“With one brief exception, the federal government has been in debt every year since 1776. In January 1835, for the first and only time in U.S. history, the public debt was retired, and a budget surplus was maintained for the next two years in order to accumulate what Treasury Secretary Levi Woodbury called “a fund to meet future deficits.” In 1837 the economy collapsed into a deep depression that drove the budget into deficit, and the federal government has been in debt ever since. Since 1776 there have been exactly seven periods of substantial budget surpluses and significant reduction of the debt. From 1817 to 1821 the national debt fell by 29 percent; from 1823 to 1836 it was eliminated (Jackson’s efforts); from 1852 to 1857 it fell by 59 percent, from 1867 to 1873 by 27 percent, from 1880 to 1893 by more than 50 percent, and from 1920 to 1930 by about a third. Of course, the last time we ran a budget surplus was during the Clinton years. I do not know any household that has been able to run budget deficits for approximately 190 out of the past 230-odd years, and to accumulate debt virtually nonstop since 1837.

The United States has also experienced six periods of depression. The depressions began in 1819, 1837, 1857, 1873, 1893, and 1929. (Do you see any pattern? Take a look at the dates listed above.) With the exception of the Clinton surpluses, every significant reduction of the outstanding debt has been followed by a depression, and every depression has been preceded by significant debt reduction. The Clinton surplus was followed by the Bush recession, a speculative euphoria, and then the collapse in which we now find ourselves. The jury is still out on whether we might manage to work this up to yet another great depression. While we cannot rule out coincidences, seven surpluses followed by six and a half depressions (with some possibility for making it the perfect seven) should raise some eyebrows. And, by the way, our less serious downturns have almost always been preceded by reductions of federal budget deficits. I don’t know of any case of a national depression caused by a household budget surplus.”

The NCAA puts out a statistical analysis looking at the “Estimated Probability of Competing in Athletics Beyond the High School Interscholastic Level.” If you have some natural talent and work on your skills, you can probably compete at the High School junior varsity level. More skills, hard work, a little luck, and you make it to Varsity.

The talent pool gets much more competitive at the college level. The NCAA estimates approximately 3% of HS basketball players, and 6% of HS football and baseball players make an NCAA team.

If those number look daunting, the cut is far more challenging at the professional level. In basketball, only 1.2% of NCAA senior players get drafted by an NBA team. NFL drafts 1.7% of NCAA senior football players; Baseball holds the best odds, where 8.9% of NCAA baseball players will get drafted by a Major League Baseball club — but that includes minor league farm teams.

Lets crunch the numbers to put this into full context: A mere 0.03% of high school basketball players eventually get drafted by an NBA team. Football, its 0.08%, and baseball its 0.44% (including farm teams).

Natural ability only gets you to college. The rest of the way takes discipline, hard work, and maybe a little luck. However, the luck will do you no good without the discipline and hard work.

I'm looking hard to source this. I heard this from yesterday's Young Turks Show. This is from David Stockman, Ronald Reagan's first Budget Director. [NOTE: this is a paraphrase.]

In 1980, the top 5% earned 9 trillion dollars. Today, the top 5% earns 40 trillion dollars. Now that increase [31 trillion dollars] is more than was created by the entire history of mankind prior to 1980.

I just found it Click here

Its from a 60 minutes show with Leslie Stahl.

~ ~ ~ ~ ~
UPDATE: I realize that my paraphrase might give an inaccurate impression. I said "earned" 9 trillion dollars in 1980, but what I meant was that the total net worth was 9 trillion. The gain of 31 trillion is a gain in net worth since 1980, and that gain was more than mankind had created prior to that point in time. We are living in exponential times.

These are dangerous times. The US may be on the verge of making among the biggest and least-necessary financial mistakes in world history. The eurozone might be on the verge of a fiscal cum financial crisis that destroys not just the solvency of important countries but even the currency union and, at worst, much of the European project. These times require wisdom and courage among those in charge of our affairs. In the US, utopians of the right are seeking to smash the state that emerged from the 1930s and the second world war. In Europe, politicians are dealing with the legacy of a utopian project which requires a degree of solidarity that their peoples do not feel. How will these clashes between utopia and reality end?

This my response to a trollish comment hawking pseudo economic ideas.

This is not true: "Government-created jobs are extremely expensive, with a net cost greater than the benefit. Moreover, government spending on job creation squeezes out private sector spending.

Businesses create jobs that deliver a net gain (i.e., the business value of hiring a new employee exceeds their cost) -- which has the additional benefit of making the newly-created job more likely to last."

-- The post office is a job that delivers a "net gain.. more likely to last". What private sector job has been squeezed out by this government spending? The coast guard is squeezing out private competition? Really? Are there a plethora of businesses trying to compete with the police department and the tax assessors office? Or the DMV?

Likewise, you don't see the government building supermarkets and coffee shops for a reason. Because its a different economic sector. Government invests for society what the free market cannot do withour perverse results. Like the national highway system, the internet, the Federal Aviation System, the National Parks Service, et cetera. And the businesses next door to various government offices do quite well economically. Downsizing those jobs will not produce the "economic benefits" of long lasting duration.

Get real Mr. Objective. Your statement is oversimplified nonsense that has been dragged around by ideologues and has no basis of fact. Its just another myth carted out by persons who have an agenda to cut down government spending for purely ideological reasons. They have no idea about history and the actual relevant economic analysis over the last 100 years which utterly refutes the nonsense.

What was it Josef Goebbels said when he was in charge of spewing Nazi propaganda?

Click here if you want to read the source. I'm comment #4 responding to comment #2.

Notice how comment #3 is a brief cheerleader to comment #2: "Well put Objectivist1. I'm stocking up on Advil."

Really? Objectivist1 was "well put" when he spewed the party rhetoric.

Typical Rethuglican neo-con ideologue. Stocking up on drugs (Advil) to solve their problems.

So far so good for the napsters. Right now the only weakness is the Batting average, and stolen bases.

As long as my pitching staff doesn't completely fall apart, I think I can go over 100 points. Last year my pitching staff eroded in the last 2 months. I barely won by 2 points. Shit happens.

This is a full month before the January 1932 Speech I posted below.

December 11, 1931 : In my recommendations to Congress and in the organizations created during the past few months, there is a definite program for turning the tide of deflation and starting the country upon the road to recovery.

This program has been formulated after consultation with leaders of every branch of American public life, of labor, of agriculture, of commerce, and of industry. A considerable part of it depends on voluntary organization in the country. This is already in action. A part of it requires legislation. It is a non-partisan program. I am interested in its principles rather than its details. I appeal for unity of action for its consummation.

The major steps that we must take are domestic. The action needed is in the home field, and it is urgent. While reestablishment of stability abroad is helpful to us and to the world, and I am confident that it is in progress, yet we must depend on ourselves. If we devote ourselves to these urgent domestic questions we can make a very large measure of recovery irrespective of foreign influences.

That the country may get this program thoroughly in mind, I review its major parts:

1. Provision for distress among the unemployed by voluntary organization and united action of local authorities in cooperation with the President's Unemployment Relief Organization, whose appeal for organization and funds has met with a response unparalleled since the war. Almost every locality in the country has reported that it will “take care of its own.” In order to assure that there will be no failure to meet problems as they arise, the organization will continue through the winter.

2. Our employers are organized and will continue to give part-time work instead of discharging a portion of their employees. This plan is affording help to several million people who otherwise would have no resources. The government will continue to aid unemployment over the winter through the large program of Federal construction now in progress. This program represents an expenditure at a rate of over $60,000,000 a month.

3. The strengthening of the Federal Land Bank System in the interest of the farmer.

4. Assistance to homeowners, both agricultural and urban, who are in difficulties in securing renewals of mortgages by strengthening the country banks, savings banks, and building and loan associations through the creation of a system of Home Loan Discount Banks. By restoring these institutions to normal functioning, we will see a revival in employment in new construction.

5. Development of a plan to assure early distribution to depositors in closed banks, and thus relieve the stress amongst millions of smaller depositors and smaller businesses.

6. The creation for the period of the emergency of a Reconstruction Finance Corporation to furnish necessary credit otherwise unattainable under existing circumstances, and so give confidence to agriculture, to industry and to labor against further paralyzing influences and shocks, but more especially by the reopening of credit channels which will assure the maintenance and normal working of the commercial fabric.

7. Assistance to all railroads by protection from unregulated competition, and to the weaker ones by the formation of a credit pool, as authorized by the Interstate Commerce Commission, and by other measures, thus affording security to the bonds held by our insurance companies, our savings banks, and other benevolent trusts, thereby protecting the interest of every family and promoting the recuperation of the railways.

8. The revision of our banking laws so as better to safeguard the depositors.

9. The safeguarding and support of banks through the National Credit Association, which has already given great confidence to bankers and extended their ability to make loans to commerce and industry.

10. The maintenance of the public finance on a sound basis. (a) By drastic economy. (b) Resolute opposition to the enlargement of Federal expenditure until recovery. (c) A temporary increase in taxation, so distributed that the burden may be borne in proportion to ability to pay amongst all groups and in such a fashion as not to retard recovery.

11. The maintenance of the American system of individual initiative and individual and community responsibility.

The broad purpose of this program is to restore the old job instead of creating a made job, to help the worker at the desk as well as the bench, to restore their buying power for the farmers' products - in fact, turn the processes of liquidation and deflation and start the country forward all along the line.

This program will affect favorably every man, woman, and child - not a special class or any group. One of its purposes is to start the flow of credit now impeded by fear and uncertainty, to the detriment of every manufacturer, business man and farmer. To reestablish normal functioning is the need of the hour.

[SOURCE: Brad DeLong | delong.typepad.com | 11 July 2011]

I love the 11th point of the plan. Taking responsibility and initiative is an important part of any plan. Gotsta make sure the intended audience is reminded, lest they forget.

And look at point number 9, and remember that 16 months later all of the nations banks failed.

This is Herbert Hoover's press conference in 1932. The speech comes before the stock market tanked again, and all the banks failed in March-April 1933.

January 8, 1932 : I wish to emphasize to the full extent of my ability the necessity, as a fundamental to recovery, for the utmost economy of governmental expenditure of all kinds. Our people must realize that Government cannot continue to live in a depression upon the scale that was possible in times of great prosperity.

The developments of the past week should give great assurances to the country. The public statements of the Republican and Democratic leaders of the Senate and House show a real non-partisan determination in cooperation with the Administration to assure the country of the balancing of the Federal expenditures and income for the fiscal year beginning July 1st. The amount of taxes we will need to impose for this purpose will depend entirely upon what further cuts we can make in government expenditures. The budget before Congress represents a reduction of $360,000,000 in Federal expenditures for the next fiscal year. I shall welcome any further reduction which can be made and still preserve the proper and just functioning of the Federal Government. With the general realization of the necessity of reductions in expenditures we should also at last be able to bring about the wholesale elimination of overlapping in the Federal Government bureaus and agencies which will also contribute materially to the program of economy.

With this program we are thus assured that we can maintain the full stability and credit of the Federal Government by no increase in the public debt after covering the deficit of this fiscal year and no further increase after the first of next July.

The balancing of next year's expenditure and receipts and the limitation of borrowing imply the resolute opposition to any new or enlarged activities of the Government. With the assurances which have now been given from the leaders in Congress I do not believe there is any ground for apprehension by the public from the flood of extravagant proposals which have been introduced there. It is true that these bills would imply an increase of Government expenditures during the next five years of over 40 billions of dollars four or more then 8 billions per annum. The great majority of these bills have been advanced by some organization or some sectional interest and are little likely to see the light of day from congressional committees. They do, however, represent a spirit of spending in the country which must be abandoned. I realize that drastic economy requires the sacrifice of large hopes of expenditures promoted by such interests. However, I appeal to their sense of patriotism in these times not to press their demands. They should withdraw the pressures upon Government officials.

Rigid economy is a real road to relief, to home owners, farmers, workers, and every element of our population. The proposed budget of Federal Government expenditures for the next fiscal year amounts to about 4 billion dollars of which over $2,800,000,000 is for debt, military and veterans' services, and nearly half the balance is for aid to employment in construction works and as aids to agriculture. It is worth noting that the state and local government expenditures of the country amount to nearly 9 billion. The Federal Government itself ofttimes contributes to increased state and local expenditure by appropriations requiring a matching of money by the states. The result is pressure upon state officials by the groups who will receive benefits from these expenditures and makes them the unwilling victims of increased Government costs.

Our first duty as a nation is to put our governmental house in order, national, state and local. With the return of prosperity the Government can undertake constructive projects both of social character and in public improvement. We cannot squander ourselves into prosperity. The people will, of course, provide against distress but the purpose of the nation must be to restore employment by economic recovery. The reduction in governmental expenditures and the stability of Government finance is the most fundamental step towards this end. It can contribute greatly to employment and the recovery of prosperity in agriculture. That must be our concentrated purpose.

[SOURCE: Brad DeLong | delong.typepad.com |11 July 2011 ]

Most of the elite can't learn because they are stricken with a massive combination of inbreed selfishness and pompous entitlement. They can't understand macroeconomics at all and hide behind petty ideological pablum to justify themselves and their actions.

It's like mafioso's buying flowers for the graves of the shopkeepers they took out so they can control the business.

When you allow an institution to provide you with your identity and sense of self-worth you become an obsequious pawn, no matter how much talent you possess. You live in perpetual fear of what those in authority think of you and might do to you. This mechanism of internalized control—for you always need them more than they need you—is effective.

Chris Hedges was once a 15 year writer for the New York Times. What he says above concerns how the media controls the dissemination of information, or at least how much and by what form the information takes. Those who mimic the paradigms of the corporate ruling class get promotions, visibility, and access. Those who might have independent thoughts are surrounded by career whores, sychophants, and snitches that get promoted by their bosses. Only the strong survive, or they resign and do something else for a living.