Back-Slapping Sellouts

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It’s a deal!

As expected… the papers are announcing that the Repubs and Demos have made an historic deal. With the solemnity and gravitas that the occasion calls for, they have come together, after great and profound debate, to join hands…

E Pluribus Unum, they said… We may have different ideas on the subject, but when it comes to the interests of the whole country, we can nevertheless work as one body, with one heart, and one digestive system…

…and so they crossed aisles…and clenched hands…and slapped backs…

…and the brightest and best…the leading statesmen, leading scholars, leading orators and rhetoricians of the world’s greatest hegemon, all came together at the last minute…

…and agreed to continue debasing the currency and credit of the United States of America.

Hallelujah.. Hallelujah… We are saved!

All over the world, shouts of Hosannah go up…along with stock prices.

And the US economy sinks…

“Great Recession Even Deeper than Thought,” says a headline at MarketWatch.

Than WHO thought? Not our Dear Readers. We knew there was no recovery…and that what we’re dealing with is a correction of epoch scope and power. The article continues…

WASHINGTON (MarketWatch) — The U.S. recession was even deeper than previously thought, a new government report showed on Friday.

As part of an annual revision of data on U.S. gross domestic product, the Commerce Department said that the economy contracted by 5.1% between the fourth quarter of 2007 and the second quarter of 2009, more than the 4.1% previously estimated.

It ranks as the most severe recession in the post-World War II era.

As a result of the revision, GDP is now still below the pre-recession peak, economists said.

Before the revision, it was hard to square an unemployment rate above 9% with the economy’s growth rate.

Under the revised data, the U.S. economy declined 0.3% in 2008, weaker than the prior estimate of a flat reading.

The contraction in GDP for 2009 was revised to 3.5%, much weaker than the previous estimate of a 2.6% decline.

The real story is worse than that. Almost all the “growth” since ’07 has not been growth at all…but just the result of US government transfer payments. The private sector — which is where real wealth is created — continues to sink.

Also, we know we’re in a powerful correction. But we still don’t know exactly what this correction is correcting. Stay tuned…

Regards,

Bill Bonner
For Daily Reckoning Australia

Bill Bonner

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
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2 Comments on "Back-Slapping Sellouts"

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Skeptic
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Oh those crazy Americans – ever the showmen. “Step right up!” they call, with their striped hats and canes; tails, top hats and baggy pants, organ music playing in the background.

They had to put on a show for the rest of the world. If they just handed it over without the “necessary” deliberation and the drama then the question may have been asked “why even have a debt ceiling?”

And this question may still be asked despite the worldwide show they just put on.

Unpopular Truth
Guest

Any comment on the fact that with this deal comes a new ‘Super Congress’ of 12 who will technically be able to force through deals without the opportunity of the other members of congress getting a chance to amend the bills?

While currently slated to only be used for the debt related issues, note the suspicious absence of any clause stating any such thing..

Does this sound like a debt crisis used to create a new political power structure? Politicians surely wouldn’t use a crisis to expand their own power would they?

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