Curious to see what Piggs Curious to see what Piggs think will happen in the coming debt ceiling situation.
moneymaker
September 24, 2013 @
7:24 AM
I think the Republicans see I think the Republicans see this as their last chance to derail Obamacare and the President will show how well he can hold the Democrats together by urging them not to budge. So yes I see a protracted impasse in the works.
spdrun
September 24, 2013 @
7:44 AM
Debt ceiling and government Debt ceiling and government shutdown are two different blotters of acid.
Gov’t shutdown = non-essential services get temporarily cut on Oct. 1 if a continuing resolution is not passed. The Repos are making the continuing resolution contingent on defunding the AHCA.
This happened in 1995-6 and about 10x in the 70s and 80s. NOT the end of the world.
Debt ceiling = government default. Congress would have to be criminally insane to play with that sort of fire.
scaredyclassic
September 24, 2013 @
7:50 AM
spdrun wrote:Debt ceiling and [quote=spdrun]Debt ceiling and government shutdown are two different blotters of acid.
Gov’t shutdown = non-essential services get temporarily cut on Oct. 1 if a continuing resolution is not passed. The Repos are making the continuing resolution contingent on defunding the AHCA.
This happened in 1995-6 and about 10x in the 70s and 80s. NOT the end of the world.
Debt ceiling = government default. Congress would have to be criminally insane to play with that sort of fire.[/quote]
two different blotters of acid?
UCGal
September 24, 2013 @
7:51 AM
spdrun wrote:Debt ceiling and [quote=spdrun]Debt ceiling and government shutdown are two different blotters of acid.
Gov’t shutdown = non-essential services get temporarily cut on Oct. 1 if a continuing resolution is not passed. The Repos are making the continuing resolution contingent on defunding the AHCA.
This happened in 1995-6 and about 10x in the 70s and 80s. NOT the end of the world.
Debt ceiling = government default. Congress would have to be criminally insane to play with that sort of fire.[/quote]
This!
There are TWO bills/issues.
The continuing resolution (budget) is the current showdown. If it doesn’t pass BOTH houses and get signed by the president, the government shuts down like it did in the Gingrich years.
Shut down means military doesn’t get paid paychecks, agencies don’t get funding.
Currently the senate has passed bills that include funding for passed laws (including ACA/obamacare). Their version has NOT been voted on in the house. The House version funded everything currently legislated except ACA/Obamacare. It has ZERO chance of passing the senate or being signed by the president. Heck it might not even pass the house if it were put to another vote.
The second issue is the raising of the debt ceiling. That is the bill that enables the treasury to borrow money (issue bonds) in order to fund things that have already happened. To not pay that is similar to a dead beat refusing to make payments on their credit card for stuff they’ve already bought… or refusing to make a mortgage payment on a house they live in… And it would seriously damage the US economy because the US Government would be the biggest dead beat of all.
no_such_reality
September 24, 2013 @
9:42 AM
Reps should screw the pooch. Reps should screw the pooch. Pass the senate budget and refuse to raise the debt ceiling.
Basically, put the money were the mouth is. You can have anything you want, you just have to pay for it.
(and yes, that would be setting off a financial nuke in our living room)
But frankly, I suspect we’ll continue with lots of posing and then everyone will agree to have their cake and eat it too.
spdrun
September 24, 2013 @
9:51 AM
Why set off a nuke when you Why set off a nuke when you can use a Tazer (the budget).
no_such_reality
September 24, 2013 @
10:33 AM
spdrun wrote:Why set off a [quote=spdrun]Why set off a nuke when you can use a Tazer (the budget).[/quote]
Because the debt and our dependency on it is a 300lb bodybuilder on PCP and meth holding a machete.
and using budget and singling out ACA is perceived and is being obstinate and obstructive and using the debt ceiling just puts the ball back on the spenders to come up with taxes or cuts.
Or more simply, the debt ceiling, is something people could understand, we want a bigger limit on the credit card, the budget is a game.
FlyerInHi
September 24, 2013 @
11:47 AM
How does the debt ceiling How does the debt ceiling make any sense?
Congress already spent the money (past years’ budgets). Now they have to pay the bills. The debt ceiling should be done away with, or automatically raised with each budget.
The question posed by the OP is weird. How does the president have any say on the debt ceiling? If I were the president, I would not negotiate the budget based on the separate issue of the debt ceiling.
I think that we will have a short shutdown of less than 10 days. The Republicans will suffer at the polls in 2014. That’s my prediction.
xbox, please revive this thread after the midterms so we can see who was right.
FlyerInHi
September 24, 2013 @
1:48 PM
The problem with extremists The problem with extremists of all kinds is that they like to issue sine qua non type ultimatums from which there is no backtracking.
If you threaten something, you have to be prepared to it, otherwise you will lose if you don’t. Don’t think that if you threaten the nuclear option, it will sound so bad that the other party will back down.
Wife tells her husband “I’m leaving you if you don’t stop surfing the Net.” If he doesn’t stop then she’s lost all leverage.
Instead she should say “if you don’t stop surfing the Net, I will do the same thing you do, or I’ll go hang out with my friends.”
no_such_reality
September 24, 2013 @
1:54 PM
It’s really simple, first, It’s really simple, first, the money isn’t spent. Hint, that’s why the sequester was such a tooth gnashing.
Second, stop spending or raise taxes. It is that simple. The debt ceiling is just a gun to the head to do it.
Otherwise, they’ll just keep kicking the can down the road.
I also don’t know why everybody thinks it’s soooooo hard to balance the budget. You take Clinton’s last budget that was balanced. You increase it by the rate of inflation and population growth. Current tax revenues exceed that budget.
So it’s all the other stuff since then that is the problem.
FlyerInHi
September 24, 2013 @
3:21 PM
It is simple indeed.
The It is simple indeed.
The debt ceiling being reached is the cumulation of all previous budgets.
Not raising the debt ceiling means that the current Congress doesn’t want to pay for past congressional appropriations.
It is not so simple in that the House majority wants to link all the past appropriations to the current budget.
It would like a husband telling his wife “I won’t pay the mortgage unless you agree to cut your shopping budget this year.” That linkage is ridiculous because he doesn’t have the option not to pay the mortgage.
no_such_reality
September 24, 2013 @
3:31 PM
The debt payments and debt The debt payments and debt ceiling are too separate items.
The existing debt is the mortgage.
Raising the debt, is the new HELOC.
FlyerInHi
September 24, 2013 @
3:42 PM
Households get the loan first Households get the loan first then they spend.
The government spends first then issue the debt to pay for spending. Corporations do the same also. They access the financial markets as they need the cash. The cash requirements today are the results of past commitments.
no_such_reality
September 24, 2013 @
3:57 PM
No, the budget is a plan for No, the budget is a plan for spending. The spending actually occurs throughout the fiscal year.
budgeting a headcount isn’t a guarantee for the headcount for the year. The budget includes assumption on revenues. When they don’t materialize it isn’t automatic to put it on the debt because we’ve committed the spend.
BTW, non-discretionary spending also fits within the current tax revenues. The only problem is nothing else does.
Hence, spending on the credit card that you propose is the root of the problem.
FlyerInHi
September 24, 2013 @
4:35 PM
Moving on…. Do the Moving on…. Do the Republicans really have the option of not raising the debt ceiling?
Empty threat… But if that happens, prepare for another financial crisis and a hit to your portfolio.
Shutting down the government is a different story. They can do it.
Either of those would hurt the economy and the sales and profits of corporations. If I were the president, I would not give an inch and let the business community pressure the Republican leadership.
Boehner will probably pass some bills with the support of democrats. He might not last as Speaker.
no_such_reality
September 25, 2013 @
8:25 AM
Yes, they really do have that Yes, they really do have that option. Not raising the debt ceiling and defaulting on the debt are two different things.
Doing so, would probably end most of their careers and it could be the best thing they ever do since it would finally end the 40 year long denial on spending more than we tax.
The populace of our country has grown fat on having our cake and eating it too.
FlyerInHi
September 25, 2013 @
9:37 AM
Why all the worship of Why all the worship of austerity?
Government deficit spending represents savings for the rest of society that buys government debt.
It’s good to invest and produce things that improve our lives. The debt is just a number.
We actually need deficit spending. The optimal level is debatable, but there is an optimal level.
spdrun
September 25, 2013 @
10:44 AM
We did quite well without it We did quite well without it in the 90s, and Germany is doing quite well without it. Government debt isn’t the only investment vehicle, last I checked.
And the money to repay the debts with interest is taken from Americans in the form of taxes (or inflation), so it’s a zero-sum game. Unless you’re proposing to nationalize some industries (or invade a country and run their oil industry directly) to guarantee the government a steady cash flow, what you’re proposing makes little sense.
FlyerInHi
September 25, 2013 @
11:02 AM
I’ve been reading Warren I’ve been reading Warren Mosler (google him) and what he says makes quite a bit of sense.
Money is just a concept used to allocate resources and encourage productivity.
We are too tied to the gold standard mentality and money as being a finite resource.
Government debt is savings; and as long as there are buyers for those savings bonds then we are all good.
Germany is export oriented, very much like China actually. Their standard of living is lower than it would be if they were more consumer oriented.
spdrun
September 25, 2013 @
11:59 AM
For what it’s worth, their For what it’s worth, their real standard of living (for the average German) is higher than the US:
(1) Tax-supported health care for all.
(2) 4+ weeks of vacation required by law, not inclusive of bank holidays
(3) Decent GDP per capita (41k vs 49k for the US), considering that there are more families with only one working parent, or one parent on half time (as it should be — I’m not a misogynist, but I see the utility of having time for one’s children).
(4) A humane amount of parental leave, guaranteed by law.
The US standard of living is only high if you consider the availability of trinkets to be important. Personally, people should give less of a fuck about having three cars, a 2500+ sq ft McMansion, cheap fast food, and the newest iToy, and care more about enjoying life. Enjoying life without using 2x the energy per person than Germany 🙂
You’re looking at this from an American standpoint, rather than the standpoint of someone who thinks that there’s more to life than work and toys made by overworked children.
I’d personally rather live in a 750 sq ft flat, own one car, and enjoy all the perks above than live the so-called American dream. FUCK! the idea of working 50+ hours a week, commuting 2+ hours a day, etc, like the average brainwashed American white-collar drone.
FlyerInHi
September 25, 2013 @
12:07 PM
Yes, I have an American Yes, I have an American viewpoint.
Just take a look at an average American home vs. a typical German/European home (more likely apartment) to see the difference. Americans have washer/dryers. Europeans have funny smelling clothes because they use those tiny clothe racks.
We eat sumptuous meals compared to the expensive food in Europe. Even French wines and champagne and other high quality items are cheaper here. Fashion is cheaper here too. Do you see European tourists shop for bargains and pigging out in America? They long for what we have.
Remember that Germany can only export and survive thanks to consumer markets like America, and emerging markets like China.
For society as a whole, the saver model is bad and that’s the reason China is moving to a consumer economy.
If your a good saver, you can live cheap and do very well in America. That’s why new immigrants succeed here. Then their kids become American consumers.
Btw, what’s the point of living in a 2-bed flat worth $300k. If you’re a similar time from work, wouldn’t you rather have a 2500sf house for that same amount?
spdrun
September 25, 2013 @
12:19 PM
Guess how much energy Guess how much energy mechanically drying one’s clothes takes vs hanging them to dry? I have to say that I’m not really bothered by a bit of natural outdoor and/or city smell, it’s just part of life. I truly don’t give a flying fuck about the antiseptic lifestyle that most Americans claim to “enjoy.”
As far as “sumptuous” meals, it seems to be quantity vs quality for most Americans. As evidenced by the percentage of disgustingly obese excuses for humanity that you see in many parts of the US.
When I have a family, I’d rather have time to cook between my wife and I than having kids get crap-ass school lunch “food” and stopping at the drive-through on the way back from work.
For society as a whole, a BALANCED model, without consumption for the mere sake of consumption would be best. Unnecessary consumption drives environmental depredation.
And it’s been proven over and over again that leisure and experiences make people happier than relatively cheap trinkets made by abused children. It reflects in the fact that Germany’s life expectancy is on average two years longer than that of the US, too!
FlyerInHi
September 25, 2013 @
1:33 PM
Happy as a state of mind is Happy as a state of mind is not an objective measure. Even so, we rated higher for happiness than Europeans on the study that came out earlier this year.
I live in a less than 700sf 1-bed by choice, near shops, restaurants and the beach.
But I try to be objective as to what that “average” person wants (not what I want or what my situation affords).
I’ve been to many European homes. People of modest means live on the edges of cities in soulless developments about 1/2 hour by public transport. Contrast that to a typical rental apartment complex in Dallas, Phoenix, Las Vegas, or Orlando. Those complexes look like club Med with pools, gyms and water features. Those would be luxury complexes in most of the world, but here they can be had for modest rent.
Growth compounds rapidly. If you have 2 countries, one with 3% annual growth, and the other one with 1.5% growth, over a generation you end up with starkly different living standards.
Giving up growth for the sake of austerity is pretty stupid.
no_such_reality
September 25, 2013 @
1:40 PM
What growth?
What What growth?
What austerity?
You trot out the austerity boogie-man and our budget and spending is anything but austere. A cut spending is not austerity.
Was Bill Clinton’s last budget austere? No, it wasn’t, yet, today per person, increased for inflation, we’re spending a trillion dollars more.
Cutting the budget isn’t austerity. Crying austerity is just political hackery.
FlyerInHi
September 25, 2013 @
2:23 PM
Nsr, I don’t think you would Nsr, I don’t think you would dispute that there is currently excess capacity in the economy and little inflation.
The government should step in and create the demand that would absorb that excess capacity. Why would you cut back now?
It’s about aggregate supply and demand, not about a debt number.
spdrun
September 25, 2013 @
2:32 PM
But let the capacity go for But let the capacity go for things that are actually useful and forward-thinking. More smartphones…. bleh. More McMansions built in areas where no one in their right mind wants to actually live … thanks but…
How about a project to get the US mostly independent from fossil fuel energy within 20 years? A combination of increased efficiency, new clean power generation, cars replaced with electric or hydrogen when they are retired, solar on every new roof in sunny areas, etc should do it — it’s mainly an engineering problem.
FlyerInHi
September 25, 2013 @
2:41 PM
spdrun wrote:
How about a [quote=spdrun]
How about a project to get the US mostly independent from fossil fuel energy within 20 years? A combination of increased efficiency, new clean power generation, cars replaced with electric or hydrogen when they are retired, solar on every new roof in sunny areas, etc should do it — it’s mainly an engineering problem.[/quote]
I agree.
Those are fiscal priority that congress should take up.
CA renter
September 26, 2013 @
12:22 AM
spdrun wrote:But let the [quote=spdrun]But let the capacity go for things that are actually useful and forward-thinking. More smartphones…. bleh. More McMansions built in areas where no one in their right mind wants to actually live … thanks but…
How about a project to get the US mostly independent from fossil fuel energy within 20 years? A combination of increased efficiency, new clean power generation, cars replaced with electric or hydrogen when they are retired, solar on every new roof in sunny areas, etc should do it — it’s mainly an engineering problem.[/quote]
Could not agree more.
no_such_reality
September 25, 2013 @
3:14 PM
FlyerInHi wrote:Nsr, I don’t [quote=FlyerInHi]Nsr, I don’t think you would dispute that there is currently excess capacity in the economy and little inflation.
The government should step in and create the demand that would absorb that excess capacity. Why would you cut back now?
It’s about aggregate supply and demand, not about a debt number.[/quote]
No, it’s about banana republic economics and that’s just what we’re creating. An economic model where the most profitable thing to do is suck on a government program.
We’ve had the government spending gas pedal on the floor for six years not including the 7 years Bush had it shoved way down with the wars.
Government spending is superseding real development.
As for our programs, our federal deficit over the each of the last five years was enough to fund 5 decade long Apollo Moon programs in their entirety from conception to landing. We’ve spent 25 decades worth of moon programs? What do we show?
Our total government spending across all levels of government for the last five years is on par per person with France, Germany and the UK.
You’re being bilked and begging for more why fed the cronies and the lobbyist and donors in DC get fat.
SK in CV
September 25, 2013 @
3:45 PM
no_such_reality wrote:
We’ve [quote=no_such_reality]
We’ve had the government spending gas pedal on the floor for six years not including the 7 years Bush had it shoved way down with the wars.
[/quote]
No, we haven’t. Federal government spending went up from the 2008 budget year to the following year. Since that year, it’s been almost flat nominally. It’s gone down, when adjusted for the even low inflation over the last 5 years. It’s gone down even more on a per capita basis.
FlyerInHi
September 25, 2013 @
8:33 PM
SK in CV [quote=SK in CV][quote=no_such_reality]
We’ve had the government spending gas pedal on the floor for six years not including the 7 years Bush had it shoved way down with the wars.
[/quote]
No, we haven’t. Federal government spending went up from the 2008 budget year to the following year. Since that year, it’s been almost flat nominally. It’s gone down, when adjusted for the even low inflation over the last 5 years. It’s gone down even more on a per capita basis.[/quote]
Most economists and editors, even from publications like the financial times, agree that government has been a drag on the economy as we dig ourselves out of the Great Recession. It was very different in previous recessions.
Not sure where certain people are getting their data.
no_such_reality
September 26, 2013 @
8:23 AM
SK in CV [quote=SK in CV][quote=no_such_reality]
We’ve had the government spending gas pedal on the floor for six years not including the 7 years Bush had it shoved way down with the wars.
[/quote]
No, we haven’t. Federal government spending went up from the 2008 budget year to the following year. Since that year, it’s been almost flat nominally. It’s gone down, when adjusted for the even low inflation over the last 5 years. It’s gone down even more on a per capita basis.[/quote]
Was Bill Clinton’s budget austere? I mean dying in the streets austere?
In real dollars, after adjusting for inflation, we are spending 40% more per person.
That’s not the peddle to the floor?
Bush push the peddle down with the wars, then withe crises and agreement of both parties and our then President elect, really stomped it.
And we’ve basically kept it there. At little grand standing here and there, a little sequester, but we’re right back to asking for $3.8 Trillion.
40% more per person in real dollars, 2X in nominal dollars than Bill Clinton’s budgets.
Don’t think I think Romney would have been any different, he wouldn’t. TARP and all the other stimulus, what do we have to show for it? Because we literally spend the money to run 25 moon programs in there entirety. Would a few hundred Hoover dams be nice? One Mars landing?
Oh, we’ve got rebated for people to buy $125K electric cars for a politically active ‘entrepreneur’.
We’ve made Washington DC and it’s suburbs the fasting growing, fastest wealth increasing area of the country.
SK in CV
September 26, 2013 @
8:39 AM
no_such_reality wrote:
Was [quote=no_such_reality]
Was Bill Clinton’s budget austere? I mean dying in the streets austere?
In real dollars, after adjusting for inflation, we are spending 40% more per person.
That’s not the peddle to the floor?
Bush push the peddle down with the wars, then withe crises and agreement of both parties and our then President elect, really stomped it.
And we’ve basically kept it there.[/quote]
No, Clinton’s budget wasn’t austere. Was there a reason for it to be with a balanced budget? It shrunk in inflation adjusted per capita dollars. Is there a good reason for it to be austere now?
How has it been peddle to the floor the last 5 years when it hasn’t changed in nominal dollars and has gone down both per capita and inflation adjusted?
There’s some pretty good evidence that the lack of spending the last 5 years has been a drag on the economy. The US budget has never shrunk in real dollars as much as it has the last 5 years without the economy shrinking. Yet fiscal policies have continued to damage both the credit rating and the financial well being of the middle class.
livinincali
September 26, 2013 @
9:39 AM
SK in CV wrote:
There’s some [quote=SK in CV]
There’s some pretty good evidence that the lack of spending the last 5 years has been a drag on the economy. The US budget has never shrunk in real dollars as much as it has the last 5 years without the economy shrinking. Yet fiscal policies have continued to damage both the credit rating and the financial well being of the middle class.[/quote]
Government has spent the past 30 years spending more than it takes in. While government may be able to do that longer than an individual eventually the bill comes due. The stimulus cheerleaders never bother to understand the long term consequences of deficit spending. It always runs into a wall at some point because the debt holders come to the realization that they aren’t going to get paid back. The interest rates reverse and then the carrying costs explodes exponentially leaving default/devaluation as the only option.
I just don’t believe there is painless solution for the past 30 years of deficit spending no matter what solutions the Keynesian economists come up with. There are going to be painful repercussions to economic policy over the past 30-40 years, you’re only hope is to postpone them long enough so you’re dead before you experience them. I believe it’s impossible to put them off indefinitely as that would seem to violate the mathematical principals economics is based on. Certainly policy can create winners and losers but it can’t create painless solutions.
FlyerInHi
September 26, 2013 @
12:35 PM
livinincali wrote:
I just [quote=livinincali]
I just don’t believe there is painless solution for the past 30 years of deficit spending no matter what solutions the Keynesian economists come up with. There are going to be painful repercussions to economic policy over the past 30-40 years, you’re only hope is to postpone them long enough so you’re dead before you experience them. I believe it’s impossible to put them off indefinitely as that would seem to violate the mathematical principals economics is based on. Certainly policy can create winners and losers but it can’t create painless solutions.[/quote]
Who’s talking painless solutions?
The government cannot conjure up productive capacity, but it can create the demand to absorb excess capacity. Why would you want productive capacity to sit idle, not producing anything for humanity?
What math? Currency crisis only happen when the currency is tied to gold or tied to another currency.
Ignore the past or the future. Right now we have low inflation and excess capacity. Why cut back and inflict more pain, right now?
spdrun
September 26, 2013 @
1:15 PM
Why the blue fuck is more Why the blue fuck is more production the be-all and end-all of human achievement? What’s wrong with a stagnant, lazy, but generally happy society?
“I’m happy with my 3-bedroom flat, why do I need to move?”
“I’m happy with my 10-year-old car, why do I need a new one unless this one breaks beyond repair?”
“This 5-year-old Macbook Air works for me, why do I need a new iPad or Macbook?”
Concentrate on art, nature, and human friendships, not on acquiring more useless crap. I’d personally like to see growth, but in the direction of increased respect for the environment and independence from fossil fuels.
Developments in the middle of the South Las Vegas desert with swimming pools, gyms, water features, and an otherwise un-redeeming location? To each one their own.
FlyerInHi
September 26, 2013 @
1:30 PM
You don’t want bigger houses You don’t want bigger houses but other people do. They want to tear down and rebuild.
We can have growth through services. Better transport services, energy research, child care, more vacation and tourism. etc.. Good services depend on building an infrastructure.
We can debate the exact kind of demand the government should create to absorb excess productive capacity. But it’s defeatist to argue that the government should cut back right at the time there is no inflation and idle capacity.
no_such_reality
September 26, 2013 @
1:41 PM
Except short of destroying it Except short of destroying it in conflict, the Government can’t really create demand.
Any demand they do is taken from someone else. Deficit spending is just taking it from our children.
FlyerInHi
September 26, 2013 @
1:50 PM
no_such_reality wrote:Except [quote=no_such_reality]Except short of destroying it in conflict, the Government can’t really create demand.
Any demand they do is taken from someone else. Deficit spending is just taking it from our children.[/quote]
Wrong. When there is excess capacity, the government is not competing for resources or driving up prices.
We consume what we produce now. Our children will consume what they produce. There is no taking from the future.
spdrun
September 26, 2013 @
1:55 PM
No: we over-consume what’s No: we over-consume what’s subsidized by the Chinese government and produced by abused children.
We also build more toys when there are millions of perfectly good toys lying around for the taking. If they don’t want to go the way of L.A., Phoenix, L.V. and other Western cities should be looking at how to encourage re-use of land rather than building on virgin land and letting older poor-quality homes go to shit.
We’re talking about land that’s always been used residentially, not brownfields here, which reduces complication compared to many older cities.
no_such_reality
September 26, 2013 @
1:58 PM
Every dollar the Governments Every dollar the Governments spends is a dollar taken from and unspent by a citizen. Whether today or tomorrow’s citizen.
spdrun
September 26, 2013 @
2:02 PM
The government mostly employs The government mostly employs citizens, so at least some of this money will be spent within the US.
FlyerInHi
September 26, 2013 @
2:15 PM
no_such_reality wrote:Every [quote=no_such_reality]Every dollar the Governments spends is a dollar taken from and unspent by a citizen. Whether today or tomorrow’s citizen.[/quote]
How are we increasing our resources today by taking them from the future? Do we have time machines?
no_such_reality
September 26, 2013 @
2:32 PM
FlyerInHi [quote=FlyerInHi][quote=no_such_reality]Every dollar the Governments spends is a dollar taken from and unspent by a citizen. Whether today or tomorrow’s citizen.[/quote]
How are we increasing our resources today by taking them from the future? Do we have time machines?[/quote]
Wow, and said with a straight face.
Go load your credit cards up.
Go load up your student loans.
Go buy property, it’s an investment. How’d that work out for many in 2008?
Step one, the money has to be investment wisely. How’d our occupation of Iraq and Afghanistan going?
FlyerInHi
September 26, 2013 @
2:36 PM
Nsr, society’s resources are Nsr, society’s resources are the same whether I get a loan or not.
If too many people compete for the limited resources, prices will go up. But new resources don’t magically appear from the future.
no_such_reality
September 26, 2013 @
3:12 PM
FlyerInHi wrote:Nsr, [quote=FlyerInHi]Nsr, society’s resources are the same whether I get a loan or not.
If too many people compete for the limited resources, prices will go up. But new resources don’t magically appear from the future.[/quote]
Short of use of force, the Government accesses any resources just like any person. They buy it.
Just like any person, when they are loaded with debt, all their available money (taxes) are used to pay the debt and interest.
Or print money, and destroy the value of every dollar already in existence.
FlyerInHi
September 26, 2013 @
3:28 PM
Nsr,how is that taking from Nsr,how is that taking from future children?
You get paid today for your productivity. If you don’t spend your money, there is no guarantee that your purchasing power is preserved. Why should money itself be an investment vehicle? Money is just a tool to facilitate trade.
no_such_reality
September 26, 2013 @
3:31 PM
FlyerInHi wrote:Nsr,how is [quote=FlyerInHi]Nsr,how is that taking from future children?
You get paid today for your productivity. If you don’t spend your money, there is no guarantee that your purchasing power is preserved. Why should money itself be an investment vehicle? Money is just a tool to facilitate trade.[/quote]
How is obligating them to payments they had no say in taking from them?
Good to know, let me go get a credit card in my kids name.
FlyerInHi
September 26, 2013 @
3:40 PM
Nsr, Government interest Nsr, Government interest payments are simply transfers from the government to the holders of bonds. Future people will get interest payments. You’re not taking anything from them today.
no_such_reality
September 27, 2013 @
9:35 AM
FlyerInHi wrote:Nsr, [quote=FlyerInHi]Nsr, Government interest payments are simply transfers from the government to the holders of bonds. Future people will get interest payments. You’re not taking anything from them today.[/quote]
1/3rd of the debt is held by Foreign entities.
So no worries, it’s just a transfer payment out of our country and into theirs.
You just transferred 1/3rd of it roughly $5.3 Trillion dollars to someone outside our country for your consumption, they, the future generation has to pay for it.
So no worries, it’s just a transfer payment out of our country and into theirs.
You just transferred 1/3rd of it roughly $5.3 Trillion dollars to someone outside our country for your consumption, they, the future generation has to pay for it.[/quote]
Our private sector invests in foreign countries in search for higher growth, as good economics would dictate.
Our claims to foreign income is higher than we need to pay on our debt held by foreigners. Look it up.
Plus, when we pay for imported good and services in dollars, that money is plowed back into US treasuries and invested here.
From a world economy standpoint , more world growth is good for us and for everyone else on earth.
no_such_reality
September 27, 2013 @
9:59 AM
Blah blah blah, we can have Blah blah blah, we can have something for nothing.
Your awakening like those of Lenin’s followers is going to be rude. Sadly, your taking the rest of us with you.
FlyerInHi
September 27, 2013 @
10:20 AM
Nsr, you make it sound like a Nsr, you make it sound like a religious crusade so we don’t go to hell.
There is no morality in economics. Just follow the money and think logically.
I’m willing to be converted. Just give me a logical valid argument I can follow.
I would concede that higher rates could be a problem. But that is to be addressed in the future. We have problems to solve now.
If there was a need to go to war, would we worry about possible higher rates (which didn’t happen btw)? Or do we just go kick ass.
SD Realtor
September 27, 2013 @
11:50 AM
If you do not see a problem If you do not see a problem where you cannot even finance your own debt, where you quite literally have to print money to buy your own debt because it is so large that there are not enough buyers on this planet then it is not worth even debating.
When there is a fundamental lack of understanding that we are only technically solvent because we print money to buy our own debt, because if we did not then we would have to sell bonds at a much higher interest rate and if we did that we would be even more insolvent and thus not able to service our debt in addition to our insatiable spending.
When fundamentals of just how screwed we are, are commonly dismissed, or simply not understood, then… it is not worth arguing over. People think the iceberg is not there because we have not slammed into it yet.
FlyerInHi
September 26, 2013 @
2:02 PM
From a supply and demand From a supply and demand standpoint, there is excess capacity now.
The government should step in and use the idle capacity to achieve our social goals.
Spd, you can debate our priorities all you want, but the economics are pretty clear.
spdrun
September 26, 2013 @
2:07 PM
From a supply and demand
From a supply and demand standpoint, there is excess capacity now.
The government should step in and use the idle capacity to achieve our social goals.
Why not reduce capacity by limiting working hours and guaranteeing sane levels of time off? Who says that the current level of capacity is the correct one and should be utilized, rather than being reduced to fit demand?
If I own a taxi depot with capacity for 1000 vehicles in the sleepy town of Bear Claw, WY (pop 500), does the town have a duty to expand to fit my business plan?
This being said, IMHO, we CAN use our excess capacity, but it shouldn’t be used to re-inflate bubbles, but rather to realign the economy entirely. But with vested interests in charge, this will be a slow process if it can happen at all.
scaredyclassic
September 26, 2013 @
2:13 PM
Grow or die.
A battleship Grow or die.
A battleship turns slowly.
I don’t think we can change scripts.
I don’t even think I personally can significantly change my own life or outlook.
An entire nation hellbent on doing it the way it’s always been done except a but bigger and faster.
Here we go….
spdrun
September 26, 2013 @
2:17 PM
Grow or die.
No. ADAPT or
Grow or die.
No. ADAPT or die. Growth for the sake of growth is often “horizontal” growth — the kind more likely to slow a person (or country) right down.
FlyerInHi
September 26, 2013 @
2:25 PM
Spd, we are talking about a Spd, we are talking about a big economy here.
The taxis could be moved to NY thereby reducing cost and providing better transportation (if only NY would allow more licenses).
As a society, we want to produce the max we can in the aggregate. Why not?
You can decide what you want but there is no reason to limit other people’s potential.
Separate your personal philosophy of life from economics.
spdrun
September 26, 2013 @
2:37 PM
As a society, we want to
As a society, we want to produce the max we can in the aggregate. Why not?
Why yes? Puritan work ethic? Why is production of often duplicative items necessarily a social good? If most people weren’t brainwashed by advertising, would they really give a fuck whether they were using an iPhone 4 or an iPhone 5s?
If anything, increased production has environmental (pollution, land use) and social costs that are often not taken into account. This goes doubly for overseas production that’s not subject to the same environmental regulations as in the US.
As far as capacity, the problem may be UNEVEN distribution of capacity. High rate of unemployment and discouraged workers, BUT a lot of the employed are actually being worked OVER their comfortable capacity.
Hence regulations to encourage a more equitable use of capacity are needed.
FlyerInHi
September 26, 2013 @
2:50 PM
Spd, the iphone 5s is faster. Spd, the iphone 5s is faster.
I’m just saying that we should use what we have to better our lives. Once we accept that, the policies on the highest and best uses will follow
spdrun
September 26, 2013 @
2:59 PM
Of course a 5s is faster. Of course a 5s is faster. Does the speed difference translate into a tangible difference in utility for the average user? I have my doubts.
I’m not actually convinced that all technology does much to better peoples’ lives. There’s a lot of hype and salesmanship that doesn’t always follow reality.
Is your life really better if you have an iPhone, iPad, Macbook, and desktop computer, or are two out of the four enough? How much of what we’re buying and doing already is essentially “busywork” that misutilizes or even over-utilizes capacity?
FlyerInHi
September 26, 2013 @
3:23 PM
spdrun wrote:
Is your life [quote=spdrun]
Is your life really better if you have an iPhone, iPad, Macbook, and desktop computer, or are two out of the four enough? How much of what we’re buying and doing already is essentially “busywork” that misutilizes or even over-utilizes capacity?[/quote]
Not my own life but, in the aggregate, the activity create jobs for other people. And I get a faster phone or a new car because I can.
human existence kinda is pointless anyway. But we exist so better make the best of it.
spdrun
September 26, 2013 @
3:42 PM
Not my own life but, in the
Not my own life but, in the aggregate, the activity create jobs for other people.
Riddle me this: Why are more jobs (in the sense of more working hours borne by society as a whole) necessarily a good thing?
What if we increased employment by decreasing average per capita hours while keeping total working hours, and thus productivity, roughly constant?
Plenty of sci-fi authors imagined a technological society where the average job was 10-20 hours per week. Why are jobs with a “40” (or really 50) hour work week considered the norm. Why is little vacation considered the norm?
Look at norms concurrently with looking at jobs.
FlyerInHi
September 26, 2013 @
3:55 PM
Spd, those are value Spd, those are value judgments society makes. There is no reason 20 hours could not be the norm.
I’m guessing people would rather work more for less money per hour so they can buy more stuff. Maybe they are brainwashed, but it is what it is. That can change.
But that doesn’t play into the federal budget and debt limit debates today.
spdrun
September 26, 2013 @
4:08 PM
True — I think this turned True — I think this turned into a continuation of one of our other discussions. 🙂
I’d argue that the 40-50 hour work week actually breeds and perpetuates brainwashing — which is why the powers that be want us turning the treadmill. If average Americans are either working or commuting 10-11 hours a day, where’s the time to kick back, read a book, learn a foreign language, educate oneself, and THINK?
It renders them more susceptible to propaganda about how America is the best because we work so hard and we don’t want any damn socialist laws to ruin this, rah, rah, rah!
CA renter
September 26, 2013 @
10:41 PM
You’ve made a lot of great You’ve made a lot of great posts on this thread, spdrun.
spdrun
September 26, 2013 @
1:45 PM
Just because people want it Just because people want it (or think they do), doesn’t mean we should encourage more development in places where the climate and geography don’t make sense.
It’s also not a question of tear down and rebuild as much as endless sprawl (think of the west side of the Phoenix valley). You have a lot of houses that were built like crap in the 70s and 80s that are NOT being torn down, because it’s cheaper to build in bumblefuck elsewhere.
Yes, we should create demand in certain areas. But that’s not where it’s mainly being created right now 🙂
FlyerInHi
September 27, 2013 @
9:30 AM
spdrun wrote:
Developments in [quote=spdrun]
Developments in the middle of the South Las Vegas desert with swimming pools, gyms, water features, and an otherwise un-redeeming location? To each one their own.[/quote]
NY will get flooded with global warming. Look what happened after the super storm. Why waste money rebuilding when it’ll happen again? Washington DC is a swamp. San Francisco is earth quake zone. San Diego is as much a desert as Las Vegas where water is more expensive than Las Vegas. Hawaii has no local energy. electricity and water are double Cali rates. Take your pick.
spdrun
September 27, 2013 @
9:38 AM
Very little happened during Very little happened during Sandy that didn’t also happen during the 1938 New England superhurricane. There were stories of the East River flowing 5 blocks inland then, which is pretty much to the level of flooding that occurred in the East Village in 2012.
Differences were that the areas hit on Long Island were more built up than they were in 1938 and the 1938 storm didn’t hit NJ as hard (but nailed CT harder). I’d chalk Sandy’s destruction less up to global warming (which I don’t deny is a problem) and more to timing. It hit during high tide on a full moon.
San Diego? No water? Start building solar and/or nuclear desalination plants: problem solved, plus the salt generated can be sold.
FlyerInHi
September 27, 2013 @
10:58 AM
spdrun wrote:
San Diego? No [quote=spdrun]
San Diego? No water? Start building solar and/or nuclear desalination plants: problem solved, plus the salt generated can be sold.[/quote]
With technology and human ingenuity, we can live anywhere.
No location is more worthy than another. It comes down to costs/benefits.
I think the quest for cheaper locations and to build developments with evermore fanciful features provide us choices and improve our lives. If you want the city, you can live in manhattan. If you want a 4000sf house with casita for the same price, you have Phoenix and Las Vegas. It’s all good economics to me.
spdrun
September 27, 2013 @
11:38 AM
I hear what you’re saying, I hear what you’re saying, but one has to admit that some regions are more equal than others in their ability to support human life (and life in general) without resorting to heroic technological means.
FlyerInHi
September 27, 2013 @
1:28 PM
spdrun wrote:I hear what [quote=spdrun]I hear what you’re saying, but one has to admit that some regions are more equal than others in their ability to support human life (and life in general) without resorting to heroic technological means.[/quote]
The most self sustaining areas would be tropical river deltas were you can live off the land pretty much without any tech. Don’t need heating and cooling. Food is plentiful.
New York cannot exist without massive distribution networks and technology. With global warming and sea level rises, NY will need sea barrages to protect itself.
I watched the show on the freedom tower. When they built WTC they need an underground barrage to the bedrock to keep out water from the Hudson River. I don’t see how NY is more life sustaining than Dubai.
spdrun
September 27, 2013 @
3:20 PM
I watched the show on the
I watched the show on the freedom tower. When they built WTC they need an underground barrage to the bedrock to keep out water from the Hudson River. I don’t see how NY is more life sustaining than Dubai.
No giant city is strictly self-sustaining.
Not specifically NYC but the Northeast — it’s sustained a sizable human population for what, a few millenia?
Whereas the desert cities had to wait until air conditioning to sustain any population at all. I also suspect that if it weren’t for:
(a) the atomic testing ground
(b) the historical accident of Nevada having loose gaming laws and a government amenable to corruption
…
Las Vegas would still be a sleepy small town in the desert roughly the size of Burlington, VT.
livinincali
September 27, 2013 @
7:30 AM
FlyerInHi wrote:
Ignore the [quote=FlyerInHi]
Ignore the past or the future. Right now we have low inflation and excess capacity. Why cut back and inflict more pain, right now?[/quote]
Because the increase in debt now will be a future drag on the economy. Paying interest in the future will be a drag on the economy in the future. Do you agree that paying interest on debt is a drag on the economy or not? If government borrows a trillion dollars to absorb the excess capacity, next year they’ll be paying somewhere around 20-30 billion dollars in interest. That’s money that won’t be available next year for spending on absorbing the excess capacity.
Digging a deeper debt hole that will make the problem worse in the future because it’s too painful to do now is short term thinking. I’ll concede that deficit stimulus spending is somewhat helpful in the short term but since it doesn’t seem to be producing a significant positive return on investment we’re going to be screwed in the long run.
scaredyclassic
September 27, 2013 @
7:33 AM
America is the best because America is the best because we have the illusion of so much choice.
SD Realtor
September 27, 2013 @
8:29 AM
People will understand debt a People will understand debt a whole lot better when rates pick up. Just like the inflation lie. Little to no inflation, yeah right. Except when I look at the price of food, the shrinking food sizes, the price of water, energy and things like that.
Life is easier when you simply accept what you are told.
Everything will be okay.
FlyerInHi
September 27, 2013 @
9:46 AM
livinincali wrote:
Because [quote=livinincali]
Because the increase in debt now will be a future drag on the economy. Paying interest in the future will be a drag on the economy in the future. Do you agree that paying interest on debt is a drag on the economy or not? If government borrows a trillion dollars to absorb the excess capacity, next year they’ll be paying somewhere around 20-30 billion dollars in interest. That’s money that won’t be available next year for spending on absorbing the excess capacity.
Digging a deeper debt hole that will make the problem worse in the future because it’s too painful to do now is short term thinking. I’ll concede that deficit stimulus spending is somewhat helpful in the short term but since it doesn’t seem to be producing a significant positive return on investment we’re going to be screwed in the long run.[/quote]
Paying the debt is not a drag on the economy. Money is transferred from the government to the private sector. Actually paying debt is like spending in that it puts money in the economy.
Higher rates are a drag on the economy because holding cash becomes more attractive and people invest less (if holding cash returns more than inflation). But the Fed has the power to lower rates. We are no longer in a gold standard or tied to any other currency so there is no strong argument for exploding rates.
You didn’t make this argument, but “taking from the future” is a boneheaded argument. We consume what we produce now. Future people will consume what they produce in the future.
So why let idle capacity sit when we could use it to better our lives? Unnecessary, self-inflicted pain.
livinincali
September 27, 2013 @
12:51 PM
FlyerInHi wrote:
Paying the [quote=FlyerInHi]
Paying the debt is not a drag on the economy. Money is transferred from the government to the private sector. Actually paying debt is like spending in that it puts money in the economy.
[/quote]
Where does the money come from to pay down the debt. It comes from some taxpayers pocket somewhere and then they don’t have the money to spend elsewhere. As a result the economy suffers because people have less money to spend because government takes more from them. How does paying the Chinese interest better our economy? How does paying some public sector employees pension fund interest put money in the hands of the private sector to invest in the economy?
You probably didn’t think about any of these factors when you made you this argument. A chess player that only focuses on the best current move is no match for a player that thinks beyond their current move. This is exactly your argument make the best current move and ignore all the long term consequences of that move. I think we’re starting to see consequences of all the short term decision making in this country, from CEOs to Government.
If you put an economic theory inside a closed box where’s there’s no external forces maybe you can accomplish the goal of increasing supply via increasing demand within that closed system. However, we don’t live in a closed system when it comes to economic policy. Countries make economic policy and yet they aren’t isolated from external forces so sometimes those policies might do what they are intended to do in terms of demand creating supply, but the supply is created in China while the demand is created here.
In the case of education and health care we’ve done a tremendous job at creating demand for American produced services for the past 20-30 years but we’ve done an atrocious job at creating supply of those services via regulations. Therefore the price of those things have gone up faster than economic growth and inflation. IMO the fundamental problem with economic policy is we exclusively focus on the demand side of the equation. Our economic leaders believe demand will fix all the economic problems yet they just can’t see unintended consequences of focusing purely on demand without any thought about how supply will meet that demand. The consequence being focusing purely on demand creates inflation and rewards business providing those particular goods and services in demand with higher profits. How much additional demand is there for iPhones because we subsidize poor Americans in various ways. And how much do we bitch about Apple make too much profit and not paying enough taxes?
FlyerInHi
September 27, 2013 @
1:36 PM
The Government issues the The Government issues the currency and spends before it can tax.
Otherwise where does the money come from?
We spent on the Bush wars and goosed up the economy. Did interest rates go up?
Why can’t we spend the same amount now to solve the problems of unemployment and renew our infrastructure? We are letting a generation of young people twist in the wind. That is taking from the future.
Livin, i don’t disagree on some of the details of regulations (some cities have high cost of living because of regulations). But let’s not have austerity for the sake of austerity and misguided ideology.
Btw, state and local governments are not the same as the federal government + the federal reserve. Huge difference. I would not defend local pensions. I’d let them local people figure out their own problems.
Federal budget, debt limit… fiscal and monetary policy are about management of our whole economic system.
livinincali
September 27, 2013 @
1:40 PM
FlyerInHi wrote:The [quote=FlyerInHi]The Government issues the currency and spends before it can tax.
Otherwise where does the money come from?
[/quote]
Well usually the government has the money in an account before it gets spent. Every time you get a paycheck money is remitted to the government so government collects taxes all year long and then then the additional money they need is raised through bond sales. Not sure what you mean by the government spends the money first and then collects the taxes
[quote=FlyerInHi]We spent on the Bush wars and goosed up the economy. Did interest rates go up?
Why can’t we spend the same amount now to solve the problems of unemployment and renew our infrastructure? We are letting a generation of young people twist in the wind. That is taking from the future.
[/quote]
Because you can’t deficit spend forever. That’s entirely the point. Suppose you get laid off off from your high paid job. You can very likely continue to live your former lifestyle using credit for some amount of time, but eventually the credit card companies are going to cut you off. When you get cut off it’s going to be quite the shock because you were used to a lavish lifestyle and now you live like a broke person.
America can certainly deficit spend until it gets cut off but once you get cut off you can only spend what you collect in taxes so there’s a instantaneous haircut of 40% of total spending. Maybe 10% of GDP gets immediately and suddenly removed from the economy. The alternative is you can start an austerity program where you remove 1% of GDP from government spending each year giving people a chance to adjust. Your argument is that go ahead and keep deficit spending and hope you don’t get cut off before a huge economic growth cycle saves you.
I favor austerity now because it gives you some control about how to resolve the debt issue rather then suddenly getting cut off. I guess your ideology is that we’ll hope and pray for an economic miracle before we get cut off or you don’t believe we can get cut off, while I have an ideology that sees the writing on the wall and figures it’s better to manage the debt problem rationally.
Live for the moment is often related to irresponsible behavior, but you advocate our government do exactly that. Live for the moment, hope for the best, and ignore the long term consequences.
FlyerInHi
September 27, 2013 @
2:03 PM
We are our own bank. We are We are our own bank. We are never going to cut ourselves off.
You are telling us of the long term consequences, but you don’t know what they will be.
Japan is the canary in the coal mine but even they have not had high inflation and a currency crisis. They have more problems than we do. They have to trade in dollars whereas we trade in our own currency. We have a young growing population.
So look for objective evidence instead of ideology. I would argue that in light of real evidence, we have quite a bit more deficit spending leeway.
Economics is an evolving science. We accumulate more knowledge as we go. Orthodoxy for the sake of ideology is unscientific and defeatist.
If someone tells me that I can’t live a certain way, else I’d go to hell, I would ask for evidence hell actually exists.
no_such_reality
September 26, 2013 @
9:46 AM
SK in CV [quote=SK in CV][quote=no_such_reality]
Was Bill Clinton’s budget austere? I mean dying in the streets austere?
In real dollars, after adjusting for inflation, we are spending 40% more per person.
That’s not the peddle to the floor?
Bush push the peddle down with the wars, then withe crises and agreement of both parties and our then President elect, really stomped it.
And we’ve basically kept it there.[/quote]
No, Clinton’s budget wasn’t austere. Was there a reason for it to be with a balanced budget? It shrunk in inflation adjusted per capita dollars. Is there a good reason for it to be austere now?
How has it been peddle to the floor the last 5 years when it hasn’t changed in nominal dollars and has gone down both per capita and inflation adjusted?
There’s some pretty good evidence that the lack of spending the last 5 years has been a drag on the economy. The US budget has never shrunk in real dollars as much as it has the last 5 years without the economy shrinking. Yet fiscal policies have continued to damage both the credit rating and the financial well being of the middle class.[/quote]
2013 United States federal budget – $3.8 trillion (submitted 2012 by President Obama)[129]
2012 United States federal budget – $3.7 trillion (submitted 2011 by President Obama)
2011 United States federal budget – $3.8 trillion (submitted 2010 by President Obama)
2010 United States federal budget – $3.6 trillion (submitted 2009 by President Obama)
2009 United States federal budget – $3.1 trillion (submitted 2008 by President Bush)
2008 United States federal budget – $2.9 trillion (submitted 2007 by President Bush)
2007 United States federal budget – $2.8 trillion (submitted 2006 by President Bush)
2006 United States federal budget – $2.7 trillion (submitted 2005 by President Bush)
2005 United States federal budget – $2.4 trillion (submitted 2004 by President Bush)
2004 United States federal budget – $2.3 trillion (submitted 2003 by President Bush)
2003 United States federal budget – $2.2 trillion (submitted 2002 by President Bush)
2002 United States federal budget – $2.0 trillion (submitted 2001 by President Bush)
Oh yea, I guess that’s flat.
As for lack of spending, yes, people stop spending until they figure out which “winner” the Government going to appoint.
SD Realtor
September 26, 2013 @
9:51 AM
Let’s not forget that we are Let’s not forget that we are also amortizing our own debt since 2008. Something that has never been done before and it seems we cannot really stop doing it either.
SK in CV
September 26, 2013 @
11:30 AM
no_such_reality wrote:
2013 [quote=no_such_reality]
2013 United States federal budget – $3.8 trillion (submitted 2012 by President Obama)[129]
2012 United States federal budget – $3.7 trillion (submitted 2011 by President Obama)
2011 United States federal budget – $3.8 trillion (submitted 2010 by President Obama)
2010 United States federal budget – $3.6 trillion (submitted 2009 by President Obama)
2009 United States federal budget – $3.1 trillion (submitted 2008 by President Bush)
2008 United States federal budget – $2.9 trillion (submitted 2007 by President Bush)
2007 United States federal budget – $2.8 trillion (submitted 2006 by President Bush)
2006 United States federal budget – $2.7 trillion (submitted 2005 by President Bush)
2005 United States federal budget – $2.4 trillion (submitted 2004 by President Bush)
2004 United States federal budget – $2.3 trillion (submitted 2003 by President Bush)
2003 United States federal budget – $2.2 trillion (submitted 2002 by President Bush)
2002 United States federal budget – $2.0 trillion (submitted 2001 by President Bush)
Oh yea, I guess that’s flat.
As for lack of spending, yes, people stop spending until they figure out which “winner” the Government going to appoint.[/quote]
I kind of prefer actuals where possible. 2013 and 2014 are CBO projections.
So yes. Flat. Pedal to the metal would have been substantial increases. They didn’t happen over this period. 2.85% increase over 5 years nominal. Adjust for inflation and population growth, it’s gone down per capita.
And Bush’s last budget year was 2009, the first year shown. Most of the increase over the submitted budget was TARP bill signed in 2008, which Bush signed into law. A smaller part of the increase was the 2009 stimulus bill signed by Obama.
Even going back to the 2008 budget year, the increase is expected to be about 21% cumulative over a 6 year period (2008 to 2014), just barely higher the inflation rate and population growth over that period.
UCGal
September 26, 2013 @
12:08 PM
no_such_reality wrote:SK in [quote=no_such_reality][quote=SK in CV][quote=no_such_reality]
Was Bill Clinton’s budget austere? I mean dying in the streets austere?
In real dollars, after adjusting for inflation, we are spending 40% more per person.
That’s not the peddle to the floor?
Bush push the peddle down with the wars, then withe crises and agreement of both parties and our then President elect, really stomped it.
And we’ve basically kept it there.[/quote]
No, Clinton’s budget wasn’t austere. Was there a reason for it to be with a balanced budget? It shrunk in inflation adjusted per capita dollars. Is there a good reason for it to be austere now?
How has it been peddle to the floor the last 5 years when it hasn’t changed in nominal dollars and has gone down both per capita and inflation adjusted?
There’s some pretty good evidence that the lack of spending the last 5 years has been a drag on the economy. The US budget has never shrunk in real dollars as much as it has the last 5 years without the economy shrinking. Yet fiscal policies have continued to damage both the credit rating and the financial well being of the middle class.[/quote]
2013 United States federal budget – $3.8 trillion (submitted 2012 by President Obama)[129]
2012 United States federal budget – $3.7 trillion (submitted 2011 by President Obama)
2011 United States federal budget – $3.8 trillion (submitted 2010 by President Obama)
2010 United States federal budget – $3.6 trillion (submitted 2009 by President Obama)
2009 United States federal budget – $3.1 trillion (submitted 2008 by President Bush)
2008 United States federal budget – $2.9 trillion (submitted 2007 by President Bush)
2007 United States federal budget – $2.8 trillion (submitted 2006 by President Bush)
2006 United States federal budget – $2.7 trillion (submitted 2005 by President Bush)
2005 United States federal budget – $2.4 trillion (submitted 2004 by President Bush)
2004 United States federal budget – $2.3 trillion (submitted 2003 by President Bush)
2003 United States federal budget – $2.2 trillion (submitted 2002 by President Bush)
2002 United States federal budget – $2.0 trillion (submitted 2001 by President Bush)
Oh yea, I guess that’s flat.
As for lack of spending, yes, people stop spending until they figure out which “winner” the Government going to appoint.[/quote]
Correct me if I’m wrong – but wasn’t the Iraq/Afghanistan spending completely OFF books during the Bush years? In other words the actual spending was much larger.
Maybe I’m wrong – but that’s the way I remember it.
no_such_reality
September 26, 2013 @
1:21 PM
UCGal wrote:
Correct me if [quote=UCGal]
Correct me if I’m wrong – but wasn’t the Iraq/Afghanistan spending completely OFF books during the Bush years? In other words the actual spending was much larger.
Maybe I’m wrong – but that’s the way I remember it.[/quote]
You’re both wrong and right. They masked the expenditures by not putting it in proposed budget but by funding it in supplemental appropriations.
If you look at the proposed budget, a chunk of it isn’t there, if you look at the expenditures, they are or sometimes are not depending on which source you use and how syntactical obfuscating they are. Kind of like the discussion around how much does the State of California have for a budget, are we talking General Funds, Bond Funds, Special Funds or Federal Funds. The State will spend $232B in 2013-2014, which might come as a shock to people since just do years ago we were approving tax increases to stop the budget from getting slashed to $84B…
Cali will spend it’s largest amount ever this next FY.
FlyerInHi
September 26, 2013 @
1:42 PM
include the Bush wars and the include the Bush wars and the subsequent drawdown of the Obama years, and you’re strengthening the case that the more recent years’ budgets have been a drag on the economy. Add to the brinksmanship that has sabotaged the recovery.
no_such_reality
September 26, 2013 @
1:43 PM
The last 13 years of The last 13 years of Government achievement is QED why Government spending won’t work.
spdrun
September 25, 2013 @
2:22 PM
I’ve been to many European
I’ve been to many European homes. People of modest means live on the edges of cities in soulless developments about 1/2 hour by public transport. Contrast that to a typical rental apartment complex in Dallas, Phoenix, Las Vegas, or Orlando. Those complexes look like club Med with pools, gyms and water features. Those would be luxury complexes in most of the world, but here they can be had for modest rent.
There are projects in the US, too — the difference is that such developments tend to be concentrated in the inner suburbs as opposed to cities themselves in Europe. Also varies by country quite a bit — more in France and former East Bloc cities than other cities.
Also, note that amenities are more needed in Phoenix, Vegas, or Orlando, simply because there are no public amenities near the complexes. Why waste space on a gym in my building’s basement if there’s a public gym two blocks away and a swimming pool in the park a few minutes’ walk in the other direction?
Water features? Really? For whom is a fake fountain a selling point?
FlyerInHi
September 25, 2013 @
2:45 PM
spdrun wrote:
Water features? [quote=spdrun]
Water features? Really? For whom is a fake fountain a selling point?[/quote]
Hahaha.
How about a whole lake or Olympic size pool with waterfall?
Looked up the address, this Looked up the address, this is south of McCarran Field — pretty far from the center of the action. It has a pool and large gym because:
(a) it needs amenities to attract tenants. Note also the free rent for a month…
(b) there are no such public amenities around it.
I’m confused, because this shows up on GMaps as a condo development with a rather small-looking pool. Is this just on the east side of I-15, did Maps get the address wrong, or did they knock something down to build it and it’s not yet in sat view?
Apparently, it has a tattoo parlor and megachurch as neighbors. woot.
FlyerInHi
September 25, 2013 @
3:15 PM
Why don’t you google map how Why don’t you google map how long it takes to drive to bellagio in your brand new financed (of course) air-conditioned BMW. Maybe 15 min. No need to take public transport with the little people.
In America, a guy out of college with an OK job can enjoy that lifestyle, depending on where he chooses to live. I don’t think it’s possible in Europe or anywhere else in the world for that matter.
It was a failed condo development that an investment fund purchased and turned to apartments. The pool is large (larger than most condo pools) because the development is large. I’ve been there.
spdrun
September 25, 2013 @
3:41 PM
The problem is that you can’t The problem is that you can’t leave the air-conditioned BMW half the year because it’s 110-120 degrees out and your brain will fry. I know people who’ve lived out in Vegas — they felt it was cool for the first year or two, got tired of it, and moved back East. Unlike coastal CA where people seem to move for keeps.
BTW – I actually don’t take public transport all that much any more — I usually end up walking or biking where I need to go… more bike lanes being built, and I can usually see clients outside of rush hour.
Need I mention that Americans have cheap energy and that nearly everyone who lives in a home built since 1980 has central air? The rest of the world is catching up to us. But still, in the rest of the world only million dollar houses have central AC. Most have those cheesy ductless units you hang on the wall.
Easy living and physical comfort contribute a lot to happiness.
I don’t mind your walking/biking city life. But your average, costco shopping, fat ass American would be miserable living like that. It doesn’t matter that he’s a porky, pill popping, sick couch potato watching his 70 inch tv. He’s happy.
spdrun
September 25, 2013 @
4:30 PM
Central AC is a matter of Central AC is a matter of need. Max average high in Berlin is about 75F in July, 80-85 is considered hot, so who needs it 99% of the time?
Not so different from San Diego’s summer high temp, and I saw very few condos with central AC in San Diego (or central heat for that matter, most had electric or gas fan coil heaters). This applies to mid 90s stuff as much as 60s through 80s.
FlyerInHi
September 25, 2013 @
8:27 PM
Yeah, AC is a luxury and is Yeah, AC is a luxury and is not “needed”. But it’s expected everywhere you go including schools. Standard of living rises as previous luxuries become common place. Why would we not want that for any technology?
I think that anything built after 1990 has central AC even in San Diego. Those are kinda undesirable condos you’re talking about.
When I’m in Europe, i feel at times aggravated at the lack of amenities I’m used. I try to do VRBO to experience what the average local lives like. Yeah, yea they have beautiful stone buildings that last centuries. But inside those buildings there is a lack of improvements and paper-thin walls also. Try washing bed sheets and dry them on a tiny rack in a small flat.
spdrun
September 25, 2013 @
8:47 PM
Yeah, AC is a luxury and is
Yeah, AC is a luxury and is not “needed”. But it’s expected everywhere you go including schools. Standard of living rises as previous luxuries become common place. Why would we not want that for any technology?
Because I don’t see the value of technology merely for the sake of technology, even if the utility in a given situation is minimal. A properly-designed building in coastal CA (or much of Germany) shouldn’t need A/C 99% of the time.
Now care for that pressurized cabin option in a Cessna 172? 🙂
spdrun
September 25, 2013 @
12:29 PM
Btw, what’s the point of
Btw, what’s the point of living in a 2-bed flat worth $300k. If you’re a similar time from work, wouldn’t you rather have a 2500sf house for that same amount?
Honestly: HELL NO!!! At least not as a primary residence.
I’d rather pay a monthly fee for maintaining the thing, and be free to travel for a month without worrying that the boiler will break down and my pipes will freeze, or whatever else may go wrong. I’ll maintain a rental, but that’s because I’m being PAID to do so. I have no desire to add work to my life when I’m not being paid to do it!
I’d rather have a 2-bedroom flat overlooking a nice park, where I can walk or bike everywhere than a house in the middle of some soul-less development. Not only a question of commute time, but time to get to shops and amenities.
This isn’t sour grapes. I live in the city by choice and enjoy it immensely.
September 24, 2013 @ 7:20 AM
Curious to see what Piggs
Curious to see what Piggs think will happen in the coming debt ceiling situation.
September 24, 2013 @ 7:24 AM
I think the Republicans see
I think the Republicans see this as their last chance to derail Obamacare and the President will show how well he can hold the Democrats together by urging them not to budge. So yes I see a protracted impasse in the works.
September 24, 2013 @ 7:44 AM
Debt ceiling and government
Debt ceiling and government shutdown are two different blotters of acid.
Gov’t shutdown = non-essential services get temporarily cut on Oct. 1 if a continuing resolution is not passed. The Repos are making the continuing resolution contingent on defunding the AHCA.
This happened in 1995-6 and about 10x in the 70s and 80s. NOT the end of the world.
Debt ceiling = government default. Congress would have to be criminally insane to play with that sort of fire.
September 24, 2013 @ 7:50 AM
spdrun wrote:Debt ceiling and
[quote=spdrun]Debt ceiling and government shutdown are two different blotters of acid.
Gov’t shutdown = non-essential services get temporarily cut on Oct. 1 if a continuing resolution is not passed. The Repos are making the continuing resolution contingent on defunding the AHCA.
This happened in 1995-6 and about 10x in the 70s and 80s. NOT the end of the world.
Debt ceiling = government default. Congress would have to be criminally insane to play with that sort of fire.[/quote]
two different blotters of acid?
September 24, 2013 @ 7:51 AM
spdrun wrote:Debt ceiling and
[quote=spdrun]Debt ceiling and government shutdown are two different blotters of acid.
Gov’t shutdown = non-essential services get temporarily cut on Oct. 1 if a continuing resolution is not passed. The Repos are making the continuing resolution contingent on defunding the AHCA.
This happened in 1995-6 and about 10x in the 70s and 80s. NOT the end of the world.
Debt ceiling = government default. Congress would have to be criminally insane to play with that sort of fire.[/quote]
This!
There are TWO bills/issues.
The continuing resolution (budget) is the current showdown. If it doesn’t pass BOTH houses and get signed by the president, the government shuts down like it did in the Gingrich years.
Shut down means military doesn’t get paid paychecks, agencies don’t get funding.
Currently the senate has passed bills that include funding for passed laws (including ACA/obamacare). Their version has NOT been voted on in the house. The House version funded everything currently legislated except ACA/Obamacare. It has ZERO chance of passing the senate or being signed by the president. Heck it might not even pass the house if it were put to another vote.
The second issue is the raising of the debt ceiling. That is the bill that enables the treasury to borrow money (issue bonds) in order to fund things that have already happened. To not pay that is similar to a dead beat refusing to make payments on their credit card for stuff they’ve already bought… or refusing to make a mortgage payment on a house they live in… And it would seriously damage the US economy because the US Government would be the biggest dead beat of all.
September 24, 2013 @ 9:42 AM
Reps should screw the pooch.
Reps should screw the pooch. Pass the senate budget and refuse to raise the debt ceiling.
Basically, put the money were the mouth is. You can have anything you want, you just have to pay for it.
(and yes, that would be setting off a financial nuke in our living room)
But frankly, I suspect we’ll continue with lots of posing and then everyone will agree to have their cake and eat it too.
September 24, 2013 @ 9:51 AM
Why set off a nuke when you
Why set off a nuke when you can use a Tazer (the budget).
September 24, 2013 @ 10:33 AM
spdrun wrote:Why set off a
[quote=spdrun]Why set off a nuke when you can use a Tazer (the budget).[/quote]
Because the debt and our dependency on it is a 300lb bodybuilder on PCP and meth holding a machete.
and using budget and singling out ACA is perceived and is being obstinate and obstructive and using the debt ceiling just puts the ball back on the spenders to come up with taxes or cuts.
Or more simply, the debt ceiling, is something people could understand, we want a bigger limit on the credit card, the budget is a game.
September 24, 2013 @ 11:47 AM
How does the debt ceiling
How does the debt ceiling make any sense?
Congress already spent the money (past years’ budgets). Now they have to pay the bills. The debt ceiling should be done away with, or automatically raised with each budget.
The question posed by the OP is weird. How does the president have any say on the debt ceiling? If I were the president, I would not negotiate the budget based on the separate issue of the debt ceiling.
I think that we will have a short shutdown of less than 10 days. The Republicans will suffer at the polls in 2014. That’s my prediction.
xbox, please revive this thread after the midterms so we can see who was right.
September 24, 2013 @ 1:48 PM
The problem with extremists
The problem with extremists of all kinds is that they like to issue sine qua non type ultimatums from which there is no backtracking.
If you threaten something, you have to be prepared to it, otherwise you will lose if you don’t. Don’t think that if you threaten the nuclear option, it will sound so bad that the other party will back down.
Wife tells her husband “I’m leaving you if you don’t stop surfing the Net.” If he doesn’t stop then she’s lost all leverage.
Instead she should say “if you don’t stop surfing the Net, I will do the same thing you do, or I’ll go hang out with my friends.”
September 24, 2013 @ 1:54 PM
It’s really simple, first,
It’s really simple, first, the money isn’t spent. Hint, that’s why the sequester was such a tooth gnashing.
Second, stop spending or raise taxes. It is that simple. The debt ceiling is just a gun to the head to do it.
Otherwise, they’ll just keep kicking the can down the road.
I also don’t know why everybody thinks it’s soooooo hard to balance the budget. You take Clinton’s last budget that was balanced. You increase it by the rate of inflation and population growth. Current tax revenues exceed that budget.
So it’s all the other stuff since then that is the problem.
September 24, 2013 @ 3:21 PM
It is simple indeed.
The
It is simple indeed.
The debt ceiling being reached is the cumulation of all previous budgets.
Not raising the debt ceiling means that the current Congress doesn’t want to pay for past congressional appropriations.
It is not so simple in that the House majority wants to link all the past appropriations to the current budget.
It would like a husband telling his wife “I won’t pay the mortgage unless you agree to cut your shopping budget this year.” That linkage is ridiculous because he doesn’t have the option not to pay the mortgage.
September 24, 2013 @ 3:31 PM
The debt payments and debt
The debt payments and debt ceiling are too separate items.
The existing debt is the mortgage.
Raising the debt, is the new HELOC.
September 24, 2013 @ 3:42 PM
Households get the loan first
Households get the loan first then they spend.
The government spends first then issue the debt to pay for spending. Corporations do the same also. They access the financial markets as they need the cash. The cash requirements today are the results of past commitments.
September 24, 2013 @ 3:57 PM
No, the budget is a plan for
No, the budget is a plan for spending. The spending actually occurs throughout the fiscal year.
budgeting a headcount isn’t a guarantee for the headcount for the year. The budget includes assumption on revenues. When they don’t materialize it isn’t automatic to put it on the debt because we’ve committed the spend.
BTW, non-discretionary spending also fits within the current tax revenues. The only problem is nothing else does.
Hence, spending on the credit card that you propose is the root of the problem.
September 24, 2013 @ 4:35 PM
Moving on…. Do the
Moving on…. Do the Republicans really have the option of not raising the debt ceiling?
Empty threat… But if that happens, prepare for another financial crisis and a hit to your portfolio.
Shutting down the government is a different story. They can do it.
Either of those would hurt the economy and the sales and profits of corporations. If I were the president, I would not give an inch and let the business community pressure the Republican leadership.
Boehner will probably pass some bills with the support of democrats. He might not last as Speaker.
September 25, 2013 @ 8:25 AM
Yes, they really do have that
Yes, they really do have that option. Not raising the debt ceiling and defaulting on the debt are two different things.
Doing so, would probably end most of their careers and it could be the best thing they ever do since it would finally end the 40 year long denial on spending more than we tax.
The populace of our country has grown fat on having our cake and eating it too.
September 25, 2013 @ 9:37 AM
Why all the worship of
Why all the worship of austerity?
Government deficit spending represents savings for the rest of society that buys government debt.
It’s good to invest and produce things that improve our lives. The debt is just a number.
We actually need deficit spending. The optimal level is debatable, but there is an optimal level.
September 25, 2013 @ 10:44 AM
We did quite well without it
We did quite well without it in the 90s, and Germany is doing quite well without it. Government debt isn’t the only investment vehicle, last I checked.
And the money to repay the debts with interest is taken from Americans in the form of taxes (or inflation), so it’s a zero-sum game. Unless you’re proposing to nationalize some industries (or invade a country and run their oil industry directly) to guarantee the government a steady cash flow, what you’re proposing makes little sense.
September 25, 2013 @ 11:02 AM
I’ve been reading Warren
I’ve been reading Warren Mosler (google him) and what he says makes quite a bit of sense.
Money is just a concept used to allocate resources and encourage productivity.
We are too tied to the gold standard mentality and money as being a finite resource.
Government debt is savings; and as long as there are buyers for those savings bonds then we are all good.
Germany is export oriented, very much like China actually. Their standard of living is lower than it would be if they were more consumer oriented.
September 25, 2013 @ 11:59 AM
For what it’s worth, their
For what it’s worth, their real standard of living (for the average German) is higher than the US:
(1) Tax-supported health care for all.
(2) 4+ weeks of vacation required by law, not inclusive of bank holidays
(3) Decent GDP per capita (41k vs 49k for the US), considering that there are more families with only one working parent, or one parent on half time (as it should be — I’m not a misogynist, but I see the utility of having time for one’s children).
(4) A humane amount of parental leave, guaranteed by law.
The US standard of living is only high if you consider the availability of trinkets to be important. Personally, people should give less of a fuck about having three cars, a 2500+ sq ft McMansion, cheap fast food, and the newest iToy, and care more about enjoying life. Enjoying life without using 2x the energy per person than Germany 🙂
You’re looking at this from an American standpoint, rather than the standpoint of someone who thinks that there’s more to life than work and toys made by overworked children.
I’d personally rather live in a 750 sq ft flat, own one car, and enjoy all the perks above than live the so-called American dream. FUCK! the idea of working 50+ hours a week, commuting 2+ hours a day, etc, like the average brainwashed American white-collar drone.
September 25, 2013 @ 12:07 PM
Yes, I have an American
Yes, I have an American viewpoint.
Just take a look at an average American home vs. a typical German/European home (more likely apartment) to see the difference. Americans have washer/dryers. Europeans have funny smelling clothes because they use those tiny clothe racks.
We eat sumptuous meals compared to the expensive food in Europe. Even French wines and champagne and other high quality items are cheaper here. Fashion is cheaper here too. Do you see European tourists shop for bargains and pigging out in America? They long for what we have.
Remember that Germany can only export and survive thanks to consumer markets like America, and emerging markets like China.
For society as a whole, the saver model is bad and that’s the reason China is moving to a consumer economy.
If your a good saver, you can live cheap and do very well in America. That’s why new immigrants succeed here. Then their kids become American consumers.
Btw, what’s the point of living in a 2-bed flat worth $300k. If you’re a similar time from work, wouldn’t you rather have a 2500sf house for that same amount?
September 25, 2013 @ 12:19 PM
Guess how much energy
Guess how much energy mechanically drying one’s clothes takes vs hanging them to dry? I have to say that I’m not really bothered by a bit of natural outdoor and/or city smell, it’s just part of life. I truly don’t give a flying fuck about the antiseptic lifestyle that most Americans claim to “enjoy.”
As far as “sumptuous” meals, it seems to be quantity vs quality for most Americans. As evidenced by the percentage of disgustingly obese excuses for humanity that you see in many parts of the US.
When I have a family, I’d rather have time to cook between my wife and I than having kids get crap-ass school lunch “food” and stopping at the drive-through on the way back from work.
For society as a whole, a BALANCED model, without consumption for the mere sake of consumption would be best. Unnecessary consumption drives environmental depredation.
And it’s been proven over and over again that leisure and experiences make people happier than relatively cheap trinkets made by abused children. It reflects in the fact that Germany’s life expectancy is on average two years longer than that of the US, too!
September 25, 2013 @ 1:33 PM
Happy as a state of mind is
Happy as a state of mind is not an objective measure. Even so, we rated higher for happiness than Europeans on the study that came out earlier this year.
I live in a less than 700sf 1-bed by choice, near shops, restaurants and the beach.
But I try to be objective as to what that “average” person wants (not what I want or what my situation affords).
I’ve been to many European homes. People of modest means live on the edges of cities in soulless developments about 1/2 hour by public transport. Contrast that to a typical rental apartment complex in Dallas, Phoenix, Las Vegas, or Orlando. Those complexes look like club Med with pools, gyms and water features. Those would be luxury complexes in most of the world, but here they can be had for modest rent.
Growth compounds rapidly. If you have 2 countries, one with 3% annual growth, and the other one with 1.5% growth, over a generation you end up with starkly different living standards.
Giving up growth for the sake of austerity is pretty stupid.
September 25, 2013 @ 1:40 PM
What growth?
What
What growth?
What austerity?
You trot out the austerity boogie-man and our budget and spending is anything but austere. A cut spending is not austerity.
Was Bill Clinton’s last budget austere? No, it wasn’t, yet, today per person, increased for inflation, we’re spending a trillion dollars more.
Cutting the budget isn’t austerity. Crying austerity is just political hackery.
September 25, 2013 @ 2:23 PM
Nsr, I don’t think you would
Nsr, I don’t think you would dispute that there is currently excess capacity in the economy and little inflation.
The government should step in and create the demand that would absorb that excess capacity. Why would you cut back now?
It’s about aggregate supply and demand, not about a debt number.
September 25, 2013 @ 2:32 PM
But let the capacity go for
But let the capacity go for things that are actually useful and forward-thinking. More smartphones…. bleh. More McMansions built in areas where no one in their right mind wants to actually live … thanks but…
How about a project to get the US mostly independent from fossil fuel energy within 20 years? A combination of increased efficiency, new clean power generation, cars replaced with electric or hydrogen when they are retired, solar on every new roof in sunny areas, etc should do it — it’s mainly an engineering problem.
September 25, 2013 @ 2:41 PM
spdrun wrote:
How about a
[quote=spdrun]
How about a project to get the US mostly independent from fossil fuel energy within 20 years? A combination of increased efficiency, new clean power generation, cars replaced with electric or hydrogen when they are retired, solar on every new roof in sunny areas, etc should do it — it’s mainly an engineering problem.[/quote]
I agree.
Those are fiscal priority that congress should take up.
September 26, 2013 @ 12:22 AM
spdrun wrote:But let the
[quote=spdrun]But let the capacity go for things that are actually useful and forward-thinking. More smartphones…. bleh. More McMansions built in areas where no one in their right mind wants to actually live … thanks but…
How about a project to get the US mostly independent from fossil fuel energy within 20 years? A combination of increased efficiency, new clean power generation, cars replaced with electric or hydrogen when they are retired, solar on every new roof in sunny areas, etc should do it — it’s mainly an engineering problem.[/quote]
Could not agree more.
September 25, 2013 @ 3:14 PM
FlyerInHi wrote:Nsr, I don’t
[quote=FlyerInHi]Nsr, I don’t think you would dispute that there is currently excess capacity in the economy and little inflation.
The government should step in and create the demand that would absorb that excess capacity. Why would you cut back now?
It’s about aggregate supply and demand, not about a debt number.[/quote]
No, it’s about banana republic economics and that’s just what we’re creating. An economic model where the most profitable thing to do is suck on a government program.
We’ve had the government spending gas pedal on the floor for six years not including the 7 years Bush had it shoved way down with the wars.
Government spending is superseding real development.
As for our programs, our federal deficit over the each of the last five years was enough to fund 5 decade long Apollo Moon programs in their entirety from conception to landing. We’ve spent 25 decades worth of moon programs? What do we show?
Our total government spending across all levels of government for the last five years is on par per person with France, Germany and the UK.
You’re being bilked and begging for more why fed the cronies and the lobbyist and donors in DC get fat.
September 25, 2013 @ 3:45 PM
no_such_reality wrote:
We’ve
[quote=no_such_reality]
We’ve had the government spending gas pedal on the floor for six years not including the 7 years Bush had it shoved way down with the wars.
[/quote]
No, we haven’t. Federal government spending went up from the 2008 budget year to the following year. Since that year, it’s been almost flat nominally. It’s gone down, when adjusted for the even low inflation over the last 5 years. It’s gone down even more on a per capita basis.
September 25, 2013 @ 8:33 PM
SK in CV
[quote=SK in CV][quote=no_such_reality]
We’ve had the government spending gas pedal on the floor for six years not including the 7 years Bush had it shoved way down with the wars.
[/quote]
No, we haven’t. Federal government spending went up from the 2008 budget year to the following year. Since that year, it’s been almost flat nominally. It’s gone down, when adjusted for the even low inflation over the last 5 years. It’s gone down even more on a per capita basis.[/quote]
Most economists and editors, even from publications like the financial times, agree that government has been a drag on the economy as we dig ourselves out of the Great Recession. It was very different in previous recessions.
Not sure where certain people are getting their data.
September 26, 2013 @ 8:23 AM
SK in CV
[quote=SK in CV][quote=no_such_reality]
We’ve had the government spending gas pedal on the floor for six years not including the 7 years Bush had it shoved way down with the wars.
[/quote]
No, we haven’t. Federal government spending went up from the 2008 budget year to the following year. Since that year, it’s been almost flat nominally. It’s gone down, when adjusted for the even low inflation over the last 5 years. It’s gone down even more on a per capita basis.[/quote]
Was Bill Clinton’s budget austere? I mean dying in the streets austere?
In real dollars, after adjusting for inflation, we are spending 40% more per person.
That’s not the peddle to the floor?
Bush push the peddle down with the wars, then withe crises and agreement of both parties and our then President elect, really stomped it.
And we’ve basically kept it there. At little grand standing here and there, a little sequester, but we’re right back to asking for $3.8 Trillion.
40% more per person in real dollars, 2X in nominal dollars than Bill Clinton’s budgets.
Don’t think I think Romney would have been any different, he wouldn’t. TARP and all the other stimulus, what do we have to show for it? Because we literally spend the money to run 25 moon programs in there entirety. Would a few hundred Hoover dams be nice? One Mars landing?
Oh, we’ve got rebated for people to buy $125K electric cars for a politically active ‘entrepreneur’.
We’ve made Washington DC and it’s suburbs the fasting growing, fastest wealth increasing area of the country.
September 26, 2013 @ 8:39 AM
no_such_reality wrote:
Was
[quote=no_such_reality]
Was Bill Clinton’s budget austere? I mean dying in the streets austere?
In real dollars, after adjusting for inflation, we are spending 40% more per person.
That’s not the peddle to the floor?
Bush push the peddle down with the wars, then withe crises and agreement of both parties and our then President elect, really stomped it.
And we’ve basically kept it there.[/quote]
No, Clinton’s budget wasn’t austere. Was there a reason for it to be with a balanced budget? It shrunk in inflation adjusted per capita dollars. Is there a good reason for it to be austere now?
How has it been peddle to the floor the last 5 years when it hasn’t changed in nominal dollars and has gone down both per capita and inflation adjusted?
There’s some pretty good evidence that the lack of spending the last 5 years has been a drag on the economy. The US budget has never shrunk in real dollars as much as it has the last 5 years without the economy shrinking. Yet fiscal policies have continued to damage both the credit rating and the financial well being of the middle class.
September 26, 2013 @ 9:39 AM
SK in CV wrote:
There’s some
[quote=SK in CV]
There’s some pretty good evidence that the lack of spending the last 5 years has been a drag on the economy. The US budget has never shrunk in real dollars as much as it has the last 5 years without the economy shrinking. Yet fiscal policies have continued to damage both the credit rating and the financial well being of the middle class.[/quote]
Government has spent the past 30 years spending more than it takes in. While government may be able to do that longer than an individual eventually the bill comes due. The stimulus cheerleaders never bother to understand the long term consequences of deficit spending. It always runs into a wall at some point because the debt holders come to the realization that they aren’t going to get paid back. The interest rates reverse and then the carrying costs explodes exponentially leaving default/devaluation as the only option.
I just don’t believe there is painless solution for the past 30 years of deficit spending no matter what solutions the Keynesian economists come up with. There are going to be painful repercussions to economic policy over the past 30-40 years, you’re only hope is to postpone them long enough so you’re dead before you experience them. I believe it’s impossible to put them off indefinitely as that would seem to violate the mathematical principals economics is based on. Certainly policy can create winners and losers but it can’t create painless solutions.
September 26, 2013 @ 12:35 PM
livinincali wrote:
I just
[quote=livinincali]
I just don’t believe there is painless solution for the past 30 years of deficit spending no matter what solutions the Keynesian economists come up with. There are going to be painful repercussions to economic policy over the past 30-40 years, you’re only hope is to postpone them long enough so you’re dead before you experience them. I believe it’s impossible to put them off indefinitely as that would seem to violate the mathematical principals economics is based on. Certainly policy can create winners and losers but it can’t create painless solutions.[/quote]
Who’s talking painless solutions?
The government cannot conjure up productive capacity, but it can create the demand to absorb excess capacity. Why would you want productive capacity to sit idle, not producing anything for humanity?
What math? Currency crisis only happen when the currency is tied to gold or tied to another currency.
Ignore the past or the future. Right now we have low inflation and excess capacity. Why cut back and inflict more pain, right now?
September 26, 2013 @ 1:15 PM
Why the blue fuck is more
Why the blue fuck is more production the be-all and end-all of human achievement? What’s wrong with a stagnant, lazy, but generally happy society?
“I’m happy with my 3-bedroom flat, why do I need to move?”
“I’m happy with my 10-year-old car, why do I need a new one unless this one breaks beyond repair?”
“This 5-year-old Macbook Air works for me, why do I need a new iPad or Macbook?”
Concentrate on art, nature, and human friendships, not on acquiring more useless crap. I’d personally like to see growth, but in the direction of increased respect for the environment and independence from fossil fuels.
Developments in the middle of the South Las Vegas desert with swimming pools, gyms, water features, and an otherwise un-redeeming location? To each one their own.
September 26, 2013 @ 1:30 PM
You don’t want bigger houses
You don’t want bigger houses but other people do. They want to tear down and rebuild.
We can have growth through services. Better transport services, energy research, child care, more vacation and tourism. etc.. Good services depend on building an infrastructure.
We can debate the exact kind of demand the government should create to absorb excess productive capacity. But it’s defeatist to argue that the government should cut back right at the time there is no inflation and idle capacity.
September 26, 2013 @ 1:41 PM
Except short of destroying it
Except short of destroying it in conflict, the Government can’t really create demand.
Any demand they do is taken from someone else. Deficit spending is just taking it from our children.
September 26, 2013 @ 1:50 PM
no_such_reality wrote:Except
[quote=no_such_reality]Except short of destroying it in conflict, the Government can’t really create demand.
Any demand they do is taken from someone else. Deficit spending is just taking it from our children.[/quote]
Wrong. When there is excess capacity, the government is not competing for resources or driving up prices.
We consume what we produce now. Our children will consume what they produce. There is no taking from the future.
September 26, 2013 @ 1:55 PM
No: we over-consume what’s
No: we over-consume what’s subsidized by the Chinese government and produced by abused children.
We also build more toys when there are millions of perfectly good toys lying around for the taking. If they don’t want to go the way of L.A., Phoenix, L.V. and other Western cities should be looking at how to encourage re-use of land rather than building on virgin land and letting older poor-quality homes go to shit.
We’re talking about land that’s always been used residentially, not brownfields here, which reduces complication compared to many older cities.
September 26, 2013 @ 1:58 PM
Every dollar the Governments
Every dollar the Governments spends is a dollar taken from and unspent by a citizen. Whether today or tomorrow’s citizen.
September 26, 2013 @ 2:02 PM
The government mostly employs
The government mostly employs citizens, so at least some of this money will be spent within the US.
September 26, 2013 @ 2:15 PM
no_such_reality wrote:Every
[quote=no_such_reality]Every dollar the Governments spends is a dollar taken from and unspent by a citizen. Whether today or tomorrow’s citizen.[/quote]
How are we increasing our resources today by taking them from the future? Do we have time machines?
September 26, 2013 @ 2:32 PM
FlyerInHi
[quote=FlyerInHi][quote=no_such_reality]Every dollar the Governments spends is a dollar taken from and unspent by a citizen. Whether today or tomorrow’s citizen.[/quote]
How are we increasing our resources today by taking them from the future? Do we have time machines?[/quote]
Wow, and said with a straight face.
Go load your credit cards up.
Go load up your student loans.
Go buy property, it’s an investment. How’d that work out for many in 2008?
Step one, the money has to be investment wisely. How’d our occupation of Iraq and Afghanistan going?
September 26, 2013 @ 2:36 PM
Nsr, society’s resources are
Nsr, society’s resources are the same whether I get a loan or not.
If too many people compete for the limited resources, prices will go up. But new resources don’t magically appear from the future.
September 26, 2013 @ 3:12 PM
FlyerInHi wrote:Nsr,
[quote=FlyerInHi]Nsr, society’s resources are the same whether I get a loan or not.
If too many people compete for the limited resources, prices will go up. But new resources don’t magically appear from the future.[/quote]
Short of use of force, the Government accesses any resources just like any person. They buy it.
Just like any person, when they are loaded with debt, all their available money (taxes) are used to pay the debt and interest.
Or print money, and destroy the value of every dollar already in existence.
September 26, 2013 @ 3:28 PM
Nsr,how is that taking from
Nsr,how is that taking from future children?
You get paid today for your productivity. If you don’t spend your money, there is no guarantee that your purchasing power is preserved. Why should money itself be an investment vehicle? Money is just a tool to facilitate trade.
September 26, 2013 @ 3:31 PM
FlyerInHi wrote:Nsr,how is
[quote=FlyerInHi]Nsr,how is that taking from future children?
You get paid today for your productivity. If you don’t spend your money, there is no guarantee that your purchasing power is preserved. Why should money itself be an investment vehicle? Money is just a tool to facilitate trade.[/quote]
How is obligating them to payments they had no say in taking from them?
Good to know, let me go get a credit card in my kids name.
September 26, 2013 @ 3:40 PM
Nsr, Government interest
Nsr, Government interest payments are simply transfers from the government to the holders of bonds. Future people will get interest payments. You’re not taking anything from them today.
September 27, 2013 @ 9:35 AM
FlyerInHi wrote:Nsr,
[quote=FlyerInHi]Nsr, Government interest payments are simply transfers from the government to the holders of bonds. Future people will get interest payments. You’re not taking anything from them today.[/quote]
1/3rd of the debt is held by Foreign entities.
So no worries, it’s just a transfer payment out of our country and into theirs.
You just transferred 1/3rd of it roughly $5.3 Trillion dollars to someone outside our country for your consumption, they, the future generation has to pay for it.
September 27, 2013 @ 9:53 AM
no_such_reality wrote:
1/3rd
[quote=no_such_reality]
1/3rd of the debt is held by Foreign entities.
So no worries, it’s just a transfer payment out of our country and into theirs.
You just transferred 1/3rd of it roughly $5.3 Trillion dollars to someone outside our country for your consumption, they, the future generation has to pay for it.[/quote]
Our private sector invests in foreign countries in search for higher growth, as good economics would dictate.
Our claims to foreign income is higher than we need to pay on our debt held by foreigners. Look it up.
Plus, when we pay for imported good and services in dollars, that money is plowed back into US treasuries and invested here.
From a world economy standpoint , more world growth is good for us and for everyone else on earth.
September 27, 2013 @ 9:59 AM
Blah blah blah, we can have
Blah blah blah, we can have something for nothing.
Your awakening like those of Lenin’s followers is going to be rude. Sadly, your taking the rest of us with you.
September 27, 2013 @ 10:20 AM
Nsr, you make it sound like a
Nsr, you make it sound like a religious crusade so we don’t go to hell.
There is no morality in economics. Just follow the money and think logically.
I’m willing to be converted. Just give me a logical valid argument I can follow.
I would concede that higher rates could be a problem. But that is to be addressed in the future. We have problems to solve now.
If there was a need to go to war, would we worry about possible higher rates (which didn’t happen btw)? Or do we just go kick ass.
September 27, 2013 @ 11:50 AM
If you do not see a problem
If you do not see a problem where you cannot even finance your own debt, where you quite literally have to print money to buy your own debt because it is so large that there are not enough buyers on this planet then it is not worth even debating.
When there is a fundamental lack of understanding that we are only technically solvent because we print money to buy our own debt, because if we did not then we would have to sell bonds at a much higher interest rate and if we did that we would be even more insolvent and thus not able to service our debt in addition to our insatiable spending.
When fundamentals of just how screwed we are, are commonly dismissed, or simply not understood, then… it is not worth arguing over. People think the iceberg is not there because we have not slammed into it yet.
September 26, 2013 @ 2:02 PM
From a supply and demand
From a supply and demand standpoint, there is excess capacity now.
The government should step in and use the idle capacity to achieve our social goals.
Spd, you can debate our priorities all you want, but the economics are pretty clear.
September 26, 2013 @ 2:07 PM
From a supply and demand
Why not reduce capacity by limiting working hours and guaranteeing sane levels of time off? Who says that the current level of capacity is the correct one and should be utilized, rather than being reduced to fit demand?
If I own a taxi depot with capacity for 1000 vehicles in the sleepy town of Bear Claw, WY (pop 500), does the town have a duty to expand to fit my business plan?
This being said, IMHO, we CAN use our excess capacity, but it shouldn’t be used to re-inflate bubbles, but rather to realign the economy entirely. But with vested interests in charge, this will be a slow process if it can happen at all.
September 26, 2013 @ 2:13 PM
Grow or die.
A battleship
Grow or die.
A battleship turns slowly.
I don’t think we can change scripts.
I don’t even think I personally can significantly change my own life or outlook.
An entire nation hellbent on doing it the way it’s always been done except a but bigger and faster.
Here we go….
September 26, 2013 @ 2:17 PM
Grow or die.
No. ADAPT or
No. ADAPT or die. Growth for the sake of growth is often “horizontal” growth — the kind more likely to slow a person (or country) right down.
September 26, 2013 @ 2:25 PM
Spd, we are talking about a
Spd, we are talking about a big economy here.
The taxis could be moved to NY thereby reducing cost and providing better transportation (if only NY would allow more licenses).
As a society, we want to produce the max we can in the aggregate. Why not?
You can decide what you want but there is no reason to limit other people’s potential.
Separate your personal philosophy of life from economics.
September 26, 2013 @ 2:37 PM
As a society, we want to
Why yes? Puritan work ethic? Why is production of often duplicative items necessarily a social good? If most people weren’t brainwashed by advertising, would they really give a fuck whether they were using an iPhone 4 or an iPhone 5s?
If anything, increased production has environmental (pollution, land use) and social costs that are often not taken into account. This goes doubly for overseas production that’s not subject to the same environmental regulations as in the US.
As far as capacity, the problem may be UNEVEN distribution of capacity. High rate of unemployment and discouraged workers, BUT a lot of the employed are actually being worked OVER their comfortable capacity.
Hence regulations to encourage a more equitable use of capacity are needed.
September 26, 2013 @ 2:50 PM
Spd, the iphone 5s is faster.
Spd, the iphone 5s is faster.
I’m just saying that we should use what we have to better our lives. Once we accept that, the policies on the highest and best uses will follow
September 26, 2013 @ 2:59 PM
Of course a 5s is faster.
Of course a 5s is faster. Does the speed difference translate into a tangible difference in utility for the average user? I have my doubts.
I’m not actually convinced that all technology does much to better peoples’ lives. There’s a lot of hype and salesmanship that doesn’t always follow reality.
Is your life really better if you have an iPhone, iPad, Macbook, and desktop computer, or are two out of the four enough? How much of what we’re buying and doing already is essentially “busywork” that misutilizes or even over-utilizes capacity?
September 26, 2013 @ 3:23 PM
spdrun wrote:
Is your life
[quote=spdrun]
Is your life really better if you have an iPhone, iPad, Macbook, and desktop computer, or are two out of the four enough? How much of what we’re buying and doing already is essentially “busywork” that misutilizes or even over-utilizes capacity?[/quote]
Not my own life but, in the aggregate, the activity create jobs for other people. And I get a faster phone or a new car because I can.
human existence kinda is pointless anyway. But we exist so better make the best of it.
September 26, 2013 @ 3:42 PM
Not my own life but, in the
Riddle me this: Why are more jobs (in the sense of more working hours borne by society as a whole) necessarily a good thing?
What if we increased employment by decreasing average per capita hours while keeping total working hours, and thus productivity, roughly constant?
Plenty of sci-fi authors imagined a technological society where the average job was 10-20 hours per week. Why are jobs with a “40” (or really 50) hour work week considered the norm. Why is little vacation considered the norm?
Look at norms concurrently with looking at jobs.
September 26, 2013 @ 3:55 PM
Spd, those are value
Spd, those are value judgments society makes. There is no reason 20 hours could not be the norm.
I’m guessing people would rather work more for less money per hour so they can buy more stuff. Maybe they are brainwashed, but it is what it is. That can change.
But that doesn’t play into the federal budget and debt limit debates today.
September 26, 2013 @ 4:08 PM
True — I think this turned
True — I think this turned into a continuation of one of our other discussions. 🙂
I’d argue that the 40-50 hour work week actually breeds and perpetuates brainwashing — which is why the powers that be want us turning the treadmill. If average Americans are either working or commuting 10-11 hours a day, where’s the time to kick back, read a book, learn a foreign language, educate oneself, and THINK?
It renders them more susceptible to propaganda about how America is the best because we work so hard and we don’t want any damn socialist laws to ruin this, rah, rah, rah!
September 26, 2013 @ 10:41 PM
You’ve made a lot of great
You’ve made a lot of great posts on this thread, spdrun.
September 26, 2013 @ 1:45 PM
Just because people want it
Just because people want it (or think they do), doesn’t mean we should encourage more development in places where the climate and geography don’t make sense.
It’s also not a question of tear down and rebuild as much as endless sprawl (think of the west side of the Phoenix valley). You have a lot of houses that were built like crap in the 70s and 80s that are NOT being torn down, because it’s cheaper to build in bumblefuck elsewhere.
Yes, we should create demand in certain areas. But that’s not where it’s mainly being created right now 🙂
September 27, 2013 @ 9:30 AM
spdrun wrote:
Developments in
[quote=spdrun]
Developments in the middle of the South Las Vegas desert with swimming pools, gyms, water features, and an otherwise un-redeeming location? To each one their own.[/quote]
NY will get flooded with global warming. Look what happened after the super storm. Why waste money rebuilding when it’ll happen again? Washington DC is a swamp. San Francisco is earth quake zone. San Diego is as much a desert as Las Vegas where water is more expensive than Las Vegas. Hawaii has no local energy. electricity and water are double Cali rates. Take your pick.
September 27, 2013 @ 9:38 AM
Very little happened during
Very little happened during Sandy that didn’t also happen during the 1938 New England superhurricane. There were stories of the East River flowing 5 blocks inland then, which is pretty much to the level of flooding that occurred in the East Village in 2012.
Differences were that the areas hit on Long Island were more built up than they were in 1938 and the 1938 storm didn’t hit NJ as hard (but nailed CT harder). I’d chalk Sandy’s destruction less up to global warming (which I don’t deny is a problem) and more to timing. It hit during high tide on a full moon.
San Diego? No water? Start building solar and/or nuclear desalination plants: problem solved, plus the salt generated can be sold.
September 27, 2013 @ 10:58 AM
spdrun wrote:
San Diego? No
[quote=spdrun]
San Diego? No water? Start building solar and/or nuclear desalination plants: problem solved, plus the salt generated can be sold.[/quote]
With technology and human ingenuity, we can live anywhere.
No location is more worthy than another. It comes down to costs/benefits.
I think the quest for cheaper locations and to build developments with evermore fanciful features provide us choices and improve our lives. If you want the city, you can live in manhattan. If you want a 4000sf house with casita for the same price, you have Phoenix and Las Vegas. It’s all good economics to me.
September 27, 2013 @ 11:38 AM
I hear what you’re saying,
I hear what you’re saying, but one has to admit that some regions are more equal than others in their ability to support human life (and life in general) without resorting to heroic technological means.
September 27, 2013 @ 1:28 PM
spdrun wrote:I hear what
[quote=spdrun]I hear what you’re saying, but one has to admit that some regions are more equal than others in their ability to support human life (and life in general) without resorting to heroic technological means.[/quote]
The most self sustaining areas would be tropical river deltas were you can live off the land pretty much without any tech. Don’t need heating and cooling. Food is plentiful.
New York cannot exist without massive distribution networks and technology. With global warming and sea level rises, NY will need sea barrages to protect itself.
I watched the show on the freedom tower. When they built WTC they need an underground barrage to the bedrock to keep out water from the Hudson River. I don’t see how NY is more life sustaining than Dubai.
September 27, 2013 @ 3:20 PM
I watched the show on the
No giant city is strictly self-sustaining.
Not specifically NYC but the Northeast — it’s sustained a sizable human population for what, a few millenia?
Whereas the desert cities had to wait until air conditioning to sustain any population at all. I also suspect that if it weren’t for:
(a) the atomic testing ground
(b) the historical accident of Nevada having loose gaming laws and a government amenable to corruption
…
Las Vegas would still be a sleepy small town in the desert roughly the size of Burlington, VT.
September 27, 2013 @ 7:30 AM
FlyerInHi wrote:
Ignore the
[quote=FlyerInHi]
Ignore the past or the future. Right now we have low inflation and excess capacity. Why cut back and inflict more pain, right now?[/quote]
Because the increase in debt now will be a future drag on the economy. Paying interest in the future will be a drag on the economy in the future. Do you agree that paying interest on debt is a drag on the economy or not? If government borrows a trillion dollars to absorb the excess capacity, next year they’ll be paying somewhere around 20-30 billion dollars in interest. That’s money that won’t be available next year for spending on absorbing the excess capacity.
Digging a deeper debt hole that will make the problem worse in the future because it’s too painful to do now is short term thinking. I’ll concede that deficit stimulus spending is somewhat helpful in the short term but since it doesn’t seem to be producing a significant positive return on investment we’re going to be screwed in the long run.
September 27, 2013 @ 7:33 AM
America is the best because
America is the best because we have the illusion of so much choice.
September 27, 2013 @ 8:29 AM
People will understand debt a
People will understand debt a whole lot better when rates pick up. Just like the inflation lie. Little to no inflation, yeah right. Except when I look at the price of food, the shrinking food sizes, the price of water, energy and things like that.
Life is easier when you simply accept what you are told.
Everything will be okay.
September 27, 2013 @ 9:46 AM
livinincali wrote:
Because
[quote=livinincali]
Because the increase in debt now will be a future drag on the economy. Paying interest in the future will be a drag on the economy in the future. Do you agree that paying interest on debt is a drag on the economy or not? If government borrows a trillion dollars to absorb the excess capacity, next year they’ll be paying somewhere around 20-30 billion dollars in interest. That’s money that won’t be available next year for spending on absorbing the excess capacity.
Digging a deeper debt hole that will make the problem worse in the future because it’s too painful to do now is short term thinking. I’ll concede that deficit stimulus spending is somewhat helpful in the short term but since it doesn’t seem to be producing a significant positive return on investment we’re going to be screwed in the long run.[/quote]
Paying the debt is not a drag on the economy. Money is transferred from the government to the private sector. Actually paying debt is like spending in that it puts money in the economy.
Higher rates are a drag on the economy because holding cash becomes more attractive and people invest less (if holding cash returns more than inflation). But the Fed has the power to lower rates. We are no longer in a gold standard or tied to any other currency so there is no strong argument for exploding rates.
You didn’t make this argument, but “taking from the future” is a boneheaded argument. We consume what we produce now. Future people will consume what they produce in the future.
So why let idle capacity sit when we could use it to better our lives? Unnecessary, self-inflicted pain.
September 27, 2013 @ 12:51 PM
FlyerInHi wrote:
Paying the
[quote=FlyerInHi]
Paying the debt is not a drag on the economy. Money is transferred from the government to the private sector. Actually paying debt is like spending in that it puts money in the economy.
[/quote]
Where does the money come from to pay down the debt. It comes from some taxpayers pocket somewhere and then they don’t have the money to spend elsewhere. As a result the economy suffers because people have less money to spend because government takes more from them. How does paying the Chinese interest better our economy? How does paying some public sector employees pension fund interest put money in the hands of the private sector to invest in the economy?
You probably didn’t think about any of these factors when you made you this argument. A chess player that only focuses on the best current move is no match for a player that thinks beyond their current move. This is exactly your argument make the best current move and ignore all the long term consequences of that move. I think we’re starting to see consequences of all the short term decision making in this country, from CEOs to Government.
If you put an economic theory inside a closed box where’s there’s no external forces maybe you can accomplish the goal of increasing supply via increasing demand within that closed system. However, we don’t live in a closed system when it comes to economic policy. Countries make economic policy and yet they aren’t isolated from external forces so sometimes those policies might do what they are intended to do in terms of demand creating supply, but the supply is created in China while the demand is created here.
In the case of education and health care we’ve done a tremendous job at creating demand for American produced services for the past 20-30 years but we’ve done an atrocious job at creating supply of those services via regulations. Therefore the price of those things have gone up faster than economic growth and inflation. IMO the fundamental problem with economic policy is we exclusively focus on the demand side of the equation. Our economic leaders believe demand will fix all the economic problems yet they just can’t see unintended consequences of focusing purely on demand without any thought about how supply will meet that demand. The consequence being focusing purely on demand creates inflation and rewards business providing those particular goods and services in demand with higher profits. How much additional demand is there for iPhones because we subsidize poor Americans in various ways. And how much do we bitch about Apple make too much profit and not paying enough taxes?
September 27, 2013 @ 1:36 PM
The Government issues the
The Government issues the currency and spends before it can tax.
Otherwise where does the money come from?
We spent on the Bush wars and goosed up the economy. Did interest rates go up?
Why can’t we spend the same amount now to solve the problems of unemployment and renew our infrastructure? We are letting a generation of young people twist in the wind. That is taking from the future.
Livin, i don’t disagree on some of the details of regulations (some cities have high cost of living because of regulations). But let’s not have austerity for the sake of austerity and misguided ideology.
Btw, state and local governments are not the same as the federal government + the federal reserve. Huge difference. I would not defend local pensions. I’d let them local people figure out their own problems.
Federal budget, debt limit… fiscal and monetary policy are about management of our whole economic system.
September 27, 2013 @ 1:40 PM
FlyerInHi wrote:The
[quote=FlyerInHi]The Government issues the currency and spends before it can tax.
Otherwise where does the money come from?
[/quote]
Well usually the government has the money in an account before it gets spent. Every time you get a paycheck money is remitted to the government so government collects taxes all year long and then then the additional money they need is raised through bond sales. Not sure what you mean by the government spends the money first and then collects the taxes
[quote=FlyerInHi]We spent on the Bush wars and goosed up the economy. Did interest rates go up?
Why can’t we spend the same amount now to solve the problems of unemployment and renew our infrastructure? We are letting a generation of young people twist in the wind. That is taking from the future.
[/quote]
Because you can’t deficit spend forever. That’s entirely the point. Suppose you get laid off off from your high paid job. You can very likely continue to live your former lifestyle using credit for some amount of time, but eventually the credit card companies are going to cut you off. When you get cut off it’s going to be quite the shock because you were used to a lavish lifestyle and now you live like a broke person.
America can certainly deficit spend until it gets cut off but once you get cut off you can only spend what you collect in taxes so there’s a instantaneous haircut of 40% of total spending. Maybe 10% of GDP gets immediately and suddenly removed from the economy. The alternative is you can start an austerity program where you remove 1% of GDP from government spending each year giving people a chance to adjust. Your argument is that go ahead and keep deficit spending and hope you don’t get cut off before a huge economic growth cycle saves you.
I favor austerity now because it gives you some control about how to resolve the debt issue rather then suddenly getting cut off. I guess your ideology is that we’ll hope and pray for an economic miracle before we get cut off or you don’t believe we can get cut off, while I have an ideology that sees the writing on the wall and figures it’s better to manage the debt problem rationally.
Live for the moment is often related to irresponsible behavior, but you advocate our government do exactly that. Live for the moment, hope for the best, and ignore the long term consequences.
September 27, 2013 @ 2:03 PM
We are our own bank. We are
We are our own bank. We are never going to cut ourselves off.
You are telling us of the long term consequences, but you don’t know what they will be.
Japan is the canary in the coal mine but even they have not had high inflation and a currency crisis. They have more problems than we do. They have to trade in dollars whereas we trade in our own currency. We have a young growing population.
So look for objective evidence instead of ideology. I would argue that in light of real evidence, we have quite a bit more deficit spending leeway.
Economics is an evolving science. We accumulate more knowledge as we go. Orthodoxy for the sake of ideology is unscientific and defeatist.
If someone tells me that I can’t live a certain way, else I’d go to hell, I would ask for evidence hell actually exists.
September 26, 2013 @ 9:46 AM
SK in CV
[quote=SK in CV][quote=no_such_reality]
Was Bill Clinton’s budget austere? I mean dying in the streets austere?
In real dollars, after adjusting for inflation, we are spending 40% more per person.
That’s not the peddle to the floor?
Bush push the peddle down with the wars, then withe crises and agreement of both parties and our then President elect, really stomped it.
And we’ve basically kept it there.[/quote]
No, Clinton’s budget wasn’t austere. Was there a reason for it to be with a balanced budget? It shrunk in inflation adjusted per capita dollars. Is there a good reason for it to be austere now?
How has it been peddle to the floor the last 5 years when it hasn’t changed in nominal dollars and has gone down both per capita and inflation adjusted?
There’s some pretty good evidence that the lack of spending the last 5 years has been a drag on the economy. The US budget has never shrunk in real dollars as much as it has the last 5 years without the economy shrinking. Yet fiscal policies have continued to damage both the credit rating and the financial well being of the middle class.[/quote]
2013 United States federal budget – $3.8 trillion (submitted 2012 by President Obama)[129]
2012 United States federal budget – $3.7 trillion (submitted 2011 by President Obama)
2011 United States federal budget – $3.8 trillion (submitted 2010 by President Obama)
2010 United States federal budget – $3.6 trillion (submitted 2009 by President Obama)
2009 United States federal budget – $3.1 trillion (submitted 2008 by President Bush)
2008 United States federal budget – $2.9 trillion (submitted 2007 by President Bush)
2007 United States federal budget – $2.8 trillion (submitted 2006 by President Bush)
2006 United States federal budget – $2.7 trillion (submitted 2005 by President Bush)
2005 United States federal budget – $2.4 trillion (submitted 2004 by President Bush)
2004 United States federal budget – $2.3 trillion (submitted 2003 by President Bush)
2003 United States federal budget – $2.2 trillion (submitted 2002 by President Bush)
2002 United States federal budget – $2.0 trillion (submitted 2001 by President Bush)
Oh yea, I guess that’s flat.
As for lack of spending, yes, people stop spending until they figure out which “winner” the Government going to appoint.
September 26, 2013 @ 9:51 AM
Let’s not forget that we are
Let’s not forget that we are also amortizing our own debt since 2008. Something that has never been done before and it seems we cannot really stop doing it either.
September 26, 2013 @ 11:30 AM
no_such_reality wrote:
2013
[quote=no_such_reality]
2013 United States federal budget – $3.8 trillion (submitted 2012 by President Obama)[129]
2012 United States federal budget – $3.7 trillion (submitted 2011 by President Obama)
2011 United States federal budget – $3.8 trillion (submitted 2010 by President Obama)
2010 United States federal budget – $3.6 trillion (submitted 2009 by President Obama)
2009 United States federal budget – $3.1 trillion (submitted 2008 by President Bush)
2008 United States federal budget – $2.9 trillion (submitted 2007 by President Bush)
2007 United States federal budget – $2.8 trillion (submitted 2006 by President Bush)
2006 United States federal budget – $2.7 trillion (submitted 2005 by President Bush)
2005 United States federal budget – $2.4 trillion (submitted 2004 by President Bush)
2004 United States federal budget – $2.3 trillion (submitted 2003 by President Bush)
2003 United States federal budget – $2.2 trillion (submitted 2002 by President Bush)
2002 United States federal budget – $2.0 trillion (submitted 2001 by President Bush)
Oh yea, I guess that’s flat.
As for lack of spending, yes, people stop spending until they figure out which “winner” the Government going to appoint.[/quote]
I kind of prefer actuals where possible. 2013 and 2014 are CBO projections.
YOY change Change 2009 to 2014
2009 3,517.7
2010 3,456.2 -1.75%
2011 3,603.1 4.25%
2012 3,537.1 -1.83%
2013 3,553.0 0.45%
2014 3,618.0 1.83% 2.85%
So yes. Flat. Pedal to the metal would have been substantial increases. They didn’t happen over this period. 2.85% increase over 5 years nominal. Adjust for inflation and population growth, it’s gone down per capita.
And Bush’s last budget year was 2009, the first year shown. Most of the increase over the submitted budget was TARP bill signed in 2008, which Bush signed into law. A smaller part of the increase was the 2009 stimulus bill signed by Obama.
Even going back to the 2008 budget year, the increase is expected to be about 21% cumulative over a 6 year period (2008 to 2014), just barely higher the inflation rate and population growth over that period.
September 26, 2013 @ 12:08 PM
no_such_reality wrote:SK in
[quote=no_such_reality][quote=SK in CV][quote=no_such_reality]
Was Bill Clinton’s budget austere? I mean dying in the streets austere?
In real dollars, after adjusting for inflation, we are spending 40% more per person.
That’s not the peddle to the floor?
Bush push the peddle down with the wars, then withe crises and agreement of both parties and our then President elect, really stomped it.
And we’ve basically kept it there.[/quote]
No, Clinton’s budget wasn’t austere. Was there a reason for it to be with a balanced budget? It shrunk in inflation adjusted per capita dollars. Is there a good reason for it to be austere now?
How has it been peddle to the floor the last 5 years when it hasn’t changed in nominal dollars and has gone down both per capita and inflation adjusted?
There’s some pretty good evidence that the lack of spending the last 5 years has been a drag on the economy. The US budget has never shrunk in real dollars as much as it has the last 5 years without the economy shrinking. Yet fiscal policies have continued to damage both the credit rating and the financial well being of the middle class.[/quote]
2013 United States federal budget – $3.8 trillion (submitted 2012 by President Obama)[129]
2012 United States federal budget – $3.7 trillion (submitted 2011 by President Obama)
2011 United States federal budget – $3.8 trillion (submitted 2010 by President Obama)
2010 United States federal budget – $3.6 trillion (submitted 2009 by President Obama)
2009 United States federal budget – $3.1 trillion (submitted 2008 by President Bush)
2008 United States federal budget – $2.9 trillion (submitted 2007 by President Bush)
2007 United States federal budget – $2.8 trillion (submitted 2006 by President Bush)
2006 United States federal budget – $2.7 trillion (submitted 2005 by President Bush)
2005 United States federal budget – $2.4 trillion (submitted 2004 by President Bush)
2004 United States federal budget – $2.3 trillion (submitted 2003 by President Bush)
2003 United States federal budget – $2.2 trillion (submitted 2002 by President Bush)
2002 United States federal budget – $2.0 trillion (submitted 2001 by President Bush)
Oh yea, I guess that’s flat.
As for lack of spending, yes, people stop spending until they figure out which “winner” the Government going to appoint.[/quote]
Correct me if I’m wrong – but wasn’t the Iraq/Afghanistan spending completely OFF books during the Bush years? In other words the actual spending was much larger.
Maybe I’m wrong – but that’s the way I remember it.
September 26, 2013 @ 1:21 PM
UCGal wrote:
Correct me if
[quote=UCGal]
Correct me if I’m wrong – but wasn’t the Iraq/Afghanistan spending completely OFF books during the Bush years? In other words the actual spending was much larger.
Maybe I’m wrong – but that’s the way I remember it.[/quote]
You’re both wrong and right. They masked the expenditures by not putting it in proposed budget but by funding it in supplemental appropriations.
If you look at the proposed budget, a chunk of it isn’t there, if you look at the expenditures, they are or sometimes are not depending on which source you use and how syntactical obfuscating they are. Kind of like the discussion around how much does the State of California have for a budget, are we talking General Funds, Bond Funds, Special Funds or Federal Funds. The State will spend $232B in 2013-2014, which might come as a shock to people since just do years ago we were approving tax increases to stop the budget from getting slashed to $84B…
Cali will spend it’s largest amount ever this next FY.
September 26, 2013 @ 1:42 PM
include the Bush wars and the
include the Bush wars and the subsequent drawdown of the Obama years, and you’re strengthening the case that the more recent years’ budgets have been a drag on the economy. Add to the brinksmanship that has sabotaged the recovery.
September 26, 2013 @ 1:43 PM
The last 13 years of
The last 13 years of Government achievement is QED why Government spending won’t work.
September 25, 2013 @ 2:22 PM
I’ve been to many European
There are projects in the US, too — the difference is that such developments tend to be concentrated in the inner suburbs as opposed to cities themselves in Europe. Also varies by country quite a bit — more in France and former East Bloc cities than other cities.
Also, note that amenities are more needed in Phoenix, Vegas, or Orlando, simply because there are no public amenities near the complexes. Why waste space on a gym in my building’s basement if there’s a public gym two blocks away and a swimming pool in the park a few minutes’ walk in the other direction?
Water features? Really? For whom is a fake fountain a selling point?
September 25, 2013 @ 2:45 PM
spdrun wrote:
Water features?
[quote=spdrun]
Water features? Really? For whom is a fake fountain a selling point?[/quote]
Hahaha.
How about a whole lake or Olympic size pool with waterfall?
Can you live like this anywhere in Europe for the same price?
http://m.forrent.com/listing.php?siteid=1000055975&_js=1
September 25, 2013 @ 3:09 PM
Looked up the address, this
Looked up the address, this is south of McCarran Field — pretty far from the center of the action. It has a pool and large gym because:
(a) it needs amenities to attract tenants. Note also the free rent for a month…
(b) there are no such public amenities around it.
I’m confused, because this shows up on GMaps as a condo development with a rather small-looking pool. Is this just on the east side of I-15, did Maps get the address wrong, or did they knock something down to build it and it’s not yet in sat view?
Apparently, it has a tattoo parlor and megachurch as neighbors. woot.
September 25, 2013 @ 3:15 PM
Why don’t you google map how
Why don’t you google map how long it takes to drive to bellagio in your brand new financed (of course) air-conditioned BMW. Maybe 15 min. No need to take public transport with the little people.
In America, a guy out of college with an OK job can enjoy that lifestyle, depending on where he chooses to live. I don’t think it’s possible in Europe or anywhere else in the world for that matter.
It was a failed condo development that an investment fund purchased and turned to apartments. The pool is large (larger than most condo pools) because the development is large. I’ve been there.
September 25, 2013 @ 3:41 PM
The problem is that you can’t
The problem is that you can’t leave the air-conditioned BMW half the year because it’s 110-120 degrees out and your brain will fry. I know people who’ve lived out in Vegas — they felt it was cool for the first year or two, got tired of it, and moved back East. Unlike coastal CA where people seem to move for keeps.
BTW – I actually don’t take public transport all that much any more — I usually end up walking or biking where I need to go… more bike lanes being built, and I can usually see clients outside of rush hour.
September 25, 2013 @ 3:59 PM
Actually only 3 months out of
Actually only 3 months out of the year.
Better than cold and dampness of other places.
http://www.vegas.com/weather/averages.html
Need I mention that Americans have cheap energy and that nearly everyone who lives in a home built since 1980 has central air? The rest of the world is catching up to us. But still, in the rest of the world only million dollar houses have central AC. Most have those cheesy ductless units you hang on the wall.
Easy living and physical comfort contribute a lot to happiness.
I don’t mind your walking/biking city life. But your average, costco shopping, fat ass American would be miserable living like that. It doesn’t matter that he’s a porky, pill popping, sick couch potato watching his 70 inch tv. He’s happy.
September 25, 2013 @ 4:30 PM
Central AC is a matter of
Central AC is a matter of need. Max average high in Berlin is about 75F in July, 80-85 is considered hot, so who needs it 99% of the time?
Not so different from San Diego’s summer high temp, and I saw very few condos with central AC in San Diego (or central heat for that matter, most had electric or gas fan coil heaters). This applies to mid 90s stuff as much as 60s through 80s.
September 25, 2013 @ 8:27 PM
Yeah, AC is a luxury and is
Yeah, AC is a luxury and is not “needed”. But it’s expected everywhere you go including schools. Standard of living rises as previous luxuries become common place. Why would we not want that for any technology?
I think that anything built after 1990 has central AC even in San Diego. Those are kinda undesirable condos you’re talking about.
When I’m in Europe, i feel at times aggravated at the lack of amenities I’m used. I try to do VRBO to experience what the average local lives like. Yeah, yea they have beautiful stone buildings that last centuries. But inside those buildings there is a lack of improvements and paper-thin walls also. Try washing bed sheets and dry them on a tiny rack in a small flat.
September 25, 2013 @ 8:47 PM
Yeah, AC is a luxury and is
Because I don’t see the value of technology merely for the sake of technology, even if the utility in a given situation is minimal. A properly-designed building in coastal CA (or much of Germany) shouldn’t need A/C 99% of the time.
Now care for that pressurized cabin option in a Cessna 172? 🙂
September 25, 2013 @ 12:29 PM
Btw, what’s the point of
Honestly: HELL NO!!! At least not as a primary residence.
I’d rather pay a monthly fee for maintaining the thing, and be free to travel for a month without worrying that the boiler will break down and my pipes will freeze, or whatever else may go wrong. I’ll maintain a rental, but that’s because I’m being PAID to do so. I have no desire to add work to my life when I’m not being paid to do it!
I’d rather have a 2-bedroom flat overlooking a nice park, where I can walk or bike everywhere than a house in the middle of some soul-less development. Not only a question of commute time, but time to get to shops and amenities.
This isn’t sour grapes. I live in the city by choice and enjoy it immensely.