The “Deal”
Yup.
“This is not a good deal,” said Rep. Steve LaTourette of Ohio. “This is a sad state of affairs—that we’re going to take a bill that was passed on New Year’s Eve by some sleep-deprived octogenarians that has very, very heavy on taxes and does nothing to cut spending, which is really part of the big problem that we have in the country.”
Dr. Tim Nerenz put it perfectly:
The fiscal cliff explained: our life is in danger because we are 16 trillion pounds overweight and gaining 1.2 trillion more each year. The Diet Party and the Exercise Party compromise on larger pants and declare victory. Forward.
Posted by hsgbdmama on January 01, 2013 at 1857 hrs
Great Job Tim Nerenz.
Thanks for posting that…my feelings exactly.
Government dysfunction at its worst.
Posted by .(JavaScript must be enabled to view this email address) on January 01, 2013 at 1945 hrs
Let the gnashing and wailing about Paul Ryan begin! I can’t wait!
Posted by Recess Supervisor on January 01, 2013 at 2211 hrs
I always knew Ryan was a closet socialist.
Posted by .(JavaScript must be enabled to view this email address) on January 02, 2013 at 0023 hrs
On the fiscal cliff:
The American people chose divided government, As elected officials, we have a duty to apply our principles to the realities of governing. And we must exercise prudence. We must weigh the benefits and the costs of action - and of inaction. In (the fiscal cliff bill), there are clearly provisions that I oppose. But the question remains: Will the American people be better off if this law passes relative to the alternative? In the final analysis, the answer is undoubtedly yes. I came to Congress to make tough decisions - not to run away from them.
- Paul Ryan
The worst part of being an elected representative of the people is making a decision that requires compromise. Of course, one would have to be or have been an elected official to understand being in that position.
What I don’t understand is what the Milk Income Loss Contract dairy program and preventing a scheduled reduction in Medicare physician payment rates are doing in the bill.
Posted by .(JavaScript must be enabled to view this email address) on January 02, 2013 at 0601 hrs
Thank you for posting Rep. Ryan’s statement.
Here is Rep. Ribble’s:
Although this bill is far from ideal, and there is still much to be done, this legislation will provide tax certainty to millions of Americans and hardworking families. This bill also averts the dairy cliff by protecting dairy farmers, manufacturers, and consumers from substantial market uncertainty and higher retail prices.
Going over the fiscal cliff would mean tax increases on everyone and that is not what our fragile economy needs right now. I have said time and again that we should keep tax rates where they are until comprehensive tax reform can be achieved, and this bill does that for nearly 99 percent of all Americans.
He also notes that this bill does not address the debt situation at all.
Here is Sen. Johnson’s:
Although I strongly prefer extension of current tax rates for all Americans, I supported the compromise bill that protects 99% of Wisconsinites from an income tax increase, limits the death tax, and prevents a dramatic increase in milk prices. It is by no means a perfect piece of legislation.
“The revenue raised by this legislation will equal approximately 7% of projected deficits. It is now time for President Obama and his Democrat colleagues to show the American public their plan to close the other 93% of the deficit.
Our nation’s debt now stands at $16.4 trillion, and has reached its statutory limit. We blew through the $2.1 trillion increase in the debt ceiling granted in August 2011 in only 17 months. This is clearly unsustainable, and President Obama must begin to work with Congress to reduce the size, scope, and cost of government.
Posted by hsgbdmama on January 02, 2013 at 0635 hrs
Ooo, I want to go over the dairy cliff! I’ll be there’s ice cream and cheese curds at the bottom!
Posted by .(JavaScript must be enabled to view this email address) on January 02, 2013 at 0700 hrs
Pelican,
It seems no elected official wants big, mean, government, scoop up dairy supply, waste it, and cause market prices to skyrocket, hurting poor and middle class.
Personally, I would have preferred Ryan and Johnson vote against this, mainly because it does not deal with the drunken Obama spending.
This bill does increase taxes for poor and middle class. (The payroll SS/Medicare tax goes up 2%. $1K for those making 50K, 2K for 100K, etc.)
So Obama ended up raising taxes on the poor and middle class…that’s Democrats for you. They just don’t take from the rich, they take from everyone. It’s a shame certain Republicans besmirched in the muck this way.
Posted by .(JavaScript must be enabled to view this email address) on January 02, 2013 at 0907 hrs
I was making a joke…I’m a joke maker.
(*bet, not be in my previous comment)
Posted by .(JavaScript must be enabled to view this email address) on January 02, 2013 at 0910 hrs
The more I learn about the PORK in this tax bill (like the $330 million for Obama’s pals in Hollywood), the less I like it.
I understand folks like Ryan and Johnson making a tough choice thinking of what could happen going off the fiscal cliff instead of taking the popular route of simply voting No but seeing the earmarks tacked on to this pig, I find it very difficult to support their decision to vote Yes.
Posted by .(JavaScript must be enabled to view this email address) on January 02, 2013 at 1602 hrs
Everybody loves bacon:)
Posted by .(JavaScript must be enabled to view this email address) on January 02, 2013 at 1734 hrs
I wish we would have gone over the cliff and Obama would have issued an executive order implementing the tax hikes and automatic spending cuts that Republicans and Democrats approved over a year ago. All that this discussion shows is that partisan politics is alive and well and no one cares about the average citizen.
And wait, Obama is correct. In two months when we reach the debt limit, there will be a fight. But he is right—the government is only able to spend what Congress appropriates—Dems and Repubs. When we hit a debt limit it is only because of spending already approved. It is criminal for Congress to refuse to raise the limit at that time because they have already appropriated the spending.
Posted by .(JavaScript must be enabled to view this email address) on January 02, 2013 at 1954 hrs
Republicans lie when they talk about deficits and debt and fiscal responsibility. They absolutely do not care about these things. What they care about is rolling back the welfare state. Some seemingly wish to do so at any cost whatsoever, even if it means global economic meltdown with the United States at the epicenter.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 0108 hrs
Scott, you are correct. George Bush received a budget surplus from Bill Clinton. A suprlus—no deficit, paying down the debt. Within 8 years his policies and the policies of his party turned this surplus into a deficit.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 0810 hrs
Aside from the obvious fact that this TAX bill was laden with PORK it is time we have an actual discussion about reality.
Friend of mine dropped the 8 zeros from the Fiscal Cliff data to put the discussion in the first person. Our household budget:
Annual Family Income = $21,700
Money the Family has spent = $38,200
New DEBT on the credit card = $16,500
OUTSTANDING BALANCE ON THE CREDIT CARD = $142,710
TOTAL BUDGET CUTS SO FAR = $38.50Long ago we went off the Fiscal Cliff but some people refuse to even speak of controlling spending. Let’s get real!!!!!!!!!
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 0831 hrs
Bill, the fact that you compare the national budget to a household budget indicates pretty clearly that you don’t know what you’re talking about. At all.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 0846 hrs
Grow up Scott. The household expense anecdote is just an attempt to put the problem in to a perspective many people could understand. It is not a serious attempt to compare the Gov’t expenditures to an actual household’s expenditures. I think it is pretty clear people don’t understand the problem(just look at your response) so every little bit helps.
Yes, Bush was a major contributor to the debt problems today. You apparently have so little understanding, however, that you still blame Bush after 4 years of continued Obama spending increases. Your attitude is the problem and proof of the ignorance today. Neither party is saving us right now. But you won’t grow up. You will blame old Republicans for new fiscal problems even as they will blame Democrats while we bankrupt America. Good job.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 0953 hrs
George Bush received a budget surplus from Bill Clinton. A suprlus—no deficit, paying down the debt. Within 8 years his policies and the policies of his party turned this surplus into a deficit.
Hahaha, anothervoice, what you left out is that Obama is taking Bush to school when it comes to spending money. Complain about Bush all you want, just remember Obama is spending more, much much more.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 1052 hrs
I would have preferred the cliff. Right now millions of folks are voting for a government they can’t afford without even knowing it.
Just wait until the bill comes due. Assuming the economy ever recovers (and Obama’s doing his best to make sure it doesn’t), do you have any idea how much of the budget will have to go to paying the historical 5% interest rate on our $16T of debt? For the math challenged: 40%. Compare that to our current 6% load and you can see that we may well be in a death spiral.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 1104 hrs
Tuerqas, Jason and nerdbert: all wrong.
The household budget thing is misleading and does not help anyone understand anything. It does the opposite. Our deficit is largely comprised of wars, the Bush tax cuts and the recession. It is not being caused by some lunatic spending increases brought about by the current occupant. There is not equal blame.
Besides which, the fact that we’re arguing about how best to reduce the deficit right now is stupid. The one reason why the fiscal cliff would be bad is that it’s too much austerity too quickly and would throw millions out of work and the economy back into recession. We don’t need immediate spending cuts. Propose some cuts that kick in automatically the nanonsecond unemployment reaches 6.5%, then I’ll hear you knocking. Until then, asking for deeper and deeper spending cuts just tells me you either don’t know what you’re talking about or you don’t care about our current economic problems.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 1152 hrs
Comment 20 is factually incorrect in a number of ways. Defense spending compromises about 20% of the federal budget and interest payments another few percent. The remainder is other spending. Federal spending comes out of the same pot of money and no particular spending is more or less to blame than any other. A person can just as easily say the deficit is comprised of medicare payments.
The Bush tax cuts ceased to exist in January 2009. With a Democratic Senate, a Democratic House and a Democratic President, they became the Obama tax cuts. A person may argue their effect on tax revenues, but there can be no argument that they belong to George Bush after that date.
Paragraph 3 of comment 20 requires that one drink the Keynesian kool aid. After yet another Keynesian failure, I’ll pass on that. Additionally it requires one to pretend that the Keynesian actions have no current costs. They do.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 1243 hrs
I don’t see a single substantive refutation of anything I said.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 1323 hrs
I don’t expect you to see anything, scott. The comment was offered for others. The purpose of the welfare state you champion is to enable people like you to live with their eyes closed. I’ll keep mine open.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 1342 hrs
Well, I’m just saying your remarks on defense spending don’t seem to connect with much that I stated above. The Iraq and Afghanistan wars really and truly have been very expensive. And it doesn’t matter what you call the tax cuts enacted in 2001 and 2003. They’re still a huge part of our deficit. And your comment about presuming Keynesianism to have no “cost” is…I don’t even know what that is supposed to mean. Does it mean something?
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 1426 hrs
scott do you think that Obama is spending less than Bush did?
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 1427 hrs
Why would going over the fiscal cliff have been a bad thing?
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 1434 hrs
Our deficit is largely comprised of wars, the Bush tax cuts and the recession.
So why did you want to extend those tax cuts? You don’t want to decrease the deficit? Falling off “the cliff” would have repealed those tax cuts for everyone, as I said it should.
And before you say it was the wars and recesssion that comprise much of the deficit, may I remind you that until 2007 when the Democrats came into office the deficit was going down. It started to ratchet up when the Democrats got control and started spending more even before the recession. If you give Obama the 2008 budget (and you should since Bush never signed it and the Democrats loaded it with pork) and note that “the Stimulus” bill Obama wanted permanently raised the base spending levels of the government, Obama does own much of the present spending fiasco.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 1611 hrs
So why did you want to extend those tax cuts?
I don’t, really. But I did see the necessity of extending them while we were in a really bad recession.
Falling off “the cliff” would have repealed those tax cuts for everyone, as I said it should.
Yes, it would have done that. And that would have been extremely bad. Probably we’d be in another recession if that happened. You’re saying you want that to happen?
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 1631 hrs
After yet another Keynesian failure…
Which failure is that, BBB?
Oh, I did know the difference. It as $6M I was wondering about:)
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 1632 hrs
And that would have been extremely bad. Probably we’d be in another recession if that happened. You’re saying you want that to happen?
Yep. Who should suffer the pain of running massive, unsupportable spending: the people who are spending, or their children?
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 2027 hrs
A totally false choice. You’re insane. At least economically.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2013 at 2117 hrs
nerdbert, you should study your history—the deficit grew every year under Bush—so in 2007 when the Dems came to power, the received an every growing deficit.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 0757 hrs
A totally false choice. You’re insane. At least economically.
In other words, you do believe that the spending we have today is supportable. The household analogy is entirely wrong in your opinion because ‘expenditures’ aren’t really that much higher than income?
nerdbert, you should study your history—the deficit grew every year under Bush—so in 2007 when the Dems came to power, the received an every growing deficit.
The data I have looked up supports this too. However, the same data shows that Obama could have dropped all of the Bush tax cuts right away in 2009 when he had it on the table and a supermajority. He chose not to. He not only chose not to, he included them in his stimulus bill(which so many of you libs including Scott above support) as part of the stimulus. Right then, they were the Obama tax cuts. Dems just still call it ‘Bush’ to give the prior admin blame for their policies and you lap up the kool-aid out of your green reusable water bowl.
Look at Scott’s excalamation of how wrong us stupid conservatives are back in comment 20:
1) He blames wars, so do I, I have believed for years that being the world police is a bad situation to be in. I sure wish Obama had gotten us out of the one that wasn’t over already when he took office, like he promised. Nope, but let’s blame Bush for it. Oh, but give Obama credit for the one positive from the Afghan crusade, getting Bin Laden. It is still Bush’s war, bad, but Obama got the bad guy, good.
2) He blames the Bush tax cuts, only there has been no such thing since early 2009. There have only been Obama tax stimulus decreases. However, if we just click our heels and believe it was Bush’s fault anyway, we make it so.
3) He blames the recession, a 100% bipartisan creation of the housing market crash. BUT! It happened under Bush! Never mind that Dems controlled the House and Senate, which made Bush toothless in 2007 and 2008, Bush is to blame.You people are so blind. How? How can you pretend to care about this, yet support the people who are making it happen right in front of your face? I certainly blame Bush for his spending policies. How is Obama still the light for you people? Do you really still just buy ‘It was Bush’s fault’?(Clearly Scott does.) Do you really just think the brobdignagian spending efforts of the last 4 years will be magically laundered through an economic lepreKaunesian prism?
Yeah Scott, I am wrong and you are not led by the nose by a media machine designed to do just that.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 0915 hrs
In other words, you do believe that the spending we have today is supportable.
No. We need to figure out how to get lower prices on health care. And probably cut defense spending by a lot, over time. And we need to raise some taxes, too.
What we don’t need, however, is a go over the cliff “solution.” We’d almost certainly go back into recession. Unemployment would skyrocket. The idea that this is just necessary pain to right the ship is nuts.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1037 hrs
The policies you support are monstrous, scott, monstrous. They have already turned a sharp recession into a depression without end and have permanently removed several million people from the work force.
Two simple questions: Why were we in recession and why will we recover? If you believe Keynesian intervention to be the means of recovery then how did recoveries occur prior to such interventions and how long did they take?
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1050 hrs
BV you’re the only one calling this a depression with no end in sight
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1053 hrs
By 2007 the fat lady had already sung.
We are still paying off some of the bad bets:(
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1115 hrs
Tell that to the millions who have left the workforce, VAPolitico. Then tell it the people who have had their incomes permanently lowered. Then tell it to the recent graduates who are unable to join the workforce. After that tell it to the folks who are trying to figure out how to fund future entitlements from a smaller workforce. Let me know how that goes.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1120 hrs
how did recoveries occur prior to such interventions
Which recessions did we recover from without Keynesian-type government stimulus?
I’d say that the policies put in place since the economic collapse have been ..very modestly successful. Most of them were the right moves, some of them were poorly executed and there were at least one or two things we could have done but did not. Altogether I’d still give them a low but passing grade, including the ones put in motion by the previous president.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1312 hrs
All of them, scott. We recovered from all of them. Plus the rest of the world managed the feat as well.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1338 hrs
BBB, I know you will enjoy this:)
http://www.ritholtz.com/blog/2013/01/imf-austerity-is-much-worse-for-the-economy-than-we-thought/
And so timely to this discussion:)
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1346 hrs
Yes, fu. Moshe Dayan once referred to Israel’s annexation of the West Bank as a person wanting a cancer so they could have the extra cells. The short term debt-fueled GDP growth at any cost crowd have the same mindset.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1405 hrs
No. We need to figure out how to get lower prices on health care. And probably cut defense spending by a lot, over time. And we need to raise some taxes, too.
So you believe that with the right price controls on one industry, some level of gutting of the military, and tax increases we can support our spending?
You do realize that every penny spent on military equipment is required by US law to be manufactured in the US to the smallest screw, right? I actually agree that military spending should be cut by 30-40%, but I realize that every penny not spent there will be pennies out of American contractor and American soldier pockets, not chinese investor’s pockets. Not very Keynesian of you, there. Cut 400 billion out of benefits and you believe it will cause a depression. Cut 400 billion out of the military and it won’t?
By 2007 the fat lady had already sung.
We are still paying off some of the bad bets:(
So again, you believe this was caused by Republicans from 2000 to 2006? Before that we had Clinton and his surplus, right? Democrats are the solution and every problem we have is traced back to one party. This is what you seriously believe…God help us all.
Altogether I’d still give them a low but passing grade, including the ones put in motion by the previous president.
Which solutions were those, Scott? Were the Bush tax cuts/Obama stimulus tax cuts part of the problem or the solution? In comment 20, they were one of the problems, now they were a low grade solution? How can they be top three in problems and still be low grade solutions? When you make a pros and cons list, you are supposed to put pros on one side and cons on the other. Get all liberally edjimacated, and you too can find a con in every pro and a pro in every con.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1451 hrs
Good to see you have an open mind about it BBB:)
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1453 hrs
It’s like you’re not even paying attention, man. I think the Bush tax cuts of 2001 and 2003 were pretty irresponsible, yes, and should be repealed as soon as economic conditions allow doing so without worsening our jobs situation. The highest earners can give theirs up now, as far as I’m concerned.
Maybe the problem I’m having with you here is that I believe the top issue we should be addressing right now is not the deficit—it’s unemployment. Long-term deficit reduction plans on the table? Sure I’m interested. Plans to reduce military spending and/or reduce health care costs (not benefits)? Sure, I’m all ears. We can get to that just as soon as we’re below 6.5% unemployment. Right now money is cheap, ostensibly free. There’s no reason on this earth for us to cut spending rather than deficit spend, so long as thats spending is as stimulative as it can be.
What lots of conservatives believe is that Medicare and Social Security are bad and that we should abandon them at any cost. If it’s convenient to claim poverty in service of that goal, such as when a recession and wars and tax cuts cause a huge deficit, sure why not use that.
These two positions are certainly not in agreement…but they aren’t really two sides of an argument, either.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1506 hrs
So again, you believe this was caused by Republicans from 2000 to 2006?
Presumption masquerading as a deduction again, TQ?
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1512 hrs
And by the way, I was just reading how government stimulus has been used five times in the last seven recessions. I’m pretty sure the president didn’t get called a communist back then, though.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2013 at 1713 hrs
Were the Bush tax cuts/Obama stimulus tax cuts part of the problem or the solution? In comment 20, they were one of the problems, now they were a low grade solution? How can they be top three in problems and still be low grade solutions? When you make a pros and cons list, you are supposed to put pros on one side and cons on the other. Get all liberally edjimacated, and you too can find a con in every pro and a pro in every con.
Water can be a solution if you’re on fire, but a problem if you’re drowning.
The Bush tax cuts are a problem, if the problem you’re talking about is the deficit. And they’re a “low grade” solution to a problem, too—if the problem you’re talking about is recession and unemployment.
Posted by .(JavaScript must be enabled to view this email address) on January 06, 2013 at 1500 hrs
Presumption masquerading as a deduction again, TQ?
Actually fu, I was asking. See the question mark? You often blame Republicans for problems. This is fair, they deserve it. I do not remember you blaming Democrats, though the link in comment 11 could go either way. Your comment on the fat lady singing seemed directed at my commentary, so I asked. You could have meant that the fat lady really sang under Reagan or LBJ or FDR. How could one presume much at all from the one liners you are so fond of?
The biggest problem with our Gov’t today is that there are people who still believe in it as it works today. As long as enough people are buying that the busines as usual get rich quick schemes of our politicians are anything more than that, the politicians will keep playing that game. Why wouldn’t they?
Maybe the problem I’m having with you here is that I believe the top issue we should be addressing right now is not the deficit—it’s unemployment.
The reason no one has debated that particular issue with you is likely that many of us don’t have a big problem with your argument. It was with the rest of comment 20 and virtually every other thing you have written in this thread that has bad reasoning.
Heck, if you wanted to add in to comment 15 that there are three people in the household not working, the 6 yr old, the teenager and the 23 yr old college kid(or grad), no one will have a big problem with that. The real reason liberal unthinkers had to call that household anecdote stupid is because it is so stark. Any and every debt lawyer in the country would tell that household to declare bankruptcy. Now a Gov’t has many options that a household does not, but the numbers involved accurately illustrate that there is a problem that Dems categorically deny and/or exclusively blame Republicans for.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2013 at 0952 hrs
The reason no one has debated that particular issue with you is likely that many of us don’t have a big problem with your argument.
Wait. Everyone here agrees that instead of cutting spending right now we should be holding the line, or even stimulus spending, even if we have to borrow more, because it’ll be better for employment which is what really matters right now?
The real reason liberal unthinkers had to call that household anecdote stupid is because it is so stark.
The reason I call it stupid is because it is used thusly: “A responsible household has to live within its means, not borrow too much, and cut back in times of lowered income. But the government doesn’t seem to understand this! When a recession hits and their income is lowered, they don’t cut back! They spend MORE than they did before! That’s irresponsible and wrong and bad.”
All of which is total BS. When I make less money, it’s a very good idea for me to spend less money. When the government makes less money (because people are out of work and aren’t paying taxes), it’s very bad idea for it to spend less money.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2013 at 1123 hrs
Actually fu, I was asking. See the question mark?
Yep, I saw it. That is why I asked my question.
Presumption masquerading as a deduction again, TQ?
See the ? mark?)
As far as the fat lady goes… by the late 70’s the imbalance in consumption between the US and the rest of the world was
already readily identifiable. Thing is, we were actually producing a fair amount of stuff back then that nobody else was, or at least wasn’t really competitive with us.In very broad and general terms the more we got away from making stuff and started buying it, the more likely we were to be put in a position that would require us to consume less.
It’s all about equilibrium isn’t it.
Despite trying to ignore the simple facts of the matter through all manner of noise, gyrations and acrobatics that got pretty obvious in during the mid/late 90’s when China really started to ramp up production and in the early 2000’s when they started to develop their own consumer class.
Now I mentioned China above, but there are several other countries who could also fit that scenario and many more that will.
Ya’know, the old “How do you keep them down on the farm after they’ve seen Paree!”
I have mentioned the Iron Law of Wages here before. We are going through a tectonic shift relative to that right now and will continue to do so for quite awhile.
As far as blaming Republicans, Democrats, libs or conservatives I think that everyone deserves a piece of that cake:)
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2013 at 1501 hrs
Wouldn’t this be fun:)
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2013 at 1506 hrs
Wait. Everyone here agrees that instead of cutting spending right now we should be holding the line, or even stimulus spending, even if we have to borrow more, because it’ll be better for employment which is what really matters right now?
There are very different theories on what will stimulate job growth. Some good and bad on both sides if you were to ask me. I think most everyone agrees that getting people back to work should be among the highest priorities, however I for instance, do not believe extending unemployment benefits is a way to do this. I think in fact it does the opposite. I have thought since the early 90s that we should be decreasing our world military presence, but I do know that in the military, they buy American. Not only is every soldier not replaced an out of work person, every truck or plane we don’t make are out of work people too. The reduction needs to be gradual and in stronger economic times. I know the same principle applies to other fields.
I have often thought about my own fiscal retirement and am on the cusp of times when most ‘realists’ believe we will no longer be able to pay social security. I don’t care. Like a good little responsible person, I will have saved enough for retirement as long as no one confiscates it. I believe a significant portion of the population are in the same boat. Are these the bloodsuckers of society? No, they are the ones who have paid in all of their lives just like me. Still, if we were to cut SS, I think there are millions of people who could live quite comfortably without a single payment(exactly like me).
There is a lot of money spent by Government that would not hurt employment growth. If there were real tax simplification, the Gov’t would make a lot more than any simple tax proposed by Dems this year increase will get. Walker gave a tax break to companies for new jobs. He did it in such a way that at least some of the companies could get it for jobs already created or one other scam loophole that I don’t remember offhand. The idea is sound. Give a straight credit for every new job created and retained for the year. The problem is that neither Gov’t nor corporate owners significantly increase their money intake from that arrangement, so it won’t happen. We don’t have any lawmakers that make laws that do not benefit them personally, whether it is helping a donor or them more directly.
See the ? mark?)
Heh, fair enough.
fu, I don’t think the Iron Law of wages theory held up through industrialization and the population decrease that comes along with it. I don’t think it holds up culturally/socially either. The American idea of subsistence living is vastly different than that of Thailand or Bangladesh and the idea heavily influences the reality, IMO. We have seen Paree, as it were. You need a constant oversupply of labor to make the iron law work.
As far as blaming Republicans, Democrats, libs or conservatives I think that everyone deserves a piece of that cake:)
Yet your arguments support one party and criticize the other almost exclusively. I guess I do that too, to a great extent, though I like to criticize both parties too. Hi pot, good to meet you. I’m kettle.
Posted by .(JavaScript must be enabled to view this email address) on January 08, 2013 at 0930 hrs
I for instance, do not believe extending unemployment benefits is a way to do this.
I think it’s probably pretty good. It’s money that goes straight into someone’s till. Those unemployed people probably don’t have a lot of money right about now. They’re going to spend everything they get, and quickly. Cha-ching. Economic stimulus. Businesses with customers don’t close their doors. Maybe they even hire someone new.
Besides which, it’s inhumane and frankly unbefitting one of the wealthiest nations the earth has ever seen to let people go with nothing when we know there are more workers than there are jobs for them.
Posted by .(JavaScript must be enabled to view this email address) on January 08, 2013 at 1344 hrs
fu, I don’t think the Iron Law of wages theory held up through industrialization and the population decrease that comes along with it. I don’t think it holds up culturally/socially either. The American idea of subsistence living is vastly different than that of Thailand or Bangladesh and the idea heavily influences the reality,
Hopefully David can allay those concerns:)
http://en.wikipedia.org/wiki/Iron_law_of_wages#Ricardo
You need a constant oversupply of labor to make the iron law work.
Exactly how parochial is your perspective on the supply of labor?
Yet your arguments support one party and criticize the other almost exclusively.
I disagree.
Although I will confess to occasional pandering in responding to our host and some of our fellow commenters more often than not:)
Posted by .(JavaScript must be enabled to view this email address) on January 08, 2013 at 1937 hrs
Hopefully David can allay those concerns:)
Let me attempt to clarify with quotes from your link:
Furthermore, Ricardo not only believed that the market price of labor could long exceed the subsistence or natural wage but also claimed that the natural wage was not what was needed to physically sustain the laborer but depended on “habits and customs”:
Exactly how parochial is your perspective on the supply of labor?
About as parochial as your theorist’s perspective, I think.
English laborer would consider his wages under their natural rate, and too scanty to support a family, if they enabled him to purchase no other food than potatoes, and to live in no better habitation than a mud cabin; yet these moderate demands of nature are often deemed sufficient in countries where ‘man’s life is cheap’, and his wants easily satisfied. Many of the conveniences now enjoyed in an English cottage, would have been thought luxuries in an earlier period of our history.
I have a problem defining subsistence level in the US where the ‘poor’ get free cell phones. I don’t have a cell phone. I don’t think the convenience is worth the cost. I would rather spend a thousand dollars more on a vacation than on a phone plan that many others define as a subsistence requirement.(Yes I know there are cheaper plans out there, but people I work with pay over $200 per month on their family phone plans)
I think it’s probably pretty good. It’s money that goes straight into someone’s till. Those unemployed people probably don’t have a lot of money right about now. They’re going to spend everything they get, and quickly. Cha-ching. Economic stimulus.
That could be said for virtually all money given out to anyone making less than they spend and that includes most families, even many making up to a million per year. My wife had to deny a refinance to a couple on their home because of bad credit, over 120% loan to home value and over 80k in credit card debt. It was a husband and wife, no children. Both were doctors and made around 500k per year. They too would likely spend whatever you gave them.
The whole theory that if you give money out, people will spend it is a crock. Of course they will spend it. I never disbelieved that part. What I disbelieve is that anyone receiving almost as much money for free as they could earn, would stop receiving that money to go back to work. Under that framework, the math will never add up without a major war, because you will never get it back.
You continually mix in the inept, the moochers, the disabled, the able bodied, et al, all in to the same pot. I don’t. I understand a man not taking a lesser job paying 70% of what he used to make when he can collect 60% for doing nothing. Why work full time for 10% of your former income? They will go back to work in a hearbeat for 70% of their former wage if their unemployment is done, though. Unless maybe there is a different free program that pays 56% for free.
I understand the moochers are not a huge minority and it is difficult to catch them, and that there are truly disabled either from birth or accident, we should help them. I would rather offer supplements to an inept person’s income if they took a min wage job first rather than just pay for their whole life, but that may just be me. A sense of worthlessness is one of the leading causes of suicide. In my anecdotal experience, I have given and received much more heartfelt gratitude when I showed someone how to do something(action was involved) or was shown rather than just giving or receiving something. It is of greater worth to all. I also know it drove me crazy to be out of work for 3 months of my life and I would have taken a McDonalds job while job searching rather than unemployment if my wife hadn’t made me promise to at least look full time for 6 months first. Obviously most people don’t feel the same and they shouldn’t. Heck, I need to feel superior somehow in today’s society, being a worthless white male.
Posted by .(JavaScript must be enabled to view this email address) on January 09, 2013 at 1006 hrs
I think you spend far too much time fretting over the fact that someone somewhere might be getting something that they don’t completely deserve.
This kind of thinking is the reason why we are so stingy with things like social security, aid to the poor, unemployment and health insurance. Ironically, it often ruins things for everyone, as in the case of health care. The whole reason our system is so expensive is because we keep trying to make sure there are no freeloaders taking advantage of someone else’s kindness.
Too many of us don’t trust their fellow Americans. And this is why we can’t have nice things.
Posted by .(JavaScript must be enabled to view this email address) on January 09, 2013 at 1023 hrs
The whole reason our system is so expensive is because we keep trying to make sure there are no freeloaders taking advantage of someone else’s kindness.
That is the most asinine comment I’ve seen in a long, long time. Why don’t you break down for us the actual dollars spent in ensuring there are no freeloaders on any social program to date. It will be eye opening for you.
Too many of us don’t trust their fellow Americans. And this is why we can’t have nice things.
Your viewpoint is completely wrong. Nothing I could say is going to change your mind, so I’ll just say it for everyone else… you don’t have a clue.
Posted by .(JavaScript must be enabled to view this email address) on January 09, 2013 at 1052 hrs
Why don’t you break down for us the actual dollars spent in ensuring there are no freeloaders on any social program to date.
You’re missing the point. I’m not talking about Medicare fraud detection or something. I’m talking about the fact that we have resisted anything like the universal insurance that other nations have because we’re too afraid that someone going to take advantage of it. And in the end, we all get screwed because of this fear. Not having universal care leads directly to the expensive and troubled system we have today.
Then we’re in a bad economic crisis, not enough jobs to go around. Should we extend unemployment benefits? Surely not! Someone somewhere might be lazy! And we not only let our fellow Americans down in their time of need, but we cheat ourselves out of a more robust recovery for lack of the economic stimulus it might have provided.
And Jason I didn’t ask you to validate my thesis. I’m quite aware that you don’t get it.
Posted by .(JavaScript must be enabled to view this email address) on January 09, 2013 at 1110 hrs
I’m talking about the fact that we have resisted anything like the universal insurance that other nations have because we’re too afraid that someone going to take advantage of it.
You’re deluded.
And in the end, we all get screwed because of this fear. Not having universal care leads directly to the expensive and troubled system we have today.
Fallacy.
Then we’re in a bad economic crisis, not enough jobs to go around. Should we extend unemployment benefits? Surely not! Someone somewhere might be lazy! And we not only let our fellow Americans down in their time of need, but we cheat ourselves out of a more robust recovery for lack of the economic stimulus it might have provided.
Chock full of stupid. Unemployment benefits have been extended through the end of 2013. What more do you want?
Who said anything about Lazy? Tuerqas did not. He exemplified only a logical thought process (perhaps that’s why you are having issues with it). If someone gets 60% of what they were making for doing nothing more than submitting an online form weekly, why would they take a job that can only pay 65% or 70% of what they were making - LOGICALLY, why would they? It has nothing to do with being lazy.
And Jason I didn’t ask you to validate my thesis.
You do have your moments of brilliance then.
Posted by .(JavaScript must be enabled to view this email address) on January 09, 2013 at 1204 hrs
Unemployment benefits have been extended through the end of 2013. What more do you want?
Yes, I realize. But the argument against doing it was made vociferously—and it’s exactly the argument I’m talking about. The same sort of thinking that screws us down the road.
Posted by .(JavaScript must be enabled to view this email address) on January 09, 2013 at 1218 hrs
So we’re reduced to cherry picking a single point of a multipoint reply. Ok, thanks for playing - better luck next time.
BTW, you’re wrong on your reply.
Posted by .(JavaScript must be enabled to view this email address) on January 09, 2013 at 1225 hrs
You’re deluded.
I’m not.
Fallacy.
It isn’t.
Who said anything about Lazy? Tuerqas did not.
He didn’t use the word, but his entire comment was about his fear that someone somewhere might choose not to work because of our collective generosity. You say tomato…
There, are we all responded to now?
Posted by .(JavaScript must be enabled to view this email address) on January 09, 2013 at 1230 hrs
... someone somewhere ...
Fallacy and delusion all in one. Like I said, your viewpoint is wrong, but no one is going to convince you otherwise. You don’t have a clue since you can’t understand the logic of his position.
Posted by .(JavaScript must be enabled to view this email address) on January 09, 2013 at 1257 hrs
He didn’t use the word, but his entire comment was about his fear that someone somewhere might choose not to work because of our collective generosity. You say tomato…
Huh what? If that is what you comprehended from what I wrote, I fear Jason is much closer to the crux than I gave you credit for. I said (I thought very clearly, thanks Jason) there are people who need our help, we should help them. There will always be some freeloading and the bigger the system the more that can hide in the cracks, so be it. Very few of those people are on unemployment. They are on different programs. A large number of the people on extended unemployment could get jobs. Jobs are available. However, it simply does not make economic sense to take a job and work for very close to the amount of money the Gov’t was giving them for free. Here, I will put it in terms a good little lib will understand. We should not extend unemployment benefits for anyone who received the max WBR, whatever it is today. To have received that amount they were making in excess of 50k before they lost their job. Odds are very high they could find a 40k per year job tomorrow. Logically, it has made fiscal sense to accept the unemployment and look for the best job available until they are about to lose the benefit. Let them lose the benefit(See, you’ll understand this one because it only takes from medium middle class people and ‘richer’)
And before you accuse anyone else of stinginess, look in the mirror bub. You pay your taxes and call that charity, care and giving. Here are few of my beliefs on that view:
1) I pay all of my taxes too. So does virtually every conservative. It is part of what makes them conservative. Most liberals believe that paying taxes is charity.
2) There are bankruptcy and tax attorney commercials on 24/7. They must be making serious money to advertise so heavily. They tell us we have a right to get out of debt. No conservative believes that, though a few may take advantage anyway. Who is doing that? Who rolls up 10k in back taxes and then hires a lawyer to pay pennies on the dollar to the Gov’t as the commercials boast? It isn’t the people fiscally responsible enough to pay their taxes and CC bills in the first place, is it? Outside of my house, I have never owed 10k on total other bills in my life.
3) You wanna make more tax revenue for the Gov’t, make everyone pay the ones they owe. If that is greedy, fine.
4) Even though I pay all of my taxes, I don’t believe that taxes are charity. In 2011, my wife and I took a family of 8 to Disney because they would never have done it on their own. Do you know why? In addition to having only one salary, the man is also a Pastor of a small church and they use all of their small excess on others. We paid for all tickets, lodging and half of the meals as well as forcing them to accept some gifts from us. We did this out of love and charity to our fellow man. The experience was so rewarding we are doing it again this year. This time all of the extra money left over from vacation (yes we save for the entire trip before we go) will go to his church instead of just a smaller donation that we gave last time.Charity is personal, man. No one, including you, cheerfully give the Gov’t all the money they say you owe and think, ah, I helped some people. ‘Oh and do I feel the love from the people I help around the country. It makes me want to pay extra taxes next year.’
Dude, if giving doesn’t make you feel like giving more, you are not doing it right. Stinginess has been created by forcibly taking money from people to give to others. People who believe their taxes are charity(liberals), believe they have now given more than enough. People who do not believe that taxes are charity are the ones still giving to real charities(It is a proven fact that conservatives give more to charity). If they give less now, it is because increased taxes have taken away from their fungible pool rather than they have gone miserly. I know you won’t believe what you see in that mirror, but that is what is there. The liberal thoughts of redistribution, public assistance, etc. are main causes of increased ‘stinginess’.
Posted by .(JavaScript must be enabled to view this email address) on January 10, 2013 at 1230 hrs
Huh what? If that is what you comprehended from what I wrote,
Um, no. I think my comment was a reasonable interpretation of what you wrote. You just don’t like hearing it put that way.
And before you accuse anyone else of stinginess, look in the mirror bub.
I really have no idea what the 500 word sermon here is supposed to be. Is it to inspire me to do more charitable giving? Or to absolve you from paying for government safety nets because you take nice pastors to Disney? I’m glad you did that, man. That’s really cool. But I don’t find it particularly helpful in the discussion we’re having.
Posted by .(JavaScript must be enabled to view this email address) on January 10, 2013 at 1501 hrs
I think my comment was a reasonable interpretation of what you wrote. You just don’t like hearing it put that way.
You can lead an ass to the water…
Posted by .(JavaScript must be enabled to view this email address) on January 10, 2013 at 1834 hrs
Yeah Jason, I got nothing else.
Posted by .(JavaScript must be enabled to view this email address) on January 11, 2013 at 1140 hrs
Furthermore, Ricardo not only believed that the market price of labor could long exceed the subsistence or natural wage but also claimed that the natural wage was not what was needed to physically sustain the laborer but depended on “habits and customs”
How does that effect the fundamental relationship between the supply of labor and the demand for it?
About as parochial as your theorist’s perspective, I think.
Fair enough:) How about this:)
An American laborer would consider his wages under their natural rate to scanty to support a family, if they enabled him to purchase no other food than potatoes, and to live in no better habitation than a mud cabin; yet these moderate demands of nature are often deemed sufficient in countries where ‘man’s life is cheap’, and his wants easily satisfied. Many of the conveniences/necessities now enjoyed in an American home, would have been thought luxuries in an earlier period of our history.
Does that freshen it up enough for you?
As always TQ, I would love to hear your theory on the underlying relationship between the current level of unemployment and the downward pressure on wages if you find Ricardo’s analysis lacking?
Posted by .(JavaScript must be enabled to view this email address) on January 14, 2013 at 0746 hrs
Does that freshen it up enough for you?
No that misses the whole point, from my perspective. What I believe the quote you repeated meant was that Ricardo believed that the English laborer(and American worker today) would not tolerate a wage that would subject him to such conditions. The American worker today believes that his wages should support a family, a relatively balanced diet and decent lodgings and this perception has a major limiting impact on downward pressures. Rather than pushing back at the downward pressures on wages at the ‘can’t afford potatoes anymore’ level, Americans attempt to push back when they perceive their livelihood is endangered. Since Americans today are overwhelmingly trained to spend to their current income, any decreases in pay, or downward pressure is met with some level of resistance(and that is a good thing).
I don’t really find his analysis lacking. I don’t think you are placing enough emphasis on his findings concerning “habits and customs”. You seem to me to be looking at La Salle’s initial theory of the Law of iron wages. IMO, Ricardo successfully disputes it. I hold with Ricardo’s analysis of La Salle’s theory. Namely, that the worker’s belief in what a wage should be has far greater influence than what an owner believes he could pay to keep men single in mud huts.
If you want one other tidbit, I have always felt recessions of any sort greatly benefit owners overall, if they can stay in business through it. I don’t think there is any question that an employer can offer less wages during a recession than he can through a boom(hence, successfull downward pressure), but I don’t see quite the correlation between that and La Salle that you do. I think America’s idea of what even an out of work person should receive is so far beyond mud huts as to make the Law of Iron Wages totally obsolete. The law may be alive and well in Bangladesh or Vietnam, I don’t know.
Posted by .(JavaScript must be enabled to view this email address) on January 14, 2013 at 1242 hrs
I’m not sure what you think we are disagreeing about TQ?
Other than your misguided belief that my reference to the Iron Law of Wages was not based in Ricardo’s qualification ns of it?
When did I mention LaSalle or use a link to him as a reference?
I’ve been pretty much a Ricardian for 40+ years, LaSallle brings this to mind:)
http://en.wikipedia.org/wiki/LaSalle_(automobile)
Sweet:)
At any given time “subsistence” can have a wide variety of attributes/definitions with one just as valid as another relative to the customs and norms of a subject pool of labor.
It can be anything from potatoes (or rice:) and mud huts to cell phones, flat screens and BMW’s depending on the pool of labor being referenced.
My point is that with an increasing globalization of the labor pool the definition of subsistence, from a global perspective, can put an American widget maker in direct competition with a Vietnamese widget maker.
What do you think the outcome of perspectives would lead to for each of them?
Posted by .(JavaScript must be enabled to view this email address) on January 14, 2013 at 1514 hrs
SHB:(
What do you think the outcome of a global perspective would lead to for each of them?
Posted by .(JavaScript must be enabled to view this email address) on January 14, 2013 at 1519 hrs
Assuming competitive marketing outlets, a whole lot of money for the Vietnamese company owners.
I have mentioned the Iron Law of Wages here before. We are going through a tectonic shift relative to that right now and will continue to do so for quite awhile.
What exactly did you mean by the original statement? How would I have known you believe in Ricardo’s writings at that point? I looked it up before you linked it, so I had to assume you believed the La Salle version(not really far off what any unionista believes). From the link, it seems like Ricardo disproved that there is a law of iron wages at all. Without looking up the whole writings of both men, I could not tell from the link you gave what level of modulating vs. disproving Ricardo did to La Salle’s theory, but it is La Salle’s theory as I understand it. So when you brought up the phrase with no Ricardo reference, it sure seemed like you gave some credence to it.
I would like to go back and forth with you, but if you wish to do so as well, please define your points a bit rather than always going the cryptic route. I know it gives one deniability if one never comes out and states anything, but it is not rewarding or informative to argue a point for half a thread to be told that; ‘Really, I never believed in the point I brought up in the first place, how ever did you come to assume that?’
Posted by .(JavaScript must be enabled to view this email address) on January 15, 2013 at 0840 hrs
Assuming competitive marketing outlets, a whole lot of money for the Vietnamese company owners.
Well that might be part of the outcome,. Nothing else?
What exactly did you mean by the original statement?
Exactly what I stated. You just don’t get it do you?
I looked it up before you linked it, so I had to assume you believed the La Salle version(not really far off what any unionista believes).
Why is that?
Without looking up the whole writings of both men, I could not tell from the link you gave what level of modulating vs. disproving Ricardo did to La Salle’s theory, but it is La Salle’s theory as I understand it.
Which actually answers my question above and the level of homework you’ve actually put into it.
Given that Ricardo died 2 years before LaSalle was born I think it would be fair to say that Ricardo wasn’t familiar with LaSalle’s writing. What do you think?
I would like to go back and forth with you, but if you wish to do so as well, please define your points a bit rather than always going the cryptic route.
It’s not cryptic at all if you actually knew what you were talking about.
but it is not rewarding or informative to argue a point for half a thread to be told that; ‘Really, I never believed in the point I brought up in the first place, how ever did you come to assume that?’
Really?
f
u, I don’t think the Iron Law of wages theory held up through industrialization and the population decrease that comes along with it. I don’t think it holds up culturally/socially either. The American idea of subsistence living is vastly different than that of Thailand or Bangladesh and the idea heavily influences the reality, IMO. We have seen Paree, as it were. You need a constant oversupply of labor to make the iron law work.
So what did you mean by that given your obviously extensive lack of knowledge concerning the Iron Law of Wages?
Posted by .(JavaScript must be enabled to view this email address) on January 15, 2013 at 0935 hrs
It’s not cryptic at all if you actually knew what you were talking about.
Hey, I never said I was an expert on the law of iron wages and since the look up that I read was the same you linked, I hope you are not in education. Read your own link. It quotes LaSalle and then Ricardo. If you had a more informative link, why didn’t you link it? I am not afraid to admit when I am ignorant on a topic. If the link you gave was supposed to educate me and you feel it failed miserably, I would call that your fault. I was willing to learn.
Yea for you, you like to set people up for a fall rather than have honest discussion. Good for you, got me for the last time. Bye
Posted by .(JavaScript must be enabled to view this email address) on January 15, 2013 at 1618 hrs
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