Black cat, white cat … both are not catching the mice.
Treasury Secretary Henry Paulson isn’t the devil … (but) on his watch the US has morphed into a huge debt-issuing machine … (and) the US deficit will more than double this year to at least $1.18 trillion, the biggest since World War II. The CBO’s estimates don’t include the cost of the president-elect’s stimulus package, which will probably add at least $750 billion to the total over the next two years. Last year’s shortfall totalled $455 billion.
Barack Obama has even bigger plans.
“I spent most of the first two quarters of 2008 marvelling at the pace of Chinese reserve accumulation,” Council on Foreign Relations economist Brad Setser in New York wrote on his Web log this week. “I expect to spend the first few quarters of 2009 marvelling at the size of the US fiscal deficit.”
Along with its Faustian bargain, one wonders if China risks a Madoffian one, too.
No, the Treasury isn’t engaged in a massive fraud of the kind allegedly perpetrated by financier Bernard Madoff. Yet the US’s $5.3 trillion government debt arena is looking more like a Ponzi scheme than a market.
Madoff personifies the greed, lack of transparency and lost trust that has accompanied the US’s fall from grace. Even though sceptics raised concerns about the veracity of Madoff’s performance over the years, regulators failed to act. They believed Madoff’s assertions and figures. (via William Pesek: China risks the Madoff treatment from treasuries).
‘Black cat, white cat, who cares as long as it can catch mice’
There are two frauds – one by the US Government on the world – and the other by the Chinese Government, on its own citizens. USA is a democratic, capitalist, developed, modern G7 country. China other an authoritarian, communist, totalitarian, developing ancient culture. And they both seem to be committing some fairly large frauds.