The Sugar Daddy has hypoglycemia?

posted at 12:00 pm on July 10, 2011 by Ed Morrissey

Margaret Thatcher distilled all the problems of central planning into this one quote*: “Socialist governments traditionally do make a financial mess. They always run out of other people’s money.”  Last night, Sarah Palin gave us a new version of the argument, saying that the sugar-daddy government — and President — has run out of sugar, and we need to cut off the supply of sucrose:

To paraphrase Hemingway, people go broke slowly and then all at once. We’ve been slowly going broke for years, but now it’s happening all at once as the world’s capital markets are demanding action from us, yet Obama assumes we’ll just go borrow another cup of sugar from some increasingly impatient neighbor. We cannot knock on anyone’s door anymore. And we don’t have any time to wait for Washington to start behaving responsibly. We’ll be Greece before these D.C. politicians’ false promises are over. We must force government to live within its means, just as every business and household does.

We can’t close our $1.5 trillion deficit overnight, but we must get as close as we can as soon as we can. Little nibbles here and there over 10 years (spun to sound like they’re huge budget cuts) aren’t anywhere near enough. I know from experience that cutting government spending isn’t easy. As governor, I made the largest veto cuts in my state’s history, and I didn’t make many friends doing it. But we will never recover, we will never get free of devastating debt, unless we make tough choices now. We don’t hear talk like this from leaders in D.C. or from those running for office because they say what they think we want to hear rather than what must be said.

We are in desperate need of real leadership, but President Obama’s solution to everything is to grow government by borrowing more money, spending more money, printing more money, and taxing our job creators. He once said that he “believes in American Exceptionalism…just as the Greeks believe in Greek Exceptionalism.” Well, the path he has us on will make us just as “exceptional” as Greece – debt crisis, stagnation, permanent high unemployment, and all.

As we approach 2012, there are important lessons we can learn from all of this. First, we should never entrust the White House to a far-left ideologue who has no appreciation or even understanding of the free market and limited government principles that made this country economically strong. Second, the office of the presidency is too important for on-the-job training. It requires a strong chief executive who has been entrusted with real authority in the past and has achieved a proven track record of positive measurable accomplishments. Leaders are expected to give good speeches, but leadership is so much more than oratory. Real leadership requires deeds even more than words. It means taking on the problems no one else wants to tackle. It means providing vision and guidance, inspiring people to action, bringing everyone to the table, and with a servant’s heart dedicating oneself to striking agreements that keep faith with our Constitution and with the ordinary citizens who entrusted you with power. It means bucking the status quo, fighting the corrupt powers that be, serving the common good, and leaving the country better than you found it. Most of us don’t see a lot of that real leadership in D.C., and it’s profoundly disappointing.

The mention of Greece should remind people that while we’re begging for more sugar from China and sovereign-wealth funds around the world, we’re also loaning sugar to Greece through the IMF.  We’re bailing out a country that has so far struggled to change course and operate without deficits, while we’re failing to learn the lesson from their collapse.  And this is the same government that ran three trillion-dollar-plus deficits in a row thanks to a massive uptick in spending, and insists that the problem is revenue.

The Obamas have fought a public battle against childhood obesity.  It’s time that they start dealing with federal-government obesity.  Time to cut off the sugar instead of accepting the idea that all we need is a trillion more donuts for government to finally start its diet.

* – It’s often rendered as “The problem with socialism is that eventually you run out of other people’s money,” but that’s a paraphrase; it’s easy to see why the paraphrase is more often remembered.

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And the current size of the CP market is $1.231 trillion ($1.653 with ABCP). Again, your point?

steebo77 on July 10, 2011 at 9:27 PM

i think he is saying no body wants to buy our debt. Now that QE2 is finished and the gov is buying its own debt.

unseen on July 10, 2011 at 9:30 PM

No prob. I feel that way bout my dog.

Fighton03 on July 10, 2011 at 9:21 PM

I am so sorry I didn’t address that. One day you look at your pet and realise their life is crap. It’s a horrible time and I have gone out the back door of a lot of vets while crying. It is the most dreadful feeling when you see that their soul is gone. Sometimes it is the merciful thing. I am old, but fine. When that changes I nwill want a good person to put me down.

katy the mean old lady on July 10, 2011 at 9:32 PM

It’s easy to forget how close the entire system came to failing.

bayam on July 10, 2011 at 8:27 PM

Easier still to forget how close we still are. The entire system of fiat currency is quite honestly a shared delusion writ large, and the bailout was merely a prohibitively expensive patch-up to it.

With the economy in shambles, we won’t be able to pull such stunts more than a few times more without destroying the system in the process. It’s now a tightrope walk with the nation in balance.

Uncle Sams Nephew on July 10, 2011 at 9:32 PM

i think he is saying no body wants to buy our debt. Now that QE2 is finished and the gov is buying its own debt.

unseen on July 10, 2011 at 9:30 PM

He’s right; nobody who’s rich enough to even consider it is going to.

I mean…would YOU make that kind of investment? I couldn’t!

Uncle Sams Nephew on July 10, 2011 at 9:34 PM

bayam on July 10, 2011 at 9:05 PM

So…in your world

1. McDonalds has no cash management in place and finances 100% of it’s operations through investment-grade credit instruments.

2. In a market where the pump is running at full tilt a liquidity problem so great has sprung up that McDonalds cannot find it’s own dollars in a disrupted market of some sort to pay its suppliers?

And I’m the idiot?

Are you wearing a tin-foil hat?

Tim_CA on July 10, 2011 at 9:35 PM

I mean…would YOU make that kind of investment? I couldn’t!

Uncle Sams Nephew on July 10, 2011 at 9:34 PM

not until I got some more clreaity. Is the gov going to stop printing money? is it going to stop borrowing and running in the red? If they show me there are serious about protecting my investment and exercising fudical responsibility with my investment in their debt then yes. If not then no. right now I would say its a no.

unseen on July 10, 2011 at 9:43 PM

bayam on July 10, 2011 at 9:08 PM

I understand more about lending and operations than you do. Your foolish response highlights that. If you are using CP to finance daily operations you are lost. The reason people buy your paper is that you are making money but your cash flow is tight. It’s purely about the short term movement of money.

BTW, most companies use revolving credit lines for those needs. The only companies hit by this issue were ones trying to set up revolvers during the period or companies seeking to issue paper because they had directed their cashflow’s into long term development plans (unless they were truly dying). Unsecured short term debt is only entered into if the company has a more beneficial use for the cash flow that will offset the short term interest expenditure for taking in the debt. In other words…you don’t use it to finance daily operations.

Fighton03 on July 10, 2011 at 9:43 PM

It is the most dreadful feeling when you see that their soul is gone.

katy the mean old lady on July 10, 2011 at 9:32 PM

yeah, and i didn’t see it that morning. hindsight is 20/20 :/

Well…..the dust in the room is gone now so…back to tearing bayam a new one :)

Fighton03 on July 10, 2011 at 9:46 PM

Fighton03 on July 10, 2011 at 9:43 PM

Agreed…you see this model time and time again in high-flying / burn-out firms that lose it all in R&D.

Tim_CA on July 10, 2011 at 9:48 PM

Tim_CA on July 10, 2011 at 9:48 PM

Unfortunately Tim, I was an employee of one such company (think alternative fuels). I was getting my MBA at the time and out of curiosity I started following our quarterlies and saw the way that cash flow really works. Let’s say I wasn’t surprised by the collapse, but I hadn’t been able to reallocate my own finances before it happened.

Fighton03 on July 10, 2011 at 9:52 PM

It’s easy to forget how close the entire system came to failing.

bayam on July 10, 2011 at 8:27 PM

We had the choice between a “V” and an “L”… The “V” would have been quick and painful. The “L” is slow and painful and we are living through it today…

Fallon on July 10, 2011 at 9:53 PM

Fighton03 on July 10, 2011 at 9:46 PM

Works for me.

katy the mean old lady on July 10, 2011 at 9:54 PM

We had the choice between a “V” and an “L”… The “V” would have been quick and painful. The “L” is slow and painful and we are living through it today…

Fallon on July 10, 2011 at 9:53 PM

The “long slow painful” way is often how investors get their money back before declaring BK. Essentially, the owners/investors know the company is dead, but they are sucking it as dry as they can before a BK court comes in and reapportions the companies remaining assets to the creditors. Emphasis on ‘remaining’.

Fighton03 on July 10, 2011 at 9:56 PM

katy the mean old lady on July 10, 2011 at 9:54 PM

:)

Fighton03 on July 10, 2011 at 9:57 PM

Fighton03 on July 10, 2011 at 9:52 PM

Sorry to hear partner….I hope things have gotten better.

Tim_CA on July 10, 2011 at 9:58 PM

bayam on July 10, 2011 at 9:08 PM

Son, you are probaby one of the dumbest people to hit this planet.

katy the mean old lady on July 10, 2011 at 10:01 PM

I would love it if people who criticize the way she looks post pictures of themselves.

idesign on July 10, 2011 at 6:50 PM

A little touchy are we? Good Lord, I make an observation that the Newsweek pic wasn’t her best, probably on purpose, and you go into a hissy fit. I keep forgetting that if a comment isn’t nothing but praise and beatification of SP, it’s criticism. You really need to get a grip.

TxAnn56 on July 10, 2011 at 8:14 PM

Idesign worships her.

CW on July 10, 2011 at 10:04 PM

Sorry to hear partner….I hope things have gotten better.

Tim_CA on July 10, 2011 at 9:58 PM

They did before obambi and the Kalifornia eco nazi’s. I owned a small transportation company for not quite 10yrs. Did pretty well until about 2008. Hmmmmmmmmm :/

Now I’m back in aerospace.

Fighton03 on July 10, 2011 at 10:06 PM

Fighton03 on July 10, 2011 at 10:06 PM

Ain’t it the truth? Kicking back in the south bay waiting for commercial development to restart….this is my 3rd CA boom/bust cycle….we do learn how to play ‘em though.

Tim_CA on July 10, 2011 at 10:10 PM

Idesign worships her.

CW on July 10, 2011 at 10:04 PM

To the point of a restaining order.

katy the mean old lady on July 10, 2011 at 10:11 PM

Ain’t it the truth? Kicking back in the south bay waiting for commercial development to restart….this is my 3rd CA boom/bust cycle….we do learn how to play ‘em though.

Tim_CA on July 10, 2011 at 10:10 PM

Third? Are you counting pre 1980?

Fighton03 on July 10, 2011 at 10:13 PM

i think he is saying no body wants to buy our debt. Now that QE2 is finished and the gov is buying its own debt.

unseen on July 10, 2011 at 9:30 PM

I think he’s trying to say something like direct bailouts and liquidity facilities were necessary to stop the CP market from shrinking further, implying that that would have led to the all-out collapse of our corporate sector by drying up short-term funding. Or something.

Too bad that’s not true. The decline in the CP market had already been going on for 2+ years at the time of the bailouts. Corporations are now sitting on record amounts of cash and have been since shortly after the bailouts. Meanwhile the CP market has continued to shrink, only starting to grow again this calendar year, though its size remains well below 2006 highs. The bottom line is that most companies would have survived without the bailouts. They would have been weakened after eating some losses (cost of doing business) but they would have survived. The financial Armageddon that was predicted would not have materialized absent the bailouts, just as financial Armageddon will not materialize on August 2 if the statutory debt limit is not raised.

steebo77 on July 10, 2011 at 10:14 PM

Son, you are probaby one of the dumbest people to hit this planet.

katy the mean old lady on July 10, 2011 at 10:01 PM

he and crr would be great on a desert island together.

Fighton03 on July 10, 2011 at 10:14 PM

Idesign worships her.

CW on July 10, 2011 at 10:04 PM

And from what I’ve seen, I would guess that CW sticks pins into a Sarah Palin-shaped voodoo doll.

steebo77 on July 10, 2011 at 10:16 PM

steebo77 on July 10, 2011 at 10:14 PM

LOL!!! You mean that if companies aren’t investing their money in new ideas they have plenty of cash to handle daily operations and don’t use short term lending????

Fighton03 on July 10, 2011 at 10:19 PM

Third? Are you counting pre 1980?

Fighton03 on July 10, 2011 at 10:13 PM

Started playing in ’78 so I’m counting the min-bubble in the late ’70′s / through 1980.

Tim_CA on July 10, 2011 at 10:20 PM

Tim_CA on July 10, 2011 at 10:20 PM

I guess I started ‘officially’ playing’ in 90 then. But we got back to the SoCal in 1982 after watching the BS that went on here in the 70′s from AZ.

Fighton03 on July 10, 2011 at 10:25 PM

OK kids…..I’ve tried, but we’re still only at 620+. I guess we won’t make 1K on this one.

Fighton03 on July 10, 2011 at 10:28 PM

West bites at O and Holder on Gunrunner:

ProudPalinFan on July 10, 2011 at 10:28 PM

Now I’m back in aerospace.

Fighton03 on July 10, 2011 at 10:06 PM

FAndamnfaStic!

SON OR DAUGHTER, 2013 WIL MAKE YOUR FORTUNE. HANG IN!
Sorry to seem so adamant, but I am one of the baby boomers who were very well educated about our country. My father worked on the space race and took me to the then” Cape Canaveral” for the lauches. Life was looser and they didn’t think a little child was a security threat.
You will be adored after 2013 Hanng in there.
We’ll have the best president in my lifetime . That’s when I wil die happy.

katy the mean old lady on July 10, 2011 at 10:32 PM

Fighton03 on July 10, 2011 at 10:25 PM

If you started in ’90 and hung inafter the ’92ish bust (or got back in immediately after)…you’re doing fine.

Getting pissed enough to move to a state with a realistic tax structure yet?

Tim_CA on July 10, 2011 at 10:32 PM

My father worked on the space race and took me to the then” Cape Canaveral” for the lauches.

katy the mean old lady on July 10, 2011 at 10:32
PM

You lucky lady! It makes me heartsick to watch our space program being scrapped…I can only imagine the wonderful feelings at watching it get started.

Did you get to see the broadcast of the first man on the moon? Just seeing archives of that gives me chills.

Uncle Sams Nephew on July 10, 2011 at 10:33 PM

he and crr would be great on a desert island together.

Fighton03 on July 10, 2011 at 10:14 PM

It’s tough for two vegans to e cannibals.

katy the mean old lady on July 10, 2011 at 10:35 PM

Getting pissed enough to move to a state with a realistic tax structure yet?

Tim_CA on July 10, 2011 at 10:32 PM

If my son wasn’t in a decent charter school with good friends I’d be in wyoming now. I own a home here, that is still right side up so I’m looking for a way to get that into my kids hands.

Fighton03 on July 10, 2011 at 10:36 PM

It’s tough for two vegans to e cannibals.

katy the mean old lady on July 10, 2011 at 10:35 PM

but ohhhhh so much fun to watch…..

Fighton03 on July 10, 2011 at 10:37 PM

Did you get to see the broadcast of the first man on the moon? Just seeing archives of that gives me chills.

Uncle Sams Nephew on July 10, 2011 at 10:33 PM

Was just a tyke, but will never forget that broadcast.

Tim_CA on July 10, 2011 at 10:37 PM

OK kids…..I’ve tried, but we’re still only at 620+. I guess we won’t make 1K on this one.

Fighton03 on July 10, 2011 at 10:28 PM

Child! It’s early. W

katy the mean old lady on July 10, 2011 at 10:40 PM

Fighton03 on July 10, 2011 at 10:36 PM

Yep….you’re right on schedule.

Mine’s in Northern Michigan…..My poker buddies have ‘em in AZ, TX and FL.

One of these days……

Tim_CA on July 10, 2011 at 10:40 PM

We’ll have the best president in my lifetime . That’s when I wil die happy.

katy the mean old lady on July 10, 2011 at 10:32 PM

Don’t put a date on it. Just keep on kicking those bastards in the teeth. BTW, Reagan cut my funding in college….and I loved him for it because he did it for the right reasons. I hated Kalifornia for keeping me out of their EOP program because I was the wrong color.

Fighton03 on July 10, 2011 at 10:41 PM

There we go with the W. What’s with Labs and W’s?

katy the mean old lady on July 10, 2011 at 10:43 PM

Mine’s in Northern Michigan…..My poker buddies have ‘em in AZ, TX and FL.

One of these days……

Tim_CA on July 10, 2011 at 10:40 PM

Hold out for AZ, the weather is better! I have ulterior motives for the wyoming thing :)

PS: I moved here from Tucson, after El Paso. Dad was in the army.

Fighton03 on July 10, 2011 at 10:43 PM

katy the mean old lady on July 10, 2011 at 10:43 PM

W’s ??

Fighton03 on July 10, 2011 at 10:44 PM

OK kids…..I’ve tried, but we’re still only at 620+. I guess we won’t make 1K on this one.

Fighton03 on July 10, 2011 at 10:28 PM

You know what this thread really needs? A shot in the arm courtesy of Lourdes.

steebo77 on July 10, 2011 at 11:27 PM

You know what this thread really needs? A shot in the arm courtesy of Lourdes.

steebo77 on July 10, 2011 at 11:27 PM

He has been very wary of Palin threads after his last 36 hour meltdown.

However if you say his name 3 times he might appear.

portlandon on July 10, 2011 at 11:37 PM

Last year, Obama used Pennsylvania’s Allentown Metal Works as a backdrop to tout his stimulus and job-creation success. A couple of months later, the plant closed.

Yes, he appears with the regularity of an unwanted season

J_Crater on July 10, 2011 at 11:38 PM

I’m not a businessman nor did I play one on TV. The way I saw the take over of GM and Chrysler, was to save the unions pensions. if the two companies would have been allowed to file for Chapter eleven, we all know the first party to have to be cut WAY would be the unions now working and those collecting retirement benefits. We see what happened, the bond holders were screwed and the unions ended up as defacto owners of both companies. Sound mighty Facistical to me. but what do I know it’s experts like Buyum or what ever he goes by, to tell me what end is up.

jainphx on July 11, 2011 at 12:05 AM

He has been very wary of Palin threads after his last 36 hour meltdown.

However if you say his name 3 times he might appear.

portlandon on July 10, 2011 at 11:37 PM

Beetlejuice!

Beetlejuice!

Beetlejuice!

gryphon202 on July 11, 2011 at 12:13 AM

2. In a market where the pump is running at full tilt a liquidity problem so great has sprung up that McDonalds cannot find it’s own dollars in a disrupted market of some sort to pay its suppliers?

And I’m the idiot?

Are you wearing a tin-foil hat?

Tim_CA

Apparently bam bam knows more about McDonald’s business than McDonalds.

“McDonald’s spokesman Walt Riker was quoted in the original story as saying that while the company recognizes “current trends…we want to make it clear that McDonald’s and McDonald’s franchisees have a variety of sources to get cash.”

“In the subsequent AP story, Riker again played down the B of A element, but said, “There are no credit issues at McDonald’s,” and there is “more than sufficient liquity available to our franchisees.”

The financial crisis of 2008 was mostly a manufactured one. Yes, there were problems, but instead of addressing them, they talked a garden variety recession into a near depression that we still haven’t gotten out of.

xblade on July 11, 2011 at 12:28 AM

From the Chicago Sun-Times

Gohawgs on July 11, 2011 at 3:16 AM

steebo77 on July 10, 2011 at 11:27 PM

portlandon on July 10, 2011 at 11:37 PM

Y’all got your buddies mixed up…
L = 17 hours lying liars lying rant, c = 36 hours of abdicating on one thread…

Gohawgs on July 11, 2011 at 3:21 AM

Reducing the annual deficit of $1.5 trillion to zero over ten years will increase the debt by $8.25 trillion over that time period.

Cutting the deficit in 1/2 over ten years would increase the debt by $12.375 trillion.

This does not count the cost of servicing the increased debt.

Deficit reduction ten year plans are just another way to kick the can down the road and avoid real reductions in the size and scope of government.

Dasher on July 11, 2011 at 4:58 AM

She is an American Thatcher…and Churchill all rolled into one, conservative principals as well as an eye for the coming disaster.

allahallahoxenfree on July 11, 2011 at 11:43 AM

Look at NASA, just as an example. 28,000 people will be estimated out of work because of the closing down of the jobs of about 2,000 Federal workers. Thats a 3 to 1 ratio. It’s not practical to apply that ratio to a potential one million laid off, but what if? Are you sure?

BrideOfRove on July 10, 2011 at 5:37 PM

Several million federal workers laid off would of course add to our recession, but it would not have the same effect as 2000 NASA laid off on the Space Coast’s economy. Most of the laid off NASA workers probably found jobs in other regions and then contributed to their economies. Most laid off federal workers will eventually find other jobs as well, but immediately following the layoffs, the economy will be greatly impacted. My sister lives in Northern VA, near DC. The economy is booming there. Last time I saw her I told her that I hope we can bring a depression to her neighborhood.

elfman on July 11, 2011 at 12:51 PM

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