Poll: Tea Partiers Hate Themselves, Vow Never to be Themselves Again

The title is kind of tongue in cheek but no doubt has an element of truth in it. 

Today a new Washington Post/ABC News poll shows that two out of every three Americans are “dissatisfied” or “angry” with the way the federal government works. Also, it found tea party supporters are overwhelmingly white, conservative, and disapproving of Obama.I am not sure that who is in the Tea Party is important because when one looks at the populace the key point is, everybody is p____ed off.

If one looks at a chart that tracks the relationship between household debt and gross domestic product you’ll see two years when Americans’ debt becomes 100 percent of GDP — 1929 and 2007.  It led Columbia professor David Beim to say: “The problem is us. The problem is not the banks, greedy though they may be, overpaid though they may be. The problem is us… We’ve been living very high on the hog. Our living standard has been rising dramatically in the last 25 years. And we have been borrowing much of the money to make that prosperity happen.”

Government debt as a percentage of GDP has moved around over the years, jumped up after the 29 depression, rose more in WW II, dropped until 1974, then stabilized and rose during the supply side experiment of the 1980’s and early 90’s, dropped a little during the Clinton tech boom era, then rose during the Bush tax cut and unfunded Irag war period and now is rising as government deals with a developing depression. 

By contrast the debt of companies, consumers, and financial businesses has soared relentlessly during the whole period.  The problem now is that the value of the assets that serve as collateral for that debt (houses, stocks, cars, etc.) is plummeting.  Thus, the percentage of debt to equity is increasing, and in many areas, the equity is being wiped out.This is why economists like Paul Krugman, Joseph Stiglitz, and others think Tim Geithner’s whole view of the crisis is nuts.  We aren’t dealing a “temporary mispricing” of debt.  We’re dealing with the collapse of asset prices that will force the restructuring of trillions of dollars of debt that was loaned against value that no longer exists.