[livinincali]

Both parties want to spend money they don’t have. The only difference is who they want to give the money to and who they want to take it away from.

I’ll “throw away my vote” on a 3rd party or independent candidate because I already know that smart democrats and republicans think they know all the answers but aren’t smart enough to know that they don’t.

We could give free reign to the democrats or free reign to the republicans and the country will still be bankrupt 10 years from now. The only difference will be how we get there.

[livinincali]

[quote=briansd1]
I don’t agree with you that we need a depression because debt and money are just human creations. Why should we let a bottleneck in the system bring human production and ingenuity to a halt? We can develop ways to overcome a systemic failure and avoid human suffering. That’s where Krugman can offer his expertise.[/quote]

I honestly don’t think that solution exists. The Marxism solution of from each by ability to each by need has been tried in countless societies and it’s always ended up in failure. I’ll admit that on paper it sounds like a valid solution but sometimes theories are just theories and don’t work in a practical application.

The human competitive spirit just gets in the way too much. Maybe we can’t control the natural selection/evolution process. Nature is going to pick the winners and losers and we can’t do anything about it. I argue that it’s better to let nature take it’s course rather than preventing it from acting. It’s eventually going to win and the more you do to prevent it the worse it’s rage is.

[livinincali]

[quote=AN]

Good for you. A couple of people I know who are atheists are very adamant that God doesn’t exist and laugh at people for believing in a God that they can’t prove. I shut them up pretty quickly when I ask them to prove that God doesn’t exist, since their belief that God doesn’t exist is no different than those who believe God does exist.
[/quote]

There’s been some great philosophical debates on the existence of god. One of the better ones I heard against the existence of god goes something like this.

You get the believer in the existence of god to agree that god is all powerful, all knowing, and benevolent. Then you say well if that is true then our current society must be the best of all possible societies, which most don’t want to accept. Most people believe there should be or can be a much better world.

You’re left with 3 choices now. Accept that god exists but isn’t the combination of all powerful, all knowing, and benevolent which is usually easiest choice for a believer (It’s not too bad to accept that god might not be as benevolent as you think). Accept that this is the best of all possible societies which a really hard core believer might accept. Accept that god doesn’t exist, which no believer would do if faced with this argument.

[livinincali]

[quote=briansd1]linvinincali, you can argue argue that we should cut spending during the good years all you want and you would agree with Keynes.

The fact remains that Bush cut taxes and increased spending.

As SK pointed out earlier, cutting spending will not stimulate the economy. It won’t work.

You can argue that short term pain is necessary for long term prosperity But nobody is proposing pain. Everyone wants to stimulate the economy.

The people on the right are proposing painful measures as if those measures would stimulate. They won’t. That’s hipocrisy right there.[/quote]

I think we should cut spending now. I don’t think we should wait until things get better. I’m not going to make an argument that cutting spending in going to be stimulative in the short term because it certainly won’t. Most likely cutting spending now will result in a short deep depression.

My argument is that although we’ll have to deal with that relatively short deep depression it is good for the long term. Clearing the bad debt, letting those that made bad debts fail, and prosecuting those that committed fraud will cure the economy for the long term. Rather than living through Japan’s up and down sideways economy that constantly needs stimulus and bailouts we’ll be back to an economy that can flourish because it isn’t saddled with a bunch of bad debt.

Our stimulus spending is not “priming the pump” like it’s suppose to, instead it’s producing a negative rate of return. If you have a small business that is losing money and subsequent investments don’t turn it around you have to cut your losses at some point. Isn’t better to cut your losses before you lose your house. Isn’t better for the US to cut it’s losses on deficit spending before it’s forced to default or print. The day you resort to unbacked currency emission or default is the day that you can no longer deficit spend, in essence the market forces you to live within your means.

[livinincali]

[quote=Allan from Fallbrook]
As to your comment about him “smacking down” his opponents: He’s gotten roughed up nearly as much. He’s also seen quite a bit of his credibility lost in those rather pointless exchanges, too. Which is sad, because I was once a big fan of his work, but have watched it increasingly tainted by shrill, partisan attacks.[/quote]

The problem with economics in a academic setting there’s no possibility of setting up an experiment to prove that a economic model is correct. Krugman can always say he is right because he can always say if you had done it earlier, or bigger, or also implemented this other thing it would have worked.

If you’re going to make that argument than I can just as well make the argument about cutting spending, balancing budgets, restoring individual freedoms would work. Well you didn’t do what I said to do and therefore the problems you’re experiencing now wouldn’t have happened if you did it my way.

Obviously cutting spending and returning to balanced budgets would be painful if we did it now, but it’s always going to be painful and if we keep increasing debt faster than GDP it just becomes more and more painful.

Wouldn’t have it been a lot easy to balance the budget back in 2001 when you could cut spending by 10% and raise taxes a bit. Wouldn’t have it been easier to balance the budget in 2008 when you could cut spending by 20% and raise taxes a bit more. Now we’re looking at cutting 40% of the government budget and no one can fathom that so we have spend more and more and more, until we meet the judgement day when the market realizes you aren’t going to pay us back we won’t loan you anymore. When that day occurs, that dreaded cut in spending that you just needed a little more time to grow your way out of hits you right in the face. You’re bankrupt and you have no plan, good luck. I hope the leader of the military coup is a nice guy.

[livinincali]

[quote=SK in CV]
If all deficit spending is stimulative, then all government spending must be stimulative. If you have a $100 deficit, you can’t identify which $100 suddenly is stimulative. But the response is no, all deficit spending is NOT stimulative. Only increased spending is stimulative. And only required under Keynsian theory if private spending has dropped.

Arguing that we’ve tried it before and it hasn’t worked is simply not true. Stimulative spending does work. What has not happened is cutting spending and raising taxs in good times. (See tax cuts, increased spending from 2002 to 2007.) You can suggest cutting spending all you want. It can’t be stimulative. It won’t work.[/quote]

Now your starting to see the problem we’ve developed over the past 30 years. Once you start stimulative spending you can never stop that spending. If stimulative spending worked you’d get to a point where you could stop doing it, but we never get there, we just keep increasing that spending.

It’s obvious to everybody that if we cut government spending that GDP will shrink. No one is going to argue that fact. The point is that when you cut spending, stop bailouts and let the debt liquidate you get to a stable economy that can grow again. It’s from a lower level but historically we’ve been quick to recover once that debt overhang is eliminated. Exponential growth forever can never work, sometimes you’ve got to reset the starting point.

Civilizations rise and fall, companies rise and fall, it’s a natural lifecycle when you’re dealing with exponents. Ideally you let this economic cycle play out before it gets so incredibly big, but we think we can avoid this economic cycle forever. Well at least until the next election.

[livinincali]

[quote=SK in CV][quote=livinincali][quote=SK in CV]
You’re closer to correct, but that’s not what I was responding to. He said spending to get out of debt. Keynes suggested just the opposite. There’s a big difference between getting out of debt and getting out of a recession. Keynesian ecomomics would lead to cutting spending, increasing taxes and deleveraging in times of economic growth.[/quote]

This is certainly true and another one of the primary excuses that is used to explain why the stimulus isn’t working as intended. If we admit that our government can’t follow this part of the Keynes economic theory why do we prescribe Keynes solutions to recessions.

Stimulus is politically popular and it does give the illusion of working over the short term, but when the government is deficit spending 1.5 trillion a year to get 420 billion (14 trillion economy * 3% growth) in growth you’re going to have a problem. Stimulus would only be worth while if the stimulus spending is less than the growth in GDP. There’s only one small window from 1997-2001 in the past 30 years where GDP grew faster than Government debt and that was during the internet boom.[/quote]

I don’t think the first part of your comment makes much sense. You’re essentially arguing that if we didn’t follow a particular economic model when the economy was decent, we shouldn’t try it now. Even though the model we did follow, didn’t work.

Beyond that, you’re mixing up a couple things. The purpose of stimulus would be to increase GDP, not decrease spending or debt. Ideally, that stimulus will increase GDP greater than the amount of the stimulus. The comparison to debt or annual deficits is false. The two are not directly related.[/quote]

All government deficit spending is stimulus. It has to be by definition because government borrowing and spending creates a demand that wouldn’t otherwise be there. Are you arguing that only some government deficit spending is stimulus?

As for the first point we’ve been trying the Keynesian stimulus spending solution for decades and every time debt grows faster than GDP. It successfully kicked the can down the road but makes the future problem bigger and bigger. I suggest we try the solution that was used in the 1920-1921 depression. Cut spending, let the bad debt fail, prosecute those criminally responsible, and rebuild the system. Yes, there will be significantly bad short term consequences for all the actors in the economy (and we’ll realize that many entitlement promises can’t be kept) but it’s far better to do it under you own terms than letting market forces dictate.

http://en.wikipedia.org/wiki/Depression_of_1920%E2%80%9321

The economy had one of it’s best growth periods ever after the 1920-1921 depression.

[livinincali]

[quote=SK in CV]
You’re closer to correct, but that’s not what I was responding to. He said spending to get out of debt. Keynes suggested just the opposite. There’s a big difference between getting out of debt and getting out of a recession. Keynesian ecomomics would lead to cutting spending, increasing taxes and deleveraging in times of economic growth.[/quote]

This is certainly true and another one of the primary excuses that is used to explain why the stimulus isn’t working as intended. If we admit that our government can’t follow this part of the Keynes economic theory why do we prescribe Keynes solutions to recessions.

Stimulus is politically popular and it does give the illusion of working over the short term, but when the government is deficit spending 1.5 trillion a year to get 420 billion (14 trillion economy * 3% growth) in growth you’re going to have a problem. Stimulus would only be worth while if the stimulus spending is less than the growth in GDP. There’s only one small window from 1997-2001 in the past 30 years where GDP grew faster than Government debt and that was during the internet boom.

[livinincali]

Got to love the Keynesian argument. If your stimulus efforts don’t produce the desired growth effects you can always say it would have worked if there was more stimulus. You can fail over and over increasing debt faster than GDP and claim there just needs to be more stimulus to produce growth.

I’ve yet to see one successful example of a person, corporation or country spending it’s way out of debt successfully. It always ends in a hyper inflationary money printing or a deflationary depression, but it’s different this time. Krugman’s got it all figured out.

[livinincali]

Here’s a good blog post that shows the progression of FHA defaults. It’s been steadily rising ever quarter and Q2 2012 should be out soon.

http://www.calculatedriskblog.com/2012/04/lawler-comments-on-fha-single-family.html

[livinincali]

The only difference between the R’s and the D’s is their definition of what “For the Greater Good” means. Our country’s founders attempted to emphasize individual liberties and rights above “for the greater good” because they knew the slippery slope that “for the greater good” can become. People have used “For the Greater Good” to commit all kinds of heinous acts, including Hilter, Stalin, Castro, etc.

I believe in libertarian principles of individual rights and a rule of law when someone’s rights are violated. If you’re willing to violate someones individual rights to get to your vision of the world utopia, your utopia is another person’s hell.

[livinincali]

[quote=AN]
I think both side can agree that we’re not heartless, regardless of political party line. Why can’t they all just sit down, investigate what are the top 10 reason for the rising healthcare cost and create 10 bills to fix those 10 problem. Would that be so hard?[/quote]

Yeah because most of the problems with rising health care costs have a strong lobby to protect their piece of the healthcare spending pie. Every dollar spent on healthcare is going into somebody’s pocket. The ACA is basically the lets throw money at the problem of rising costs rather than addressing the primary reasons for rising costs. We’ll hope and pray that insurance exchanges will drive the price of insurance down but we can’t guarantee that. Some of the big ones for rising prices would be

1) Getting rid of cost shifting in billing practices. Don’t let hospitals provide the same services for different prices depending on who’s paying.

2) Tort reform/Malpractice cases. Certainly there’s going to be cases of gross negligence that need recourse but when you’re taking a drug or having a procedure done that involves known risks you shouldn’t get to sue when one of those risks materializes.

3) Remove the ban on re-importation of drugs and medical devices. This is similar to 1 but why do American’s have to pay the drug manufacturer 10 times the cost of the same drug that the Canadian government pays.

Of course you can keep going on this trajectory of 10% increases in health care costs every year and let the healthcare system blow itself up. Then move to a single payer system which has it’s flaws (the primary one is some form of rationing) but it’s better than what we have now.

[livinincali]

[quote]As far as the partisan nature of the court – in this case Roberts *didn’t* vote in a partisan fashion. Are you saying you wish he had? Or are you complaining about the 8’s predictable votes? [/quote]

The 7-8 predictable votes. Where any kind of relatively 50-50 legislation is a 5-4 vote. Things should either be constitutional or not most decisions should be 9-0 maybe 7-2 We have a mechanism to amend the constitution if it’s truly something the people want. The problem is our 2 party system has succeeded at dividing us down the middle on silly stuff like God guns and gays and there’s no room for a good decision where a constitutional amendment would succeed. People just want to be on the winning side instead of the good decision side.

Maybe the ACA is a good law but when half like it half don’t like it and 99% don’t really know how it really affects them it’s scary how adamant people get about it.

[livinincali]

[quote]
How it’s a tax? If you have insurance from your employer then this law will not affect you. If you are self employed and decide not to buy insurance, you want a free ride when you end up in a hospital and declare bankruptcy?

Do you buy car insurance?
[/quote]

It’s a tax because that’s what made it constitutional. The same is true of social security, it’s a tax also so there’s no guarantee that you’ll get anything from the system. EMTALA of 1986 is law that made it a requirement for hospitals to provide care regardless of ability to pay. It survived constitutionality on the premise that if you take medicare tax dollars than government could regulate your business.

My comment was based on the constitutionality, not whether it’s right health care system or the wrong one. Health care is a contentious issue.

Everybody is probably going to need health care at some point in their life but most of us want somebody else to pay the high cost of having the best services on demand. Health “insurance” should cover the unexpected, the accidents, the random cancer early in a person’s life, not standard things that happen when you get old.

This law does nothing to change the escalating costs of health care.

[livinincali]

I just wish the supreme court wasn’t so polarized and becoming so liberal vs. conservative. It’s suppose to determine constitutionality not ideals of political minds (with 5-4 decisions based on the politics of the person you were appointed by).

The reality is now it’s not an individual mandate at all and instead it’s a tax on people for not buying something. I don’t like the prescience it sets where it’s giving taxing authority for something you don’t purchase.

[Author]

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