☰ Menu
Blog of Mass Destruction

Uncle Al

By The Reverend Published: November 15, 2010

It was just so great to hear from the fallen Oracle, Alan Greenspan, yesterday. Uncle Al. It's always a pleasure to hear the latest wisdom from the greatest economic psycho-babble specialist in modern times.

Memory Lane 2001 is always pleasant in the autumn.....

The Fed chief had long been a proponent of using budget surpluses to pay down the national debt first, instead of using additional revenue to pay for tax reduction.

But Greenspan said government estimates project more than enough surplus funds to pay off the debt and reduce taxes too. These projections have convinced him that it is sound to proceed with a tax cut now,...

More 2001 Memories...

"The most recent projections from OMB and CBO indicate that, if current policies remain in place, the total unified surplus will reach about $800 billion in fiscal year 2010, including an on-budget surplus of almost $500 billion. Moreover, the admittedly quite uncertain long-term budget exercises released by the CBO last October maintain an implicit on-budget surplus under baseline assumptions well past 2030 despite the budgetary pressures from the aging of the baby-boom generation, especially on the major health programs..."

Dean Baker from Memory Lane 2001....

Greenspan claimed that he was worried that we would pay off the national debt too quickly and then the government would be forced to buy private assets like stocks and bonds. Since he didn’t want the federal government to own stocks and bonds, he argued that it was better to slow the rate at which the debt was paid off.

The Oracle from 2001. Uncle Al's Wisdom, and honesty, are actually so stunning.....they are difficult for mere mortals to fully appreciate.

No stinking unprofessional, unSerious blogger could explain or plumb the depths of wisdom as witnessed in Uncle Al being wrong on virtually everything dealing with the national economy.

And that's why we have The Fluffster.....Meet the Press's David Gregory.

And because Alan the Expert has been wrong on just about every goddamn thing he has ever had anything to do with involving the national economy, Meet the Press asked Uncle Al to come on yesterday as their Serious Expert to, once again, apply his always-wrong wisdom to the, apparently, knotty problem of the Deficit Commission's report.
Full transcript here.

The United States must move to rein in its massive budget deficits or it faces the risk of a bond market crisis, former Federal Reserve Chairman Alan Greenspan said on Sunday.

Greenspan, who spoke on NBC's "Meet the Press," said he believed "something equivalent" to what Bowles and Simpson recommended would eventually be approved by Congress.

"The only question is, is it before or after a bond market crisis? Because there's no alternative," he said.

"The big, serious problem is whether or not the outlook for the longer-term deficit spooks the bond market to a point where long-term interest and mortgage rates move up very sharply," said Greenspan. "If that happens, that will cause the double dip."

It's the bond vigilantes again. They're going to come in the night and get us all. Between the terr'rists under my bed and the goddamn bond vigilantes spooking me outside my window....I just can't get any sleep anymore.

Here's what this non-expert, unSerious blogger knows about those bond vigilantes that Always Wrong, Yet Serious Uncle Greenspan says are going to be our ruination.

Bond yields (percentage interest paid on bonds when cashed) go down if there is a strong appetite for purchasing bonds in the marketplace. Bond yields go up if the market isn't purchasing as many bonds. Greenspan's fear is that investors will back off buying Treasuries which, in turn, will create inflation and higher interest rates. By the way, the 10 year Treasury bond yield is the determining factor in establishing mortgage rates. Recent 30 year fixed mortgages are coming in at record lows below 4.5%.

So how has the market in Treasury bonds been working out? 2009, when all the Tea Party crackpipe talk began over the oh-so-scary-deficit the 10 year bond yield was 3.5%. In early 2010, the 10 year T-bill yielded 3.1%......and today it's yield is....wait for it.....2.77%. Translation: no bond vigilantes in sight fueling inflation by selling off their Treasuries in mass......the market has shown just the opposite. Investors have been flocking to the 10 year note.

So Uncle Al looks and sees what this dumb blogger sees and concludes that we should be very, very scared about those bond vigilantes who are going to step in, any day now, and start selling all their Treasuries.....and then, well.....who knows how awful it will be. Any day now.

And that must be why the very Serious Uncle Al wants Congress to endorse and implement the Catfood Commission's recommendations to lower the top 1%'s tax rates by some 12%...and that's after making all Bush's tax cuts permanent, naturally.

In 2001, Wise Old Al told us the surpluses were so deep and wide that not only would the Bush tax cuts be appropriate at the time, but also that if Bush didn't hand out those tax cuts....the government would be forced into purchasing equities from Wall Street.....because they would be paying the national debt off so fast with all those trillions of surplus.

In 2010, it's the effing bond vigilantes. Now Greenspan is telling us if the working classes don't suffer even more for the sake of the top 1%, don't eat even more s**t from our wealthiest of overlords...then those mysterious, and yet-unseen, bond vigilantes are going to steal everything.

Go on home and make yourself a hod-toddy Uncle Al....and keep quiet, you've already done enough.



About This Blog

  • Main Blog Promo
  • Cavs Blog Promo
  • Browns Blog Promo
  • Indians Blog Promo
  • Beer Blog Promo
  • Fracking Blog Promo
  • High School Blog Promo
  • Zips Blog Promo
  • Akron Dish Food Blog
Prev Next