The Tea Party Hypocrites - At the Margin, Debt Is the Economy
The Tea Party is merely a reactionary bulwark to billionaire special interests, while masquerading as a populist front. It purports to represent fiscal responsibility while taking three quarters of the budget off of the table for negotiation. It exists to ensure that the flow of government funding continues to be directed at large-scale corporate interests in the medical insurance, pharmaceutical, military industrial industries and away from a fair allocation of resources to the wage slaves who keep the economy operating day to day. The only "entitlement" cuts they ever endorsed were for those people under the age of 50. They have no problem balancing the budget as long as its on the backs of the children and grandchildren. Those who endorsed two wars and the Bush tax cut get off Scot free. This is all just a diversion anway, because the real issue is that it's now five years (i.e. late) into the "expansion" and the U.S. is still borrowing 5% of GDP to have a +2% positive "growth" rate. So second grade logic dictates that the debt is no longer amortizing and there is no way to cut back on spending that balances the budget and doesn't tank the economy. Meanwhile, Republicans will never allow a tax increase to balance the budget. All of which means that we can take the bogus threat of a voluntary default off the table. It was always just a negotiating tactic. Now, at the margin, debt is the economy. Without it, Special Interest Groups don't get paid. To add insult to injury, Mr. Green Eggs and Ham Ted Cruz, leader of the Tea Party - his wife is a VP at Goldman Sachs if you can imagine. Likewise, with Yellen's nomination to Fed we can take the likelihood of QE reduction off the table as well. Meanwhile, deflation continues to pour in from the Third World one container ship at a time, while the frat boys in power turn a blind eye to relentless outsourcing. All of which means we are on steady course for the Minsky Moment and the deflationary collapse. Those who think that a liquidity driven rally such as this one can never end, were not around in year 2000. At that time, the market went vertical due to the wall of money being thrown at it, and mutual fund inflows were at their peak when the market rolled over.
Stock Liquidity Flows (aka. cash withdrawals) Peak With the Market