Can’t kick the habit …

… but at least we can kick the can

“The economic catch phrase of the year has become ‘kicking the can down the road’, applied to all the problems that are not being solved, but are simply kicked further down the road. It’s an apt description, as it is exactly what’s happening.”

“There are already elements of fragility,” [Nouriel Roubini] said. “Everybody’s kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest.”

“This week we turn from the crisis brewing in the U.S. to the one that is coming to a slow boil in Europe. We visit our old friends Greece and Ireland and ponder how this will end. It is all well and good to kick the can down the road, but what happens when you come to the end of the road?”

“Sovereign debt in Europe is on everyone’s mind. Three of the seventeen members of the Euro system are in trouble; Greece is a basket case. There is universal agreement that Greece is now illiquid and insolvent. The latest compromise is another temporary bandage. Our American idiom ‘kicking the can down the road’ fits perfectly.”

“An irreverant official at the International Monetary Fund recently installed a jarring ringtone on his mobile phone. It is the sound of cans being kicked down a road. That, alas, is what Europe’s politicians and the IMF look set to do with their latest rescue plan for Greece.”

“Kathleen Brooks, research director at Gain Capital wrote in a note yesterday: ‘There is a growing sense that a bespoke solution to Ireland’s crisis is only kicking the can of peripheral financial worms further down the street. Until there is a convincing automatic default mechanism for all eurozone members then we could see other debt flare ups over the medium-term.'”

“‘[Japan’s Government Pension Investment Fund] might secure 2 trillion yen by bank lending to finance part of the payout shortfall, the Nikkei said.’ This will have two effects, neither of which is positive for dealing with the funding problem. The first is that it will merely kick the can down the road which seems to be the standard response from Japan, Inc over the last two decades. The second is that it reduces the income – and thus the funds holdings – as they turn from earning interest on their investments to paying interest on these loans which rather has the effect of shortening the road down which they are kicking the can.”

“We live in a world profoundly addicted to debt-financed consumption. Today, many people, companies, and countries borrow with no evident intention to repay. When the debt comes due, they will replace it with new (and often larger) debt. Kick the can down the road, again and again. But inevitably the road ends abruptly with a wall, much like the ones at the end of a crash testing site.”

“Speaking to a room full of reporters at the National Press Club Thursday, Bernanke said that without an increase in the debt limit, the United States could potentially default on its debt, an outcome he referred to as ‘catastrophic.’ … ‘There’s only so far that we can kick the can down the road,’ he said in response to a question about the deficit.”

“Monetary reform never takes place because everyone wants to defer final judgment. Everyone wants to go to heaven, but nobody wants to die. Everyone wants a stable economy with growth. No one wants recession and increased bankruptcies to re-price capital goods. So, kick the can always results in another round of monetary inflation. The boom-bust cycles repeat. … This is continuity in the modern fiat money economy. The voters want it. The debtors want it. The banks want it. Businessmen want it. … The result: American prices as measured by the consumer price index have risen by a factor of 20 since the Federal Reserve System began operating in 1914. The dollar has depreciated by about 95%.”

“The voters want the government to guarantee them a safe retirement, Medicare benefits, and a stable dollar. But the government is already so far down the road to default that it can only play kick the can.”

“Dana Milbank of the Washington Post chides Democrats, Republicans and DC elites for ‘kicking the can‘ of deficits and debt to future generations. This is an inherent defect of all democracies. Elected politicians buy votes today and affix the burden on future generations.”

“It’s ridiculous that, as often as we get speeches about how we need to stop kicking the can down the road on the debt and the deficit, we get more can-kicking.”

“We’re going to keep kicking the can down the road for as long as we can see the road and the can ahead. Then all of a sudden – Oooops! No more road!”

[K]icking the can down the road won’t work: there is no more road.”

“There are an awful lot of Cans on this road and our leaders keep kicking them and kicking them. I can’t help the feeling that we are near the end of this road.”

Can-kicking, rather than problem-solving, is the political method of dealing with big and small problems. Problems do not get solved so much as they get hidden. Political hoopla and self-congratulations accompany each can-kicking action. The spectacle and declaration of problem-solved is usually enough to satisfy the concerns of the public, the only consideration that matters for the political class.”

“Essentially, all we are doing is kicking the can down the road.”

“Two years ago in a speech to U.S. House Democrats, Microsoft CEO Steve Ballmer predicted that America was headed for ‘a fundamental economic reset.’ According to Ballmer, for 25 years our economy grew on unrealistically cheap debt. That is over. … Since Ballmer’s remarks, our national debt has continued to grow and now surpasses $14 trillion, President Obama and Congress are struggling with massive federal budget deficits, state and local governments are drowning in red ink, and protesters are massing at state capitols demonstrating against wage and benefit cuts. … Elected officials have no choice. They must trim spending and make some very difficult choices. As Gov. Chris Gregoire has repeatedly told state lawmakers, we have to make fundamental changes and do things much differently. We have to quit kicking the can down the road in hopes that somehow our problems will magically disappear.”

Can-Kicking toward the Double Dip”

“Same Kick, Same Road, Bigger Can

Can kicking continues for real estate and banks”

“In general, the capacity of large wealthy societies to allow festering problems to go un-addressed seems perennially underrated. I’ll be thirty next week and for as long as I can remember people have been talking about how the United States needs to address entitlement spending and trade imbalances. And as best I can tell, we do need to address those things. Presumably at some point something will happen. But in practice we’ve managed a great deal of can-kicking, seem to have more can-kicking in us, and actually the public and the political elite alike are quite averse to the kind of steps that would address these issues.”

“The House GOP is considering a vote to extend the debt ceiling through the end of 2012. This is kicking the can down the road …”

“‘The debt ceiling is supposed to be a mechanism to force Democrats and Republicans to come together and cut spending,’ Congressman Kingston said. ‘Instead, what does Congress do? We push the ceiling further and further up. Instead of moving the ceiling, we need to cut spending and quit kicking the can down the road for another Congress, another election and another generation.'”

“If history is any guide, there will be no problem raising the debt ceiling once again in 2011. And that’s what’s called kicking the can down the road. You don’t have to be a U.S. Republican (I’m neither) to care about U.S. debt levels. Any chimpanzee can see the problem (yes, even if the U.S. can just keep on printing its own money. That’s the problem).”

Kicking the can down the road by increasing debt limits is not a solution. It just allows Washington politicians to continue to feed their spending habits.”

“During the current state budget crisis we’ve heard a lot about ‘kicking the can down the road.’ … It didn’t have to be this way. Had the state accounted for its promises rather than kicking that can down the road, true costs would’ve been revealed, proper funding would have been required or no such promises would’ve been made, and discretionary programs would’ve been protected. But instead, politicians chose to kick the can, and down a very low road. … California has kicked that can into a $200-300 billion obligation that grows every year that it’s kicked down the road again.”

“The phrase ‘kick the can‘ refers to a specific form of procrastination: to delay making a decision regarding a problem that can be deferred but cannot be avoided indefinitely. With each kick of the can, the problem grows worse. The problem compounds. The resources required to solve it do not compound at an equally high rate. The can-to-foot ratio grows larger.”

“Maybe all of this can-kicking will produce the desired outcome. But the more likely scenario is that the U.S. government will continue to throw newly printed dollars bills at the problem until eventually something that looks like a lot like a recovery will appear. Shortly thereafter, the recovery will yield to something that looks a lot like debilitating hyperinflation.”

“Metaphorically things are getting just about as tedious as the downturn in the global economy. The operative ‘kicking the can down the road’ continues to proliferate, alarming[ly] so. A search on the Google (U.S.) News site on June 13, 2011, for this phrase listed 2,805 citations embedded in news texts during the previous week.”

[Tomb]
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