Fed Worried About Recovery
Yeah… me too.
A new document, released Wednesday, revealed a more cautious mood among the Fed policymakers in light of Europe’s debt crisis, a volatile Wall Street, a stalled housing market and high unemployment.
With risks growing, Fed officials at their June 22-23 meeting saw the need to explore new options for bolstering the economy. That’s a turnaround from earlier this year when they were moving to wind down crisis-era supports.
But, but… The stimulus worked!? At least it prevented the new “Great Depression”, right? I mean, I have absolutely NO evidence that the stimulus really did anything, except the word of the partisans themselves, but that is good enough, isn’t it?
How can the Fed be worried? The President PROMISED me that everything was going to be OK when we passed the stimulus, he wouldn’t lie to me, I mean, he went to Harvard…
Time to wake up people. You cannot expect that spending ourselves into oblivion is going to lift us out of the economic doldrums. Government debt decreases consumer confidence, you know, one of our leading indicators of demand. Massive deficits do just the opposite, take a look at the PIGS if you need examples.
Our current debt levels are unsustainable. I have been criticized for my debt-hawkishness during a time of recession, but even if Keynes were right, there is no way that even a healthy US economy could dig its way out of the hole we are digging.
The federal budget deficit will total $1.6 trillion this year, while combined shortfalls are forecast to total $9.05 trillion in the next 10 years, according to projections from the nonpartisan Congressional Budget Office. - Bloomberg News
We are looking at nearly doubling our national debt in the next 10 years, this is a conservative estimate from the CBO. Tepid growth as a result of MASSIVE stimulus (IF that is why we are seeing tepid growth) is not going to be enough to grow out of this debt. We are still losing manufacturing to offshore firms, and as a result we are losing export dollars every day.
If unemployment remains high, how long will it be before the unions begin pushing for protectionist measures? What will be the result of such measures?
It’s easy to look at the protesters and the politicians in Greece — and at the other European countries with huge debts — and wonder why they don’t get it. They have been enjoying more generous government benefits than they can afford. No mass rally and no bailout fund will change that. Only benefit cuts or tax increases can.
Yet in the back of your mind comes a nagging question: how different, really, is the United States?
The numbers on our federal debt are becoming frighteningly familiar. The debt is projected to equal 140 percent of gross domestic product within two decades. Add in the budget troubles of state governments, and the true shortfall grows even larger. Greece’s debt, by comparison, equals about 115 percent of its G.D.P. today. -NY Times
Even the NY Times is expressing concern over the debt, yes, even during a time of economic distress.
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 0933 hrs
I am very worried, for awhile things started to show signs of life, but the last few months its like someone hit the off switch again. I dont think many will survive another round that images 2009.
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 1115 hrs
Pretty much sums up how I think we got here.
http://krugman.blogs.nytimes.com/2010/07/14/cassandra-time/
(Cue head explosions: KRUGMANNN???!!!1)
Posted by scott on July 15, 2010 at 1400 hrs
I wish I had something constructive to propose.
Something on which Krugman and I actually agree.
This will be the new mantra from the left - “the stimulus didn’t work because it wasn’t big enough!”
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 1520 hrs
It’s not “new.” He had something constructive to say all those months ago—nobody listened. Certainly not you. And the reason today’s possibilities are so small is because of fiscal peacocks like yourself.
Posted by scott on July 15, 2010 at 1522 hrs
Nobody listened because he’s a crackpot that only hard-left liberals like yourself actually believe.
But, aside from that, who are you blaming for the stimulus being too small? Bush?
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 1534 hrs
I should expand on my earlier comment also - you’re right, scott, that it is not new for some on the left to say the stimulus wasn’t big enough.
The difference is now it looks like they’re attempting to buy political cover by saying anything we do now might not work, that we lost our one and only opportunity. I just don’t see how that’ll work for them, since Ds control both the executive and legislative branches.
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 1541 hrs
There was never any chance of doing stimulus on a sufficient scale because lack of stimulus was not, and is not, the problem.
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 1544 hrs
But, aside from that, who are you blaming for the stimulus being too small? Bush?
No. I blame the people, pundits and politicians who find it easy to resist the kind of spending we needed. A lot of the same people to day who have their panties in a twist about the deficit as opposed to extending unemployment benefits.
they’re attempting to buy political cover by saying anything we do now might not work,
I think what Krugman is saying is that we shouldn’t be surprised about where we are. Also, that if we do nothing more but whine about the deficit we’re going to be here for a while yet. I don’t hear him saying “nothing we do can work.” I hear him saying “the real solutions have little political support right now because of the way the game was played a year ago”—we should have done a larger stimulus back then because making up for it now is politically very hard.
Posted by scott on July 15, 2010 at 1615 hrs
I will say this, Scott has been consistent all along about the stimulus being too small. I still disagree with him, and Krugman.
I also think the argument that it is foolish to be wary of deficit spending during a recession is ridiculous. When you are talking about the numbers that Carter, Reagan, Bush, Clinton, Bush, and Obama have racked up on the national card, adding anything else is just stupid.
Why?
Because as I stated in my initial post. This country cannot outgrow our debt, we are going to have to pay it off the old fashioned way. You know, tighten the belt and begin paying it down, to the detriment of other programs.
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 1657 hrs
we are going to have to pay it off the old fashioned way. You know, tighten the belt and begin paying it down, to the detriment of other programs.
Which is I think the ultimate, tippy-top strategy of American conservatism in the first place: bankrupt the place and then say “we cannot now afford any of the social spending that we coincidentally have been against for the last 60 years.”
Another way to deal with our budget deficit is to let some of the Bush tax cuts expire. Surely everyone here knows that a very large portion of it comes directly from that source. And maybe it would be nice to stop with the whole having-wars-we-don’t-need thing, too. And what about shaving down some of the military technologies that the pentagon itself does not even want?
In any case, paying it will be easier and faster if we all have jobs again. And the best shot at ending the recession and getting back to full employment has always been stimulus spending and other items like extending unemployment insurance—both of which have been hindered if not outright stymied by the very same “deficit peacocks” who engage in a lot of public handwringing about it.
The way I figure it, we gave it a half-hearted try and we’re reaping a half-hearted recovery. Not a lot of mystery there. And I suspect we’re going to continue doing a 60/40 split with the GOP (even though they’re out of power!) for the foreseeable future.
Posted by scott on July 15, 2010 at 1751 hrs
The way I figure it, we gave it a half-hearted try and we’re reaping a half-hearted recovery.
Oddly, the only other time we tried to buy our way out of an economic downturn, we wound up with a massive second dip leading to the prolonged Great Depression. Spending government dollars offers an anemic return in economic growth, at best. Just look at the Porkulus scam for a good example. Taxing the private sector, the one that does provide a good bang for the buck, is a galacticly stupid idea during a severe downturn, and an even more idiotic one if your goal is to to stimulate economic growth… of course, I’d expect nothing less from Scott and his little bearded guru Paul.
By the way, there was no half hearted recovery… all we have seen is a leveling off of the decline. Recovery indicates improvement.
If you have an economic downturn at home, do you run out and buy new furniture and remodel the basement? No. You reduce your debt and get a second job.
If a small business has an economic downturn, does the boss order new office chairs all around and throw a pizza party every Friday? No, he tries to cut costs and find ways to be more productive or add to his customer base (or hers).
If a big business sees hard times, do they pave the parking lot, re-roof the plant, and offer the employees a three week paid vacation to London? Nope. Again, they cut expenses, seek to improve productivity, enlarge customer base, or innovate.
At no time would you go massively into debt far greater than your ability to ever repay… except when you listen to the people advocating Keynesian economics…. to them, somehow that makes sense, though no one will ever understand why… and when it fails they always remark that you simply did not go into debt massive enough to stimulate the economy. They are never real strong on how to repay the astronomical debt without monetizing it or sinking the economy with excessive over taxation either.
Barack blew it. All the smart kids are saying so and the economy is set to falter a second time. The Krugmanites have sacked DC and all America got was a lousy T-Shirt that said “Paid for with Stimulus dollars”
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 1840 hrs
If you have an economic downturn at home, do you run out and buy new furniture and remodel the basement? No.
Showing that you understand very little about economics if you think a household budget is the same as a federal one.
Posted by scott on July 15, 2010 at 1850 hrs
Showing that you understand very little about economics if you think a household budget is the same as a federal one.
Yes, because clearly Federal money is imaginary. Loans never need to be repaid. Interest does not build up exponentially. Printing as much money as you’d like has no effect on the economy. Taxes do not affect economic growth… is that the Federal budget to which you allude?
You are correct, I do not understand that one because it exists only in the imagination of the Krugmanites. It just doesn’t work that way in real life. That’s why the ship is still sinking. The last thing the Titanic needed was MORE water.
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 2013 hrs
With regard to your last two comments.
http://www.youtube.com/watch?v=5hfYJsQAhl0
I hate to be such a snarky asshole, but jesus. Make some sense, man.
Posted by scott on July 15, 2010 at 2034 hrs
Which is I think the ultimate, tippy-top strategy of American conservatism in the first place: bankrupt the place and then say “we cannot now afford any of the social spending that we coincidentally have been against for the last 60 years.
Scott, I respect your opinion, REALLY, but....
THIS, is wingnut conspiracy theory territory. I don’t support deficit spending under any President. In fact, I cannot under any circumstances see a situation in which deficit spending would actually be necessary…. I think we should have a rainy day fund, IMAGINE THAT.
To prove my non-partisan sentiments in this regard:
I will give Bill Clinton (Newt Gingrich) props to this day, for ALMOST getting us to balanced budget territory…. BUT IT DIDN’T ACTUALLY HAPPEN.Yes, because clearly Federal money is imaginary. Loans never need to be repaid. Interest does not build up exponentially. Printing as much money as you’d like has no effect on the economy. Taxes do not affect economic growth… is that the Federal budget to which you allude
Bingo. The Federal Government is seemingly immune (although clearly not really) to the laws of economics. No matter what happens, or what indicators are out there, it is always OK to print more money to spend.
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 2044 hrs
THIS, is wingnut conspiracy theory territory.
Certainly I don’t suspect a lot of folks here are in on it. But I’m thinking of Grover Norquist and his ilk. I don’t think I’m far off the mark with them.
Posted by scott on July 15, 2010 at 2058 hrs
I hate to be such a snarky asshole, but jesus. Make some sense, man.
Actually, I believe that might be your only real contribution to the conversation…
Nothing about deficit spending to the point of non-repayment makes sense. We will soon reach a debt so large that the entire domestic output of our economy for a year would not pay it off… but warnings that we are in fiscal danger are what makes no sense to you, Scott?
How do you propose to pay off the Obama debt and pay for the new Obama entitlements? We can’t borrow forever… no matter what Paul Krugman tells you, math fails you here.
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 2114 hrs
You’re right about one thing: calling you out for utter nonsense was a decent contribution. Nobody else seems willing to. Even those who I’m sure know better.
I actually provided several ideas about the economy and how to start erasing the deficit. I believe I mentioned reversing some of the Bush tax cuts, which after all are responsible for a large portion of it. I also mentioned cutting military spending.
Posted by scott on July 15, 2010 at 2126 hrs
I believe I mentioned reversing some of the Bush tax cuts, which after all are responsible for a large portion of it.
This statement is true in the mind of one who believes:
- personal income is inherently the property of the government
- spending has not been the issue in the last decade
- tax cuts do not stimulate the GDPVery telling is his argument that the finances of a gov’t are not subject to the same rules of discipline of financial matters as an individual budget. Even a huge corporation quickly becomes a smaller corporation (General Motors) when finances are not properly attended.
Scott and his four foot bong, Kamala, are really on a roll tonight.
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 2150 hrs
personal income is inherently the property of the government
Dont’ make me post the Billy Madison clip again, mkay?
- spending has not been the issue in the last decade
Sorry, “the” issue? I think one of “the” issues was the Bush tax cuts.
- tax cuts do not stimulate the GDP
Tax cuts do not increase government revenue. And while they have a stimulative effect, they’re not as stimulative as direct government spending. A relevant point in today’s economic situation where we desperately needed a few more billion in stimulation.
Posted by scott on July 15, 2010 at 2157 hrs
Let’s take a look at some of your valuable ideas, Scott. Cut defense spending? Well even if we cancel Barack’s hobby war in Afghanistan and and then reduce the military by 50% across the board (an idea that I’m sure appeals to your liberal sensibilities), we save only 350 billion or so. That leaves around 1.2 trillion still needed just to balance the budget…. assuming that we completely ignore the medicare and social security impending bankruptcies. With Federal revenue currently at 2.2 trillion and the huge saving from the Feldstein Peace Initiative, a simple 50% across the board tax hike on all taxes, fees and duties would get us there… right? Yeah, I’m sure that would do wonders for economic growth… this IS the summer of recovery after all.
Your plan fails the math test again, Scott.
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 2158 hrs
f we cancel Barack’s hobby war in Afghanistan
I can only guess at what dark recesses of the ultra-conservative mind this remark emerged from. Or perhaps it emerged from the other end of the conservative body politic. And besides, I’m not suggesting a single thing about Afghanistan, or Iraq. I’m talking about stopping the billions going into defense spending for projects the pentagon does not even want.
Posted by scott on July 15, 2010 at 2203 hrs
I can only guess at what dark recesses of the ultra-conservative mind this remark emerged from.
More than half the US casualties in the Afghan conflict have occurred in the last 18 months… mostly due to the ridiculous rules of engagement and the foolish new mission priorities that were ordered by Barack. What his end goal is remains unclear though. It’s his war, to be sure… but his abject lack of interest in it labels it as no better than a hobby to him… something he had to do because he campaigned on it. That’s Baracks hobby war, Scottie. Did you think that just because Keith Olberman and the network news no longer report on it that it was over?
I’m talking about stopping the billions going into defense spending for projects the pentagon does not even want.
I put that into the equation for you… a 50% reduction in military spending… was that not enough? How about a 75% reduction then. Still leaves us with a hole of over 1 trillion dollars blown into the budget. To balance it will require considerably more than the redaction of the evil Bush tax cuts that will expire in 6 months (an expiration that will likely be the beginning of the second dip in the economy).
Where do you plan on coming up with the rest of the money? Or didn’t Paul Krugman tell you that yet? Perhaps we’ll have to await your answer when he gives it to you. It seems that you have very little to offer in the way of concrete, dollars and cents numbers here…. just sophomoric links. Par for the course with you.
Posted by .(JavaScript must be enabled to view this email address) on July 15, 2010 at 2325 hrs
C’mon Scott. Surely you can see that the typical leftist knee jerk, “Cut defense and raise taxes” is not even nearly enough to pay for the proposed spending THIS YEAR. What are we going to do when the meat of your “deficit neutral” (Hah!) healthcare spending bill kicks in?
Tax cuts do not increase government revenue.
Scott, when income taxes are reduced, business owners pay themselves more, because there is no need to attempt to shelter their income. 35% of 100,000 / yr is more than 35% of 60,000 / yr. I use the same 35% number, because the business owner is smart enough to keep himself in a lower tax bracket when taxes are high.
I know, I know, its “VOODOO”, right?
High marginal tax rates discourage work effort, saving, and investment, and promote tax avoidance and tax evasion. A reduction in high marginal tax rates would boost long term economic growth, and reduce the attractiveness of tax shelters and other forms of tax avoidance. The economic benefits of ERTA were summarized by President Clinton’s Council of Economic Advisers in 1994: “It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth.” Unfortunately, the Council could not bring itself to acknowledge the counterproductive effects high marginal tax rates can have upon taxpayer behavior and tax avoidance activities.Since 1984 the JEC has provided factual information about the impact of the tax cuts of the 1980s. For example, for many years the JEC has published IRS data on federal tax payments of the top 1 percent, top 5 percent, top 10 percent, and other taxpayers. These data show that after the high marginal tax rates of 1981 were cut, tax payments and the share of the tax burden borne by the top 1 percent climbed sharply. For example, in 1981 the top 1 percent paid 17.6 percent of all personal income taxes, but by 1988 their share had jumped to 27.5 percent, a 10 percentage point increase. The graph below illustrates changes in the tax burden during this period.
- Joint Economic Committee, Congress of the United States.
So, according to this, not only did tax revenues increase under the Reagan tax cuts, the overall tax burden became more “progressive”.... Huh.Do I have to post the CBO report again?
Or are you going to come back at me with the “correlation is not causation” argument again, because if you’d like, I can make the same argument about our “recovery” and the stimulus.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 0917 hrs
I don’t even really know why I am arguing this point, though…
I favor a flat tax. Or the Paul Ryan tax plan. I think our current tax code is far too “progressive”.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 0920 hrs
Tax cuts do not increase government revenue.The 1993 Clinton tax increase appears to having the opposite effect on the willingness of wealthy taxpayers to expose income to taxation. According to IRS data, the income generated by the top one percent of income earners actually declined in 1993. This decline is especially significant since the retroactivity of the Clinton tax increase in that year limited the ability of taxpayers to deploy tax avoidance strategies, temporarily resulting in an increase in their tax burden. Moreover, according to the FY 1997 Clinton budget submission, individual income tax revenues as a share of GDP will be lower during the first four years of the Clinton tax increase, which include the effects of the 1990 tax increase, than under the last four years of the Reagan tax changes (FY 1986-89). Furthermore, according to a study published by the National Bureau for Economic Research,[2] the Clinton tax hike is failing to collect over 40 percent of the projected revenue increases.
Incidentally, the claim that unrealistic supply side Reagan Administration revenue projections caused large budget deficits during the 1980s is false. Nonetheless, this false allegation is often used against current tax reform proposals. The official Reagan revenue projections immediately following enactment of ERTA did not assume huge revenue increases, and were actually quite close to the CBO revenue projections. Even the Democrat-controlled CBO projected that deficits would fall after the enactment of the Reagan tax cuts. The real problem was a recession that neither CBO nor OMB could foresee. Even so, individual income tax revenues rose from $244 billion in 1980 to $446 billion in 1989.
Same JEC Document as above
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 0923 hrs
I believe I mentioned reversing some of the Bush tax cuts, which after all are responsible for a large portion of it
Once again. Tax cuts CANNOT cause a deficit. ONLY SPENDING can cause a deficit.
ONLY SPENDING
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 0934 hrs
after the high marginal tax rates of 1981 were cut, tax payments and the share of the tax burden borne by the top 1 percent climbed sharply.
That’s because their share of income also rose “sharply.”
Seriously, you guys. If you honestly believe that Bush’s tax cuts raised government revenue over where it would have been had they remained the same, I don’t know what to tell you. I can’t argue with fairytale logic.
And, SoL? Your “analysis” of the Afghanistan war is packed with so much BS I can’t even begin. I think I disagree with every single sentence you wrote and I don’t have it in me to argue every. single. thing with you—especially knowing in advance that your view is unlikely to change one iota. Even I’m not that quixotic.
Posted by scott on July 16, 2010 at 0941 hrs
ONLY SPENDING can cause a deficit.
So if I reduce my hours at work to half-time, I can’t run out of money even though my rent is the same? Good to know.
Posted by scott on July 16, 2010 at 0943 hrs
The highest total federal revenue (using inflation adjusted dollars) was achieved in 2007 under President Bush during the height of his tax cut.
On the other hand, in his first year at the White House, Barack created a deficit larger than all eight years of President Bush’s term in office. Barack’s total deficit at this point is larger than all the 43 Presidents combined.
In spite of the math, some people still like to believe that tax cuts can’t increase revenue. Those same people like to believe that a deficit larger than all those in history combined is not enough spending to have any effect. Sadly, you can’t reason someone out of something that they didn’t reason themselves into in the first place.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 0944 hrs
That’s because their share of income also rose “sharply.”
That income was always there, Scott, it was just hidden, sheltered, cash or otherwise “illegal”. Tax cuts brought it out in the open, and “produced” revenue for the government….
Seriously, if you cannot see that this is plain and simple logic, I don’t know what to tell you.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 0944 hrs
So if I reduce my hours at work to half-time, I can’t run out of money even though my rent is the same? Good to know.
Scott, it is your RENT, the SPENDING that is causing the deficit. If you cut your hours at work to half time, you should be smart enough to find a cheaper place to live.
Unfortunately our government is not smart enough to live within its means.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 0946 hrs
I think I disagree with every single sentence you wrote and I don’t have it in me to argue every.
Again you disagree with the math? Go look up the casualty numbers yourself. After that, please explain the massive increase. Then tell me what our current mission in Afghanistan is and what our exit plan is. Saying you disagree is lovely… but again, you offer nothing in the way of facts. Par for the course.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 0948 hrs
Furthermore, it is a bad analogy, because we have incontrovertible evidence that revenues ROSE after the Bush tax cuts. You can see it, pretty clearly.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 0953 hrs
So if I reduce my hours at work to half-time, I can’t run out of money even though my rent is the same? Good to know.
Scott, it is your RENT, the SPENDING that is causing the deficit. If you cut your hours at work to half time, you should be smart enough to find a cheaper place to live.
Unfortunately our government is not smart enough to live within its means.
An excellent point djm, and Scott… an enlightening window into your grasp of economics. Now I understand why you say the things you do.
Basic math… you can’t wind up with a negative number unless you subtract from a positive total. You can’t run a deficit unless you spend too much.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 0954 hrs
To put it more simply:
If I make $100.00 a week, and spend nothing, I have a net positive of $100.00 a week.
If I make $100.00 a week, and spend $20.00 a week, I have a net positive of $80.00 a week.
If I make $100.00 a week, and spend $125.00 a week, I have a net deficit of $25.00 a week.
Income or revenue, is totally independent of the deficit. The deficit is created by spending, and only spending.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1016 hrs
it is your RENT, the SPENDING that is causing the deficit.
So if I reduce my income and subsequently run out of money, it makes absolutely no sense to say that it was reducing my income which caused the deficit?
I get that you have an ideological hard on for reducing spending or the size of government or whatever. I get that. And you can make cases for why you want to do that. But if you expect me to join you in this lunacy where reducing income CANNOT lead to a deficit, you can forget it. A world where you can’t say that reducing my income “caused” my financial shortfall is a purely ideological one and doesn’t reflect a common sense view of the world.
Posted by scott on July 16, 2010 at 1020 hrs
Me: Fuck, I’m broke.
Friend: Gee, how’d that happen?
Me: My rent and my car payment.
Friend: Oh. Did they increase or something?
Me: No.
Friend: I don’t get it. You had plenty of money before. How are you short now even if your expenses didn’t change?
Me: Well, I cut my hours at work in half.
Friend: I see. So doesn’t it make sense to say that your shortfall was caused by reducing your income like that?
Me: Absolutely not. You see these guys on B&S made it clear to me that a budget shortfall cannot be caused by a reduction in income. Such a thing can ONLY be caused by your spending habits.
Friend: They’re fucking idiots. You know that, right?
Me: Yeah.
Posted by scott on July 16, 2010 at 1026 hrs
First, revenue went up, not down as a result of the tax cuts. The fact is that 2007 saw the highest federal revenue in history. It was the increase in spending that caused the deficit.
A more appropriate analogy would be that your employer cut costs enabling them to increase sales and make a higher total profit. You got a raise as a result. You decided to rent a bigger apartment and that increase in rent exceeded your raise… you created a deficit.
To be totally accurate, your neighbor decided to rent a bigger apartment and forced YOU to pay for it… creating the deficit.
It’s all basic math, simple economics, and a sense of personal responsibility for your own debts.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1028 hrs
They’re fucking idiots. You know that, right?
Ding-Ding!American Liberalism in a nutshell.
“I cant’t disprove the argument with logical statements, so I’m gonna swear and name-call.”
Sorry for making it so simple to understand, Scott, I guess you just can’t get it. When your income goes down, your spending has to necessarily be reduced. It has to be, unless you are the government, controlled by people who think the way you do….
I’ll wait for you to get Krugman’s talking points before you can actually make an argument, I guess.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1032 hrs
Me: Absolutely not. You see these guys on B&S made it clear to me that a budget shortfall cannot be caused by a reduction in income. Such a thing can ONLY be caused by your spending habits.
Only an economic mental midget would believe that, having had your income reduced, you should continue the same level of spending that you did prior to the reduction.
Scott: Just had my hours at work reduced
B&S guys: Too bad, I suppose you’ll have to cut your spending.
Scott: Oh no, I’ve increased my spending… after all, it’s the best way to see my pay increased… and now that I’m on unemployment I’m REALLY contributing to the economy.
B&S Guys: Huh? That’s doesn’t make sense. How can you afford all the new debt you are creating?
Scott: No worries, my kids can pay for it when they grow up.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1034 hrs
Oh no, I’ve increased my spending… after all, it’s the best way to see my pay increased… and now that I’m on unemployment I’m REALLY contributing to the economy.
That would be idiotic. But again, you completely fail to understand the difference between a federal budget and a household one.
Posted by scott on July 16, 2010 at 1043 hrs
I apologize for making the assumption that you would understand that spending must be reduced in lean times.
Realistically, the government should be operating under a surplus at all times. We should have a static rainy day fund, and the additional surplus should be redistributed to taxpayers proportionate to the amount they paid in.
Imagine that.
Instead we have had two generations of progressives creating a government which can never be sated. We have programs to support programs to support programs to support people who should be doing something for themselves. We have a government mandate that health insurers cover “kids” until they are 26 under their parents plan. We have people being diagnosed with adult ADD so that they can collect SSI/Disability. We have a black unemployment rate around 50%. We have failing government school systems, that refuse to educate our children about civics or economics, AT ALL. We have a federal deficit for ONE YEAR, totaling more than what was considered a sickeningly high proposed budget 25 years ago (Reagans 1T budget).....
And the way the progressives think we should fix it is to continue the death march towards Greece….
Wow.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1049 hrs
That would be idiotic. But again, you completely fail to understand the difference between a federal budget and a household one.
Please Scott, other than scale, enlighten me on the difference…. Because to me, it sure seems like they are similar, I mean government dollars are the same as the ones in my pocket right?
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1052 hrs
money in, money out.
It really is that simple, even when you are talking about the…... ooooh…... “federal budget”.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1059 hrs
That would be idiotic. But again, you completely fail to understand the difference between a federal budget and a household one.
That is where your disconnect happens. You seem to have no idea where the money for the federal budget comes from. Revenue is taken from the people… simple as that. Debt is borrowed now and taken from the people in the future.
The only two other alternatives are simply printing money to cover your spending and defaulting on the debt. I assume you understand what a cataclysmic impact those two methods would have on our nation…
Save those two suicidal option, the government has to manage the same way every other entity does. Too much debt and you go broke.
Now, you keep telling us that the federal government is different. Explain how? Just saying it does not make it so.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1114 hrs
Defaulting on debt really isn’t an option when a country’s debt is in its’ own currency as ours is.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1126 hrs
Not really true. Much of our debt is borrowed money financed with treasury bills and other types of securities. A default would be as simple as you heading to the bank with your savings bonds, and the bank telling you, “I’m sorry sir, the federal government is no longer honoring those.”. There is nothing to prevent a nation from doing so…. it’s happened many times before.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1135 hrs
Except that many of those bonds have been sold to foreign, sovereign nations….
Defaulting on foreign debt could result in war.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1142 hrs
Don’t forget, there have already been discussions on the Senate floor about whether or not we can/should default on debt….
Despite the magical world of monopoly money that progressives live in, we are nearing the wall.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1146 hrs
The problem I see with such a default is that there’s no way to do it without incurring all of the problems you would have from simply printing more money. In addition you would probably create an immediate panic, an end to foreign trade, and be left with a borrowing capacity of zero. One way or another in the end we’d print money.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1152 hrs
The real point is that either of those options would be economic suicide… yet we are heading to a level of debt that could very well force us to make that choice. The progressives don’t seem to understand that debt must be repaid… they just want to keep spending like the numbers don’t mean a thing and then tut tut us with platitudes and weasel words like “you just don’t understand the federal budget”.
There is a bad road ahead for us if we don’t get rid of the knuckleheads that think this way.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1206 hrs
Unproductive debt must not be incurred in the first place, including military spending. But, because the present value of our future liabilities dwarfs the current debt, and because those liabilites consist of social spending, the solution will be massive social spending cuts.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1212 hrs
Unproductive debt must not be incurred in the first place, including military spending.
Well, according to some of the arguments presented here, military spending must be good… it clearly stimulates the economy as much as the Stimulus Package did. It employs people and gives them a paycheck that spends almost as effectively as those unemployment dollars.
Strange that the resident progressive socialists would want to cut such worthwhile Stimulus spending. Hm. Go figure.
Posted by .(JavaScript must be enabled to view this email address) on July 16, 2010 at 1338 hrs
Total Entries: 19998
Total Comments: 134035
Most Recent Entry: 05/24/2012 05:43 pm
Most Recent Comment on: 05/24/2012 08:52 pm
Total Members: 9751
Total Logged in members: 0
Total guests: 105
Total anonymous users: 1
Most Recent Visitor on: 05/24/2012 09:15 pm
The most visitors ever was 538 on 12/01/2007 02:11 pm
Protected and licensed under a Creative Commons License (some rights reserved).