Got my mitts on the talking points:
Quote
The talking points:
The American Jobs Act is:
-- based on bi-partisan ideas;
-- it is fully paid for by closing corporate tax loopholes and asking the wealthiest Americans to pay their fair share; and
-- it will have an impact on job and economic growth NOW -- just as soon as Congress acts.
-- Every day, people in this country are working hard to meet their responsibilities. The question now is whether Washington will meet theirs.
-- The time for obstruction and gridlock is over. Congress needs to put country ahead of politics.
-- The American people know that the economic crisis and the deep recession weren't created overnight and won't be solved overnight. The economic security of the American middle class has been under attack for decades.
-- That's why President Obama believes we need to do more than just recover from this economic crisis.
-- The President is rebuilding the economy the American way -- based on balance, fairness and the same set of rules for everyone from Wall Street to Main Street where hard work and responsibility pay and gaming the system is penalized.
-- It's an American economy that's built to last and creates the jobs of the future, by forcing Washington to live within its means so we can invest in small business entrepreneurs, education, and making things the world buys, not outsourcing, loopholes and reckless financial deals that put middle class security at risk.
Not that Congress will do The Plan.
Quote-- based on bi-partisan ideas;
I'm sure it'll be a raging success.
No mention of what the money would be spent on. :huh:
Quote from: Admiral Yi on September 08, 2011, 03:10:27 PM
No mention of what the money would be spent on. :huh:
Isn't he pushing for extension of payroll tax cuts? That'd be good. I'd add infrastructure.
Quote from: Sheilbh on September 08, 2011, 03:13:05 PM
Isn't he pushing for extension of payroll tax cuts? That'd be good. I'd add infrastructure.
One thing that cheeses me off about infrastructure spending is the way in which the original stimulus bill was sold at least in part as a response to our crumbling infrastructure. And turned out not to have much to do with repairing any crumbling infrastructure.
I've got a brilliant idea for stimulus spending: free one way bus tickets for unemployed people to North Dakota. :)
Quote from: Admiral Yi on September 08, 2011, 03:19:23 PMOne thing that cheeses me off about infrastructure spending is the way in which the original stimulus bill was sold at least in part as a response to our crumbling infrastructure. And turned out not to have much to do with repairing any crumbling infrastructure.
They spent about 10% on infrastructure, which is hardly enough to make a big dent. But I think the left were right that it was too small and too focused on tax cuts - which were probably necessary to win over the Republican votes - which was a shame.
I think a good start would be to repair more of Americas roads and interstates; as pump priming it could be relatively efficient.
Quote from: Sheilbh on September 08, 2011, 03:24:23 PM
They spent about 10% on infrastructure, which is hardly enough to make a big dent. But I think the left were right that it was too small and too focused on tax cuts - which were probably necessary to win over the Republican votes - which was a shame.
Are you sure that any of that money was spent on repairing bridges on the verge of collapse and that sort of thing? My impession was it was all greenfield stuff.
Don't know what you mean by winning over Republican votes; I don't think a single Republican ended up voting for stimulus I.
"-- it is fully paid for by closing corporate tax loopholes and asking the wealthiest Americans to pay their fair share"
This will go over like beer in Church with the Tea Baggers and many in the GOP.
INCOME REDISTIRBUTION!!!1!
Quote from: Admiral Yi on September 08, 2011, 03:30:42 PMDon't know what you mean by winning over Republican votes; I don't think a single Republican ended up voting for stimulus I.
Specter and at least one of the Senators from Maine.
QuoteAre you sure that any of that money was spent on repairing bridges on the verge of collapse and that sort of thing? My impession was it was all greenfield stuff.
Sorry, it was 5%. I'm not including environment or things like that. But $21 billion went to highways, for example, a billion to the airports, $250 mil to high speed rail. The US Army Engineers got $300 mil to do something with the Mississippi and Tributaries - a lot of infrastructure spending seems to have gone through military agencies, weirdly.
Quote from: Sheilbh on September 08, 2011, 03:39:38 PM
QuoteAre you sure that any of that money was spent on repairing bridges on the verge of collapse and that sort of thing? My impession was it was all greenfield stuff.
Sorry, it was 5%. I'm not including environment or things like that. But $21 billion went to highways, for example, a billion to the airports, $250 mil to high speed rail. The US Army Engineers got $300 mil to do something with the Mississippi and Tributaries - a lot of infrastructure spending seems to have gone through military agencies, weirdly.
But Yi was asking if any of that went to badly needed repairs. The spending on high speed rail certainly didn't--it went mostly to studies and that sort of thing.
Quote from: Sheilbh on September 08, 2011, 03:39:38 PM
Sorry, it was 5%.
I think if it had been 100% or even 50% the overall stimulus could have been way way smaller and maybe actually had an effect.
Quote from: dps on September 08, 2011, 04:12:18 PMBut Yi was asking if any of that went to badly needed repairs. The spending on high speed rail certainly didn't--it went mostly to studies and that sort of thing.
I don' t know. We're talking small amounts of money in the context of the bill. But of the money to highways, for example, only 8% went to entirely new projects from what I can see. This is all accessible for Yi to look at - as I am - on government websites, he can add some definition to his impressions.
Quote from: MadImmortalMan on September 08, 2011, 04:32:03 PM
I think if it had been 100% or even 50% the overall stimulus could have been way way smaller and maybe actually had an effect.
I think it would still need to have been larger. US GDP shrunk by almost 7% (annualised) in the first quarter of 2009 and the 2008 decline has also been consistently revised downwards. I think you needed a larger stimulus and had the debate taken place knowing how large a decline had taken place, I think you would've got one.
Quote from: Sheilbh on September 08, 2011, 04:53:01 PM
I think it would still need to have been larger. US GDP shrunk by almost 7% (annualised) in the first quarter of 2009 and the 2008 decline has also been consistently revised downwards. I think you needed a larger stimulus and had the debate taken place knowing how large a decline had taken place, I think you would've got one.
GDP shrank from a bubble inflated level. It doesn't make a lot of sense to me to try and regain that level through Keynesian stimulus.
Quote from: Admiral Yi on September 08, 2011, 05:01:43 PM
Quote from: Sheilbh on September 08, 2011, 04:53:01 PM
I think it would still need to have been larger. US GDP shrunk by almost 7% (annualised) in the first quarter of 2009 and the 2008 decline has also been consistently revised downwards. I think you needed a larger stimulus and had the debate taken place knowing how large a decline had taken place, I think you would've got one.
GDP shrank from a bubble inflated level. It doesn't make a lot of sense to me to try and regain that level through Keynesian stimulus.
Are you suggesting that the current state of the economy is where it ought to be?
The malinvestment point is a good one (I think that's where Yi is going with that). There are businesses and jobs that need to stop existing so people and investment can go to something society actually needs. The problem is one of letting it deflate gradually vs crash. Crash delays the reinvestment process I would think since it makes everything seize up.
Quote from: Razgovory on September 08, 2011, 05:45:23 PM
Are you suggesting that the current state of the economy is where it ought to be?
No.
Sort of MIM. Take the PIIGS as an example. Their economies were previously inflated by unsustainable deficit spending. When you remove that, the economy deflates. Surprise, surprise.
I better not miss ONE SECOND of Packers/Saints.
Quote from: Admiral Yi on September 08, 2011, 05:57:25 PM
Quote from: Razgovory on September 08, 2011, 05:45:23 PM
Are you suggesting that the current state of the economy is where it ought to be?
No.
Sort of MIM. Take the PIIGS as an example. Their economies were previously inflated by unsustainable deficit spending. When you remove that, the economy deflates. Surprise, surprise.
Like Spain, you mean?
Quote from: Admiral Yi on September 08, 2011, 05:57:25 PMSort of MIM. Take the PIIGS as an example. Their economies were previously inflated by unsustainable deficit spending. When you remove that, the economy deflates. Surprise, surprise.
You're only describing Greece.
Spain and Ireland both had healthy surpluses and Italy and Portugal had middlingly sustainable deficits. Government spending isn't the cause of the collapse in these economies.
HURRY THE FUCK UP YOU IDIOTS. I've got 50 bucks on the Pack you assholes.
Quote from: Sheilbh on September 08, 2011, 06:04:14 PM
You're only describing Greece.
Spain and Ireland both had healthy surpluses and Italy and Portugal had middlingly sustainable deficits. Government spending isn't the cause of the collapse in these economies.
Spain had a surplus???
The bond markets seem to have disagreed with your assessment of the sustainability of Italy and Portugal's deficits.
Quote from: Ed Anger on September 08, 2011, 06:09:21 PM
HURRY THE FUCK UP YOU IDIOTS. I've got 50 bucks on the Pack you assholes.
They can't kick off till we finish this discussion? :unsure:
Quote from: Admiral Yi on September 08, 2011, 06:11:06 PM
Quote from: Ed Anger on September 08, 2011, 06:09:21 PM
HURRY THE FUCK UP YOU IDIOTS. I've got 50 bucks on the Pack you assholes.
They can't kick off till we finish this discussion? :unsure:
Let me rage, ok?
Full Text (http://www.businessinsider.com/obama-my-jobs-plan-2011-9)
Quote from: Admiral Yi on September 08, 2011, 06:10:18 PMSpain had a surplus???
Yep. Spain had a surplus and a very low debt as % of GDP prior to the crisis. There was talk of this being unsustainably based on a construction boom, property taxes (similar in Ireland) and a flood of cheap credit, but high government spending didn't sustain the Spain prior to the crisis. Equally the Spanish, and Italian and Portuguese welfare states weren't terribly effective, or generous unless you're elderly.
QuoteThe bond markets seem to have disagreed with your assessment of the sustainability of Italy and Portugal's deficits.
Yeah, sorry on Portugal. Their deficit was above the EU and the Portuguese average for most of the last decade - though again that was facilitated by very low bond yields. So the markets didn't disagree for a very long time.
In terms of bond markets with Italy though we're only about where we were before the Euro. That's part of the problem is that the markets with Eurozone governments haven't really worked in a way that judged each country's deficit as sustainable or not for most of the past decade. But for most of this period Italy was Europe's Japan. They had deficits, unsustainable amounts of debt, anemic growth, but pretty low bond yields - I think Italy, like Japan has a far higher than average proportion of domestic pension funds.
Edit: And it's worth saying the bond markets loved that Spain got their debt down to just under 40% of GDP and had balanced budgets or surpluses for the best part of the last decade. They never expected what hit them.
Quote from: Admiral Yi on September 08, 2011, 06:10:18 PM
Spain had a surplus???
Yes? I'm surprised that's news for you.
Fuck the young people. Worthless young people. Only good for slicing their wrists.
I think it'll be interesting to look at the plan. I turn over to find Congress interrupting and applauding :bleeding: :weep: <_<
I'm now back to non-news channels.
Quote from: Sheilbh on September 08, 2011, 06:19:54 PM
Yep. Spain had a surplus and a very low debt as % of GDP prior to the crisis. There was talk of this being unsustainably based on a construction boom, property taxes (similar in Ireland) and a flood of cheap credit, but high government spending didn't sustain the Spain prior to the crisis. Equally the Spanish, and Italian and Portuguese welfare states weren't terribly effective, or generous unless you're elderly.
So we're agreed then that Spain was running significant deficits post-crisis?
QuoteYeah, sorry on Portugal. Their deficit was above the EU and the Portuguese average for most of the last decade - though again that was facilitated by very low bond yields. So the markets didn't disagree for a very long time.
That's the point I was trying to make in the US thread. Bond markets think your debt is sustainable until they don't.
So far, I see in here:
1: A tax cut for hiring employees
2: An infrastructure bank
3: Repair schools
4: Tax credits for hiring veterans
5: $4000 tax credit for hiring someone who has been looking for work for longer than 6 months (interesting)
6: Keep the payroll tax cut
And this:
Quote
It will be paid for. And here's how:
The agreement we passed in July will cut government spending by about $1 trillion over the next ten years. It also charges this Congress to come up with an additional $1.5 trillion in savings by Christmas. Tonight, I'm asking you to increase that amount so that it covers the full cost of the American Jobs Act.
Man, I doubt the superretardcongress will even be able to accomplish the original mission, Mr. President.
I'm watching the speech.
He is talking shit as always. A friggin demagogue.
Just because he wishes for more jobs, there are not going to be more jobs.
Quote from: MadImmortalMan on September 08, 2011, 06:29:32 PM
So far, I see in here:
1: A tax cut for hiring employees
Tax cut for corporate fat cats. :mad:
Quote2: An infrastructure bank
wtf?
Quote4: Tax credits for hiring veterans
5: $4000 tax credit for hiring someone who has been looking for work for longer than 6 months (interesting)
Tax cuts for corporate fat cats. :mad:
I'm tired of this guy and his ideology.
Quote from: Admiral Yi on September 08, 2011, 06:29:21 PMSo we're agreed then that Spain was running significant deficits post-crisis?
Yes, but that's irrelevant to this:
QuoteSort of MIM. Take the PIIGS as an example. Their economies were previously inflated by unsustainable deficit spending. When you remove that, the economy deflates. Surprise, surprise.
QuoteThat's the point I was trying to make in the US thread. Bond markets think your debt is sustainable until they don't.
The US isn't comparable with any of those countries though. The key to their deficit, debt, bond crisis is the Euro. The US doesn't have a Germany for the markets to focus on.
Quote from: Habsburg on September 08, 2011, 03:37:14 PM
"-- it is fully paid for by closing corporate tax loopholes and asking the wealthiest Americans to pay their fair share"
This will go over like beer in Church with the Tea Baggers and many in the GOP.
INCOME REDISTIRBUTION!!!1!
Depends on what 'fair share' means. I mean, I'm sure the Tea Party lunatics will whine and cry no matter what, but an increase in taxation would be good, especially if you structure it in a way that also gets money out of the middle class.
Still, if Obama's counting on a GOP House to pass a tax increase, he's going to be disappointed. I have a hard time imagining circumstances where the GOP leadership could get a tax increase through, even if they were inclined to do so.
I'll start paring down my workforce so I can hire some long term unemployed and get my tax credits.
Quote from: Siege on September 08, 2011, 06:34:46 PM
I'm tired of this guy and his ideology.
He has an ideology?
In any case if you are tired of him don't watch his speeches.
Quote from: Sheilbh on September 08, 2011, 06:35:24 PM
Quote from: Admiral Yi on September 08, 2011, 06:29:21 PMSo we're agreed then that Spain was running significant deficits post-crisis?
Yes, but that's irrelevant to this:
QuoteSort of MIM. Take the PIIGS as an example. Their economies were previously inflated by unsustainable deficit spending. When you remove that, the economy deflates. Surprise, surprise.
Irrelevant how? The sustainability part?
QuoteThe US isn't comparable with any of those countries though. The key to their deficit, debt, bond crisis is the Euro. The US doesn't have a Germany for the markets to focus on.
No idea what you mean by this.
Quote from: Ed Anger on September 08, 2011, 06:38:18 PM
I'll start paring down my workforce so I can hire some long term unemployed and get my tax credits.
Yeah, I think that's an unintended consequence. Still, at least unemployment amongst the unskilled will rotate a bit.
Quote from: Admiral Yi on September 08, 2011, 06:38:42 PM
Irrelevant how? The sustainability part?
The Spanish economy wasn't inflated by unsustainable deficit spending and that isn't a part in why the economy deflated. As I say, you're only describing Greece I think that acronym simplifies but also confuses very different situations that actually need different solutions.
QuoteNo idea what you mean by this.
The Italian, Portuguese and Spanish bond yield is still historically low compared to their national averages. They got artificially low rates for much of the past decade because of the effects of the Euro. The US hasn't experienced anything like that (though I wonder if municipalities and states within the US have?).
Of course the Spanish (and Irish) are an exception, again, they had surpluses or balanced budgets and spent most of the past decade paying down their national debt.
Quote from: Ed Anger on September 08, 2011, 06:38:18 PM
I'll start paring down my workforce so I can hire some long term unemployed and get my tax credits.
:w00t:
I like this idea! I'm going to copycat you.
Quote from: Valmy on September 08, 2011, 06:38:24 PM
Quote from: Siege on September 08, 2011, 06:34:46 PM
I'm tired of this guy and his ideology.
He has an ideology?
In any case if you are tired of him don't watch his speeches.
I did. I am watching now UFO Hunters on the Pseudo-History Channel.
I'll listen tomorrow to Glenn Beck and Rush Limbough comentaries on the speech and unmasking of Obama;s lies.
Worst President evah.
Quote from: Siege link=topic=5900.msg309262#msg309262
I did. I am watching now UFO Hunters on the Pseudo-History Channel.
/quote]
May I suggest "Searching for Bigfoot" on the Animal Planet (network)??1?
:mmm:
Quote from: Habsburg on September 08, 2011, 06:49:38 PM
Quote from: Siege link=topic=5900.msg309262#msg309262
I did. I am watching now UFO Hunters on the Pseudo-History Channel.
/quote]
May I suggest "Searching for Bigfoot" on the Animal Planet (network)??1?
:mmm:
Why you are weird so?
Don't know you quote how?
Quote from: Siege on September 08, 2011, 06:47:35 PM
I did. I am watching now UFO Hunters on the Pseudo-History Channel.
:lol: I like this.
QuoteI'll listen tomorrow to Glenn Beck and Rush Limbough comentaries on the speech and unmasking of Obama;s lies.
Worst President evah.
I don't know anything about Beck of Limbaugh's opinions on economic issues, but you might not want to trust them.
Surely Obama isn't as bad as Woodrow Wilson?
Quote from: Sheilbh on September 08, 2011, 06:45:51 PM
The Spanish economy wasn't inflated by unsustainable deficit spending and that isn't a part in why the economy deflated. As I say, you're only describing Greece I think that acronym simplifies but also confuses very different situations that actually need different solutions.
I didn't say anything about a solution to anything. I was merely pointing out that deficit spending inflates an economy above the level it would be in the absence of that deficit. Which is also true of the Spanish deficit, regardless of their previous fiscal balance.
QuoteThe Italian, Portuguese and Spanish bond yield is still historically low compared to their national averages. They got artificially low rates for much of the past decade because of the effects of the Euro. The US hasn't experienced anything like that (though I wonder if municipalities and states within the US have?).
Of course the Spanish (and Irish) are an exception, again, they had surpluses or balanced budgets and spent most of the past decade paying down their national debt.
Adoption of the euro lowered their nominal rates because the lower inflation expectation. That's different than what I'm talking about, which is that yields are very flat through out the debt/GDP range, until debt/GDP hits a tipping point and the bond market starts shitting all over you.
FUCK, Maroon 5 on the pre-game. COME BACK OBAMA!!! Talk some more plz.
Quote from: Ed Anger on September 08, 2011, 07:04:51 PM
FUCK, Maroon 5 on the pre-game. COME BACK OBAMA!!! Talk some more plz.
And Lady Antebellum. The NFL Kickoff is being programmed by someone who sucks.
Good to see him coming out fighting.
OK all the commentards are saying this is a political act, but I'd like to think he's realised that there's no point winning if you're not doing.
The trade agreements with Colombia, South Korea and Panama are in there too.
Quote from: Neil on September 08, 2011, 07:05:54 PM
Quote from: Ed Anger on September 08, 2011, 07:04:51 PM
FUCK, Maroon 5 on the pre-game. COME BACK OBAMA!!! Talk some more plz.
And Lady Antebellum. The NFL Kickoff is being programmed by someone who sucks.
NFL just sucks at music choice period anymore. <_<
Quote from: JacobL on September 08, 2011, 07:28:05 PM
Quote from: Neil on September 08, 2011, 07:05:54 PM
Quote from: Ed Anger on September 08, 2011, 07:04:51 PM
FUCK, Maroon 5 on the pre-game. COME BACK OBAMA!!! Talk some more plz.
And Lady Antebellum. The NFL Kickoff is being programmed by someone who sucks.
NFL just sucks at music choice period anymore. <_<
They're just terrified that someone will expose their underwear and the Republicans will ban television or something.
Quote from: Siege on September 08, 2011, 06:34:46 PM
I'm tired of this guy and his ideology.
We're tired of you and your ideology. :hug:
I'm not tired of you Seeb. :hug:
I wonder how the six months for the four grand credit would be calculated. <_<
Quote from: MadImmortalMan on September 08, 2011, 07:11:03 PM
The trade agreements with Colombia, South Korea and Panama are in there too.
Those have been tied up forever.
In the South Korean case, one issue is that they want Koreans to buy more US brand cars. Except GM owns Daewoo, one of the most popular cars in South Korea :loll:
And the protectionists claim that the agreement would take US jobs, ignoring the fact that most Hyundais and Kias sold in the US are made in the US, by Americans.
Quote from: Admiral Yi on September 08, 2011, 07:00:40 PM
I didn't say anything about a solution to anything. I was merely pointing out that deficit spending inflates an economy above the level it would be in the absence of that deficit.
Fine, but I would also note that your pointing it out doesn't make it true. National economies don't operate at a deficit. Government deficits are paid for by selling bonds, generally, and those bonds suck cash out of the economy, deflating it at exactly the same rate that government deficit spending inflates it. Where deficits are financed by inflation, the relationship is similar but not as direct. This won't be true for non-national economies like Greece's, where inflation can be exported via the common currency, but that makes the PIIGS model largely inapplicable to the US.
What deficit spending by government does is distort spending; the government doesn't spend the dollars it borrows the same way as the consumer would have spent those dollars had he opted to do something with them other than to buy bonds (with the equivalent effect for inflation). Deficit spending is more distorting than pay-as-you-go spending, because its costs are higher and longer-term.
Quote from: Admiral Yi on September 08, 2011, 05:01:43 PM
Quote from: Sheilbh on September 08, 2011, 04:53:01 PM
I think it would still need to have been larger. US GDP shrunk by almost 7% (annualised) in the first quarter of 2009 and the 2008 decline has also been consistently revised downwards. I think you needed a larger stimulus and had the debate taken place knowing how large a decline had taken place, I think you would've got one.
GDP shrank from a bubble inflated level. It doesn't make a lot of sense to me to try and regain that level through Keynesian stimulus.
This confuses output with asset values.
GDP attempts to measure actual value added produced on an annual basis. The bubble was not in GDP, but in the valuation of certain kinds of assets (real estate) already in existance. An asset bubble affects current production only to the extent that it causes producers of those assets to over-invest in production of those assets on the basis of straight extrapolation from an unsustainable trend. That did happen to a certain extent, for example in the construction of new housing and to a lesser extent in new car purchasers (which also were boosted by securitization driven easy credit terms). But the drop in GDP far exceeded any "bubble effect" on current production, as inevitably happens when this sort of crash occurs.
You can't get around the fundamental accounting reality that the sum of spending/saving balance of the consumer, business, government and foreign sectors must sum to zero. For a country like the US with a significant current account deficit, that means that the household, business, and government sectors must run a net savings deficit on a combined basis. For households, balance is simply household savings, i.e income - consumption, for business it is business savings (undistributed profit) - investment, for the government it is the budget deficit.
The essential problem in the US crisis was and is the overextension of private households, that is households used cheap credit to finance consumption levels in excess of income. Once the assets used as collateralize this process deflate, the only way the situation can be "worked out" is by allowing the household sector to repair its collective balance sheet by saving on a net basis. That is what happened starting in late 08 and continues to this day.
But if households are saving, then the combination of the business and government sectors must be in deficit. On the business side, this requires either a profits crash or an investment boom. Profits luckily have held up but investment has been restrained. That is not surprising not only because an asset crash does little to encourage business confidence, but also because large swaths of the business sector were also overextended in terms of financing and have used the interim period to improve their own balance sheets rather than invest in further expansion.
That leaves the government. Put simply, if the private sector is to be afforded the opportunity to recover and restructure, and there is no practical way to a earn a large current account surplus, the government must run a large deficit. That is the essence of the Keynesian argument. The government acts as the borrower of last resort, sustaining the national GDP until revived consumer spending and business investment can take over and perform their traditional functions as engines of growth. If the government does not, than the private sector must go into deficit, and the mechanism for that will not a private spending boom, but rather a reduction in household income and/or business profits.
The Chicago school response is to contend running deficits just kicks the problem down the road and that the key to recovery is to get the motor of business sector investment going. The freshwater economists argue that running government deficits hurts business confidence while fiscal probity improves it. But the historical evidence does not support the argument and ultimately it is based on a fundamentally flawed economic model that does not take into account how business investment actually arises - i.e. how it is financed. An big asset bubble generates complex and highly leveraged financial structures that collapse when the bubble pops, and the consequence is that the financial sector must restructure and financial investors become risk averse. So businesses cannot increase investment coming out the crash like Chicago would like because the financing is not there.
If you look at the present state of the US, this is all very apparent. Securitization is still effectively dead to the extent not directly propped by the Fed or Treasury. Banks are not lending on affordable terms to business. The junk and acquisition finance markets, after a brief revival, are back in the doldrums. But Treasury yields are ridiculously low. The market is speaking loud and clear and what it is saying is that notwithstanding the US fiscal deficits and debt, it views US federal government debt as a high-quality asset, and prefers the liquidity and security advantages of lending to the government over financing private business activity. That presents the US with a simple choice: either exploit the willingess of the world to finance the US government at ludicrously cheap rates to invest in needed infrastructure projects that promise long run economic returns, or retrench and trigger a collapse in US living standards and productive capacity in the hope that at some future date the falling knife of debt deflation can be caught.
Quote from: The Minsky Moment on September 08, 2011, 07:52:36 PM
.....
. That presents the US with a simple choice: either exploit the willingess of the world to finance the US government at ludicrously cheap rates to invest in needed infrastructure projects that promise long run economic returns, or retrench and trigger a collapse in US living standards and productive capacity in the hope that at some future date the falling knife of debt deflation can be caught.
Sorry for cutting your excellent post, but I think this is a very important opportunity that some in the republican party will both fail to understand and actively work against, to the long term detriment of their own country.
Joan, of course bubbles involve assets. But as you already mentioned in many cases they do involve production, such as the breakneck production of housing.
You omit the fact that government borrowing has a crowding out effect on business investment.
You wave away the current account deficit as an exogenous variable. It's obviously not. It's a function of consumption and the exchange rate. If we stop sucking in the world's capital (through the deficit) and propping up consumption (through the deficit) then the effect should be to reduce both the current account deficit and the capital account surplus.
And your closing comment about government investment in economically beneficial infrastructure is kind of goofy. The overwhelming majority of government spending is consumption.
Quote from: Siege on September 08, 2011, 06:47:35 PM
Quote from: Valmy on September 08, 2011, 06:38:24 PM
Quote from: Siege on September 08, 2011, 06:34:46 PM
I'm tired of this guy and his ideology.
He has an ideology?
In any case if you are tired of him don't watch his speeches.
I did. I am watching now UFO Hunters on the Pseudo-History Channel.
I'll listen tomorrow to Glenn Beck and Rush Limbough comentaries on the speech and unmasking of Obama;s lies.
Worst President evah.
Why do you listen to a guy who hates Jews?
Quote from: Admiral Yi on September 08, 2011, 08:29:53 PM
You omit the fact that government borrowing has a crowding out effect on business investment.
I think the plan is to sell all the debt to Ben Bernanke.
Quote from: Admiral Yi on September 08, 2011, 08:29:53 PM
You omit the fact that government borrowing has a crowding out effect on business investment.
Government borrowing *can* crowd out business investment under certain conditions. Those conditions are not even close to be present now. Banks now are perfectly happy to park billions in excess cash with the Fed and earn a whopping 0.25% interest rather than lend it out. If the government really were competing with the private sector for finance, one would expect to see high and rising interest rates; instead they are at historical lows and falling.
QuoteYou wave away the current account deficit as an exogenous variable. It's obviously not. It's a function of consumption and the exchange rate. If we stop sucking in the world's capital (through the deficit) and propping up consumption (through the deficit) then the effect should be to reduce both the current account deficit and the capital account surplus.
Its true the current account isn't exogenous. So if government were to cut spending, the negative income and profit effect would be offset to some degree by improvement in the current account. But for a large domestically focused economy like the US, the effect is only just that - an offset, and a minor one like that. Especially given that there is no other economy or group of economies out there currently capable or willing to absorb hundreds of billions of dollars of net exports from the US.
QuoteAnd your closing comment about government investment in economically beneficial infrastructure is kind of goofy. The overwhelming majority of government spending is consumption.
Don't understand your point. All government spending ultimately translates into household income (and consumption) or business profits.
Quote from: The Minsky Moment on September 08, 2011, 09:13:58 PM
Don't understand your point. All government spending ultimately translates into household income (and consumption) or business profits.
Not until after it's taxed.
Edit: I mean, it first comes OUT of the economy by taxing those households and businesses. Or debt issuance.
Quote from: MadImmortalMan on September 08, 2011, 09:16:05 PM
Not until after it's taxed.
Government spending either involves payment of wages of government workers (HH income), income transfer payments (HH income) or procurement of goods and services (business profits). To the extent the spending is deficit spending, then by definition that income and profits is not offset by taxes.
Watched the speech tonight. Reassuring to see that certain House members continue to eschew decorum when a nigger's at the podium. Why break a streak.
Quote from: The Minsky Moment on September 08, 2011, 09:23:25 PM
Quote from: MadImmortalMan on September 08, 2011, 09:16:05 PM
Not until after it's taxed.
Government spending either involves payment of wages of government workers (HH income), income transfer payments (HH income) or procurement of goods and services (business profits).
Yes, obviously. But it's not magic. The money the government spends has to first come out of the economy before it can go back in. That money was already out there in the households and businesses before the government took it to spend back to them. If it's borrowed, it's just future taxes.
Quote from: MadImmortalMan on September 08, 2011, 09:32:05 PM
Quote from: The Minsky Moment on September 08, 2011, 09:23:25 PM
Quote from: MadImmortalMan on September 08, 2011, 09:16:05 PM
Not until after it's taxed.
Government spending either involves payment of wages of government workers (HH income), income transfer payments (HH income) or procurement of goods and services (business profits).
Yes, obviously. But it's not magic. The money the government spends has to first come out of the economy before it can go back in. That money was already out there in the households and businesses before the government took it to spend back to them. If it's borrowed, it's just future taxes.
But, ideally, infrastructural improvements pay for themselves. I.e., a road without potholes leads to systemic transportation savings, water without bacteria in it leads to systemic healthcare savings, B-52s capable of threatening Arabs who would dare embargo oil leads to systemic energy savings, and so on.
:lol:
Yes. Which is why stimulus should be spent on those types of things that produce growth like infrastructure.
Quote from: MadImmortalMan on September 08, 2011, 09:39:04 PM
:lol:
Yes. Which is why stimulus should be spent on those types of things that produce growth like infrastructure.
Well, wouldn't the government be paying government employees and private businesses to renovate that infrastructure? It would become household income and business profits.
But I guess we're not really disagreeing here... :hmm:
Quote from: MadImmortalMan on September 08, 2011, 09:32:05 PM
Yes, obviously. But it's not magic. The money the government spends has to first come out of the economy before it can go back in. That money was already out there in the households and businesses before the government took it to spend back to them.
Money may be "out there" but under conditions of flight to liquidity, as after an asset crash, it is effectively inert and undeployed. Again - that is the condition we are in now, as banks hold abut $1 trillion in Fed reserves and households pour savings into no yield savings accounts and inert security assets like gold. Ideally, as good capitalists we would like to see this money invested in private enterprises who would in turn use the finance to expand operations. That is not happening, both because investors seeking safety and liquidity have no appetite for private risk assets and because business are not sufficiently optimistic about future prospects to expand capacity. But if investors have a strong appetite for government debt assets - and they do - that opens the possibility of a second best solution of having the government temporarily fill in the investment gap. The alternative is to let existing stocks of savings sit undeployed and then watch them shrink in a debt deflationary spiral.
QuoteIf it's borrowed, it's just future taxes.
Only if you accept strict Ricardian Equivalence, which I don't for many reasons.
Quote from: MadImmortalMan on September 08, 2011, 09:39:04 PM
:lol:
Yes. Which is why stimulus should be spent on those types of things that produce growth like infrastructure.
:)
One of the things I found curious about the last stimulus debate was how the left side of the debate wanted to emphasize immediate shovel-ready projects. I thought that short-sighted and based on fundamental error. Once the government commits in a credible way to significant infrastucture investment, there can be a very quick stimulative effect even if the first shovel doesn't go into the ground for a while, because businesses that want to bid for construction work have to start to ramp up in advance of actually doing the work, engineering firms have to start preparation on drawings, concrete and steel producers have to get capacity on line to supply future expected needs, etc. Investment decisions in the present can be driven by expectations of future business, so long as those business prospects are not unduly remote or uncertain.
Quote from: CountDeMoney on September 08, 2011, 09:26:45 PM
Watched the speech tonight. Reassuring to see that certain House members continue to eschew decorum when a nigger's at the podium. Why break a streak.
You're keeping up your own streak, I see.
The opportunity cost of taxation changes so dramatically in a liquidity trap situation I wonder if the best thing to do then is just to jack tax rates to the moon. :p
I mean, Japan's working on their third lost decade and all the deficit spending isn't doing anything..
Didn't even bother to watch it. Ide and CdM proposing a nuclear first strike on China is more entertaining and has about the same effect on US policy.
Quote from: derspiess on September 08, 2011, 10:09:31 PM
Quote from: CountDeMoney on September 08, 2011, 09:26:45 PM
Watched the speech tonight. Reassuring to see that certain House members continue to eschew decorum when a nigger's at the podium. Why break a streak.
You're keeping up your own streak, I see.
I'm not the racist GOPtard here, derfuhrer.
Quote from: CountDeMoney on September 09, 2011, 12:10:35 AM
I'm not the racist GOPtard here, derfuhrer.
No, you're the racist "Independent".
Love your sig, btw. Bonus points for leaving "son of a bitches" uncorrected :thumbsup:
Quote
Dear Mr. President:
Thank you for your address to a Joint Session of the Congress last night, and for presenting your ideas. We believe creating long-term, sustainable jobs must be the top priority for elected leaders of both parties, and it is our desire to work with you to find common ground on steps that can be taken to allow our economy to grow and to create those jobs. While we have a different vision in terms of what is needed to boost private-sector job creation in our country, we believe your ideas merit consideration by the Congress, and believe the American people expect them to be given such consideration.
We look forward to receiving legislative text for any of your ideas in a manner that can be scored by the nonpartisan Congressional Budget Office, and to the upcoming speech you described last night in which you will detail the offsets that will be needed to ensure your proposals are paid for.
The House and our committees will immediately begin the process of reviewing and considering your proposals. We will examine the impact of your proposals on both short and long term economic growth and we will identify modifications and additional ideas that could achieve economic and job growth in a manner that may be more impactful or effective. For instance, these ideas could include elements of the multiple bills passed by the House earlier this year to remove government barriers to private-sector job creation that are currently awaiting action in the Senate. In addition, the House will continue with the jobs agenda outlined last month which among other things would provide relief to our nation's job creators – especially small businesses – from the high costs of some of your Administration's pending regulatory actions
As we are certain your advisors have told you, not all your ideas should be packaged in a single legislative vehicle. For instance, due to the structure of Trade Promotion Authority procedures, passage of the free trade agreements with our allies – Colombia, Panama and South Korea – is better achieved moving as stand-alone legislation. We again ask that you send those agreements immediately to the Congress for our consideration and approval.
We share your desire for bipartisan cooperation, and assume that your ideas were not presented as an all-or-nothing proposition, but rather in anticipation that the Congress may also have equally as effective proposals to offer for consideration. The American people expect us to bring together the best of both parties' ideas, and it is our desire to work together to find common ground between your ideas and ours. The House is committed to working with our Senate colleagues and your administration to confront our nation's economic and employment challenges.
Sincerely,
John Boehner Eric Cantor
Speaker
Love Boehner, hate Cantor.
Also on those free trade deals I thought the South Koreans were dead against it (and angry) over something to do with American beef? :mellow:
Quote from: Sheilbh on September 09, 2011, 02:49:03 PM
Love Boehner, hate Cantor.
Also on those free trade deals I thought the South Koreans were dead against it (and angry) over something to do with American beef? :mellow:
Korean farmers tend to congregate in front of cameras and howl and cut off fingers but that doesn't equate to the entire country being against it.
Quote from: Admiral Yi on September 09, 2011, 02:55:07 PMKorean farmers tend to congregate in front of cameras and howl and cut off fingers but that doesn't equate to the entire country being against it.
Enough to effect the legislature though?
Quote from: Sheilbh on September 09, 2011, 02:56:37 PM
Enough to effect the legislature though?
I thought it had already passed. Could be wrong.
Quote from: Admiral Yi on September 09, 2011, 02:58:53 PM
Quote from: Sheilbh on September 09, 2011, 02:56:37 PM
Enough to effect the legislature though?
I thought it had already passed. Could be wrong.
They delayed it until the US ratifies it. If it happens before 2012 then I expect Lee Myung Bak will get it through. We can expect at least one good fistfight however.
http://money.cnn.com/2011/09/09/technology/solyndra_fbi/index.htm?section=money_mostpopular&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_mostpopular+%28Most+Popular%29
Tax payer money well invested.
I wonder why a low-silicon solar panel would be attractive? 15% of the Earth's mass consists of silicon. It's not exactly a rare earth.
At a guess, I'd say the processing expense.