More Bad News on Economic Future…

 http://www.noquarterusa.net/blog/2011/02/22/america-needs-to-stop-the-lies-and-the-liars/

When I first started reading The Market Ticker and Sense on Cents I thought the two authors were far apart in their economic assessments. Karl Denninger has always been acerbic with a knack for a scathing turn of Doomsday phrasing. Larry Doyle always reminded me of my own financial advisor. Cautious, steady, hopeful, dedicated and essentially calm. Lately, they have been sounding very similar themes in almost idential language. Convergence can be good. Or not.

Here is Doyle:

“1. Great nations do not allow themselves to wallow in debt in the manner that we have.

2. Great nations do not allow themselves to plummet in educational standards and rankings in the manner that we have.

3. Great nations do not allow “regulatory capture” to propagate thoughout the financial industry in the manner that we have.

4. Great nations do not allow political systems to get corrupted by the big money of industry lobbyists in the manner that we have.

5. Great nations do not allow a polarization in political and economic standing in the manner that we have.

6. Great nations do not lack real statesmen who can evoke our best spirits and lead us to greatness. Who in our nation are real statesmen? Who?”

Doyle is seeing an apocalyptic collapse of this nation because of top-down dishonesty. He was highly critical before the election of President Obama, but even more so now.

And here’s Denninger:

http://market-ticker.org/akcs-www?post=180855

“One way or another, the artificial support to GDP that is embedded in our insane deficit spending will stop.  It mathematically must stop.  And when it does stop, if you believe Goldman’s analysis, even if we only cut deficit spending in half GDP will fall by 25%.

If we eliminate it?  GDP is halved.

Thank you Mr. Phillips for validating what I’ve been saying for four years – what we’re doing can’t work forever, and our choices are to either accept the damage voluntarily (and it will be large) or take a catastrophic hit to our economy when we are forced to accept reality by circumstances beyond our direct control.”

I have looked to find actual attempts to refute these arguments and claims with rational, directed argument. Karl Denninger makes it easier by linking to his critics. One had no facts to offer, and attacked his “patriotism” for accusing government fiscal agencies of mis and mal feasance. Another was trying to sell us gold, a tactic Mr. Denninger thinks is of limited value. That attack ignored Denninger’s basic points. The third was surreal television. Mr. D. appeared on a TV show and stated his case, the host turned to a panel of experts, arranged as in Hollywood Squares, and they all began waving their arms and shouting either in agreement or disagreement. He could barely get a word in edgewise.

As I said, Larry Doyle does not directly link to his critics. But reading their twin perspectives and balancing it against statistics leads me to worry the critics are hiding from the argument and simply blowing hot air.

The Market Ticker is loaded with charts and graphs, I have yet to find anyone who can or will refute the basic premise as I understand it: That our monstrous debt is about to explode in exactly the same way overdrawn credit cards explode.

As for Larry Doyle. He too is becoming increasingly scathing in his assessments, and I see little effort to even argue with him. Mr. Doyle is a Wall Streeter by background, and Mr. Denninger seems to be the kind of maverick entrepreneur we are supposed to be creating, not embalming. Both are saying very similar things about the economy and this time convergence is not good.

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