Mark McHugh

Archive for April, 2012|Monthly archive page

Elmo Tries to Explain The National Debt (Again)

In Humor, National Debt on Tuesday, April 17, 2012 at 9:41 pm

Update: This is one of those pieces that’s traveled far and wide.  Thanks to everyone who helped make that happen: Zerohedge, Wall Street examiner, The Daily Crux, Financial Survival Network,  Monty Perelin, Azizonomics,  Playing the Ponzi, and everyone else.

My original content (99% of what’s here) is free to anyone.   Take it in good health.

Muppets have received a lot of bad press since Greg Smith realized that he is not, in fact, a one-percenter.  Fortunately Elmo’s back to reclaim his rightful place in the financial world:  Making the seemingly incomprehensible  comprehensible while politely pointing out what should be obvious to everyone not in diapers.  That’s not so easy when the economic views espoused by everyone from central bankers to TV talking heads can only be accurately described as infantile.

It’s hard to get the right answer when you’re counting the wrong stuff, and maybe that’s why Wall Street’s minions never discuss income per capita.  It’s a meaningful measure of economic strength that ordinary Americans can relate to.  Well, that and it exposes “pro-growth” policies for what they actually are:  An excuse to loot the country in broad daylight by focusing on GDP, where government money, no matter how horribly misspent, shows up in the “win” column.  Strip away that illusion and it becomes crystal clear that their path to prosperity is our highway to hell.

In case you haven’t noticed, incomes (not GDP) pay mortgages and support small businesses.  Increasing the National Debt by a can you say “parabolic?” 54% in the last 42 months hasn’t budged income per capita in nominal terms.  If you adjusted for inflation, you’d find that Americans are actually about 12% poorer today than they were in 2006.   We’re not “growing” our way out of this, we’re just going deeper and deeper into hock, courtesy of a government with about as much fiscal discipline as crack-whores with a stolen credit card.  Here’s the thing: It’s your credit card, so maybe you should understand how much they’re spending:

Just to be clear, we’re talking about $400 per citizen per month in new charges alone, month after month after month.  Here’s what me and Elmo can’t figure out: Why would attempting to break this spiral be labeled Class Warfare?  Of course you don’t have to believe  us, there’s far more distinguished schools of thought out there:

Fun facts:

    • From 1947 to 1974 US income per capita grew more than National debt per capita 25 times.
    • In the last 30 years, National debt per capita has grown more than income per capita 24 times.
    • The last time income per capita grew more than national debt per capita was 2001.
    • Ben Bernanke arrived at the Federal Reserve in 2002.


I’m going to ask Elmo to leave before this gets ugly…



I’ve Got A Crush On Sheila Bair

In Open Thread on Monday, April 16, 2012 at 1:32 pm

Smart’s always been sexy to me;  Smart and funny makes me gush.  So don’t be surprised if you see me running around with a Sharpie trying to get the former FDIC chairwoman to sign my chest.

Nobody but me spends any time thinking about how I aspire to write, but if I were ever to point to a shining example of something that I wish I had written, this is it:

Fix income inequality with $10 million loans for everyone!

By Sheila Bair, Published: April 13 The Washington Post

Are you concerned about growing income inequality in America? Are you resentful of all that wealth concentrated in the 1 percent? I’ve got the perfect solution, a modest proposal that involves just a small adjustment in the Federal Reserve’s easy monetary policy. Best of all, it will mean that none of us have to work for a living anymore.

For several years now, the Fed has been making money available to the financial sector at near-zero interest rates. Big banks and hedge funds, among others, have taken this cheap money and invested it in securities with high yields. This type of profit-making, called the “carry trade,” has been enormously profitable for them.

So why not let everyone participate? 

Under my plan, each American household could borrow $10 million from the Fed at zero interest. The more conservative among us can take that money and buy 10-year Treasury bonds. At the current 2 percent annual interest rate, we can pocket a nice $200,000 a year to live on. The more adventuresome can buy 10-year Greek debt at 21 percent, for an annual income of $2.1 million. Or if Greece is a little too risky for you, go with Portugal, at about 12 percent, or $1.2 million dollars a year. (No sense in getting greedy.) 

Think of what we can do with all that money. We can pay off our underwater mortgages and replenish our retirement accounts without spending one day schlepping into the office. With a few quick keystrokes, we’ll be golden for the next 10 years. 

Of course, we will have to persuade Congress to pass a law authorizing all this Fed lending, but that shouldn’t be hard. Congress is really good at spending money, so long as lawmakers don’t have to come up with a way to pay for it. Just look at the way the Democrats agreed to extend the Bush tax cuts if the Republicans agreed to cut Social Security taxes and extend unemployment benefits. Who says bipartisanship is dead? 

And while that deal blew bigger holes in the deficit, my proposal won’t cost taxpayers anything because the Fed is just going to print the money. All we need is about $1,200 trillion, or $10 million for 120 million households. We will all cross our hearts and promise to pay the money back in full after 10 years so the Fed won’t lose any dough. It can hold our Portuguese debt as collateral just to make sure. 

Because we will be making money in basically the same way as hedge fund managers, we should have to pay only 15 percent in taxes, just like they do. And since we will be earning money through investments, not work, we won’t have to pay Social Security taxes or Medicare premiums. That means no more money will go into these programs, but so what? No one will need them anymore, with all the cash we’ll be raking in thanks to our cheap loans from the Fed. 

Come to think of it, by getting rid of work, we can eliminate a lot of government programs. For instance, who needs unemployment benefits and job retraining when everyone has joined the investor class? And forget the trade deficit. Heck, we want those foreign workers to keep providing us with goods and services. 

We can stop worrying about education, too. Who needs to understand the value of pi or the history of civilization when all you have to do to make a living is order up a few trades? Let the kids stay home with us. They can play video games while we pop bonbons and watch the soaps and talk shows. The liberals will love this plan because it reduces income inequality; the conservatives will love it because it promotes family time. 

I’m really excited! This is the best American financial innovation since liar loans and pick-a-payment mortgages. I can’t wait to get my super PAC started to help candidates who support this important cause. I think I will call my proposal the “Get Rid of Employment and Education Directive.” 

Some may worry about inflation and long-term stability under my proposal. I say they lack faith in our country. So what if it cost 50 billion marks to mail a letter when the German central bank tried printing money to pay idle workers in 1923? 

That couldn’t happen here. This is America. Why should hedge funds and big financial institutions get all the goodies? 

Look out 1 percent, here we come.


Love it!


Rick Santelli’s Math And Reason Fail

In Open Thread on Friday, April 13, 2012 at 12:20 am

I like Rick.  He is my hands-down favorite person on TV.  If he ran for President, not only would I vote for him, I’d campaign for him because I know his heart’s truly in the right place.  That said, Rick can really be a total fucking dunce at times.

Rick starts off by displaying he has no idea how many million-dollar earners there are (which probably means you should step away from the whiteboard).  If the White House actually published the utterly insane number (22,000) Rick attributes to them, we should all start looking for a new country immediately, but I digress.

Here’s a link to the IRS’s stats page:,,id=134951,00.html#_pt1

And here is the exact file Rick should have used:

Note: Personally, I’d love to see a high-octane Santelli rant on how the fuck it could possibly be that as of April, 2012, the most recent IRS taxpayer data is from, wait for it, 2009!!!

In 2009, there were 230,323 filers with adjusted gross incomes of one million or more. 

Rick does some crazy shit where he takes $1,000,000 from all of them (like he’s taking all their money or something).  Here’s a much more reasonable thing to do: Let them keep a million, because that 230,323 actually earned $711.6B.  Hold that thought.

Next Rick asserts that our deficits are $200B a month, drawing another bullshit flag from yours truly.  While the March deficit was $198.2B, if Rick had divided the last six months borrowing ($792B) by six, he’d have discovered that $132B per month is a much more realistic number.

Taxing the Rich isn’t worth it in Rick’s mind because it would only pay off the deficit for one month.  Rick is now down the rabbit hole…

Let me point out if we let the rich keep the first million and took the rest for taxes, the government would get $481B, which would finance the deficit for 3.64 months, or 109 of the 365 days in the year.

Still not worth it, Brother?

Funny story, periods of real prosperity in America (like post-WWII, when income per capita outpaced debt per capita for 25 of 28 years) were marked by high taxes on high-earners.  If you’re looking to create another great depression, keep cutting taxes on the rich like they did in the 1920s.  Looky here.

Here’s the “Top Secret” part that no one seems to understand.  Raising tax rates on high earners doesn’t increase tax revenues, it forces people to avoid the tax.  Here’s a list of ways successful people can avoid those taxes:

Hire more people
Pay employees more
Increase benefits
Buy new equipment
Expand business

Rick turns himself into a walking, talking Italian joke when he asks, How are my kid’s opportunities effected by how many millionaires there are?”

If you don’t understand the answer to that question, Rick, you may as well build a time machine and send your kids to coal country circa 1875.  Spoiler alert: If your kids inherited the mental acuity displayed in this clip, they ain’t gonna be running the mine.


Note: Don’t miscontrue this piece as an endorsement of fucktarded goverment deficit spending.  It is not.  Horrific  fiscal policy and poorly reasoned tax policy are the yin and yang that will produce a total collapse that will make the Great Depression seem like an afternoon at the park.

Get it together, Santelli and quit sniffing those markers.


Happy Easter

In Open Thread on Sunday, April 8, 2012 at 12:29 am

My sister sent me this.   Maybe I spend too much time thinking about the bad guys.