Fiscal Cliff MEGATHREAD: Wile E. Economy falls off, lands in cloud at bottom

[Berkut]

I can't help but think that it appears that there are no "real" circumstances under which it can ever be appropriate to not spend more and more and more and more and more.

Considering that every economist I've seen has clearly stated that the debt crisis cannot be solved simply by raising taxes, this strikes me as something of a problem.

The Republicans have really epically failed at getting their message across. They've let the Dems successfully make the entire thing all about taxes on the wealthy, which is very unfortunate, since the problem cannot even be solved solely by higher taxes on the wealthy (or even on the middle class). It is something like, at best, 8% of the solution.

This has always been my problem with the Dems. No matter what the circumstances are, the answer is always to spend more money than last year. Things are going well, spend more. Things are going ok, spend more. Things are going badly? Holy shit, now we REALLY have to spend more!

[Valmy]

This has always been my problem with the Dems. No matter what the circumstances are, the answer is always to spend more money than last year. Things are going well, spend more. Things are going ok, spend more. Things are going badly? Holy shit, now we REALLY have to spend more!

Paul Krugman just came.  Well actually he would be furious because they did not spend enough money.

Deficit spending seems to be like a drug for governments.  The withdrawal symptoms will be severe if we ever try to go clean.

[frunk]

Economists are almost always in favor of cutting spending when things are booming, but nobody listens because "things are going well, and we don't want to mess with what works".  The problem is that cutting the deficit/debt is only ever discussed when the deficit/debt start skyrocketing.  This happens when tax revenues go down and/or gov't spending goes up, which can be an indication of recession.  If it is a recession that's the worst time to cut gov't spending. 

So yeah, there's always people saying it's the wrong time to cut spending, but it's different people at different times.

I'd like it if target gov't spending would be reduced year to year whenever the economy is doing well, but freed up again when things went south.

[MadImmortalMan]

Or if we kept it the same all the time, then the deficit would automatically go positive and negative as the economy fluctuates and effects revenues. Probably everyone on both sides would hate that plan though.

[Admiral Yi]

Or if we kept it the same all the time, then the deficit would automatically go positive and negative as the economy fluctuates and effects revenues. Probably everyone on both sides would hate that plan though.

That would tend to make booms boomier and busts bustier (cue Caligula).  Not a good thing.

[Razgovory]

I can't help but think that it appears that there are no "real" circumstances under which it can ever be appropriate to not spend more and more and more and more and more.

Considering that every economist I've seen has clearly stated that the debt crisis cannot be solved simply by raising taxes, this strikes me as something of a problem.

The Republicans have really epically failed at getting their message across. They've let the Dems successfully make the entire thing all about taxes on the wealthy, which is very unfortunate, since the problem cannot even be solved solely by higher taxes on the wealthy (or even on the middle class). It is something like, at best, 8% of the solution.

This has always been my problem with the Dems. No matter what the circumstances are, the answer is always to spend more money than last year. Things are going well, spend more. Things are going ok, spend more. Things are going badly? Holy shit, now we REALLY have to spend more!

What an odd post.  The Dems have said consistently they are willing to cut spending.

[derspiess]

What an odd post.  The Dems have said consistently they are willing to cut spending.

Yeah, cuts that won't take effect until 5-10 years from now or longer.  Pretty easy to throw shit like that on the table without any intention of actually making it become a reality.  And they won't even talk about cutting entitlement spending. 

Besides, Obama is pushing for a new round of stimulus spending.

[Razgovory]

What an odd post.  The Dems have said consistently they are willing to cut spending.

Yeah, cuts that won't take effect until 5-10 years from now or longer.  Pretty easy to throw shit like that on the table without any intention of actually making it become a reality.  And they won't even talk about cutting entitlement spending. 

Besides, Obama is pushing for a new round of stimulus spending.

You know, I seem to recall Republican plans to cut the budget a few years ago using the same gimmick.  Along with tax cuts that take effect right now.

[garbon]

What an odd post.  The Dems have said consistently they are willing to cut spending.

Yeah, cuts that won't take effect until 5-10 years from now or longer.  Pretty easy to throw shit like that on the table without any intention of actually making it become a reality.  And they won't even talk about cutting entitlement spending. 

Besides, Obama is pushing for a new round of stimulus spending.

You know, I seem to recall Republican plans to cut the budget a few years ago using the same gimmick.  Along with tax cuts that take effect right now.

I'm not sure about the relevance. Der didn't say in his post that the Repubs do it better than Dems.

[merithyn]

You know, I seem to recall Republican plans to cut the budget a few years ago using the same gimmick.  Along with tax cuts that take effect right now.

Two wrongs don't make a right.

[garbon]

You know, I seem to recall Republican plans to cut the budget a few years ago using the same gimmick.  Along with tax cuts that take effect right now.

Two wrongs don't make a right.

Do two Wongs make a Wright?

[Razgovory]

What an odd post.  The Dems have said consistently they are willing to cut spending.

Yeah, cuts that won't take effect until 5-10 years from now or longer.  Pretty easy to throw shit like that on the table without any intention of actually making it become a reality.  And they won't even talk about cutting entitlement spending. 

Besides, Obama is pushing for a new round of stimulus spending.

You know, I seem to recall Republican plans to cut the budget a few years ago using the same gimmick.  Along with tax cuts that take effect right now.

I'm not sure about the relevance. Der didn't say in his post that the Repubs do it better than Dems.

No, but this was the implied in Berkut's post.  If Speiss's post didn't imply a superiority in Republican plans compared to Democratic plans then what was the fucking point?

[garbon]

No, but this was the implied in Berkut's post.  If Speiss's post didn't imply a superiority in Republican plans compared to Democratic plans then what was the fucking point?

Watch your language.

[DGuller]

Yeah, for fuck's sake. 

[Admiral Yi]

No I did not propose that.
Reread post 39.

You're right.  But close to it.  I believe someone posted some historical data here a long time ago (around the debate on Obamastimulus) that showed the fiscal multiplier in the US is around 2.  So since we're not at full employment, the most we can do right now is decrease the deficit by 1% of GDP without going into recession.  The remaining 7% of deficit will have to wait for the reoccurence of growth.