I’ll say this again as it’s not rocket science, it’s simple math and a dose of honesty: the growth rate of the country’s debts and deficits are driven mostly by Medicare, Medicaid and Social Security and any deal that doesn’t PERMANENTLY change the spending trajectory of them will not matter to the overall numbers.

The US is in serious, perhaps irretrievable, financial trouble. There is a lack of political or popular will to take the action necessary to even stabilise the position. The role of US dollars and US government bonds in the financial system mean that the problems are likely to spread rapidly to engulf other nations.

Thus, however ironic it may be, it turns out that virtually all of the problems the Occupy Wall Street protesters complain about are the result of the enactment of policies that they support and in which they fervently believe.

The problem is that the federal government is too important. It was not designed that way. Originally it was the States that were important. But their power has been drained away and the Constitution has been jettisoned to create an all powerful federal government. Now money flocks to Washington to seek favors because politicians have the power to grant them. The system is broken, but not in the way the MSM is saying. What’s broken is a system that can’t be fixed.

Somehow, the governments and the banking sector remind me of two drunks leaning on one another, trying to make it home.

An economist who attended a business conference told me that the trucking industry is doing well (probably a sign that the economy overall is improving). However, industry experts foresee a shortage of drivers next year. How is that?

In short, it is becoming nearly irrefutable that peace has broken out. To proponents of human flourishing in liberty, dignity and prosperity, this is wonderful news. To the political class, not so much.

The weakness in household balance sheets and the associated pullback in spending are directly responsible for the lion’s share of employment losses in the U.S. economy. This deficiency remains the most significant impediment to a robust recovery.
Our research suggests that 65 percent of the job losses from 2007 to 2009 came from the drop in household spending induced by the collapse in home prices and its effect on a highly levered household sector.

I’ve noticed that only academics are skeptical of ZMP. Anyone who works in business understands it immediately.