Wednesday, April 23, 2014
PLACERVILLE, CALIFORNIA
99 CENTS

Can debt and ill health create prosperity?

EDITOR:

Demicans and Republicrats have been arguing for decades about “fiscal responsibility.” Democrats say we need higher taxes. Republicans say we need lower taxes, which will grow the economy and thereby raise tax revenue. As I see it, they’re both off the mark.

We need extreme, painful fiscal austerity on the city, county, state and federal levels to begin to reduce the giant amounts of future debts that must be paid over the next one to 10 decades.

Do you have children or grandchildren?

My opinion is that the “prosperity” of the last three decades was entirely fueled by monetary expansion and debt-fueled consumption. All caused by Nixon’s 1971 decision to exit the gold standard. And fueled by the Reagan/Greenspan “supply-side” myth. Please look for and read David Stockman’s (Reagan’s first term budget advisor) 2012 book about U.S. financial follies, entitled “The Great Deformation — The Corruption of Capitalism in America.” Stockman says what we all know: consuming more than you produce, and printing a bunch of money to cover the difference and make Wall Street rich, is not a solid long-term plan.

Come on, baby boomers, let’s fess up. And the “greatest generation” too. We’re in a huge fiscal mess: we’re broke. We let it happen. You government retirees — I sure hope you volunteer every spare minute you have. Nobody has your deal. If you retire and hole up, you’re a snake.

By the way, where is recently retired EDUHSD Superintendent Sherry Smith? I understand she gets a lifetime pension upwards of $150,000 with full health benefits. But I could be wrong…

FRED ROUSE
Placerville

Letters to the Editor

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Discussion | 7 comments

  • Phil VeerkampJune 26, 2013 - 10:42 pm

    FRED ROUSE asserts, " All caused by Nixon’s 1971 decision to exit the gold standard." Fred, consider the function governing compound interest - A = P(1+r/n)^nt - where A = the amount accumulated, P = principal, r = %(rate) , n = number of compoundings per year and t = the number of years. Assume that a "banker" 2013 years ago lent 1 oz. of gold at 3.0567% for one year. At the end of the year the "banker" collected 1.030567 oz. of gold. The gold was lent and repaid every year to the present. After 2013 years of lending at 3.0567% the banker collects 2.101E+26 oz. of gold = a number, 2.101 plus 23 zeros = equals the mass of the earth. Obviously this is a ridiculously unreal result, but such is the reality of compounding interest. I wonder, when that banker had to go off the gold standard, Fred?

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  • James E.June 26, 2013 - 10:53 pm

    Phil, I would have happily loaned you $1,000 in 5 A.D. However, in 2013 things are a bit tight, so sorry.

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  • Phil VeerkampJune 26, 2013 - 11:11 pm

    James, had you been that banker in 5 AD you would have had only 1.162 oz. to lend. But if you had the appropriate reserve requirements in place you could have lent me the extra . . . even though you didn't have it. Thanks for the thought, James!

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  • Phil VeerkampJune 27, 2013 - 10:52 am

    WHAT? NO GOLD STANDARD AFFICIANADOS? progress!!!

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  • cookie65July 15, 2013 - 6:53 am

    A rational argument against eliminating entire branches of government cannot be made. But those who are dependent on all this government outnumber those who are paying for it. The ticking timebomb is the public sector obligations. It is staggering the amount of money the taxpayers are on the hook for.

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  • Jim RiordanJuly 15, 2013 - 11:03 am

    Hi Patrick Ibarra, is there a reason why you cannot narrow the advertising on the right side of the page, or narrow our comments column on the left such that we can actually read the comments that are being continually cut off? Not a lot of magic there Bud. Thanks

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  • cookie65July 15, 2013 - 1:27 pm

    And while your at it fix the reply feature. If the last comment made is made using the reply icon. The actual comment is completely covered by the grey comment box. It worked better when it was free.

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