Contributors

Showing posts with label Debt. Show all posts
Showing posts with label Debt. Show all posts

Monday, May 16, 2016

About That Debt...

Paul Krugman's recent piece on where Trump gets his support is sheer brilliance. The part I especially enjoyed was this.

The Trump solution would, among other things, deprive the world economy of its most crucial safe asset, U.S. debt, at a time when safe assets are already in short supply.

Right. US debt is still one of the safest assets in the world despite what foams out of the mouth of the old lady debt hystericals.

And I'm still waiting for those debt collectors to come a callin' by the by...:) (he said, wondering the people who caterwaul about our debt even understand who owns it).

Friday, March 20, 2015

Good Words


Sunday, February 08, 2015

Waving Buh Bye To Austerity

It's not surprising that Europe is finally ejecting austerity from the capsule and moving on to an economic policy rooted in reality as opposed to unicorn, fairy land.

The ECB’s new stimulus “should strengthen demand, increase capacity utilization and support money and credit growth,” Mr. Draghi said. He rejected any criticism that the vast expansion of the ECB’s easy-money policies would stoke inflation down the road, noting that inflation has stayed very low even after several interest-rate cuts and abundant ECB loans to banks. “There must be a statute of limitations for those who say there will be inflation,” he said.

Yeah, that was passed by a long time ago...

Equally not surprising is the recent vote in Greece firmly against austerity.

Greece currently has public debt equivalent to 177 percent of its gross domestic product (GDP). Its unemployment rate stands near 25 percent overall, and more than half of young adults have no jobs and few prospects. The austerity measures have gutted many of the country's most vital social programs. The economy has shrunk by more than 23 percent since the 2008 global financial crisis, a contraction comparable to the U.S. economy's during the Great Depression.

Austerity in times of economic contraction doesn't work. It never has. The only question that remains is when this shift in policy produces results, will the pathological haters of government finally admit fault?

Wednesday, April 02, 2014

What Is Your Alternative, Ms. Palin?

Sarah Palin recently called Paul Ryan's latest budget "a joke" saying "it is STILL not seeing the problem; it STILL is not proposing reining in wasteful government overspending TODAY, instead of speculating years out that some future Congress and White House may possibly, hopefully, eh-who-knows, take responsibility for today’s budgetary selfishness and shortsightedness to do so."

“THIS is the definition of insanity,” she continued.

Fine. Where do you propose cuts?

“You’d think one who is representing the mighty Badgers, who made it to the Final Four based on sacrificial work ethic and discipline that obviously pays off in the end, … would understand that future success depends on hard work and sacrifices,” Palin said.

Again, where exactly do you propose cuts?

There is plenty to cut, Palin argued, as “every omnibus bill is loaded with pork and kickbacks.”

Be specific. How much? What would happen as a result of the cuts?

“As my Dad would say after these April Fool’s announcements, ‘This would kill a lesser man.’ This out-of-control debt is killing our economic future,” Palin wrote.

How exactly?

Sarah Palin is a great example of how all conservatives have these days is criticism...even of their own party! They don't offer anything but strident language and hollow (and really, really played) talking points that appeal to fear. Considering our massive wealth and assets, the debt is a phantom menace and she is simply lying about our economic future.

Of course, she (and any other conservatives) are welcome to prove me wrong with substantive plans of their own:)

Thursday, January 16, 2014

Paying Down Debt

Hey, look what super liberal California Governor Jerry Brown is doing.

Gov. Jerry Brown on Thursday proposed a $106.8 billion general-fund budget that seeks to pay off a big chunk of the state's long-term debt while making modest investments in public schools, health care and the troubled bullet train. While the state's finances have improved significantly since the days of embarrassing, multibillion-dollar deficits, Brown said at a morning news conference that he believes the newfound fiscal stability could be short-lived and that restrained spending of scarce state resources is crucial.

What the-?!!?? A fiscally responsible liberal. you say? Where is Spock with a beard?:)

Thursday, September 19, 2013

How Fucked Up?

When children throw a temper tantrum, they usually end up breaking something. Mom's dishes or dad's sports memorabilia isn't quite on the level of the US Economy.

Republicans are far more likely to oppose raising the debt limit than anyone else; they say don’t raise it by 61-25. Republicans, however, also believe overwhelmingly that not raising it would cause serious economic harm — by 66-27.

At least we now have confirmation as to just how fucked up the Right is there days.

Friday, May 10, 2013

The Obsessives

I've been saying for quite some time now that the Right's obsession with the deficit and the debt is detrimental to our economy. Apparently, everyone agrees now that this is the case. By "everyone," I mean the people who live outside of the bubble and actually deal with economic and financial matters on a daily basis.

Example #1

“Fiscal tightening is hurting,” Ian Shepherdson, chief economist of Pantheon Macroeconomic Advisors, wrote to clients recently. The investment bank Jefferies wrote of “ongoing fiscal mismanagement” in its midyear report on Tuesday, and noted that while the recovery and expansion would be four years old next month, reduced government spending “has detracted from growth in five of past seven quarters.”

Agreed. The article details how unemployment would likely be around 6.5 percent and quarterly growth between 3 and 4 percent as opposed to the 2 percent we are at right now.

Example #2

The Federal Open Market Committee, which sets policy for the central bank, noted signs of improvement in the private sector last week in a statement. “But fiscal policy is restraining economic growth,” it added, echoing public comments that Ben S. Bernanke, the Fed chairman, has made for months. In April, the International Monetary Fund said the United States would achieve further growth “in the face of a very strong, indeed overly strong, fiscal consolidation.”

Again, US fiscal policy is restraining growth. One would almost think that the Right doesn't want the president to succeed. Hmm....

Example #3

“Whenever I talk to our customers or clients, they sort of brush off everything that’s related to fiscal policy,” Mr. Daco said. “The view is, ‘Oh, it doesn’t matter.’ That’s what I hear a lot.” “What we try to convey is that it does matter,” he said. “It is important in terms of growth. It’s also important in terms of confidence.” He noted that the economy was much stronger than Europe’s largely because the United States initially opted for stimulus measures and allowed deficits to increase when the recession and financial crisis hit five years ago. European governments pursued austerity policies to cut their debts, further stalling economic activity and in turn inflating deficits.

Isn't it time we did away with all this debt and deficit obsessiveness? It's all rooted in emotion anyway. The Right just doesn't like government spending. The only way they would embrace it is if Jesus himself came down and told them it was poor fiscal policy. And even then, I'd have to wonder....

Saturday, December 29, 2012

Happily Going Over The Cliff

It's been amusing in a sort of horrifying way to watch Congress try to come up with some sort of plan to avert the tax rate rise and spending cuts that are going to occur on January 1, 2013. I don't think I've ever seen a Republican leader admit that he was powerless as Speaker Boehner did last week. "It's now up to the president and Harry Reid," he said. Unbelievable.

But that's what happens when you have a caucus that is comprised of juveniles who are eternally stomping down the hallway and slamming their doors at what they perceive to be their dad. They're perfectly happy to crash the car in order to sate their adolescent power fantasies. They'd rather cut of their nose despite their faces.

And that's just what is going to happen. If no deal is reached by Tuesday (and it looks doubtful), January 2nd is going to be a barn burner at the New York Stock Exchange. At that point, the GOP will be fucked. If they deal now, they are going to get something for those upper income folks. If they wait, however, the only bill they are going to see is one that makes the tax cuts permanent for those making under 250K and they will have no choice but to sign it as the market drops 500-1000 points.

They're also going to get bloody ears (and possibly more) in terms of the spending cuts and will likely have to give in on those as well. Much of their constituency is old people who love Medicare and Social Security. Any sort of cuts will be viewed with much animosity. This doesn't even take into account the defense cuts which, in my view, if they happen, will basically mean the end of the Tea Party. Democrats learned a long time ago that you don't fuck with defense contractors.

So, this begs the question, do the Republicans want to be the Whigs of the 21st century? Given their intransigent stance on immigration (along with the rest of all of this), I think they do. Bottom line: they need to change. If they don't, Texas will turn blue in 2016 or 2020 and that will be it for them.

Monday, October 01, 2012

The Harvester

Lost in this election is one very simple reason why Mitt Romney would not be a good president: he made most of his money off of driving companies into debt.

But what most voters don't know is the way Mitt Romney actually made his fortune: by borrowing vast sums of money that other people were forced to pay back. This is the plain, stark reality that has somehow eluded America's top political journalists for two consecutive presidential campaigns: Mitt Romney is one of the greatest and most irresponsible debt creators of all time. In the past few decades, in fact, Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on planet Earth.

By making debt the centerpiece of his campaign, Romney was making a calculated bluff of historic dimensions - placing a massive all-in bet on the rank incompetence of the American press corps. The result has been a brilliant comedy: A man makes a $250 million fortune loading up companies with debt and then extracting million-dollar fees from those same companies, in exchange for the generous service of telling them who needs to be fired in order to finance the debt payments he saddled them with in the first place..

If Romney pulls off this whopper, you'll have to tip your hat to him: No one in history has ever successfully run for president riding this big of a lie. It's almost enough to make you think he really is qualified for the White House.

Indeed.

The video below surfaced recently from Mitt's days at Bain which confirms this.


Harvest them at a significant profit...wow.

Monday, December 12, 2011

EuroGraphics

My main source of news, The Christian Science Monitor, recently posted a wonderful summation of the EuroZone economic crisis. As is often the case with the CSM, their analysis is thoughtful and well balanced. Let's take a look at the five graphics they provided. First we have the shadow economy graphic.
When nearly a quarter of your economy is untaxed (as is the case with Greece and Italy), you're going to have problems. Couple this with all the tax evasion that goes on in Greece, for example, and it's both a revenue and spending problem. Next up we have the export issue.

Germany is obviously the behemoth here. Greece is the lowest which is another explanation as to why they are in so much trouble. They aren't selling anything in the global marketplace. To put it simply, they aren't competing. Of course, we also have the issue of public sector size.

And the issue of deficit spending as a percentage of GDP.

Note here the stability of Germany. Finally, we have the main thing that the right in this country focuses on nearly to a fault.

My main point in showing all of these graphics is to stress that it is the summation of all five of these issues (plus interest rates, of course) that is causing the problem. To say that it's simply an issue of spending is ridiculous. Germany, for example has fairly high debt as percentage of GDP but their deficit spending is low and their exports are high. Their shadow economy is much lower as well.

So, it's the whole meal and not just the salad.

Saturday, December 03, 2011

Are you KIDDING me??!!???!!????!!???

Some party officials were surprised by both the size of the debt and the ongoing spending.

Any Minnesotan who continues to support the GOP in my home state has just reached 11 on the hypocrisy dial and infinity on the moron scale.

Tuesday, April 26, 2011

The Budget Director

I enjoyed David Stockman's recent piece on what has to be done in order to reign in our nation's debt. Likely, no one is going to like what needs to be done including myself. He gets right to the point very quickly.

The resulting squabble is not only deepening the fiscal stalemate but also bringing us dangerously close to class war. This lamentable prospect is deeply grounded in the policy-driven transformation of the economy during recent decades that has shifted income and wealth to the top of the economic ladder. The share of wealth held by the top 1 percent of households has risen to 35 percent from 21 percent since 1979, while their share of income has more than doubled to around 20 percent.

The culprit here was the combination of ultralow rates of interest at the Federal Reserve and ultralow rates of taxation on capital gains.

Hmm...who else has been saying these same things? Me. And I was never lucky enough to be the Budget Director for Ronald Reagan. So, Stockman's not exactly a liberal although by the current GOP's standards he's probably a communist. Later in the article, he puts forth some solutions, one of which I don 't agree with at all.

We are about to descend into class war because the Obama plan picks on the rich when it should be pushing tax increases for all, while the Ryan plan attacks the poor when it should be addressing middle-class entitlements and defense.

Well, there it is. At least someone had the guts to say it. Everyone needs to have their taxes raised. Except I can't see how that would be helpful given the decided lack of consumer confidence. Given that consumers make up two thirds of our economy, raising taxes on the lower 90 percent, in my opinion, would be disastrous. The middle class is the engine that drives this economy and they do not need any more burdens place upon them.

Overall, Stockman's piece states the obvious. Everyone wants solutions but no one wants to sacrifice. Worse, political theater is driving all of this which means nothing is getting done. I've stated many times on here that, as far as I'm concerned, everything is on the table including Social Security and Medicare. Hell, simply controlling the growth of Medicare would make a significant dent in our deficit and debt. Of course, that would mean controlling the cost of health care which means government regulation which means a pile of skulls, right?