By the way, that chart shows real data up through the last 20-year block. At least half of that last block - the part showing the deficit dropping - is nothing but a guess. Did you not understand that, or did you think it would go un-noticed?
There is no data about the deficit from 2011-16. It is a projection. A rather rosy one. It runs substantially contrary to the trendline up through 2010. We should just accept it without any questions. Read the linked article.
On the other hand M, why don't we talk about what the deficit looked like during your Golden Age of "Good Capitalism"?
That's absolutely true. So, if the projections hold true, what will you say?
I'll check out the article when I have some time to fully absorb it.
On the other hand M, why don't we talk about what the deficit looked like during your Golden Age of "Good Capitalism"?
Well, they look great but that's largely because we spent like crazy and ran deficits post war to flood the world with the dollar and encourage free trade. The year after the war, for example, saw a -7.2 percent deficit in spending. Recall that year also saw a debt of 270 billion dollars which was 121 percent of our GDP. In fact, our debt to GDP was over 90 percent until 1951. So, spending and high debt during that time seemed to work out just fine.
That post war 'flooding the world with US dollars' thing? Yeah, we were the worlds largest lender. Today we are the worlds largest debtor. It's the same thing only different right??????
A post war debt that we quickly paid down is not comparable to a debt incurred by what is essentially luxury spending.
If the projections hold true? I will say it was a miracle.
So, spending and high debt during that time seemed to work out just fine.
Playing Russian Roulette works just fine 5 out of 6 times too.
Seriously?!? Talk about the epitome of Cargo-Cult: we make movements just like before - but we don't understand why goodies no come no more.
I really don't know what you are saying with your gibberish about "flooding the world with dollars". At best it is post hoc ergo propter hoc and at worst you don't really have any idea what you are saying - but you think that was the apex of American life/economics and you just want to go back to it. Maybe you need to refresh your acquaintance with Manzi.
A post war debt that we quickly paid down is not comparable to a debt incurred by what is essentially luxury spending.
What do you mean, luxury spending? And it depends on how you define quickly. Take a look at 1944-1951 in terms of the debt. In fact, from 1944 to 1954 (11 years) we ran very high debt to GDP (over 70 percent).
I really don't know what you are saying with your gibberish about "flooding the world with dollars".
I'd recommend "The Global Future" by Charles Kegley and Gregory Raymond, Chapter 12. On page 310 we see this:
The United States also encouraged deficits in its own balance of payments as a way of providing international liquidity in the form of dollars.
So, your accusation of a logical fallacy doesn't make any sense but it does raise an interesting point that I've noticed lately with some of you guys. Rather than try to discuss the issue I have raised, you haul out the Latin in the hopes of masking the fact that you are pissed that I'm making a valid point backed up with facts. I also think it's possible that you don't know what I'm talking about or are too lazy to actually discuss the point in depth.
So, enough of the mouth foaming. Make a your point using some evidence and facts.
Again you cite a non-economics source about an economics point. Just another poopie in your pants, huh?
Was the dollar the de facto [oops more Latin] world currency post WWII - which appears to be your point. Yes, it was - which is one of the reasons the Europeans were so keen on the Euro. Does that mean what you think it means? Hard to tell because your thoughts are pretty much incomprehensible and you refuse to work toward any further explanation. Now, what did Manzi have to say about the post-war worldwide economic environment and the U.S. position within it? And in particular how that relates to the contemporary world?
You really ought to take the 10 to 15 minutes to read the Samuelson piece I linked to.
WTF do you think I mean? Is the spending to prevent our extinction? Is is in a fight for survival? A real no-shit, people in the camps, dead by the billions fight for survival?
Anything spent by easily half of the federal government is luxury spending compared to that. So stop using debt incurred during a god damned world war to compare to your fucking social democracy debt.
Again you cite a non-economics source about an economics point.
So, it's OK when you guys commit a genetic fallacy but now when I do, eh?
Hard to tell because your thoughts are pretty much incomprehensible and you refuse to work toward any further explanation.
Ad hominem again. There's no further point to be made. We ran deficits on purpose to provide international liquidity in the form of dollars. We spent beyond our means for years and didn't fall into a boiling pit of sewage. It happened, it's a fact and that makes your contention that excess spending is a bad thing not accurate.
Is the spending to prevent our extinction? Is is in a fight for survival?
I think you need to put your actions where your mouth is. Did I link this for you or was it someone else? In any case...
OK smart guy - exactly how does a deficit in balance of payments relate to deficit spending by the federal govt? If you can answer that, then the cite you made has some validity - otherwise it is just another one of your random links.
it's a fact and that makes your contention that excess spending is a bad thing not accurate.
I bet that translates into Greek really well. Do you recall that recently I said the govt could spend wisely or profligately and that I favored wisely. I guess we know what you favor.
Well, what were your results? And what preconceived ideas would you change and how would you be more flexible? More importantly, evaluate what you think would happen if you enacted these changes.
OK smart guy
Why must you be such an asshole when discussing this stuff? It's very difficult to have a discussion with you when you act like this.
And are you actually asking me how federal deficit spending relates to federal deficit spending? While balance of payments is defined as a summary of a country's financial transactions with the rest of the world, we're talking about spending (internal or external) and whether or not deficit spending of any kind is a good thing. There's also crossover as foreign aid(e.g The Marshall Plan) is part of the federal budget. In short, we spent a lot of money intentionally and it worked out quiet well. I'm sorry you don't like that.
And what preconceived ideas would you change and how would you be more flexible?
Did you take the test Mark? Does it strike you that you could do something other than "reduce federal workforce by 10%"? Perhaps eliminate entire federal agencies?
"Cut 250,000 contractors"? Why not cut 100,000 or 500,000 contractors? You see how it's locking you into it's choices not your own?
Besides the doublespeak involved in saying "savings from tax increases", the entire thing locks the reader into the NYT's choices of what to cut and what to charge. That's not an honest graphic, and it's dishonest of you to foist it upon us.
And are you actually asking me how federal deficit spending relates to federal deficit spending?
No I wasn't - and that is exactly why I was being an asshole - because you don't know what you are talking about. For example...
whether or not deficit spending of any kind is a good thing
In short, we spent a lot of money intentionally and it worked out quiet well.
That is bullshit and I think even you know it. Again, you are contradicting what you learned from Manzi - which isn't surprising as you fall back to bullshit and/or nonsense whenever you can't carry your end of a discussion. You could learn something from that, but you won't. You can't relate a deficit in balance of payments to deficit spending - and for a good reason. But I will not let you bluff your way out this time you little fucking weasel. You are going to have to crawl away with your tail between your legs.
Which ones? And then what do you do when unemployment spikes and consumer spending falls off a cliff? I know you don't like federal agencies but would you hurt our economy just because of your feelings?
My point in getting you to take a look at this was to see that it's not as easy to cut spending as you might think. I don't think you are really considering the ramifications for what would happen and likely affect you personally depending upon the agencies you want to eliminate.
because you don't know what you are talking about.
And we're back to that again...sheesh...of course I don't. I have TO not know, right? The alternative is (shiver) too frightening...
But I will not let you bluff your way out this time you little fucking weasel. You are going to have to crawl away with your tail between your legs.
Good Lord. What's the matter with you? And you insist that you don't want to win the argument or prove me wrong:)
My point in getting you to take a look at this was to see that it's not as easy to cut spending as you might think.
Bullshit. From the NY time piece you link it shows a $418 billion shortfall for 2015, let's see if I can easily save that using spending cuts only...
Lets see, cut half of the agriculture dept. $76b, half of homeland security $22b, half of treasury dept. $346b, all of education and energy $118b, half of epa $5b and cut 10% of everything else aprox $290b. That's a grand total savings of $857 billion. Well that almost doubles what we needed to cut - guess we could have a budget surplus and pay off some of that debt huh?
I don't think you are really considering the ramifications for what would happen and likely affect you personally depending upon the agencies you want to eliminate.
Not only do I not care, but what I do care about is the continued survival and well being of this country. That will not happen if we keep spending money that we don't have.
Which ones? And then what do you do when unemployment spikes and consumer spending falls off a cliff?
That is fucking hysterical. So if the Dept of Education or Agriculture was shut down tomorrow - the entire American economy would be sent into a tailspin?
The alternative is (shiver) too frightening...
The alternative is we could have an intelligent discussion - but maybe that is too frightening to you. I don't know. If you actually could explain points I might even be persuaded - but throwing around slogans and random pseudo-intellectual claims doesn't do it. Providing links that don't support your claim is not evidence of any reasonable thought process on your part.
I know I would like to have a discussion with someone who knows what they are talking about, and can admit when they don't. People who ask questions because they want to better understand something. Instead I keep trying to discuss stuff with Minnesota's answer to Cliff Clavin.
If you actually could explain points I might even be persuaded
But that's not what you want, juris. You've consistently shown that you want to bully/weasel me rather than have an intelligent discussion. This usually becomes more pointed when I make a valid point. Rather than refute it with your own evidence, you attack personally and keep the focus on me.
Here is my point again.
The United States also encouraged deficits in its own balance of payments as a way of providing international liquidity in the form of dollars.
Now, refute that point and tell me why this was not successful (without personal attacks). Our discussion was about how continually having a deficit is bad because sooner or later, you have to pay the piper. I offered my evidence and the results of those policies.
After you've addressed this point (without the bully-weasel),we can talk about why this:
You can't relate a deficit in balance of payments to deficit spending - and for a good reason.
Is that also true of the thousands of people employed by defense contracts? I'd say that the government is one of many entities in our country that provides jobs for citizens. I would think, though, that you would be happy as public sector employment has dropped dramatically since the president took office.
guess we could have a budget surplus and pay off some of that debt huh?
Ok, fine. What happens as a result of these cuts? Let's see some evidence as to what you think would be the results if this would happen-good and bad since we are thinking critically, right? Oh wait...
Not only do I not care, but what I do care about is the continued survival and well being of this country. That will not happen if we keep spending money that we don't have.
So, it's an emotional thing as to why you want spending cuts, not logical in anyway. What if you're wrong? Like yourself, I too want to see the continued well being and survival of this country. It's my view that you are being irrational about spending and not taking into account how, in your fervor, the very thing you are trying to prevent might end up happening. In my opinion, it seems to me that you you (and other libertarians) want to cut off their nose to spite their face.
So not caring is considered emotional around here now? OK Mark......
Ok, fine. What happens as a result of these cuts?
Here's the thing Mark - If we make the cuts we can control when and where they happen. If we default the cuts happen anyway and not under our control.
I'm still having trouble communicating with you when you can't accept the simple economic reality of defaulted debt due to excessive debt spending. Talking details is rather worthless when you refuse to believe that our nation can indeed go bankrupt. What's worse is you haven't given any supporting reasoning for this belief other than "it can't happen to us, so there!"
Is the trouble that you can't believe it is possible for a country to default? If so I can provide examples. Is the problem that you can't believe the worlds largest economy can default? If so I can provide examples of that as well.
Well thank you ever so much for telling me what I really think/want/feel. I shall be sure to consult you about every future decision since you know me better than I do. You fucking arrogant prick. I suppose if I asked questions like you do, you might have a point - since you aren't interested in the slightest in actually understanding anyone elses point. You only ask questions that you think make you a winner. That's just so special.
Now, refute that point
Simple, it has nothing to do with federal deficit spending. Not one fucking thing - which is why I challenged you to show ANY piece of evidence or chain of logic otherwise. And you haven't. You just REASSERT your stupid claim and stand there proud as punch of that poopie in your pants.
without the bully-weasel
LMFAO - I am so taking that as my new nickname - juris "the bully-weasel" imprudent!
is silly.
Of course, call "silly" that which you can't argue - probably because you don't have a fucking clue what is being discussed. Not that that will stop you from weighing in with your opinion "supported" by random internet links. If you are going for argument by distraction you could at least try some porn links.
If we make the cuts we can control when and where they happen. If we default the cuts happen anyway and not under our control.
Well, there is a great deal of validity to what you are saying here. I guess I'd like to see some projections on what would happen if you eliminted the energy and education department completely.
Is the trouble that you can't believe it is possible for a country to default? If so I can provide examples. Is the problem that you can't believe the worlds largest economy can default? If so I can provide examples of that as well.
Well, anything is possible but I think it's highly unlikely. I think it's fine for you to be concerned but we've seen examples in the past where forgiving debt is more palatable than letting a country go into default.
I guess when it really comes down to it, it seems to me that your feelings about small government are heightening your paranoia of things that likely will never happen. This is what I have been trying to show you by looking at past examples of deficit spending. Yet, you persist in believing that the end is nigh. Take a step back and think logically for a moment. Of course, I'd be happy to look at any examples you have.
Simple, it has nothing to do with federal deficit spending. Not one fucking thing - which is why I challenged you to show ANY piece of evidence or chain of logic otherwise. And you haven't.
I haven't because you're being an asshole, juris. So far, your only response to the original statement has been this:
Again you cite a non-economics source about an economics point. Just another poopie in your pants, huh?
So, agree or disagree with Kegeley and Raymond's point and explain why. The challenge was made to me to explain how deficit spending over the long term can be effective. Here's one way it can be. Another way would be foreign aid like the Marshall Plan (which is part of the federal budget btw) which worked in tandem with running a trade deficit. So that would be two forms of deficit spending.
After you do so, I would be happy to discuss further how federal deficit spending is related to balance of payments. Before we do, though, I think you might want to take a breath and think about whether or not you really want to make that claim.
Kegeley and Raymond aren't talking about federal deficit spending - read your quote again, nowhere do they say anything about federal spending. Because they are talking about balance of payments in international trade (which is not anywhere near the same as federal spending). You just don't get that, do you? They are talking about something completely independent - and the only reason you have linked the two is because of the presence of the word deficit.
Here is some good resource material. Of course since you didn't read the first link I gave, I don't expect you to read (or understand) this one. The U.S. trade deficit (also unrelated to federal deficit spending) did not develop until the late 60s (and only means that we import more than we export - nothing about federal revenue/spending). Balance of payments became less important with Nixon floating the dollar (instead of the fixed currency exchange rates under the Bretton Woods agreement).
This is truly laughable. Until I recall that you are responsible in some small part for the education of children - and then it is all but tragic.
This is truly laughable. Until I recall that you are responsible in some small part for the education of children - and then it is all but tragic.
That thought runs through my head reading his posts every time. Sad.
Last chance, juris (and now 6Kings). You said "You can't relate a deficit in balance of payments to deficit spending - and for a good reason." And "Simple, it has nothing to do with federal deficit spending. Not one fucking thing - which is why I challenged you to show ANY piece of evidence or chain of logic otherwise. And you haven't." Any hope whatsoever of you qualifying this statement? I'm affording you (yet another) opportunity to back out of this imperial edict.
I so want to jump the gun here and butt in on Mark but that would completely ruin what will surely be the most epic takedown and fail on any blog in history. It's going to be a joy watching you fall, juris, since you are a complete fucknut.
we've seen examples in the past where forgiving debt is more palatable than letting a country go into default.
Well of course it's more palatable, but it's technically the same thing. This difference is more akin to a chapter 7 (full discharge) and a chapter 13 (restructuring) bankruptcies. It's also rather easy for a large country such as ours to forgive a debt that is crushing to smaller country. It is not as easy to expect any other country to forgive a debt large enough to be unmanageable to the worlds largest economy.
Default (basically saying we can't pay) or debt forgiveness, somebody still loses their money. In the case of our debt - that would be a lot of money and could put the entire world into an economic tailspin.
You've mentioned forgiveness before. An earlier mention even seemed like you were saying that we needn't worry about the debt because we could always have it forgiven. It most circles, borrowing money you don't have the means of repaying or borrowing what you don't intend to repay is criminal fraud. I really hope you that's not what you are saying.
it seems to me that your feelings about small government are heightening your paranoia of things that likely will never happen
This isn't Republican vs. Democrat vs. Libertarian. It's math.
If you spend more than you make you increase your debt. If you continuously spend more than you make then you are increasing your debt at a faster level than your income is rising. If your debt rises continuously faster than your income rises, eventually you will reach a point where your entire income can do no more than make payments on that debt (or just on the interest on that debt)
These are facts Mark. You cannot argue them.
IF you looked at the link I sent you about Japan, you'd see that if the interest on their debt went to just 3% then just paying the interest on their debt would be half of their governments income. Half! Imagine that Mark, paying half of your income just to pay the interest on your credit cards. You can't pay your mortgage, food and utilities etc. when half your income is just paying the interest on your debt. No mention there of paying any of the principal off - which means you aren't getting out from under that debt. That also per-supposes that you've stopped borrowing more money at that point as well.
No, that's not what I'm saying. Obviously, forgiving debt won't be in the cards for us-the world's biggest economy. But it does work for smaller countries.
Regarding your list, my first thought is that we are not Zimbabwe. There's a very big difference between how our risk is perceived and how their's is perceived. Interesting mention of Iceland as their collapse (like ours in 2008) was the result of unregulated markets. In the case of Iceland, a very pure form of laissez faire economics which illustrated quite clearly what happens when you go down that path.
It's math Mark, not politics.
It's more than that, though, GD. You're not including risk and the perception of the United States as being a good bet. This will likely remain the case in the future. I do agree that we need to lower our deficit spending and hopefully get back to the point where we have a surplus but that's going to mean a combination of spending cuts and revenue increases. That's math too, GD.
And we are always going to have debt. We've had it since the country was founded. If we can get our debt down to 50-60 percent of GDP, we'll be back in good shape. That's possible as well and the first step towards getting there is to cease the anti science campaign of the right and get us back to being the leader of innovation in the world.
So, I don't really believe your dire warnings about the shape of our country. I've noticed the level of worry spike with many of my libertarian friends of late and I have to wonder what information you folks are reading that leads you to believe we are headed for doom. It's simply not the case.
The Bully Weasel is going to fall soon. This is going to be a real treat especially after Mark has been so generous in allowing him every opportunity to back off his ridiculous comments.
It's going to be a joy watching you fall, juris, since you are a complete fucknut.
Hell, I just read and never post, except now, and I feel like a kid on Christmas. Juris, you are a very rude person who deserves everything that's coming to him.
Any hope whatsoever of you qualifying this statement?
I explained it to you, and I provided a link (which you obviously didn't read). You see M unlike you, I provide links that are relevant to the point. I even showed where your own quote of the authors doesn't address what you claim - and that it isn't in accord with the chart you had in the post atop this thread (because there was not big deficit spending throughout the hayday of the Bretton Woods era).
But just so no one can say I didn't try, here are two more links - to charts, so you don't have to actually read.
Maybe pictures will help you understand that there is no innate linkage between federal spending policy (surplus or deficit) and the balance of trade (imports versus exports). Even if the word deficit is used in both.
No, I obviously haven't done enough to change your mind. You have made your pronouncement and no mountain of factual information can alter your opinion. Which is fine - it is your opinion, it just isn't tied to reality. You might as well say so though - just to be honest with yourself. And don't claim to be a critical thinker - ever.
I love the YLDP contribution. All safely hiding behind big brave M to take me down. Careful or the bully weasel will come getcha!
Alright, here's how this is going to work, juris. I'm going to show how both of your statements...
Simple, it has nothing to do with federal deficit spending. Not one fucking thing - which is why I challenged you to show ANY piece of evidence or chain of logic otherwise. And you haven't.
and
You can't relate a deficit in balance of payments to deficit spending - and for a good reason.
are wrong. If your response to my points contain any personal attacks, I will not respond. I'm effectively done with your bullshit games. I've asked you repeatedly to stick to refuting my points with actual evidence but you can't resist ripping into me and doing the bully weasel thing with your redirecting questions.
Side note to sasquatch, angelo and serial, this isn't about "taking down juris." My original point was to try to get him to see that deficit spending can be effective, whether it's trade deficit spending or federal deficit spending, at certain times.
The relationship between our trade deficit and federal deficit is quite obvious. Essentially, the trade deficit funds the national debt. When we spend 10 dollars in China, for example, and they spend 6 dollars here, there is an extra 4 dollars of money (the trade deficit). China takes that money and buys US securities (mostly T Bonds). Bonds are basically loans to the US government so the trade deficit and US trading partners fund the debt. Now China could sell the dollar for the yuan but that would devalue the dollar and start some problems with its trading partner-us. I'm certain that there are a lot of behind the scenes games that go on where this happens.
The other way they are related (and how it pertains to the conversation above) is foreign aid. Foreign aid is part of the federal budget and this sort of deficit spending was also encouraged. As I have said repeatedly, we purposefully ran deficits in tandem during the post war years to strengthen the value of the dollar (both foreign aid and trade). The two had to work together for the LIEO to work and that's just what Kegeley and Raymond talk about in that section of their book. It's spending from the same source with the same intent so they are, in fact, connected.
Incidentally, this is also why MNCs like running trade deficits because it overvalues the dollar. But when this happens, we end up with a lot of foreign investment in our national debt which is certainly a concern. One of the reasons why Japan has been able to run high debts for years is they have smaller foreign investment in their debt.
President Reagan spoke of the connection between the trade deficit and the federal deficit in 1987.
“Here in the United States, we must restrain government spending. Our trade deficit in goods and services reflects that, over the past several years, we have spent more than we have produced—and we have spent too much because of the profligacy of the federal government. As the Congress reviews my proposed 1988 budget, it should remember that a vote for more government spending is a vote against correcting our trade deficit.
I don't care what your intentions were, Mark. That was hands down the best flame I've ever seen in a comments section. Hubris never stood a chance. His head was too busy trying to find new ways to ad hominem the "yippie dog posse."
My original point was to try to get him to see that deficit spending can be effective, whether it's trade deficit spending or federal deficit spending
Two things that have no relation. None except that one word gets used in both. That is your stunning insight? That deficit is used as an adjective?
Essentially, the trade deficit funds the national debt.
Not according the data from the St. Louis Fed I provided you. You have no data or chain of causation. Nor are you describing what happened following the Bretton Woods agreement and during your Golden Age - you are now talking about what is happening today with China. This doesn't follow from your previous quote and you offer no new supporting data, quote (save what ol' senile Ronnie may have said) or link. Absolute FAIL.
Foreign aid is part of the federal budget and this sort of deficit spending was also encouraged.
Say what - foreign aid is such a big part of federal spending that it aids in causing the deficit? Gosh, so does paying for the ATF and the federal mohair subsidy.
As I have said repeatedly, we purposefully ran deficits in tandem during the post war years
Really? Go back and look at your own chart on the deficit - what was happening in the 50s? Was that a routine deficit? If so your chart doesn't show it.
You have nothing, nothing but what you say. No data from anywhere, no such-and-such economist says, no textbook reference - NOTHING. And you think that puts me down? And the YLDP is all ready to slobber your knob? Wow!
I gotta say M, that was disappointing - even for you. This might mark the lowest point for you since Centerpoint/RMR. Remember how even blk said how foolish you were in that case. I promise, I won't get as frustrated and angry as I did then. At that time I was under the impression that I was talking to a sane person and therefore expected sane responses. Now I can just be the bully-weasel, rip you a new asshole and not take it seriously in the slightest.
And speaking of the YLDP, funny how days and weeks go by without a peep from either of these two, and then within an hour of M's epic failure to take me down, there they are. Tell me last_in_line - since you actually know M do you wonder if these aren't a bit like M's "conservative friends" (i.e. the voices in his head)? Am I actually conversing with nothing but a bunch of sockpuppets?
I'm meeting M at the bar in a couple hours for a cold one. I'll get the truth out of him...I usually do that by asking him "Hey, does this rag smell like chloroform to you?"
To Juris-I don't think you are being fair with Mark at all. I happened upon this thread when I saw the graphic and then read the comments. He has made an honest effort to engage with you on the subject of deficit spending and you resort to name calling? You also switch the subject when the discussion isn't going the way you like it and try to find some angle to trip Mark up. Yet every time he continues to illustrate his points effectively. I wouldn't blame Mark if he never engaged you again.
I like the Reagan quote. He was right then and it's still true today. More government spending or deficit spending does mean further problems with our trade deficit.
What a ridiculous thread. This is why I don't post comments that much anymore. All of you are talking past each other and not even taking the time to consider what the other is saying. What piffle.
"Hey, does this rag smell like chloroform to you?"
LOL - I think he would fall for that.
I don't think you are being fair with Mark at all.
Fair has got nothing to do with it. He makes claims and when asked, FUCKING ASKED, to expand, explain or support - he runs off on, well, you can't even call them tangents. I may have to invent a word to accurately describe it.
He has made an honest effort to engage with you on the subject of deficit spending and you resort to name calling?
Really? You call talking about a deficit in balance of payments an honest effort to discuss federal spending in excess of income. Do tell me more. And M was the one that quoted the BoP and because it said "deficit" argued that it was related to federal deficit spending. Funny how you can't support that either.
What a ridiculous thread.
And juliet, you have contributed exactly what to it?
Seriously these must be sockpuppets - real people might actually pick up M's argument and support it better than he does. At least they would if they considered themselves friends and supporters of liberal causes.
Juris, you made the claim that the trade deficit has nothing to do with the federal deficit. Mark just showed that, while separate in some ways, they are related. Your statement is false.
Hey Angelo how exactly did M demonstrate that. By waving his hands? Because he said so? What?
How about you? You got any links? Something scholarly that shows he is right and I'm wrong.
I know, let's put it to a vote - all the sockpuppets in favor say "aye". I mean lets get the whole sock drawer emptied out!
The underlying fundamentals are entirely different. You might have noticed that if you visited the St. Louis Fed cite I linked to. They are under different categories of economic statistics. But hey, what would that bunch of egghead economists know anyway!
They say the definition of madness is doing the same thing over and over again and expecting a different result. I've followed this blog for long enough to know that there is no piece of information available in human history that will change or sway you, Hubris. Maybe Mark has finally woken up.
You changed the line of argument you asshole, not me. You started with the deficit, brought up trade (and I asked why) and now you play all wounded child.
Not playing your game, Juris. I'll go back to just reading and recommending this site to my friends (14 now have started following it) who are interested in insightful, intelligent and well informed (and often funny) commentary on politics, history, and economics.
What is it with you fucktard liberals and "games"? You can't make an honest, intelligent argument so all you do is pull your puds about how smart and witty you are and how evil and mean everyone else is? How all political discussion is a fucking game?
Wowee. A guy goes on vacation to deliver millions of presents to billions of kids and look what he comes back to-a whole new level of denial and attacks by Hubris Imprudent.
The trade deficit feeds into our national debt/deficit just as Mark described. Does Mark need to provide you a link that shows that the Chinese have bought T Bonds? Really? The amount of foreign investment in our debt that comes out of our balance of payments is a concern that clearly shows the relationship between the two types of deficits. Admit that your statements were wrong, Hubris, or are you that far gone that you can't admit fault?
How we spent $$ post WWII and traded were very much intertwined as well. Mark was attempting to show that deficit spending of any kind can be effective. That was the challenge given to him and he accepted it, proving not only that it can be effective but the world won't end if it happens. Him trying to show this to you involves thinking outside of the box and bringing in wider array of factors to consider.
Hubris didn't like that and had hisself a hissy fit just like he always does. It takes a man to admit when they are wrong, Hubris, but I guess you decided to go full on pussy and put it all back on Mark-just like you always do. What a whiny bitch.
The trade deficit feeds into our national debt/deficit just as Mark described.
Really? Why? Explain how that works precisely.
The Chinese buying Treasuries is because they have to do something with their dollars - since they aren't buying U.S. goods. They would do that even if our spending was balanced with our taxation (since we would still have a substantial debt that needs to be continuously rolled over). U.S. Treasuries are still the best govt paper in the world - not because they are so good, but the rest of the world is just worse.
Mark was attempting to show that deficit spending of any kind can be effective.
And deficit spending (or surplus for that matter) by the feds has nothing to do with whether our imports exceed our exports. Nothing. Which is why none of you are citing economists in support of that. Nor does talking about what is happening today reflect what was done (and why) in the Post-War period (Bretton Woods - which is where M started this whole falderal).
How can you all be so fucking stupid? Thanks though Santa for being slightly less stupid and lame than the rest of the YLDP. At least you tried - that is more than can be said for the rest.
-And deficit spending (or surplus for that matter) by the feds has nothing to do with whether our imports exceed our exports. Nothing-
He just showed they did with the Chinese and foreign investment in our debt which is completely related to trade. He showed they did in the post war period as well. You just don't want him to be right.
"If the government did not have to sell so many Treasury bonds to foreign buyers, they would have more dollars available to spend on U.S. exports and to invest in the U.S. private sector. This problem is nothing new."
This link has the same quote from Reagan that Mark used.
The original contention by you guys was the deficit spending over a period of time was always bad. He showed that it wasn't. I appreciate the compliment but you're not really paying attention to what Mark is saying. He has responded to all of your questions and offered evidence to back up his claims. Be reasonable and look at the big picture here. You just won't give and that's the problem.
I would guess that that is where M got the Reagan quote in the first place, which also explains why he didn't link to it - it comes from one of those evil, right-wing websites that can never be trusted due to their incredible bias. At least that's the case when anyone but him quotes them. And seriously, Reagan was in early senility by '87, and his budget deficits were due to never bringing spending into balance with tax revenues.
Now, this does introduce some problems to M's argument - which is it doesn't excuse deficits in either case. In fact it makes the argument that they are problematic - exactly contrary to M's thesis. It also argues that deficit spending feeds the trade deficit (due to Treasuries displacing consumption of U.S. goods - which is a very debatable point itself). At best, the trade deficit is an effect of the budget deficit - not some good thing that benefits the U.S. or world economies. Also, the Chinese case is a very recent phenomenon - not the norm that M insists was the case post WWII: e.g. As I have said repeatedly, we purposefully ran deficits in tandem during the post war years which is demonstrably not true, first in his chart at the top of this thread, and second in the two Fed links I provided.
Again Santa I will give you credit for picking up the argument and trying. You aren't any more correct or persuasive, but at least you gave it a try. And lo and behold we don't have to just insult each other. See how that works kids? Now eventually you might see the error in the argument and stop mindless defending it just because you can't stand to see M fail.
And we are always going to have debt. We've had it since the country was founded. If we can get our debt down to 50-60 percent of GDP, we'll be back in good shape.
Interesting M - how do you think we are going to get federal debt back down to that range? Are we going to stop spending more than we take in? Are we going to use some of that budget surplus (you know - spending less than taxes bring in) to pay off that debt to bring it down to the range you cite? You're talking about nearly chopping our debt in half. That's going to take some aggressive payback.
Or are we going to do it according the liberal-logic and spend and tax more while growing the economy so fast that it outstrips the burgeoning debt?
"Simple, it (the trade deficit)has nothing to do with federal deficit spending. Not one fucking thing - which is why I challenged you to show ANY piece of evidence or chain of logic otherwise. And you haven't."
"You can't relate a deficit in balance of payments to deficit spending - and for a good reason. "
Our government makes decisions every day regarding the federal deficit based on the trade deficit. This is certainly true with China. Their investment in our debt comes from the trade deficit. We also make decisions based on the trade deficit based on the federal deficit. How much foreign aid we give to a country may well depend on how much they owe us or we owe them.
I think you should just admit that you went overboard in trying to prove Mark wrong and walk it back a little. After all, he did write above,
"While balance of payments is defined as a summary of a country's financial transactions with the rest of the world, we're talking about spending (internal or external) and whether or not deficit spending of any kind is a good thing."
He has been saying all along that there are both differences and similarities so you are both in half agreement anyway.
Have you read the chapter of the text that Mark has quoted? It seems to be that you need to review the material before you can make any sort of evaluation.
Our government makes decisions every day regarding the federal deficit based on the trade deficit.
Really? We change our spending on a daily basis because we import more than we export?
Their investment in our debt comes from the trade deficit.
They could be buying American goods instead of American debt. Remember how the Japanese terrified us a couple of decades back buying up our real estate? Do you recall how that turned out for them? Maybe the Chinese took note of that.
He has been saying all along that there are both differences and similarities so you are both in half agreement anyway.
Ah, the Cult of Both Sides is it? M brought up the trade issue, not me. The fact that he linked to something irrelevant to his original argument is not my problem. Again, it seems to pain you that he was simply wrong.
Have you read the chapter of the text that Mark has quoted?
Yes I did, did you? That was how I found out it wasn't economists writing it. By the way, I never disputed what the authors actually said - it was all about M's non sequitir [damn, more Latin]. The authors quoted didn't make any silly claims, M did. So, did you read the items I linked?
Iowa and Santa-the definition of madness is doing the same thing over and over again and expecting a different result. You'll have better luck trying to get a giant slab concrete to dance.
>Or are we going to do it according the liberal-logic and spend and tax more while growing the economy so fast that it outstrips the burgeoning debt?
This, I think, is the real root of it. The fundamental problem with "welfare capitalism" (which Mark hasn't really defined but I'd guess is a strong regulatory state combined with generous entitlement benefits), there is very little political benefit to cut (or restrain) spending, and great benefit to increase spending. Similarly, there isn't much political benefit to raising taxes (certainly not on the middle class), and great benefit to lowering taxes. When doing the "right thing" is not politically beneficial, politicians will choose to increase spending or lower taxes by borrowing or printing money in order to get votes, if they are able to. This is the main reason why the debt and deficit are so worrisome to me - I see nothing to indicate that political incentives have or will change, and thus I don't see any course change being likely unless forced (such as by interest rates) to do so. Even looking at your deficit graph - doesn't it seem odd that the only time in the last 30 years we came close to reducing the debt was during the late 90's tech bubble and the relative political gridlock that occurred during tha time? What actions would our government plausibly take, that is palatable to large portions of the electorate, that would significantly reduce the debt or deficit? (And no, wishing that 50% of the electorate didn't exist is not plausible.) Hoping for lots of growth seems like a pretty poor strategy - hope doesn't get you much tax revenue. So yeah, I second Juris's question - how are you going to get the debt back down to 50-60? Outside of rather massive unexpected economic growth, not seeing many options.
"welfare capitalism" (which Mark hasn't really defined but I'd guess is a strong regulatory state combined with generous entitlement benefits),
I have defined it several times but you chose instead to not listen/play games. Here it is again for the final time so cut and paste because I won't be putting it up again.
Welfare Capitalism embraces the free market and its role in allocating goods/services and how they will be produced in tandem with government regulation that prevents monopolies and oligopolies. As Mankiw says in his list of 10, the government can sometimes improve the efficiency of markets. Otherwise, the welfare capitalist thinks that the market should be left alone to do what it does naturally. WC looks to the government to provide infrastructure (roads, bridges, canals, ports etc) as well as the basics needed in the human resource area (education and essential health care). Unions, unemployment insurance, and Social Security are also party of WC. Essentially, welfare capitalism is what we have now in our country.
This is the main reason why the debt and deficit are so worrisome to me
Herein lies the problem. As Lofgren noted in his exit piece from Congress, the right has largely become like an apocalyptic cult. If I don't worry as you are worrying, then I must be naive. Except that history shows me otherwise. We have been through far worse in this country...other civilizations have been through much worse...and the results have not been a boiling pit of sewage. I think you need to stop and consider what you will say if things get better. Will you admit it? Especially if it is the result of Democratic policies? In my view, this sort of think is self-perpetuating...it sadly never ends.
To answer your question regarding the debt and deficit, it's going to depend on a combination of factors. First, we are going to have to cut defense spending and alter Social Security and Medicare (means testing and raising the age of retirement). Next, we are going to have end subsidies and tax breaks which distort the market and erode the revenue stream. Third, we are going to have to raise taxes back to Clinton era (that gridlock time of which you spoke:)) levels. Basically, what I am saying here with these three is Winston Bowles.
Finally, we need to become the world's leading producer of green technology. I don't care if this comes from the public or private sector but it has to happen. If this means that we need to dispense with some government regulations, so be it. If this means we need to go a little more into debt for awhile, so be it. Both? So be it. To me, this is the future as climate change is very, very real and renewable energy sources are the future. If this happens, we will see more revenue.
And, honestly, if we get above 3 percent growth in the economy, we are going to see an improved revenue stream. 4 percent and you and I are done having this conversation.
Now, before you try to redirect me down the doom and gloom path, I'd like you to take a look at this recent piece from the Christian Science Monitor.
I'm going to be talking a lot about it over the next few weeks. I'd urge you to temper your negative thoughts with the information provided in it.
For all the problems we face right now, we're going to come out just fine. The world is becoming a much better place to live in and it's largely due to the LIEO that has been sprouting since 1944. Obviously, we are going to hit snags and road bumps along the way but we are not going to "fall apart like Greece."
How are we going to reduce the federal debt to the 50-60% range? Either GDP growth has to go through the roof - not 3 or 4%, or you have to spend a lot less than you tax (and use the surplus to pay down the debt).
You said that was a reasonable debt load (and I would tend to agree) - so how do we get there. I don't see us getting there via the Republicans, let alone the Democrats.
Finally, we need to become the world's leading producer of green technology.
Oh, that's it - we are relying on fantasies. Well, that will do it - if we wish hard enough our dreams are sure to come true.
Welfare Capitalism embraces the free market and its role in allocating goods/services and how they will be produced in tandem with government regulation that prevents monopolies and oligopolies. As Mankiw says in his list of 10, the government can sometimes improve the efficiency of markets
Ahhh, I see. The free market is the best way to efficiently allocate goods and services - except when it does certain things that certain people don't like. Then it's time to the government to "improve" those things......right.
If I don't worry as you are worrying, then I must be naive. Except that history shows me otherwise. We have been through far worse in this country...other civilizations have been through much worse...and the results have not been a boiling pit of sewage.
So no other civilization has ever fallen? There aren't any examples in history of lost empires or forgotten peoples? Billions haven't died dues to disease, famine, pestilence common when their country falls? None of these things have ever happened and to warn against activity that could lead down the same path is cult-like dystopian fear mongering? Perhaps you are naive then.
alter Social Security and Medicare (means testing and raising the age of retirement)
Because the current promises made to those recipients is unsustainable due to the pyramid like nature of the program. So we are going to have to unilaterally change what we promised to people for the forty or fifty years they paid into the program and give them less or none than they were told they would receive. But it bears no relation whatsoever to a ponzi scheme.
end subsidies and tax breaks which distort the market...
Except when it comes to health care, then this activity is considered making the market more efficient.
eading producer of green technology. I don't care if this comes from the public or private sector
By using tax breaks and subsidies? Huh?
we need to dispense with some government regulations, so be it
But, it's only those dang government regulations that are keeping oil expensive enough that green tech can even be thought of as competitive....
we get above 3 percent growth in the economy, we are going to see an improved revenue stream. 4 percent and you and I are done
Except we increase our debt at a faster pace than that - so the conversation continues. Bet you can't figure out that you can't go into debt without spending, so it's like talking to a wall.
except when it does certain things that certain people don't like. Then it's time to the government to "improve" those things......right.
No. Except when it fails to allocate resources efficiently on its own. This can happen in a variety of ways but the chief ones are monopolies and oligopolies.
Perhaps you are naive then.
Of course other civilizations have fallen but they haven't ALL fallen. Certainly, others have been through worse then we have (including us) and are still around. I know it's fun to play "Apocalypse" but it's very counterproductive.
So we are going to have to unilaterally change what we promised to people for the forty or fifty years they paid into the program and give them less or none than they were told they would receive.
Our society has changed. It doesn't mean these programs are going to go away. People are living longer and some people are wealthy enough to not need Social Security, for example.
But it bears no relation whatsoever to a ponzi scheme.
Cut and paste the following below. I won't be repeating it again.
No, for three reasons. First, no one is being misled. Everyone knows that we are going to have to make changes and those changes will come about via Congress who represents the people. It is exactly what it claims to be: A mandatory transfer payment system under which current workers are taxed on their incomes to pay benefits, with no promises of huge returns. Second, as Michael Zuckoff (author of Ponzi's Scheme) recently stated, "A Ponzi scheme is unsustainable because the number of potential investors is eventually exhausted. That's when the last people to participate are out of luck; the music stops and there's nowhere to sit. It's true that Social Security faces a huge burden — and a significant, long-term financing problem — in light of retiring Baby Boomers. … But Social Security can be, and has been, tweaked and modified to reflect changes in the size of the taxpaying workforce and the number of beneficiaries. It would take great political will, but the government could change benefit formulas or take other steps, like increasing taxes, to keep the system from failing." Third, Social Security is morally opposite of a Ponzi Scheme. Zuckoff: "At the height of the Great Depression, our society (see "Social") resolved to create a safety net (see "Security") in the form of a social insurance policy that would pay modest benefits to retirees, the disabled and the survivors of deceased workers. By design, that means a certain amount of wealth transfer, with richer workers subsidizing poorer ones.That might rankle, but it's not fraud... None of this is to suggest that Social Security is a perfect system or that there aren't sizeable problems facing the incoming administration and Congress. But it's not a Ponzi scheme. And Ponzi himself, who died in a hospital charity ward with only enough money for his burial, would never have recognized it as his own."
In sum, this assertion is a logical fallacy, as demonstrated in comments a while back. Example:
1. Last in Line doesn't wear his seat belt (true, btw) 2. Hitler doesn't wear his seat belt 3. Last in Line is like Hitler
Now apply it to the SS/Ponzi Scheme silliness
1. Social Security pays out more than it takes in 2. Ponzi Schemes pay out more than they take in 3. Social Security is like a Ponzi Scheme
So, you are wrong but I'm certain that won't stop you from believing what you want to believe.
Except when it comes to health care, then this activity is considered making the market more efficient.
Health care is a giant problem in a number of ways when it comes to the free market. As I have said previously, many of the markets have such inelastic demand that it's very difficult to let the free market sort itself out. We are talking about people's lives here. There are no easy answers and I certainly don't have all of them. But I do have ideas as opposed to intransigent beliefs so that puts me ahead of some folks.
By using tax breaks and subsidies? Huh?
No. I think that the president should level the entire playing field and let everyone duke it out. No more special breaks for anyone including the oil companies. Obviously, this will be tough given how many people in Congress are on the oil dole.
Except we increase our debt at a faster pace than that - so the conversation continues.
No, because we cut spending at the same time. Of course, we have a different definition of this and I'm simply not going to buy into your Draconian ideas of eliminating entire departments...especially the ones that don't add to the debt or deficit in a significant fashion. Defense, Social Security, Medicare...those are the three places to start. Again, it's Simpson-Bowles and I do fault the president for not embracing it but I understand why he did not.
Certainly, others have been through worse then we have (including us) and are still around.
OK, just out of curiousity which countries are you talking about?
Again, it's Simpson-Bowles and I do fault the president for not embracing it but I understand why he did not.
S-B never proposed getting spending reduced to the point of running surpluses (let alone big ones) - which are necessary to getting our debt down to the level you suggested. Good that you fault the President for his lack of leadership - that's about the first substantive criticism you've had of him. Of course you immediately soft peddle it, but it is a start.
If you want to cut Defense, you have to give up the liberal/neo-con foreign policy consensus. Also, good luck getting elected on the promise of cutting SocSec & MC. I still don't see what value you place in the Dept of Education (amongst others).
>Except when it fails to allocate resources efficiently on its own. This can happen in a variety of ways but the chief ones are monopolies and oligopolies.
See, this is one of those many times where you say "I believe X", but your actions speak otherwise. You say that as a welfare capitalist, you embrace the free market. Yet you sure seem to like your centrally planned interventions or distortions. In fact, I can't recall you opposing a single one, much less opposing them on free market grounds. Solyndra? GM? Healthcare? Bailouts? Stimulus? Cash for clunkers? As GD said - you seem to like the free market until it does something you don't like. When asked, you then say, "Oh, this case is special." This is why I am skeptical of the label of "welfare capitalist" - i think you're just a standard issue statist. But, whatever, call yourself whatever you want. And really - was that paragraph you pasted really any different than what I said? Strong regulatory state and generous entitlements? No, not really.
>I think you need to stop and consider what you will say if things get better.
Hrm. Let me think. How about, "I was wrong."? Would be nice if I was, wouldn't it.
As to green tech, zzz. Another example of you being a fair weather free marketer. Just so you know - a free marketer would say something like, "Hey, if green tech can't make it in the marketplace on its own, its probably not viable, and subsizing it will only hide its true costs and delay its inevitable failure." We get it, you think green tech is super important. Me, I'll take steady incremental improvements on existing technologies. Have you ever considered that diverting resources to green tech might slow down or stop those types of incremental improvements?
As to Soc Sec like a Ponzi scheme, no point - we know how irrational you are on that one. Or are you going to, once and for all, tell us how the trust fund represents real assets that the government takes great care of?
Re: 4% growth rate saving us - nonsense. GDP growth has been at our near 4% numerous times in the past 30 years, and the debt has not gone down once. Growth rate simply isn't a reliable indicator of whether the debt or the deficit decreases, since spending can easily eat up whatever revenue increases come from it. As was said on a previous thread - all the revenue increases in the world won't help you if you can't control your spending.
Again though, you are hand waving the larger question. The debt currently stands at about 100% of GDP, or around 16 trillion. Getting that to the 50-60% of GDP range requires reducing that debt by 7-8 trillion. The deficit is currently ~1 trillion. Where do you think the political will exists to close the deficit, much less get into a surplus such that we could pay down the debt? As I stated before - I don't see where the political incentives exist to do the right thing, whether the right thing is hugely cutting spending or hugely raising taxes, or some combination thereof. Neither of those things is politically beneficial, and thus, won't be done except when there are no other options, such as borrowing becoming nearly impossible.
Yet you sure seem to like your centrally planned interventions or distortions.
i think you're just a standard issue statist.
Well, right, because from your view, anything to the left of the one yard line means communism. So, your opinion is so warped that it really doesn't matter but, as always, it's welcome.
The free market is fine with something like Lasik (which I've mentioned before) or other similar health care markets. But with dialysis, things get different because we are talking about someone's life. I guess what I'd like to hear from you and the other commenters is what you are afraid to say: that you would let people die so the market could correct itself without government interference. At least the price would go down for lack of buyers, right?
Hap, you really need to grok that libertarian fantasies are just as FUBAR as socialist ones. That's why a more balanced approach works.
As to Soc Sec like a Ponzi scheme, no point - we know how irrational you are on that one. Or are you going to, once and for all, tell us how the trust fund represents real assets that the government takes great care of?
Then, by all means, refute my points, one by one, with a similar rational argument and demonstrate how I am not accurate in my logical fallacy example, Haplo "Projection/Flipping" 9. And if the trust fund isn't a real asset, then why do so many people in the world by Treasury Bonds? I'd like to hear you state your case as to why the United States government isn't an asset. Please try to do so rationally and using evidence.
Where do you think the political will exists to close the deficit, much less get into a surplus such that we could pay down the debt?
Well, where was it in the 1950s after the debt ran as high as it did? From 1944 to 1950, we ran very high debt to GDP. It took us several years but we got back down to the 50s/60s in 1957 so that took 13 years. We were at 69 percent in 2008. In 2010, we were at 93 percent. As of now there is only an estimate for 2011 at 102 percent. After that, there are only projections as I am so often reminded. I guess those projections are "realer" when they support your paranoia (unlike the deficit ones). So, are saying that it's impossible that, by the year 2021, we will not be back down to the 50s/60s?
It seems to me that you wouldn't have made it through the 40s and 50s very well, Hap. Doom and gloom...boiling pit of sewage...
Yeah, I just saw that as well, Santa. Crap! I just went to the store and bought paper towels. Time to go back and get another package. I'm going to have a lot of exploded heads to clean up on here. Ah well, it's Krugman so he has to be wrong. How will they ever explain away Britain from the mid teens to the mid 60s. 50 years of 100 percent plus debt to GDP? Why aren't they in a boiling pit of sewage right now?
These two points..
First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.
Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.
My head doesn't explode for Krugnuts - he gave up his intellectual honesty a long time ago, first for Enron, then for liberalism. I might shake my head in disbelief, but that's it. The man is rapidly devolving into an incoherent ball of left-wing rage. You still haven't read the Samuelson article, have you?
you would let people die so the market could correct itself
Would you happen to have an example of where this actually happened or are we just to take your word for it that the evil dialysis cartel is out for blood? Less than 400K people are on dialysis, and 20% die per year (so it isn't like this is a real long term 'solution'). It appears we spend less on dialysis than on cosmetic surgery - so this one single case that you hang onto so desperately isn't exactly representative of most health care spending, is it? Fine - there are some FEW cases where govt intervention may be needed. That is a far cry from what we have now, and even farther from the proggie wet-dream of single-payer (fully socialized medicine).
You know, fuckstick, I'd expect a lot more for someone who asks a lot of questions but never answers any. Who owns our debt, Hubris? Who? And that question goes for all three of you wise men. Our debt doesn't matter because we owe it to ourselves and because our assets worldwide outweigh the part of our debt that foreigners own. And when are those interest rates going to rise again? I challenge each of you to prove Krugman wrong using evidence and a logical argument because I don't think any of the three of you understand debt or the deficit.
How will they ever explain away Britain from the mid teens to the mid 60s.
So much more easily than you imagined!
First, since you are so fond of the Bretton Woods arrangement. Second, see Chart 4 on page 19.
The British govt devalued their currency (i.e. inflation) which reduces debt (in value, not nominally) while GDP follows inflation. But please, do read the links - I wouldn't want you to think that I was misrepresenting them.
You know, that is a fair question, ya big shitstain. The SocSec Trust Fund holds a big chunk. Funny how proggies used to assert that those were solid assets earning real income - and now you claim [correctly btw] they are just intergovernmental IOUs. Still, those IOUs (and interest) have to be made good - which is going to cost you spending on something else. If you think it doesn't matter at all, try convincing a SocSec recipient of that.
However, as M has noted - the Chinese also hold a fairly big stake. I don't think they are going to be any less interested in forgiving that debt than your granny.
Krugman is wrong about the WWII debt. The instruments of that debt were paid off long ago - we just keep rolling it over with new debt instruments. The U.S. hasn't defaulted which means the debt hasn't just "gone away" as Kruggie so imaginatively puts it. He was correct that growth made it less onerous to carry that debt; the problem is you proggies can't create economic growth to do that again. About all you are really able to do is inflate the hell out of the currency (as the original progressives wanted to do) - which does devalue debt (national and private); but it does introduce some other problems into the economy.
This can happen in a variety of ways but the chief ones are monopolies and oligopolies.
Which one was health care again?
First, no one is being misled. Everyone knows that we are going to have to make changes and those changes will come about via Congress who represents the people.
Except the people who just paid into it for forty years expecting pay out of a certain level at a certain age. Just because Mr. Ponzi stands in front of you and tells you that you aren't getting any cash doesn't mean there isn't any deceit.
It is exactly what it claims to be: A mandatory transfer payment system
Except it usually is not claimed to be that, and even you had fought admitting that was what it was. No, no deceit there either.
"A Ponzi scheme is unsustainable because the number of potential investors is eventually exhausted.
And social security is sustainable because it is a mandatory system where there is forced compliance with all potential investors and the payout can be adjusted post facto despite promises to 'investors'.
1. Social Security pays out more than it takes in 2. Ponzi Schemes pay out more than they take in 3. Social Security is like a Ponzi Scheme
Cute Mark, but you've demonstrated in the other thread that you are not capable of following logic, so I am unimpressed.
Wait.... 1.Congress pays out more than it takes in. 2.Ponzi schemes pay out more than they take in. 3.Congress is a ponzi scheme......
I have said previously, many of the markets have such inelastic demand that it's very difficult to let the free market sort itself out. We are talking about people's lives here.
Yup, health care is important. It's peoples lives. The free market cannot allocate properly because everybody needs it to survive. Just like food, right. Food is important and everybody needs it to survive. Food has an inelasitc demand because you have to have it. And this is obvious by looking and the food market where being without price controls people would be starving due to the utter lack of efficient markets. Wait, we don't have price controls? We actually pay farmers not to produce food because food is so plentiful and cheap that the farmers would convert good future farm land into condos if we didn't? We have so much food for so cheap that obesity is a huge problem? How can this be without market controls? Price controls? Single payer food rationing? Obama-chow?
level the entire playing field and let everyone duke it out. No more special breaks for anyone including the oil companies.
I can agree with that, level the field. No special tax breaks, same prohibitions (or lack of) upon development and resourcing. I don't think you realize that leveling the field will hurt your renewables much more than it will hurt oil.
No, because we cut spending at the same time.
Right, because debt is a spending issue.
Well, right, because from your view, anything to the left of the one yard line means communism. So, your opinion is so warped that it really doesn't matter but, as always, it's welcome
I love this oft repeated bit of Mark-lore. Dude, I know I'm not central. That you think you are even close to the center is laughable.
From 1944 to 1950, we ran very high debt to GDP.
Yup, and post war we were the single largest producer in the world - and would remain so for many years. To recreate the same circumstances today would you have us bomb the EU, Russia, eastern Europe, South America, South Africa and the majority of Asia? I've brought this up to you several times without response. It's obvious that you have no answer. You cannot keep using post WWII as an example without addressing the unique ECONOMIC issues that allowed us to finance through it.
It depends on the market. Some are monopolies, some are monopolistically competitive, some are oligopolies.
Except the people who just paid into it for forty years expecting pay out of a certain level at a certain age. Just because Mr. Ponzi stands in front of you and tells you that you aren't getting any cash doesn't mean there isn't any deceit.
With Ponzi, though, they never got it. I would expect you to understand that there's a difference between losing your money entirely and getting it at age 67 as opposed to 65. And each person who stands to get Social Security has the right to work with their rep to make sure the adjustments will suit them. Again, no deceit.
Except it usually is not claimed to be that, and even you had fought admitting that was what it was. No, no deceit there either.
Where? By whom?
https://www.socialsecurity.gov/history/ponzi.htm
It would be most accurate to describe Social Security as a transfer payment--transferring income from the generation of workers to the generation of retirees--with the promise that when current workers retire, there will be another generation of workers behind them who will be the source of their Social Security retirement payments.Social Security is and always has been either a "pay-as-you-go" system or one that was partially advance-funded
Why don't just just admit that you (and others who believe this silliness) are aching to make SS a scam so you can prove people wrong about government and win the argument. It's so obvious that at this point it's highly amusing.
1.Congress pays out more than it takes in. 2.Ponzi schemes pay out more than they take in. 3.Congress is a ponzi scheme......
Still, a logical fallacy:)
. Food is important and everybody needs it to survive.
Ah, but with food, you have a competitive market. There are many buyers and sellers so each has a negligible effect on price. Sellers of potatoes, for example, have little control over the price because other sellers offer a similar product. If a potato seller raises his price, the buyer can easily go elsewhere.
With many health care markets, there are a lot of buyers but not as many sellers. These markets aren't as competitive. Lasik and other elective processes have certainly achieved this but this is not the case with more complex procedures and the life threatening ones like dialysis. This is where the element of inelastic demand comes in and why the government has to step in to help make the market more efficient.
Why then is your preferred fix for the government to address the demand side and do nothing to the supply side?
Well, it's both really. But let's suppose that there were many suppliers of life saving treatments and medicines. Would they all charge high prices because of inelastic demand? Or would the market correct itself as people would have many choices?
The other thing about food...people do need it but remember that with so many different products and suppliers, substitutes can easily be made. Suppose ice cream goes up 3 dollars in price due to some sort of problem. People will buy yogurt instead. If dialysis goes up, where's the "yogurt" to take its place?
But why are you even addressing the demand side? It's not the problem - unless the issue being addressed is inelastic demand which can only be modified by controlling demand - and the only way to control demand is by rationing access. Is that what you are saying?
Suppose ice cream goes up 3 dollars in price due to some sort of problem. People will buy yogurt instead. If dialysis goes up, where's the "yogurt" to take its place?
Ok, so we have ice cream going up not because there was not enough competition right? This isn't a matter of lack of suppliers this is something is the supply chain? Something like a lack of sugar or milk or something?
Again - why does the government need to address the demand side to fix this?
If dialysis goes up, where's the "yogurt" to take its place?
Does dialysis go up because lack of competition or because of some other issue in it's supply chain? What's that issue? And why do we fix this by addressing the demand side and not the supply chaing?
Would they all charge high prices because of inelastic demand?
That isn't the way it works. Too bad you don't understand any more than drooling out "inelastic demand". That only impresses the fools and YLDP.
Healthcare demand overall is no more inelastic than the demand for food. Dialysis is not representative, it is an exception. Just keep ignoring this point and harping on, and on, and on, and on about it. It really shows your credibility and what you are really trying to do.
Just to properly expand, a competitive market would be characterized by multiple suppliers competing for customers. At that point, it is competitive and absent collusion between suppliers, the price elasticity of demand (the proper term - not "inelastic demand") is irrelevant. Considering that dialysis is not a large market, there is a good chance that you would not get multiple suppliers (particularly given that the process is not simple). However, as long as that company (with govt collaboration) does not raise barriers to entry it is possible that an innovator may find a way to deliver dialysis more effectively/cheaply. Since M always lies about what I (and other libertarians) think about regulation, this may be a case in favor of it. Is that clear enough?
So how big a problem is this dialysis case. Well, according to the link I provided earlier it affects about 400K people at an annual cost of $20B. Annual Medicare fraud is more than double that according to the GAO.
86 comments:
Go read. If you don't understand, read it again.
By the way, that chart shows real data up through the last 20-year block. At least half of that last block - the part showing the deficit dropping - is nothing but a guess. Did you not understand that, or did you think it would go un-noticed?
Let's see...juris sees something he doesn't like and...questions my intelligence. You're nothing if not consistent:)
The only estimates are for the years 2011-2016. From 2010 and back we see the actual numbers.
There is no data about the deficit from 2011-16. It is a projection. A rather rosy one. It runs substantially contrary to the trendline up through 2010. We should just accept it without any questions. Read the linked article.
On the other hand M, why don't we talk about what the deficit looked like during your Golden Age of "Good Capitalism"?
That's absolutely true. So, if the projections hold true, what will you say?
I'll check out the article when I have some time to fully absorb it.
On the other hand M, why don't we talk about what the deficit looked like during your Golden Age of "Good Capitalism"?
Well, they look great but that's largely because we spent like crazy and ran deficits post war to flood the world with the dollar and encourage free trade. The year after the war, for example, saw a -7.2 percent deficit in spending. Recall that year also saw a debt of 270 billion dollars which was 121 percent of our GDP. In fact, our debt to GDP was over 90 percent until 1951. So, spending and high debt during that time seemed to work out just fine.
That post war 'flooding the world with US dollars' thing? Yeah, we were the worlds largest lender. Today we are the worlds largest debtor. It's the same thing only different right??????
A post war debt that we quickly paid down is not comparable to a debt incurred by what is essentially luxury spending.
If the projections hold true? I will say it was a miracle.
So, spending and high debt during that time seemed to work out just fine.
Playing Russian Roulette works just fine 5 out of 6 times too.
Seriously?!? Talk about the epitome of Cargo-Cult: we make movements just like before - but we don't understand why goodies no come no more.
I really don't know what you are saying with your gibberish about "flooding the world with dollars". At best it is post hoc ergo propter hoc and at worst you don't really have any idea what you are saying - but you think that was the apex of American life/economics and you just want to go back to it. Maybe you need to refresh your acquaintance with Manzi.
A post war debt that we quickly paid down is not comparable to a debt incurred by what is essentially luxury spending.
What do you mean, luxury spending? And it depends on how you define quickly. Take a look at 1944-1951 in terms of the debt. In fact, from 1944 to 1954 (11 years) we ran very high debt to GDP (over 70 percent).
I really don't know what you are saying with your gibberish about "flooding the world with dollars".
I'd recommend "The Global Future" by Charles Kegley and Gregory Raymond, Chapter 12. On page 310 we see this:
The United States also encouraged deficits in its own balance of payments as a way of providing international liquidity in the form of dollars.
So, your accusation of a logical fallacy doesn't make any sense but it does raise an interesting point that I've noticed lately with some of you guys. Rather than try to discuss the issue I have raised, you haul out the Latin in the hopes of masking the fact that you are pissed that I'm making a valid point backed up with facts. I also think it's possible that you don't know what I'm talking about or are too lazy to actually discuss the point in depth.
So, enough of the mouth foaming. Make a your point using some evidence and facts.
Again you cite a non-economics source about an economics point. Just another poopie in your pants, huh?
Was the dollar the de facto [oops more Latin] world currency post WWII - which appears to be your point. Yes, it was - which is one of the reasons the Europeans were so keen on the Euro. Does that mean what you think it means? Hard to tell because your thoughts are pretty much incomprehensible and you refuse to work toward any further explanation. Now, what did Manzi have to say about the post-war worldwide economic environment and the U.S. position within it? And in particular how that relates to the contemporary world?
You really ought to take the 10 to 15 minutes to read the Samuelson piece I linked to.
What do you mean, luxury spending?
WTF do you think I mean? Is the spending to prevent our extinction? Is is in a fight for survival? A real no-shit, people in the camps, dead by the billions fight for survival?
Anything spent by easily half of the federal government is luxury spending compared to that. So stop using debt incurred during a god damned world war to compare to your fucking social democracy debt.
Again you cite a non-economics source about an economics point.
So, it's OK when you guys commit a genetic fallacy but now when I do, eh?
Hard to tell because your thoughts are pretty much incomprehensible and you refuse to work toward any further explanation.
Ad hominem again. There's no further point to be made. We ran deficits on purpose to provide international liquidity in the form of dollars. We spent beyond our means for years and didn't fall into a boiling pit of sewage. It happened, it's a fact and that makes your contention that excess spending is a bad thing not accurate.
Is the spending to prevent our extinction? Is is in a fight for survival?
I think you need to put your actions where your mouth is. Did I link this for you or was it someone else? In any case...
http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html
...let's see how you would do it. Then we can talk about essential spending.
OK smart guy - exactly how does a deficit in balance of payments relate to deficit spending by the federal govt? If you can answer that, then the cite you made has some validity - otherwise it is just another one of your random links.
it's a fact and that makes your contention that excess spending is a bad thing not accurate.
I bet that translates into Greek really well. Do you recall that recently I said the govt could spend wisely or profligately and that I favored wisely. I guess we know what you favor.
...let's see how you would do it. Then we can talk about essential spending.
Did it. It locks me into their own preconceived ideas and doesn't give me the flexibility to cut anywhere and any level.
Well, what were your results? And what preconceived ideas would you change and how would you be more flexible? More importantly, evaluate what you think would happen if you enacted these changes.
OK smart guy
Why must you be such an asshole when discussing this stuff? It's very difficult to have a discussion with you when you act like this.
And are you actually asking me how federal deficit spending relates to federal deficit spending? While balance of payments is defined as a summary of a country's financial transactions with the rest of the world, we're talking about spending (internal or external) and whether or not deficit spending of any kind is a good thing. There's also crossover as foreign aid(e.g The Marshall Plan) is part of the federal budget. In short, we spent a lot of money intentionally and it worked out quiet well. I'm sorry you don't like that.
And what preconceived ideas would you change and how would you be more flexible?
Did you take the test Mark? Does it strike you that you could do something other than "reduce federal workforce by 10%"? Perhaps eliminate entire federal agencies?
"Cut 250,000 contractors"? Why not cut 100,000 or 500,000 contractors? You see how it's locking you into it's choices not your own?
Besides the doublespeak involved in saying "savings from tax increases", the entire thing locks the reader into the NYT's choices of what to cut and what to charge. That's not an honest graphic, and it's dishonest of you to foist it upon us.
And are you actually asking me how federal deficit spending relates to federal deficit spending?
No I wasn't - and that is exactly why I was being an asshole - because you don't know what you are talking about. For example...
whether or not deficit spending of any kind is a good thing
In short, we spent a lot of money intentionally and it worked out quiet well.
That is bullshit and I think even you know it. Again, you are contradicting what you learned from Manzi - which isn't surprising as you fall back to bullshit and/or nonsense whenever you can't carry your end of a discussion. You could learn something from that, but you won't. You can't relate a deficit in balance of payments to deficit spending - and for a good reason. But I will not let you bluff your way out this time you little fucking weasel. You are going to have to crawl away with your tail between your legs.
Perhaps eliminate entire federal agencies?
Which ones? And then what do you do when unemployment spikes and consumer spending falls off a cliff? I know you don't like federal agencies but would you hurt our economy just because of your feelings?
My point in getting you to take a look at this was to see that it's not as easy to cut spending as you might think. I don't think you are really considering the ramifications for what would happen and likely affect you personally depending upon the agencies you want to eliminate.
because you don't know what you are talking about.
And we're back to that again...sheesh...of course I don't. I have TO not know, right? The alternative is (shiver) too frightening...
But I will not let you bluff your way out this time you little fucking weasel. You are going to have to crawl away with your tail between your legs.
Good Lord. What's the matter with you? And you insist that you don't want to win the argument or prove me wrong:)
what do you do when unemployment spikes
Government is not a jobs program.
My point in getting you to take a look at this was to see that it's not as easy to cut spending as you might think.
Bullshit. From the NY time piece you link it shows a $418 billion shortfall for 2015, let's see if I can easily save that using spending cuts only...
Lets see, cut half of the agriculture dept. $76b, half of homeland security $22b, half of treasury dept. $346b, all of education and energy $118b, half of epa $5b and cut 10% of everything else aprox $290b. That's a grand total savings of $857 billion. Well that almost doubles what we needed to cut - guess we could have a budget surplus and pay off some of that debt huh?
I don't think you are really considering the ramifications for what would happen and likely affect you personally depending upon the agencies you want to eliminate.
Not only do I not care, but what I do care about is the continued survival and well being of this country. That will not happen if we keep spending money that we don't have.
Which ones? And then what do you do when unemployment spikes and consumer spending falls off a cliff?
That is fucking hysterical. So if the Dept of Education or Agriculture was shut down tomorrow - the entire American economy would be sent into a tailspin?
The alternative is (shiver) too frightening...
The alternative is we could have an intelligent discussion - but maybe that is too frightening to you. I don't know. If you actually could explain points I might even be persuaded - but throwing around slogans and random pseudo-intellectual claims doesn't do it. Providing links that don't support your claim is not evidence of any reasonable thought process on your part.
I know I would like to have a discussion with someone who knows what they are talking about, and can admit when they don't. People who ask questions because they want to better understand something. Instead I keep trying to discuss stuff with Minnesota's answer to Cliff Clavin.
If you actually could explain points I might even be persuaded
But that's not what you want, juris. You've consistently shown that you want to bully/weasel me rather than have an intelligent discussion. This usually becomes more pointed when I make a valid point. Rather than refute it with your own evidence, you attack personally and keep the focus on me.
Here is my point again.
The United States also encouraged deficits in its own balance of payments as a way of providing international liquidity in the form of dollars.
Now, refute that point and tell me why this was not successful (without personal attacks). Our discussion was about how continually having a deficit is bad because sooner or later, you have to pay the piper. I offered my evidence and the results of those policies.
After you've addressed this point (without the bully-weasel),we can talk about why this:
You can't relate a deficit in balance of payments to deficit spending - and for a good reason.
is silly.
Government is not a jobs program.
Is that also true of the thousands of people employed by defense contracts? I'd say that the government is one of many entities in our country that provides jobs for citizens. I would think, though, that you would be happy as public sector employment has dropped dramatically since the president took office.
guess we could have a budget surplus and pay off some of that debt huh?
Ok, fine. What happens as a result of these cuts? Let's see some evidence as to what you think would be the results if this would happen-good and bad since we are thinking critically, right? Oh wait...
Not only do I not care, but what I do care about is the continued survival and well being of this country. That will not happen if we keep spending money that we don't have.
So, it's an emotional thing as to why you want spending cuts, not logical in anyway. What if you're wrong? Like yourself, I too want to see the continued well being and survival of this country. It's my view that you are being irrational about spending and not taking into account how, in your fervor, the very thing you are trying to prevent might end up happening. In my opinion, it seems to me that you you (and other libertarians) want to cut off their nose to spite their face.
So not caring is considered emotional around here now? OK Mark......
Ok, fine. What happens as a result of these cuts?
Here's the thing Mark - If we make the cuts we can control when and where they happen. If we default the cuts happen anyway and not under our control.
I'm still having trouble communicating with you when you can't accept the simple economic reality of defaulted debt due to excessive debt spending. Talking details is rather worthless when you refuse to believe that our nation can indeed go bankrupt. What's worse is you haven't given any supporting reasoning for this belief other than "it can't happen to us, so there!"
Is the trouble that you can't believe it is possible for a country to default? If so I can provide examples. Is the problem that you can't believe the worlds largest economy can default? If so I can provide examples of that as well.
But that's not what you want, juris.
Well thank you ever so much for telling me what I really think/want/feel. I shall be sure to consult you about every future decision since you know me better than I do. You fucking arrogant prick. I suppose if I asked questions like you do, you might have a point - since you aren't interested in the slightest in actually understanding anyone elses point. You only ask questions that you think make you a winner. That's just so special.
Now, refute that point
Simple, it has nothing to do with federal deficit spending. Not one fucking thing - which is why I challenged you to show ANY piece of evidence or chain of logic otherwise. And you haven't. You just REASSERT your stupid claim and stand there proud as punch of that poopie in your pants.
without the bully-weasel
LMFAO - I am so taking that as my new nickname - juris "the bully-weasel" imprudent!
is silly.
Of course, call "silly" that which you can't argue - probably because you don't have a fucking clue what is being discussed. Not that that will stop you from weighing in with your opinion "supported" by random internet links. If you are going for argument by distraction you could at least try some porn links.
Oh M, you STILL haven't read the Samuelson article have you?
If we make the cuts we can control when and where they happen. If we default the cuts happen anyway and not under our control.
Well, there is a great deal of validity to what you are saying here. I guess I'd like to see some projections on what would happen if you eliminted the energy and education department completely.
Is the trouble that you can't believe it is possible for a country to default? If so I can provide examples. Is the problem that you can't believe the worlds largest economy can default? If so I can provide examples of that as well.
Well, anything is possible but I think it's highly unlikely. I think it's fine for you to be concerned but we've seen examples in the past where forgiving debt is more palatable than letting a country go into default.
http://en.wikipedia.org/wiki/Heavily_Indebted_Poor_Countries
I guess when it really comes down to it, it seems to me that your feelings about small government are heightening your paranoia of things that likely will never happen. This is what I have been trying to show you by looking at past examples of deficit spending. Yet, you persist in believing that the end is nigh. Take a step back and think logically for a moment. Of course, I'd be happy to look at any examples you have.
Simple, it has nothing to do with federal deficit spending. Not one fucking thing - which is why I challenged you to show ANY piece of evidence or chain of logic otherwise. And you haven't.
I haven't because you're being an asshole, juris. So far, your only response to the original statement has been this:
Again you cite a non-economics source about an economics point. Just another poopie in your pants, huh?
So, agree or disagree with Kegeley and Raymond's point and explain why. The challenge was made to me to explain how deficit spending over the long term can be effective. Here's one way it can be. Another way would be foreign aid like the Marshall Plan (which is part of the federal budget btw) which worked in tandem with running a trade deficit. So that would be two forms of deficit spending.
After you do so, I would be happy to discuss further how federal deficit spending is related to balance of payments. Before we do, though, I think you might want to take a breath and think about whether or not you really want to make that claim.
Kegeley and Raymond aren't talking about federal deficit spending - read your quote again, nowhere do they say anything about federal spending. Because they are talking about balance of payments in international trade (which is not anywhere near the same as federal spending). You just don't get that, do you? They are talking about something completely independent - and the only reason you have linked the two is because of the presence of the word deficit.
Here is some good resource material. Of course since you didn't read the first link I gave, I don't expect you to read (or understand) this one. The U.S. trade deficit (also unrelated to federal deficit spending) did not develop until the late 60s (and only means that we import more than we export - nothing about federal revenue/spending). Balance of payments became less important with Nixon floating the dollar (instead of the fixed currency exchange rates under the Bretton Woods agreement).
This is truly laughable. Until I recall that you are responsible in some small part for the education of children - and then it is all but tragic.
This is truly laughable. Until I recall that you are responsible in some small part for the education of children - and then it is all but tragic.
That thought runs through my head reading his posts every time. Sad.
This is truly laughable. Until I recall that you are responsible in some small part for the education of children - and then it is all but tragic.
That thought runs through my head reading his posts every time. Sad.
Last chance, juris (and now 6Kings). You said "You can't relate a deficit in balance of payments to deficit spending - and for a good reason." And "Simple, it has nothing to do with federal deficit spending. Not one fucking thing - which is why I challenged you to show ANY piece of evidence or chain of logic otherwise. And you haven't." Any hope whatsoever of you qualifying this statement? I'm affording you (yet another) opportunity to back out of this imperial edict.
I so want to jump the gun here and butt in on Mark but that would completely ruin what will surely be the most epic takedown and fail on any blog in history. It's going to be a joy watching you fall, juris, since you are a complete fucknut.
we've seen examples in the past where forgiving debt is more palatable than letting a country go into default.
Well of course it's more palatable, but it's technically the same thing. This difference is more akin to a chapter 7 (full discharge) and a chapter 13 (restructuring) bankruptcies. It's also rather easy for a large country such as ours to forgive a debt that is crushing to smaller country. It is not as easy to expect any other country to forgive a debt large enough to be unmanageable to the worlds largest economy.
Default (basically saying we can't pay) or debt forgiveness, somebody still loses their money. In the case of our debt - that would be a lot of money and could put the entire world into an economic tailspin.
You've mentioned forgiveness before. An earlier mention even seemed like you were saying that we needn't worry about the debt because we could always have it forgiven. It most circles, borrowing money you don't have the means of repaying or borrowing what you don't intend to repay is criminal fraud. I really hope you that's not what you are saying.
I'd be happy to look at any examples you have.
10 Governments That Went Bankrupt
it seems to me that your feelings about small government are heightening your paranoia of things that likely will never happen
This isn't Republican vs. Democrat vs. Libertarian. It's math.
If you spend more than you make you increase your debt. If you continuously spend more than you make then you are increasing your debt at a faster level than your income is rising. If your debt rises continuously faster than your income rises, eventually you will reach a point where your entire income can do no more than make payments on that debt (or just on the interest on that debt)
These are facts Mark. You cannot argue them.
IF you looked at the link I sent you about Japan, you'd see that if the interest on their debt went to just 3% then just paying the interest on their debt would be half of their governments income. Half! Imagine that Mark, paying half of your income just to pay the interest on your credit cards. You can't pay your mortgage, food and utilities etc. when half your income is just paying the interest on your debt. No mention there of paying any of the principal off - which means you aren't getting out from under that debt. That also per-supposes that you've stopped borrowing more money at that point as well.
It's math Mark, not politics.
I really hope you that's not what you are saying.
No, that's not what I'm saying. Obviously, forgiving debt won't be in the cards for us-the world's biggest economy. But it does work for smaller countries.
Regarding your list, my first thought is that we are not Zimbabwe. There's a very big difference between how our risk is perceived and how their's is perceived. Interesting mention of Iceland as their collapse (like ours in 2008) was the result of unregulated markets. In the case of Iceland, a very pure form of laissez faire economics which illustrated quite clearly what happens when you go down that path.
It's math Mark, not politics.
It's more than that, though, GD. You're not including risk and the perception of the United States as being a good bet. This will likely remain the case in the future. I do agree that we need to lower our deficit spending and hopefully get back to the point where we have a surplus but that's going to mean a combination of spending cuts and revenue increases. That's math too, GD.
And we are always going to have debt. We've had it since the country was founded. If we can get our debt down to 50-60 percent of GDP, we'll be back in good shape. That's possible as well and the first step towards getting there is to cease the anti science campaign of the right and get us back to being the leader of innovation in the world.
So, I don't really believe your dire warnings about the shape of our country. I've noticed the level of worry spike with many of my libertarian friends of late and I have to wonder what information you folks are reading that leads you to believe we are headed for doom. It's simply not the case.
The Bully Weasel is going to fall soon. This is going to be a real treat especially after Mark has been so generous in allowing him every opportunity to back off his ridiculous comments.
It's going to be a joy watching you fall, juris, since you are a complete fucknut.
Hell, I just read and never post, except now, and I feel like a kid on Christmas. Juris, you are a very rude person who deserves everything that's coming to him.
Any hope whatsoever of you qualifying this statement?
I explained it to you, and I provided a link (which you obviously didn't read). You see M unlike you, I provide links that are relevant to the point. I even showed where your own quote of the authors doesn't address what you claim - and that it isn't in accord with the chart you had in the post atop this thread (because there was not big deficit spending throughout the hayday of the Bretton Woods era).
But just so no one can say I didn't try, here are two more links - to charts, so you don't have to actually read.
Federal spending surplus or deficit (starts in 1895)
Balance on current account (series starts in 1960)
Maybe pictures will help you understand that there is no innate linkage between federal spending policy (surplus or deficit) and the balance of trade (imports versus exports). Even if the word deficit is used in both.
No, I obviously haven't done enough to change your mind. You have made your pronouncement and no mountain of factual information can alter your opinion. Which is fine - it is your opinion, it just isn't tied to reality. You might as well say so though - just to be honest with yourself. And don't claim to be a critical thinker - ever.
I love the YLDP contribution. All safely hiding behind big brave M to take me down. Careful or the bully weasel will come getcha!
Alright, here's how this is going to work, juris. I'm going to show how both of your statements...
Simple, it has nothing to do with federal deficit spending. Not one fucking thing - which is why I challenged you to show ANY piece of evidence or chain of logic otherwise. And you haven't.
and
You can't relate a deficit in balance of payments to deficit spending - and for a good reason.
are wrong. If your response to my points contain any personal attacks, I will not respond. I'm effectively done with your bullshit games. I've asked you repeatedly to stick to refuting my points with actual evidence but you can't resist ripping into me and doing the bully weasel thing with your redirecting questions.
Side note to sasquatch, angelo and serial, this isn't about "taking down juris." My original point was to try to get him to see that deficit spending can be effective, whether it's trade deficit spending or federal deficit spending, at certain times.
The relationship between our trade deficit and federal deficit is quite obvious. Essentially, the trade deficit funds the national debt. When we spend 10 dollars in China, for example, and they spend 6 dollars here, there is an extra 4 dollars of money (the trade deficit). China takes that money and buys US securities (mostly T Bonds). Bonds are basically loans to the US government so the trade deficit and US trading partners fund the debt. Now China could sell the dollar for the yuan but that would devalue the dollar and start some problems with its trading partner-us. I'm certain that there are a lot of behind the scenes games that go on where this happens.
The other way they are related (and how it pertains to the conversation above) is foreign aid. Foreign aid is part of the federal budget and this sort of deficit spending was also encouraged. As I have said repeatedly, we purposefully ran deficits in tandem during the post war years to strengthen the value of the dollar (both foreign aid and trade). The two had to work together for the LIEO to work and that's just what Kegeley and Raymond talk about in that section of their book. It's spending from the same source with the same intent so they are, in fact, connected.
Incidentally, this is also why MNCs like running trade deficits because it overvalues the dollar. But when this happens, we end up with a lot of foreign investment in our national debt which is certainly a concern. One of the reasons why Japan has been able to run high debts for years is they have smaller foreign investment in their debt.
President Reagan spoke of the connection between the trade deficit and the federal deficit in 1987.
“Here in the United States, we must restrain government spending. Our trade deficit in goods and services reflects that, over the past several years, we have spent more than we have produced—and we have spent too much because of the profligacy of the federal government. As the Congress reviews my proposed 1988 budget, it should remember that a vote for more government spending is a vote against correcting our trade deficit.
Juris=pwned.
I don't care what your intentions were, Mark. That was hands down the best flame I've ever seen in a comments section. Hubris never stood a chance. His head was too busy trying to find new ways to ad hominem the "yippie dog posse."
My original point was to try to get him to see that deficit spending can be effective, whether it's trade deficit spending or federal deficit spending
Two things that have no relation. None except that one word gets used in both. That is your stunning insight? That deficit is used as an adjective?
Essentially, the trade deficit funds the national debt.
Not according the data from the St. Louis Fed I provided you. You have no data or chain of causation. Nor are you describing what happened following the Bretton Woods agreement and during your Golden Age - you are now talking about what is happening today with China. This doesn't follow from your previous quote and you offer no new supporting data, quote (save what ol' senile Ronnie may have said) or link. Absolute FAIL.
Foreign aid is part of the federal budget and this sort of deficit spending was also encouraged.
Say what - foreign aid is such a big part of federal spending that it aids in causing the deficit? Gosh, so does paying for the ATF and the federal mohair subsidy.
As I have said repeatedly, we purposefully ran deficits in tandem during the post war years
Really? Go back and look at your own chart on the deficit - what was happening in the 50s? Was that a routine deficit? If so your chart doesn't show it.
You have nothing, nothing but what you say. No data from anywhere, no such-and-such economist says, no textbook reference - NOTHING. And you think that puts me down? And the YLDP is all ready to slobber your knob? Wow!
I gotta say M, that was disappointing - even for you. This might mark the lowest point for you since Centerpoint/RMR. Remember how even blk said how foolish you were in that case. I promise, I won't get as frustrated and angry as I did then. At that time I was under the impression that I was talking to a sane person and therefore expected sane responses. Now I can just be the bully-weasel, rip you a new asshole and not take it seriously in the slightest.
And speaking of the YLDP, funny how days and weeks go by without a peep from either of these two, and then within an hour of M's epic failure to take me down, there they are. Tell me last_in_line - since you actually know M do you wonder if these aren't a bit like M's "conservative friends" (i.e. the voices in his head)? Am I actually conversing with nothing but a bunch of sockpuppets?
Not to mention the Reagan quote doesn't say what he thinks it does.
Mark, will reply to your post when I get back home....
I'm meeting M at the bar in a couple hours for a cold one. I'll get the truth out of him...I usually do that by asking him "Hey, does this rag smell like chloroform to you?"
To Juris-I don't think you are being fair with Mark at all. I happened upon this thread when I saw the graphic and then read the comments. He has made an honest effort to engage with you on the subject of deficit spending and you resort to name calling? You also switch the subject when the discussion isn't going the way you like it and try to find some angle to trip Mark up. Yet every time he continues to illustrate his points effectively. I wouldn't blame Mark if he never engaged you again.
I like the Reagan quote. He was right then and it's still true today. More government spending or deficit spending does mean further problems with our trade deficit.
What a ridiculous thread. This is why I don't post comments that much anymore. All of you are talking past each other and not even taking the time to consider what the other is saying. What piffle.
"Hey, does this rag smell like chloroform to you?"
LOL - I think he would fall for that.
I don't think you are being fair with Mark at all.
Fair has got nothing to do with it. He makes claims and when asked, FUCKING ASKED, to expand, explain or support - he runs off on, well, you can't even call them tangents. I may have to invent a word to accurately describe it.
He has made an honest effort to engage with you on the subject of deficit spending and you resort to name calling?
Really? You call talking about a deficit in balance of payments an honest effort to discuss federal spending in excess of income. Do tell me more. And M was the one that quoted the BoP and because it said "deficit" argued that it was related to federal deficit spending. Funny how you can't support that either.
What a ridiculous thread.
And juliet, you have contributed exactly what to it?
Seriously these must be sockpuppets - real people might actually pick up M's argument and support it better than he does. At least they would if they considered themselves friends and supporters of liberal causes.
Juris, you made the claim that the trade deficit has nothing to do with the federal deficit. Mark just showed that, while separate in some ways, they are related. Your statement is false.
Hey Angelo how exactly did M demonstrate that. By waving his hands? Because he said so? What?
How about you? You got any links? Something scholarly that shows he is right and I'm wrong.
I know, let's put it to a vote - all the sockpuppets in favor say "aye". I mean lets get the whole sock drawer emptied out!
The underlying fundamentals are entirely different. You might have noticed that if you visited the St. Louis Fed cite I linked to. They are under different categories of economic statistics. But hey, what would that bunch of egghead economists know anyway!
You also switch the subject when the discussion isn't going the way you like it and try to find some angle to trip Mark up.
Well put. It's exactly what he does and I'm sick of it.
They say the definition of madness is doing the same thing over and over again and expecting a different result. I've followed this blog for long enough to know that there is no piece of information available in human history that will change or sway you, Hubris. Maybe Mark has finally woken up.
You changed the line of argument you asshole, not me. You started with the deficit, brought up trade (and I asked why) and now you play all wounded child.
Grow up, grow a pair, do something.
Not playing your game, Juris. I'll go back to just reading and recommending this site to my friends (14 now have started following it) who are interested in insightful, intelligent and well informed (and often funny) commentary on politics, history, and economics.
What is it with you fucktard liberals and "games"? You can't make an honest, intelligent argument so all you do is pull your puds about how smart and witty you are and how evil and mean everyone else is? How all political discussion is a fucking game?
Wowee. A guy goes on vacation to deliver millions of presents to billions of kids and look what he comes back to-a whole new level of denial and attacks by Hubris Imprudent.
The trade deficit feeds into our national debt/deficit just as Mark described. Does Mark need to provide you a link that shows that the Chinese have bought T Bonds? Really? The amount of foreign investment in our debt that comes out of our balance of payments is a concern that clearly shows the relationship between the two types of deficits. Admit that your statements were wrong, Hubris, or are you that far gone that you can't admit fault?
How we spent $$ post WWII and traded were very much intertwined as well. Mark was attempting to show that deficit spending of any kind can be effective. That was the challenge given to him and he accepted it, proving not only that it can be effective but the world won't end if it happens. Him trying to show this to you involves thinking outside of the box and bringing in wider array of factors to consider.
Hubris didn't like that and had hisself a hissy fit just like he always does. It takes a man to admit when they are wrong, Hubris, but I guess you decided to go full on pussy and put it all back on Mark-just like you always do. What a whiny bitch.
The trade deficit feeds into our national debt/deficit just as Mark described.
Really? Why? Explain how that works precisely.
The Chinese buying Treasuries is because they have to do something with their dollars - since they aren't buying U.S. goods. They would do that even if our spending was balanced with our taxation (since we would still have a substantial debt that needs to be continuously rolled over). U.S. Treasuries are still the best govt paper in the world - not because they are so good, but the rest of the world is just worse.
Mark was attempting to show that deficit spending of any kind can be effective.
And deficit spending (or surplus for that matter) by the feds has nothing to do with whether our imports exceed our exports. Nothing. Which is why none of you are citing economists in support of that. Nor does talking about what is happening today reflect what was done (and why) in the Post-War period (Bretton Woods - which is where M started this whole falderal).
How can you all be so fucking stupid? Thanks though Santa for being slightly less stupid and lame than the rest of the YLDP. At least you tried - that is more than can be said for the rest.
-Really? Why? Explain how that works precisely.-
Mark already did above.
-And deficit spending (or surplus for that matter) by the feds has nothing to do with whether our imports exceed our exports. Nothing-
He just showed they did with the Chinese and foreign investment in our debt which is completely related to trade. He showed they did in the post war period as well. You just don't want him to be right.
http://blog.heritage.org/2011/07/01/federal-spending-and-the-trade-deficit/
"If the government did not have to sell so many Treasury bonds to foreign buyers, they would have more dollars available to spend on U.S. exports and to invest in the U.S. private sector. This problem is nothing new."
This link has the same quote from Reagan that Mark used.
The original contention by you guys was the deficit spending over a period of time was always bad. He showed that it wasn't. I appreciate the compliment but you're not really paying attention to what Mark is saying. He has responded to all of your questions and offered evidence to back up his claims. Be reasonable and look at the big picture here. You just won't give and that's the problem.
I would guess that that is where M got the Reagan quote in the first place, which also explains why he didn't link to it - it comes from one of those evil, right-wing websites that can never be trusted due to their incredible bias. At least that's the case when anyone but him quotes them. And seriously, Reagan was in early senility by '87, and his budget deficits were due to never bringing spending into balance with tax revenues.
Now, this does introduce some problems to M's argument - which is it doesn't excuse deficits in either case. In fact it makes the argument that they are problematic - exactly contrary to M's thesis. It also argues that deficit spending feeds the trade deficit (due to Treasuries displacing consumption of U.S. goods - which is a very debatable point itself). At best, the trade deficit is an effect of the budget deficit - not some good thing that benefits the U.S. or world economies. Also, the Chinese case is a very recent phenomenon - not the norm that M insists was the case post WWII: e.g. As I have said repeatedly, we purposefully ran deficits in tandem during the post war years which is demonstrably not true, first in his chart at the top of this thread, and second in the two Fed links I provided.
Again Santa I will give you credit for picking up the argument and trying. You aren't any more correct or persuasive, but at least you gave it a try. And lo and behold we don't have to just insult each other. See how that works kids? Now eventually you might see the error in the argument and stop mindless defending it just because you can't stand to see M fail.
And we are always going to have debt. We've had it since the country was founded. If we can get our debt down to 50-60 percent of GDP, we'll be back in good shape.
Interesting M - how do you think we are going to get federal debt back down to that range? Are we going to stop spending more than we take in? Are we going to use some of that budget surplus (you know - spending less than taxes bring in) to pay off that debt to bring it down to the range you cite? You're talking about nearly chopping our debt in half. That's going to take some aggressive payback.
Or are we going to do it according the liberal-logic and spend and tax more while growing the economy so fast that it outstrips the burgeoning debt?
Juris, you said the following two things.
"Simple, it (the trade deficit)has nothing to do with federal deficit spending. Not one fucking thing - which is why I challenged you to show ANY piece of evidence or chain of logic otherwise. And you haven't."
"You can't relate a deficit in balance of payments to deficit spending - and for a good reason. "
Our government makes decisions every day regarding the federal deficit based on the trade deficit. This is certainly true with China. Their investment in our debt comes from the trade deficit. We also make decisions based on the trade deficit based on the federal deficit. How much foreign aid we give to a country may well depend on how much they owe us or we owe them.
I think you should just admit that you went overboard in trying to prove Mark wrong and walk it back a little. After all, he did write above,
"While balance of payments is defined as a summary of a country's financial transactions with the rest of the world, we're talking about spending (internal or external) and whether or not deficit spending of any kind is a good thing."
He has been saying all along that there are both differences and similarities so you are both in half agreement anyway.
Have you read the chapter of the text that Mark has quoted? It seems to be that you need to review the material before you can make any sort of evaluation.
Our government makes decisions every day regarding the federal deficit based on the trade deficit.
Really? We change our spending on a daily basis because we import more than we export?
Their investment in our debt comes from the trade deficit.
They could be buying American goods instead of American debt. Remember how the Japanese terrified us a couple of decades back buying up our real estate? Do you recall how that turned out for them? Maybe the Chinese took note of that.
He has been saying all along that there are both differences and similarities so you are both in half agreement anyway.
Ah, the Cult of Both Sides is it? M brought up the trade issue, not me. The fact that he linked to something irrelevant to his original argument is not my problem. Again, it seems to pain you that he was simply wrong.
Have you read the chapter of the text that Mark has quoted?
Yes I did, did you? That was how I found out it wasn't economists writing it. By the way, I never disputed what the authors actually said - it was all about M's non sequitir [damn, more Latin]. The authors quoted didn't make any silly claims, M did. So, did you read the items I linked?
Iowa and Santa-the definition of madness is doing the same thing over and over again and expecting a different result. You'll have better luck trying to get a giant slab concrete to dance.
>Or are we going to do it according the liberal-logic and spend and tax more while growing the economy so fast that it outstrips the burgeoning debt?
This, I think, is the real root of it. The fundamental problem with "welfare capitalism" (which Mark hasn't really defined but I'd guess is a strong regulatory state combined with generous entitlement benefits), there is very little political benefit to cut (or restrain) spending, and great benefit to increase spending. Similarly, there isn't much political benefit to raising taxes (certainly not on the middle class), and great benefit to lowering taxes. When doing the "right thing" is not politically beneficial, politicians will choose to increase spending or lower taxes by borrowing or printing money in order to get votes, if they are able to. This is the main reason why the debt and deficit are so worrisome to me - I see nothing to indicate that political incentives have or will change, and thus I don't see any course change being likely unless forced (such as by interest rates) to do so. Even looking at your deficit graph - doesn't it seem odd that the only time in the last 30 years we came close to reducing the debt was during the late 90's tech bubble and the relative political gridlock that occurred during tha time? What actions would our government plausibly take, that is palatable to large portions of the electorate, that would significantly reduce the debt or deficit? (And no, wishing that 50% of the electorate didn't exist is not plausible.) Hoping for lots of growth seems like a pretty poor strategy - hope doesn't get you much tax revenue. So yeah, I second Juris's question - how are you going to get the debt back down to 50-60? Outside of rather massive unexpected economic growth, not seeing many options.
"welfare capitalism" (which Mark hasn't really defined but I'd guess is a strong regulatory state combined with generous entitlement benefits),
I have defined it several times but you chose instead to not listen/play games. Here it is again for the final time so cut and paste because I won't be putting it up again.
Welfare Capitalism embraces the free market and its role in allocating goods/services and how they will be produced in tandem with government regulation that prevents monopolies and oligopolies. As Mankiw says in his list of 10, the government can sometimes improve the efficiency of markets. Otherwise, the welfare capitalist thinks that the market should be left alone to do what it does naturally. WC looks to the government to provide infrastructure (roads, bridges, canals, ports etc) as well as the basics needed in the human resource area (education and essential health care). Unions, unemployment insurance, and Social Security are also party of WC. Essentially, welfare capitalism is what we have now in our country.
This is the main reason why the debt and deficit are so worrisome to me
Herein lies the problem. As Lofgren noted in his exit piece from Congress, the right has largely become like an apocalyptic cult. If I don't worry as you are worrying, then I must be naive. Except that history shows me otherwise. We have been through far worse in this country...other civilizations have been through much worse...and the results have not been a boiling pit of sewage. I think you need to stop and consider what you will say if things get better. Will you admit it? Especially if it is the result of Democratic policies? In my view, this sort of think is self-perpetuating...it sadly never ends.
To answer your question regarding the debt and deficit, it's going to depend on a combination of factors. First, we are going to have to cut defense spending and alter Social Security and Medicare (means testing and raising the age of retirement). Next, we are going to have end subsidies and tax breaks which distort the market and erode the revenue stream. Third, we are going to have to raise taxes back to Clinton era (that gridlock time of which you spoke:)) levels. Basically, what I am saying here with these three is Winston Bowles.
Finally, we need to become the world's leading producer of green technology. I don't care if this comes from the public or private sector but it has to happen. If this means that we need to dispense with some government regulations, so be it. If this means we need to go a little more into debt for awhile, so be it. Both? So be it. To me, this is the future as climate change is very, very real and renewable energy sources are the future. If this happens, we will see more revenue.
And, honestly, if we get above 3 percent growth in the economy, we are going to see an improved revenue stream. 4 percent and you and I are done having this conversation.
Now, before you try to redirect me down the doom and gloom path, I'd like you to take a look at this recent piece from the Christian Science Monitor.
http://www.csmonitor.com/World/2011/1226/The-surprisingly-upbeat-state-of-the-world
I'm going to be talking a lot about it over the next few weeks. I'd urge you to temper your negative thoughts with the information provided in it.
For all the problems we face right now, we're going to come out just fine. The world is becoming a much better place to live in and it's largely due to the LIEO that has been sprouting since 1944. Obviously, we are going to hit snags and road bumps along the way but we are not going to "fall apart like Greece."
How are we going to reduce the federal debt to the 50-60% range? Either GDP growth has to go through the roof - not 3 or 4%, or you have to spend a lot less than you tax (and use the surplus to pay down the debt).
You said that was a reasonable debt load (and I would tend to agree) - so how do we get there. I don't see us getting there via the Republicans, let alone the Democrats.
Finally, we need to become the world's leading producer of green technology.
Oh, that's it - we are relying on fantasies. Well, that will do it - if we wish hard enough our dreams are sure to come true.
Welfare Capitalism embraces the free market and its role in allocating goods/services and how they will be produced in tandem with government regulation that prevents monopolies and oligopolies. As Mankiw says in his list of 10, the government can sometimes improve the efficiency of markets
Ahhh, I see. The free market is the best way to efficiently allocate goods and services - except when it does certain things that certain people don't like. Then it's time to the government to "improve" those things......right.
If I don't worry as you are worrying, then I must be naive. Except that history shows me otherwise. We have been through far worse in this country...other civilizations have been through much worse...and the results have not been a boiling pit of sewage.
So no other civilization has ever fallen? There aren't any examples in history of lost empires or forgotten peoples? Billions haven't died dues to disease, famine, pestilence common when their country falls? None of these things have ever happened and to warn against activity that could lead down the same path is cult-like dystopian fear mongering? Perhaps you are naive then.
alter Social Security and Medicare (means testing and raising the age of retirement)
Because the current promises made to those recipients is unsustainable due to the pyramid like nature of the program. So we are going to have to unilaterally change what we promised to people for the forty or fifty years they paid into the program and give them less or none than they were told they would receive. But it bears no relation whatsoever to a ponzi scheme.
end subsidies and tax breaks which distort the market...
Except when it comes to health care, then this activity is considered making the market more efficient.
eading producer of green technology. I don't care if this comes from the public or private sector
By using tax breaks and subsidies? Huh?
we need to dispense with some government regulations, so be it
But, it's only those dang government regulations that are keeping oil expensive enough that green tech can even be thought of as competitive....
we get above 3 percent growth in the economy, we are going to see an improved revenue stream. 4 percent and you and I are done
Except we increase our debt at a faster pace than that - so the conversation continues. Bet you can't figure out that you can't go into debt without spending, so it's like talking to a wall.
except when it does certain things that certain people don't like. Then it's time to the government to "improve" those things......right.
No. Except when it fails to allocate resources efficiently on its own. This can happen in a variety of ways but the chief ones are monopolies and oligopolies.
Perhaps you are naive then.
Of course other civilizations have fallen but they haven't ALL fallen. Certainly, others have been through worse then we have (including us) and are still around. I know it's fun to play "Apocalypse" but it's very counterproductive.
So we are going to have to unilaterally change what we promised to people for the forty or fifty years they paid into the program and give them less or none than they were told they would receive.
Our society has changed. It doesn't mean these programs are going to go away. People are living longer and some people are wealthy enough to not need Social Security, for example.
But it bears no relation whatsoever to a ponzi scheme.
Cut and paste the following below. I won't be repeating it again.
No, for three reasons. First, no one is being misled. Everyone knows that we are going to have to make changes and those changes will come about via Congress who represents the people. It is exactly what it claims to be: A mandatory transfer payment system under which current workers are taxed on their incomes to pay benefits, with no promises of huge returns. Second, as Michael Zuckoff (author of Ponzi's Scheme) recently stated, "A Ponzi scheme is unsustainable because the number of potential investors is eventually exhausted. That's when the last people to participate are out of luck; the music stops and there's nowhere to sit. It's true that Social Security faces a huge burden — and a significant, long-term financing problem — in light of retiring Baby Boomers. … But Social Security can be, and has been, tweaked and modified to reflect changes in the size of the taxpaying workforce and the number of beneficiaries. It would take great political will, but the government could change benefit formulas or take other steps, like increasing taxes, to keep the system from failing." Third, Social Security is morally opposite of a Ponzi Scheme. Zuckoff: "At the height of the Great Depression, our society (see "Social") resolved to create a safety net (see "Security") in the form of a social insurance policy that would pay modest benefits to retirees, the disabled and the survivors of deceased workers. By design, that means a certain amount of wealth transfer, with richer workers subsidizing poorer ones.That might rankle, but it's not fraud... None of this is to suggest that Social Security is a perfect system or that there aren't sizeable problems facing the incoming administration and Congress. But it's not a Ponzi scheme. And Ponzi himself, who died in a hospital charity ward with only enough money for his burial, would never have recognized it as his own."
In sum, this assertion is a logical fallacy, as demonstrated in comments a while back. Example:
1. Last in Line doesn't wear his seat belt (true, btw)
2. Hitler doesn't wear his seat belt
3. Last in Line is like Hitler
Now apply it to the SS/Ponzi Scheme silliness
1. Social Security pays out more than it takes in
2. Ponzi Schemes pay out more than they take in
3. Social Security is like a Ponzi Scheme
So, you are wrong but I'm certain that won't stop you from believing what you want to believe.
Except when it comes to health care, then this activity is considered making the market more efficient.
Health care is a giant problem in a number of ways when it comes to the free market. As I have said previously, many of the markets have such inelastic demand that it's very difficult to let the free market sort itself out. We are talking about people's lives here. There are no easy answers and I certainly don't have all of them. But I do have ideas as opposed to intransigent beliefs so that puts me ahead of some folks.
By using tax breaks and subsidies? Huh?
No. I think that the president should level the entire playing field and let everyone duke it out. No more special breaks for anyone including the oil companies. Obviously, this will be tough given how many people in Congress are on the oil dole.
Except we increase our debt at a faster pace than that - so the conversation continues.
No, because we cut spending at the same time. Of course, we have a different definition of this and I'm simply not going to buy into your Draconian ideas of eliminating entire departments...especially the ones that don't add to the debt or deficit in a significant fashion. Defense, Social Security, Medicare...those are the three places to start. Again, it's Simpson-Bowles and I do fault the president for not embracing it but I understand why he did not.
Certainly, others have been through worse then we have (including us) and are still around.
OK, just out of curiousity which countries are you talking about?
Again, it's Simpson-Bowles and I do fault the president for not embracing it but I understand why he did not.
S-B never proposed getting spending reduced to the point of running surpluses (let alone big ones) - which are necessary to getting our debt down to the level you suggested. Good that you fault the President for his lack of leadership - that's about the first substantive criticism you've had of him. Of course you immediately soft peddle it, but it is a start.
If you want to cut Defense, you have to give up the liberal/neo-con foreign policy consensus. Also, good luck getting elected on the promise of cutting SocSec & MC. I still don't see what value you place in the Dept of Education (amongst others).
>Except when it fails to allocate resources efficiently on its own. This can happen in a variety of ways but the chief ones are monopolies and oligopolies.
See, this is one of those many times where you say "I believe X", but your actions speak otherwise. You say that as a welfare capitalist, you embrace the free market. Yet you sure seem to like your centrally planned interventions or distortions. In fact, I can't recall you opposing a single one, much less opposing them on free market grounds. Solyndra? GM? Healthcare? Bailouts? Stimulus? Cash for clunkers? As GD said - you seem to like the free market until it does something you don't like. When asked, you then say, "Oh, this case is special." This is why I am skeptical of the label of "welfare capitalist" - i think you're just a standard issue statist. But, whatever, call yourself whatever you want. And really - was that paragraph you pasted really any different than what I said? Strong regulatory state and generous entitlements? No, not really.
>I think you need to stop and consider what you will say if things get better.
Hrm. Let me think. How about, "I was wrong."? Would be nice if I was, wouldn't it.
As to green tech, zzz. Another example of you being a fair weather free marketer. Just so you know - a free marketer would say something like, "Hey, if green tech can't make it in the marketplace on its own, its probably not viable, and subsizing it will only hide its true costs and delay its inevitable failure." We get it, you think green tech is super important. Me, I'll take steady incremental improvements on existing technologies. Have you ever considered that diverting resources to green tech might slow down or stop those types of incremental improvements?
As to Soc Sec like a Ponzi scheme, no point - we know how irrational you are on that one. Or are you going to, once and for all, tell us how the trust fund represents real assets that the government takes great care of?
Re: 4% growth rate saving us - nonsense. GDP growth has been at our near 4% numerous times in the past 30 years, and the debt has not gone down once. Growth rate simply isn't a reliable indicator of whether the debt or the deficit decreases, since spending can easily eat up whatever revenue increases come from it. As was said on a previous thread - all the revenue increases in the world won't help you if you can't control your spending.
Again though, you are hand waving the larger question. The debt currently stands at about 100% of GDP, or around 16 trillion. Getting that to the 50-60% of GDP range requires reducing that debt by 7-8 trillion. The deficit is currently ~1 trillion. Where do you think the political will exists to close the deficit, much less get into a surplus such that we could pay down the debt? As I stated before - I don't see where the political incentives exist to do the right thing, whether the right thing is hugely cutting spending or hugely raising taxes, or some combination thereof. Neither of those things is politically beneficial, and thus, won't be done except when there are no other options, such as borrowing becoming nearly impossible.
Yet you sure seem to like your centrally planned interventions or distortions.
i think you're just a standard issue statist.
Well, right, because from your view, anything to the left of the one yard line means communism. So, your opinion is so warped that it really doesn't matter but, as always, it's welcome.
The free market is fine with something like Lasik (which I've mentioned before) or other similar health care markets. But with dialysis, things get different because we are talking about someone's life. I guess what I'd like to hear from you and the other commenters is what you are afraid to say: that you would let people die so the market could correct itself without government interference. At least the price would go down for lack of buyers, right?
Hap, you really need to grok that libertarian fantasies are just as FUBAR as socialist ones. That's why a more balanced approach works.
As to Soc Sec like a Ponzi scheme, no point - we know how irrational you are on that one. Or are you going to, once and for all, tell us how the trust fund represents real assets that the government takes great care of?
Then, by all means, refute my points, one by one, with a similar rational argument and demonstrate how I am not accurate in my logical fallacy example, Haplo "Projection/Flipping" 9. And if the trust fund isn't a real asset, then why do so many people in the world by Treasury Bonds? I'd like to hear you state your case as to why the United States government isn't an asset. Please try to do so rationally and using evidence.
Where do you think the political will exists to close the deficit, much less get into a surplus such that we could pay down the debt?
Well, where was it in the 1950s after the debt ran as high as it did? From 1944 to 1950, we ran very high debt to GDP. It took us several years but we got back down to the 50s/60s in 1957 so that took 13 years. We were at 69 percent in 2008. In 2010, we were at 93 percent. As of now there is only an estimate for 2011 at 102 percent. After that, there are only projections as I am so often reminded. I guess those projections are "realer" when they support your paranoia (unlike the deficit ones). So, are saying that it's impossible that, by the year 2021, we will not be back down to the 50s/60s?
It seems to me that you wouldn't have made it through the 40s and 50s very well, Hap. Doom and gloom...boiling pit of sewage...
Hmm...someone has been listening...
http://www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html?_r=1
Yeah, I just saw that as well, Santa. Crap! I just went to the store and bought paper towels. Time to go back and get another package. I'm going to have a lot of exploded heads to clean up on here. Ah well, it's Krugman so he has to be wrong. How will they ever explain away Britain from the mid teens to the mid 60s. 50 years of 100 percent plus debt to GDP? Why aren't they in a boiling pit of sewage right now?
These two points..
First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.
Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.
need a whole lot o' splainin', Lucy!
My head doesn't explode for Krugnuts - he gave up his intellectual honesty a long time ago, first for Enron, then for liberalism. I might shake my head in disbelief, but that's it. The man is rapidly devolving into an incoherent ball of left-wing rage. You still haven't read the Samuelson article, have you?
you would let people die so the market could correct itself
Would you happen to have an example of where this actually happened or are we just to take your word for it that the evil dialysis cartel is out for blood? Less than 400K people are on dialysis, and 20% die per year (so it isn't like this is a real long term 'solution'). It appears we spend less on dialysis than on cosmetic surgery - so this one single case that you hang onto so desperately isn't exactly representative of most health care spending, is it? Fine - there are some FEW cases where govt intervention may be needed. That is a far cry from what we have now, and even farther from the proggie wet-dream of single-payer (fully socialized medicine).
You know, fuckstick, I'd expect a lot more for someone who asks a lot of questions but never answers any. Who owns our debt, Hubris? Who? And that question goes for all three of you wise men. Our debt doesn't matter because we owe it to ourselves and because our assets worldwide outweigh the part of our debt that foreigners own. And when are those interest rates going to rise again? I challenge each of you to prove Krugman wrong using evidence and a logical argument because I don't think any of the three of you understand debt or the deficit.
How will they ever explain away Britain from the mid teens to the mid 60s.
So much more easily than you imagined!
First, since you are so fond of the Bretton Woods arrangement. Second, see Chart 4 on page 19.
The British govt devalued their currency (i.e. inflation) which reduces debt (in value, not nominally) while GDP follows inflation. But please, do read the links - I wouldn't want you to think that I was misrepresenting them.
Who owns our debt
You know, that is a fair question, ya big shitstain. The SocSec Trust Fund holds a big chunk. Funny how proggies used to assert that those were solid assets earning real income - and now you claim [correctly btw] they are just intergovernmental IOUs. Still, those IOUs (and interest) have to be made good - which is going to cost you spending on something else. If you think it doesn't matter at all, try convincing a SocSec recipient of that.
However, as M has noted - the Chinese also hold a fairly big stake. I don't think they are going to be any less interested in forgiving that debt than your granny.
Krugman is wrong about the WWII debt. The instruments of that debt were paid off long ago - we just keep rolling it over with new debt instruments. The U.S. hasn't defaulted which means the debt hasn't just "gone away" as Kruggie so imaginatively puts it. He was correct that growth made it less onerous to carry that debt; the problem is you proggies can't create economic growth to do that again. About all you are really able to do is inflate the hell out of the currency (as the original progressives wanted to do) - which does devalue debt (national and private); but it does introduce some other problems into the economy.
This can happen in a variety of ways but the chief ones are monopolies and oligopolies.
Which one was health care again?
First, no one is being misled. Everyone knows that we are going to have to make changes and those changes will come about via Congress who represents the people.
Except the people who just paid into it for forty years expecting pay out of a certain level at a certain age. Just because Mr. Ponzi stands in front of you and tells you that you aren't getting any cash doesn't mean there isn't any deceit.
It is exactly what it claims to be: A mandatory transfer payment system
Except it usually is not claimed to be that, and even you had fought admitting that was what it was. No, no deceit there either.
"A Ponzi scheme is unsustainable because the number of potential investors is eventually exhausted.
And social security is sustainable because it is a mandatory system where there is forced compliance with all potential investors and the payout can be adjusted post facto despite promises to 'investors'.
1. Social Security pays out more than it takes in
2. Ponzi Schemes pay out more than they take in
3. Social Security is like a Ponzi Scheme
Cute Mark, but you've demonstrated in the other thread that you are not capable of following logic, so I am unimpressed.
Wait....
1.Congress pays out more than it takes in.
2.Ponzi schemes pay out more than they take in.
3.Congress is a ponzi scheme......
I have said previously, many of the markets have such inelastic demand that it's very difficult to let the free market sort itself out. We are talking about people's lives here.
Yup, health care is important. It's peoples lives. The free market cannot allocate properly because everybody needs it to survive. Just like food, right. Food is important and everybody needs it to survive. Food has an inelasitc demand because you have to have it. And this is obvious by looking and the food market where being without price controls people would be starving due to the utter lack of efficient markets. Wait, we don't have price controls? We actually pay farmers not to produce food because food is so plentiful and cheap that the farmers would convert good future farm land into condos if we didn't? We have so much food for so cheap that obesity is a huge problem? How can this be without market controls? Price controls? Single payer food rationing? Obama-chow?
level the entire playing field and let everyone duke it out. No more special breaks for anyone including the oil companies.
I can agree with that, level the field. No special tax breaks, same prohibitions (or lack of) upon development and resourcing. I don't think you realize that leveling the field will hurt your renewables much more than it will hurt oil.
No, because we cut spending at the same time.
Right, because debt is a spending issue.
Well, right, because from your view, anything to the left of the one yard line means communism. So, your opinion is so warped that it really doesn't matter but, as always, it's welcome
I love this oft repeated bit of Mark-lore. Dude, I know I'm not central. That you think you are even close to the center is laughable.
From 1944 to 1950, we ran very high debt to GDP.
Yup, and post war we were the single largest producer in the world - and would remain so for many years. To recreate the same circumstances today would you have us bomb the EU, Russia, eastern Europe, South America, South Africa and the majority of Asia? I've brought this up to you several times without response. It's obvious that you have no answer. You cannot keep using post WWII as an example without addressing the unique ECONOMIC issues that allowed us to finance through it.
Gosh, looks like somebody has be reading Krugman too...
Krugman: Time For A Skullf%c*ing
This fool continues to prove that having a Nobel is actually a sign of stupidity rather than intelligence:
Which one was health care again?
It depends on the market. Some are monopolies, some are monopolistically competitive, some are oligopolies.
Except the people who just paid into it for forty years expecting pay out of a certain level at a certain age. Just because Mr. Ponzi stands in front of you and tells you that you aren't getting any cash doesn't mean there isn't any deceit.
With Ponzi, though, they never got it. I would expect you to understand that there's a difference between losing your money entirely and getting it at age 67 as opposed to 65. And each person who stands to get Social Security has the right to work with their rep to make sure the adjustments will suit them. Again, no deceit.
Except it usually is not claimed to be that, and even you had fought admitting that was what it was. No, no deceit there either.
Where? By whom?
https://www.socialsecurity.gov/history/ponzi.htm
It would be most accurate to describe Social Security as a transfer payment--transferring income from the generation of workers to the generation of retirees--with the promise that when current workers retire, there will be another generation of workers behind them who will be the source of their Social Security retirement payments.Social Security is and always has been either a "pay-as-you-go" system or one that was partially advance-funded
Why don't just just admit that you (and others who believe this silliness) are aching to make SS a scam so you can prove people wrong about government and win the argument. It's so obvious that at this point it's highly amusing.
1.Congress pays out more than it takes in.
2.Ponzi schemes pay out more than they take in.
3.Congress is a ponzi scheme......
Still, a logical fallacy:)
. Food is important and everybody needs it to survive.
Ah, but with food, you have a competitive market. There are many buyers and sellers so each has a negligible effect on price. Sellers of potatoes, for example, have little control over the price because other sellers offer a similar product. If a potato seller raises his price, the buyer can easily go elsewhere.
With many health care markets, there are a lot of buyers but not as many sellers. These markets aren't as competitive. Lasik and other elective processes have certainly achieved this but this is not the case with more complex procedures and the life threatening ones like dialysis. This is where the element of inelastic demand comes in and why the government has to step in to help make the market more efficient.
OOOOOOHHHH, so the fix for health care is to introduce more suppliers into the market to ensure competition?
Why then is your preferred fix for the government to address the demand side and do nothing to the supply side?
With many health care markets
You say it, and I don't doubt that you passionately believe it. But not once have you ever provided an iota of evidence supporting this claim.
Why then is your preferred fix for the government to address the demand side and do nothing to the supply side?
Well, it's both really. But let's suppose that there were many suppliers of life saving treatments and medicines. Would they all charge high prices because of inelastic demand? Or would the market correct itself as people would have many choices?
The other thing about food...people do need it but remember that with so many different products and suppliers, substitutes can easily be made. Suppose ice cream goes up 3 dollars in price due to some sort of problem. People will buy yogurt instead. If dialysis goes up, where's the "yogurt" to take its place?
Well, it's both really.
But why are you even addressing the demand side? It's not the problem - unless the issue being addressed is inelastic demand which can only be modified by controlling demand - and the only way to control demand is by rationing access. Is that what you are saying?
Suppose ice cream goes up 3 dollars in price due to some sort of problem. People will buy yogurt instead. If dialysis goes up, where's the "yogurt" to take its place?
Ok, so we have ice cream going up not because there was not enough competition right? This isn't a matter of lack of suppliers this is something is the supply chain? Something like a lack of sugar or milk or something?
Again - why does the government need to address the demand side to fix this?
If dialysis goes up, where's the "yogurt" to take its place?
Does dialysis go up because lack of competition or because of some other issue in it's supply chain? What's that issue? And why do we fix this by addressing the demand side and not the supply chaing?
Would they all charge high prices because of inelastic demand?
That isn't the way it works. Too bad you don't understand any more than drooling out "inelastic demand". That only impresses the fools and YLDP.
Healthcare demand overall is no more inelastic than the demand for food. Dialysis is not representative, it is an exception. Just keep ignoring this point and harping on, and on, and on, and on about it. It really shows your credibility and what you are really trying to do.
Just to properly expand, a competitive market would be characterized by multiple suppliers competing for customers. At that point, it is competitive and absent collusion between suppliers, the price elasticity of demand (the proper term - not "inelastic demand") is irrelevant. Considering that dialysis is not a large market, there is a good chance that you would not get multiple suppliers (particularly given that the process is not simple). However, as long as that company (with govt collaboration) does not raise barriers to entry it is possible that an innovator may find a way to deliver dialysis more effectively/cheaply. Since M always lies about what I (and other libertarians) think about regulation, this may be a case in favor of it. Is that clear enough?
So how big a problem is this dialysis case. Well, according to the link I provided earlier it affects about 400K people at an annual cost of $20B. Annual Medicare fraud is more than double that according to the GAO.
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