Unwinding of the Welfare State

[jficquette]

>As Newt Gingrich once told an overzealous partisan dismayed at the slow pace of change: “Rome wasn’t burned in a day.” The temptation to look for a silver bullet, one-time, all-in, universal fix will be great and, if we are unlucky, it may even become necessary. But as attractive as that possibility may be, denying ourselves the pleasure of implementing it should be the main political goal of reasonable reformers in both parties and of all ideological stripes for as long as the threat of crisis remains. Crises are unruly things, and only fools and the power-mad hope for them. It is one thing to have a plan to get rich, another to have a plan to get rich quick. One is a strategy, the other a scheme. We should welcome the opportunity for necessary reform, but not welcome it too enthusiastically. The world isn’t ending. Yet.<



http://www.newcriterion.com/articles.cfm/Future-tense--V--Everybody-gets-rich-7247

 

[nutmeg]

That is a very interesting article.

A paragraph..

"Voters, like investors, do not have a bottomless appetite for risk, and while the entrepreneurially spirited and autistically libertarian may scoff, Americans from the Great Depression forward were collectively making a deliberate tradeoff between risk and return. They chose the lower-risk, lower-return model of the welfare state not because they were irrational, but because they were rational. The welfare state model catered to their preferences for the distribution of risk and reward better than the alternatives. Unfortunately, like the lords of finance and congressional barons who staked everything and more on the proposition that American houses are a magical commodity, the generations of Americans who acceded to the creation of the welfare state were working from a faulty set of economic assumptions. The welfare state does not, in the long run, reduce risk, any more than the securitization of mortgages reduced risk. It concentrates it, putting more and more economic decisions into the hands of political operators who have neither the information nor the incentives to make rational decisions. This, too, is a fact that is becoming increasingly clear in both the financial and political realms."

 

[pspr]

"...we are rich, rich, rich, besotted with wealth, drowning in affluence, up to our fat little earlobes in the good life."

Maybe we are due for a taste of the good ol days when times where hard.

 

[RCG Trader]

Quote from pspr:

"...we are rich, rich, rich, besotted with wealth, drowning in affluence, up to our fat little earlobes in the good life."

Maybe we are due for a taste of the good ol days when times where hard.

It is coming, no worries. We have already hit the iceberg.