immediate, when mortgage rates bite, when auctions tail, when the political price of a rising long bond finally exceeds the political price of touching spending.

Every basis point of artificial yield suppression is a subsidy to procrastination.

Suppressed long rates sugarcoat the interest-cost projections, shrink the apparent urgency, and let incumbents assure voters the debt is someone else's problem.

If Congress and the administration are unlikely to touch entitlements even with the market's signal, they are certain not to touch them without one.

Whatever this operation saves in basis points, it will cost multiples in delay.

Yield management always begins as a technical operation and ends as a policy commitment.

From 1942 to 1951, the Federal Reserve capped long Treasury yields to finance World War II.

The cap outlived the war, financed deficits with printed money, and fueled double-digit inflation.

It took the 1951 Treasury-Fed Accord to dismantle the cap, followed by years of financial repression that quietly taxed a generation of savers.

U.S. policymakers built the wall between debt management and price management for a reason.

This intervention starts dissolving it.

Within a day of the announcement, Treasury Secretary Scott Bessent indicated the operations could grow beyond $4 billion, and analysts observed that Treasury can double them again and again.

When the bond market didn't respond to this threat, senior Treasury officials told reporters that the department could use the Treasury General Account to intervene.

Once markets believe Treasury is defending a price, every rise in yields becomes a test of official resolve, and the operations must grow to survive the tests.

There is a quieter cost, too.

Buying back long bonds while funding the purchases with bills shifts duration, or long-term interest-rate risk, out of public hands-economically, a small dose of quantitative easing run out of the Treasury rather than the Fed, easing financial conditions while inflation sits above target.

These enlarged operations happen to run through the final stretch of a midterm campaign.

Debt management that even appears to follow the political calendar spends the one asset that took two centuries to accumulate: the credibility of the Treasury market.

That asset doesn't regain its value so easily.

During the debt-ceiling fight in 2011, I said a brief technical delay in payments would be terrible, but less terrible than another decade of can-kicking without reform.

In 2013, Geoffrey Canada and I toured college campuses calling the entitlement trajectory what it is: generational theft.

Transfers that accounted for roughly a quarter of federal outlays in 1960 consume 70% today.

I told students, "I love entitlements, but I want them for you guys," when they turn 65, not merely for my generation at their expense.

In 2023 I said Washington was spending like drunken sailors, with federal outlays up from 20% of GDP before Covid to 25% after, and I called Secretary Janet Yellen's failure to term out the debt at generational-low rates the biggest blunder in Treasury history.

Every household and corporation in America locked in low rates, and the one borrower that needed to most, didn't.

At prevailing rates, interest expense reaches 4.5% of GDP by 2033 and 144% of all discretionary spending by 2043.

We are tracking those markers early.

Anyone who tells you entitlements won't be cut is lying-not about the outcome but about who decides it. 

Either we restructure the promises deliberately, on our terms, protecting those who most need them, or the bond market restructures them for us, all at once, on its terms.

The defense of the buybacks writes itself: It is a routine tool, introduced in 2024 for liquidity and cash management, trivial against a marketable debt stock approaching $30 trillion.

All true but beside the point.

Routine operations aren't announced off-cycle, at double size, on the heels of the long bond's hitting a two-decade high, with a signal that they can grow without limit.

Judge an intervention by what it responds to.

This one responded to a price, not to plumbing, which is exactly how the market read it, and why the effect evaporated within a day.

You can't buy your way out of a solvency conversation with liquidity tools.

You can only postpone the conversation and raise the eventual price.

What should happen instead is straightforward.

Return buybacks to their stated purpose: small, scheduled, off-the-run liquidity operations announced at quarterly refundings, never off-cycle responses to yield levels.

Term out the debt honestly and pay the price the market sets.

If the 30-year must trade at 5.5% to clear, that isn't a crisis.

It is an invoice.

Then do the only thing that durably lowers long-term yields: address the primary deficit.

Reform entitlements gradually and honestly, through means testing, indexing changes, eligibility adjustments phased in over decades-so that the burden is shared across generations instead of dumped on the youngest.

The reward is enormous: A credible fiscal package would do more for the long end of the curve than a buyback program 1,000 times this size.

Governments defending prices against fundamentals always lose.

The only variable is how much they spend before conceding.

The U.S. shouldn't put itself on the wrong side of that trade, not with the most important price in the world, and not when that price is trying to say the one thing Washington most needs to hear: Let the bond market speak.                                  

https://www.wsj.com/opinion/let-the-bond-market-speak-81529d74?mod=hp_opin_pos_1 

Kremlin Karoline shockingly spouts Russian propaganda, says Zaporizhzhia Nuclear Power Station is on the Ukraine-Russia border

The official White House spokesperson is conceding that the lands taken in Russia's invasion of Ukraine are Russia.

This is a lie, a big lie, an utter disgrace.

 

 

The Current Big Lie: There was an agreement in 1991 when the Soviet Union fell apart that prevented former Eastern bloc countries from joining NATO

 

‘There was no promise not to enlarge NATO’ - Harvard Law School

Mar 16, 2022 By Jeff Neal

---

When President George H.W. Bush sat down with Soviet President Mikhail Gorbachev to negotiate the peaceful end of the Cold War and the reunification of Germany, former Under Secretary of State Robert Zoellick ’81 was in the room where it happened.

During the 1990 summit, Zoellick says President Gorbachev accepted the idea of German unification within the North Atlantic Treaty Organization, based on the principle that every country should freely choose its own alliances.

“I was in those meetings, and Gorbachev has [also] said there was no promise not to enlarge NATO,” Zoellick recalls. Soviet Foreign Minister, Eduard Shevardnadze, later president of Georgia, concurred, he says. Nor does the treaty on Germany’s unification include a limit on NATO enlargement. Those facts have undermined one of Russian President Vladimir Putin’s justifications for invading Ukraine — that the United States had agreed that former Warsaw Pact nations would never become part of the North Atlantic security alliance.

Zoellick, a former deputy and undersecretary of state, deputy White House chief of staff, U.S. trade representative, and World Bank president, shared his recollections about the Cold War’s end and its ties to the ongoing war in Ukraine as part of a broader conversation with Harvard Law Today about the 75th anniversary of the Truman Doctrine, an American foreign policy aimed at containing Soviet expansion following World War II.

He is the author of “America in the Word: A History of U.S. Diplomacy and Foreign Policy.” An alumnus of both Harvard Law School and Harvard Kennedy School, where he is a senior fellow at the Belfer Center for Science and International Affairs, Zoellick believes Putin’s false claim about NATO enlargement is part of a disinformation campaign by the former KGB agent to mask his true intentions.

Zoellick vividly recalls the White House meeting he attended nearly three decades ago in which Bush asked Gorbachev if he agreed with the Conference on Security and Cooperation in Europe principle that nations are free to ally with others as they see fit. When Gorbachev said yes, he says, the Soviet leader’s “own colleagues at the table visibly separated themselves.”

Sensing the import of the possible breakthrough, he says a colleague at the meeting, Robert Blackwill, sent him a note checking what they had heard and asking if they should ask Bush to repeat the question. “Gorbachev agreed again,” Zoellick recalls, to the principle that Germany could choose to enter NATO.

“The reality was that, in 1989-90, most people, and certainly the Soviets, weren’t focusing on whether the Eastern European countries would become part of NATO,” Zoellick says. Knowing Soviet and Russian diplomacy, he believes Moscow would have demanded assurances in writing if it believed the U.S. had made such a promise. And even in 1996, when President Bill Clinton welcomed former Warsaw Pact nations to join NATO, he says that, “[o]ne of the German diplomats involved told me that as they discussed the enlargement with the Russians, no Russian raised the argument that there had been a promise not to enlarge.”

But if the West never gave the promise Putin has used to explain his decision to invade Ukraine, what does Zoellick think motivates the Russian president’s decision to inflict death and destruction on one of Russia’s nearest neighbors? “Putin does not see Ukraine as an independent and sovereign state,” he says. “He has a view of Russian history where the Rus [the medieval ancestors of the people who came to form Russia, Belarus, and Ukraine] began in Kyiv. He believes that they are all Russians, living in a greater Russia. And I think at age 69, Putin feels that this is a question not only of Russian history, but his place in Russian history.”

Zoellick says that when Putin’s earlier attacks in the Crimea and country’s eastern regions failed to halt Ukraine’s drift towards the West, the Russian leader believed he had no other choice but to invade. “That’s his motivation. And I think we need to be aware that he’s going to double down. The resilience and resolve of the Ukrainian people to resist has been a surprise to him and everybody else. I don’t think he’s going to ultimately be successful. In addition to today’s brutal battles, Russia faces a difficult occupation and insurgency, even if it can seize cities and territory.”

The experienced diplomat also credits Ukrainian President Volodymyr Zelensky with rallying the Ukrainian people by refusing to flee Kyiv and through adept use of social media and language.

“We’re seeing that the skills that he developed as an entertainer and a communicator can be used in different ways, just as Ronald Reagan did,” he says. “It does raise a concern that, if something happens to Zelensky, what will that do to morale? Will he be a martyr or will his loss break the public will?”

Zoellick also notes that, as the war in Ukraine has garnered the world’s attention, many of the questions being asked today about the West’s relationship with Russia are similar to those he had dealt with at the end of the Cold War, including “Russia’s sense of whether it feels like a great power or threatened by NATO … those are the issues that are at very much at play in dealing with Ukraine.”

“Can Russia forge peaceful, constructive ties with the West?” he asks. “Failed economic and political reforms left Russia behind. Its economy depends on energy production. Putin played off public frustrations, but many Russians don’t want war and isolation.”

When thinking about global diplomacy and the factors that might have led to the Russian invasion, Zoellick harkens back to a comment made by his boss for eight years, James Baker, who served both as secretary of state and the treasury, as well as White House chief of staff: “As you address the problems of one era, you’re often planting the seeds for the next set of challenges. History doesn’t stop.”

More than 30 years after the fall of the Berlin Wall, Zoellick says the legacy of decisions made at the end of the Cold War are echoing throughout Europe today: “Would we keep NATO alive? Would it enlarge into Central and Eastern Europe? How far? What would be the effects on Russia of its loss of empire?”

“That leaves the question of whether the U.S. could have avoided Russia’s turn,” he says. The answer, he believes, depended on Russia’s choices. “Certainly, we wouldn’t have wanted East and West Germany to remain divided.” The related questions are many: What if Eastern European countries had been barred from joining NATO and therefore remained, like Ukraine, outside the western security umbrella? And how would they react to the Russian threat and being left again as “lands between” Germany and Russia? The U.S. and Europe, he notes, offered Russia partnerships, but Russia felt humiliated by the loss of its empire.

“I was the U.S. negotiator for German unification,” he says. “We wanted to make sure that a democratic Germany was unified in NATO. I don’t think anybody would think that’s a bad idea today. And if anything, we’re now seeing Germany stepping up to a security role for NATO and the European Union.”

In 1989-90, Zoellick was also focused on the idea that Poland — long subject to invasions by Russia and Germany — should be able to eventually join NATO. He made sure that the treaty on German unification kept that possibility open. “Given Putin’s behavior, can you imagine what the effect would be on Poland today if it weren’t in NATO? I think it’s wise to have Poland and Germany on the same side. The Baltic countries were a tougher choice for NATO, not because they don’t deserve the security, but they’re very hard to defend.” Nevertheless, he adds, because the Baltic states are now NATO members, he believes we must “take serious steps to defend them from both direct and hybrid threats.”

Ultimately, he believes supporting Ukraine economically and supplying arms for self-defense, rather than opening the potential for eventual NATO membership, would have been a better approach than the one the West has taken in recent years.

“If NATO gives a security guarantee, it has to mean it,” he says. “It has to be serious about providing deterrence under Article Five of the North Atlantic Alliance treaty. … I support Ukraine’s economic reforms and its democracy, [but] I doubted that the American people were ultimately willing to fight for Ukraine. The worst thing to do was to suggest Ukraine might join NATO, but without a serious pathway to membership.”

The U.S., he adds, “isn’t going to defend everybody all the time, everywhere in the world; we have to know what we will and won’t defend. Having said that, I think the Obama and Trump administrations erred by not giving more military support to Ukraine. I believe that we should help the Ukrainians defend themselves. But those are the exact issues debated today.”

https://hls.harvard.edu/today/there-was-no-promise-not-to-enlarge-nato/

Oh, we've paid attention: Kamala has had a private lunch with Joe Biden every week as VP and has participated in The Big Lie about his condition all along

 

Capehart: Anyone Who Says VP Kamala Harris Has To "Earn It" Hasn't Been Paying Attention To What She's Done

Ann Coulter's best tweet ever

 

"America is an idea, not a place, not a people" is the BIG LIE mantra of neo-conservatism and libertarianism. 

If that's true, one should be able to explain it, write it down, teach it, and put it into practice successfully anywhere. No need to come here for it.

And of course it isn't just an idea. Millions come here and never come to learn it anymore. Millions more aren't taught it in school anymore, and don't see it in practice at home anymore.

That's why the country is a mess.

A famous Italian-American once had it figured out, as I, a German-American, once had it figured out. He starts in, in earnest, at about minute ten:

Jonah Goldberg, Charles C. W. Cooke and NATIONAL REVIEW have it all wrong: The Founders' modest goal was to keep CHRISTIANS from killing each other

The Conservative Divide:

The post-liberals think that Enlightenment-based liberalism is the disease afflicting society because it has no answer for how people should live. They have a point: It is not a religion or moral philosophy. But it wasn’t meant to be. Instead, as National Review’s Charles Cooke rightly put it, classical liberalism was a system designed to keep people of different religions from killing each other.

This is hubris, but not American hubris. America wasn't about people of different religions, broadly conceived. To say otherwise remains the Big Lie of contemporary liberalism.

The Founders sought to create a unique home for mostly English Christian diversity, which meant Protestantism in relation to Catholicism, where its citizens would "assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them". 

Classical liberalism in America was as much a creature of Protestant Christianity as it was of the Enlightenment. It wouldn't have existed without the unique history and interaction of the two phenomena. By importing non-Christian religion into the Founders' equation as liberals do today, however, private hostility among Christians has been all but replaced by public hostility toward Christians. Some parties actually want to kill Christians just as much as some Protestants and Catholics once upon a time wanted to kill each other. Some think that's actually their plan.

It's been a recipe for disaster, and we're living it more and more.

It was a difficult enough game of chess before non-Christianity got introduced. The history of Protestant-Catholic relations in America proves that. But now it's 3-D chess, and very few can play that game, or want to.

But the last person who is going to reset this game board, touted by Goldberg, is the atheist George Will, an open borders libertarian who wants any and every immigrant who can get here to come here. Nor, frankly, will the Catholic enthusiasts at First Things Magazine be of much help. They are not inspired by American sensibilities, by definition, and represent Protestantism's fiercest theological opponents and are at the same time Catholic illegal immigrants' most practical defenders. Their loyalty is plain. All the ills of America and the West they blame on both the Enlightenment and Protestantism.

Both of these parties, ostensibly opposed to each other, seem to agree on one thing: reducing the Protestants to minority status.  

The hatred for what we were and what we are, coming from our supposed allies on the right, should astonish more Republican voters.

Jews now have Israel, thanks to the West. They should move there. Muslims have Arabia, and much more. We don't need them here. Catholics have Rome.

America is the once and future home of Protestantism. Everyone deserves a home.

Michael Goodwin: If Hillary were a better person she would apologize and acknowledge Trump's legitimacy, should be shunned until she does

We should all be celebrating the collapse of Hillary’s big lie:

In a better world, or if she were a better person, she would apologize and publicly acknowledge Trump’s legitimacy. I won’t hold my breath. But until she does, she should be shunned in public life. She has no credibility to speak on any issue or endorse any candidate. She has put the nation through hell all because she lost an election she should have won. Let’s remember, too, that her campaign actually did work with Russians, through FusionGPS and British agent Christopher Steele, to create a fictional scenario about Trump being compromised. ...

It was, after all, the Clinton-financed Russian dossier that formed the basis of the FBI investigation launched by the disgraced James Comey that summer. How did that happen? How did a partisan dirty trick result in an FBI probe of the other party’s presidential candidate? And how did so much classified information leak, including the names of Trump associates picked up incidentally on wiretaps? Who in the Obama White House broke the law?

These and other questions deserve at least as much scrutiny as Clinton’s false claims. As Trump said Sunday, “This was an illegal takedown that failed. And hopefully, somebody’s going to be looking at the other side.”

Amen to that.

Rush Limbaugh: 94 million not in labor force are ALL on welfare, ALL have an EBT card, ALL getting food stamps, ALL getting disability

Today, here, with the right's version of The Big Lie:

"We don't have 5% unemployment. We've got 20% unemployment.  Bob, we have 94 million Americans not working, not in the labor force.  They're all on welfare, Bob, one way or another.  You are talking about vandals basically coming in and ripping you off at the laundromat.  Half of this country is on welfare, Bob. That's another reason why people aren't talking about it.  Half the country that votes is on welfare, and they vote for Santa Claus, Bob. And to them, you're Santa Claus.  And you're...

"I can understand exactly why you want to sell the business and get out of there.  It's probably being stolen from you.  Customers in there get harassed by people that want to commit vandalism or crime in there.  I have total understanding, relatability, sympathy for what you're going through.  But we've succeeded in letting so many people... Bob, 94 million Americans not working, and they all have an EBT card. They're all getting food stamps. They're all getting some form -- many of them -- of disability."

Trump pulls the trigger, runs for president as a Republican

[H]e said he'll be "the greatest jobs-president that God ever created" . . ..

He said he will: "repeal and replace the Big Lie, Obamacare";

"build a great, great wall on our southern border, and I will have Mexico pay for that wall" ("nobody builds walls better than me");

and "find the General Patton or … General MacArthur" in the U.S. military to fight the Islamic State.

More here.

The Banks Rule America And Blaspheme Against Capitalism

In "Bankistan Vanquishes America" here Barry Ritholtz rages against the criminal enterprise under which we live, with a rash of supporting links. Under Clinton, Bush and Obama, its grip has only gotten tighter.

From the conclusion:

On the other side lay the bank apologists, corrupted politicians, and crony capitalists. They advocate the Big Lie of the financial crisis. They choose to ignore the facts and data that disprove their narrative. They continue to push the lies that the bailouts were a good investment. (They weren’t). They work against the Bipartisan consensus that the giant banks should be broken up. They ignore the many former bank CEOs who call for the break up of “Too Big to Fail” banks. They mandated that GSEs were banned from Lobbying, but they made sure that the big banks retained their influence peddling and hold on Washington DC.

They no longer represent the voters of their districts, but instead are the elected representatives of Bankistan.

And unless we do something — and soon — they will vanquish America.

Things haven't changed much since 1819 when the revolutionary paper of fictitious capital resulted in fraudulent bankruptcies on the backs of real capital, real property and commerce (think of today's zero interest rates returning nothing to retirees, collapse in the value of housing long purchased honestly, and moribund GDP and zero velocity money punishing millions with unemployment):

The enormous abuses of the banking system are not only prostrating our commerce, but producing revolution of property, which without more wisdom than we possess, will be much greater than were produced by the revolutionary paper. That too had the merit of purchasing our liberties, while the present trash has only furnished aliment to usurers and swindlers. The banks themselves were doing business on capitals, three fourths of which were fictitious: and, to extend their profit they furnished fictitious capital to every man, who having nothing and disliking the labours of the plough, chose rather to call himself a merchant to set up a house of 5000. D. a year expence, to dash into every species of mercantile gambling, and if that ended as gambling generally does, a fraudulent bankruptcy was an ultimate resource of retirement and competence. This fictitious capital probably of 100. millions of Dollars, is now to be lost, & to fall on some body; it must take on those who have property to meet it, & probably on the less cautious part, who, not aware of the impending catastrophe have suffered themselves to contract, or to be in debt, and must now sacrifice their property of a value many times the amount of their debt. We have been truly sowing the wind, and are now reaping the whirlwind. If the present crisis should end in the annihilation of these pennyless & ephemeral interlopers only, and reduce our commerce to the measure of our own wants and surplus productions, it will be a benefit in the end. But how to effect this, and give time to real capital, and the holders of real property, to back out of their entanglements by degrees requires more knolege of Political economy than we possess. I believe it might be done, but I despair of it’s being done. The eyes of our citizens are not yet sufficiently open to the true cause of our distresses. They ascribe them to every thing but their true cause, the banking system; a system, which, if it could do good in any form, is yet so certain of leading to abuse, as to be utterly incompatible with the public safety and prosperity. At present all is confusion, uncertainty and panic.

-- Thomas Jefferson

The Greedy Bastards' Big Lie About Your Mortgage Interest Deduction

1

Read the data for yourself, here, from the Joint Committee on Taxation's own estimate of the "cost" to the government of your mortgage interest deduction.

The JCT estimated that the government's biggest loss of revenue between 2007 and 2011 came from the exclusion of dividends and long term capital gains from higher tax rates. This does NOT include gains from selling real estate.

Tax losses from deductions for health insurance expenditures ranked second, tax losses from deductions for retirement plans third, all three of which range between $632 billion and $607 billion over 5 years.

The tax loss from deducting mortgage interest was a distant fourth, at $430 billion, yet the drumbeat from so-called conservatives to eliminate the deduction gets louder everyday.

Can you say, "Middle Class Tax Increase"?

2

3

4

WaPo Repeats The Big Lie: "There Are Just Not Enough Tax Breaks To Close For The Rich"

Here:

"[T]here are just not enough tax breaks to close for the rich, and the big money is in those for middle-income taxpayers."

The leftist drumbeat to raise taxes on the middle class just never ends.

But it's not just their agenda, it's the agenda of Republicans and libertarians, and it flies under the radar of "tax reform" and "broadening the base". Its most passionate advocates in the Republican Party are people like Gov. Mitt Romney and Rep. Paul Ryan, and certain members of the Gang of Six and the Gang of Twelve, you know, like Sen. Tom Coburn and Sen. Saxby Chambliss. The Stupid Party is stupid because the rank and file of America end up voting for this liberalism all the time. But those elected officials aren't stupid. They know exactly what they are doing and how it works.

You promise lower marginal tax rates across the board in exchange for giving up some tax deductions. Then as time passes the Democrats get the government in their hands again and raise taxes. But those lost deductions? They remain lost, and overall the tax burden on the middle class increases. It's what happened in 1986 with the loss of deductibility of interest on revolving credit in exchange for tax reform which lowered rates. But along came Bill Clinton in 1992 and up went the taxes. To help pay for things during the recession which Clinton's higher taxes made worse, middle class Americans tapped home equity like crazy, which was the rope Republicans furnished to hang us with. And now look at us, tapped out like never before with owners' equity in real estate down to 41 percent, facing a bunch of traitors on our side who want more money to misspend.

Tax collectors for the welfare state is who they are, to borrow a phrase from a recent Republican candidate for president who really let us down by not using it during the primary season.

As usual, conservatism's worst enemies are in their own party.

I'm getting just a little sick of it, too, primarily because there is a HUGE pool of tax revenue forfeited by the government which amounts to a gift to the top third of income earners in America. In 2012 everything earned above $110,100 escapes Social Security taxation. That's roughly $2 trillion which flies under the tax radar. At 15.3 percent, that's the biggest tax loss expenditure out there by far: $306 billion of lost revenue to the federal government because high-income earners don't pay it. The mortgage interest deduction, by contrast, is less than a third of that.

Conservatives want the misspending stopped. Until it is, tax increases are off the table.

F. Fukuyama: Our World is Devoid of Monstrous Projects of Social Transformation

The Big Lie, softly told.

In The New York Times, here:

"The undergraduate students I teach . . . are fortunate not to live in a world where ideas could be translated into monstrous projects for the transformation of society, and where being an intellectual could often mean complicity in enormous crimes."

He's never heard of Barack Obama, I guess, nor the enormous crime of abortion in which all our intellectuals are complicit, nor the compulsion of ObamaCare, targeted drone killings, the TSA's war on the fourth amendment, the illegal war in Libya, TARP and the fascist bank bailouts, the zero interest rate policy war against elderly savers, the war on carbon, the war on the rich and the middle class, gays in the military . . ..

Barry Ritholtz Can't Take It That Fellow Liberal Bloomberg Blames Congress For '08 Meltdown

In The Washington Post, here.

In the end, I think this is because of two things. One, a bias toward liberalism, the finger prints of which are all over the current crisis, so Barry can't stand it when one of his own departs from his version of the accepted narrative and puts the blame on liberalism's institutional face. And two, a widespread intellectual failure affecting liberals, conservatives and independents alike, which conflates the free market and the banking sector:

The previous Big Lie — the discredited belief that free markets require no adult supervision — is the reason people have created a new false narrative.

The banks are beholden to a fiat currency mediated by a fiat central bank fed by a government printing press. They are by no means a private sector player, and haven't been since 1913. Banking isn't a free market, it does require adult supervision, and the taxpayers should be outraged by the on-going failure of it every goddamn Friday night. Congress willingly acceded to this failure in the 1990's under Clinton and the Republicans when they gave banks free reign over money creation. The Federal Reserve became beside the point. It only took a decade to implode.

To paraphrase Russell Kirk: Free markets aren't a failure, they just haven't been tried recently.

Off the Hook

Remove the taxpayer guarantee and put bankers personally on the hook, and that will change things for the better in a hurry. 

Tennessee Democrat Didn't Get the Civil Discourse Memo

ABC News has the story here:

“They say it's a government takeover of health care, a big lie just like Goebbels. You say it enough, you repeat the lie, you repeat the lie, and eventually, people believe it.  Like blood libel.  That's the same kind of thing.

“The Germans said enough about the Jews and people believed it--believed it and you have the Holocaust.  We heard on this floor, government takeover of health care.  Politifact said the biggest lie of 2010 was a government takeover of health care because there is no government takeover."

-- Representative Steve Cohen, D-TN