Confusion about the deficit

Discussion in 'Politics' started by Ricter, Jun 2, 2012.

  1. Mercor

    Mercor

    Earth's Magnetic Poles May
    Be About To Switch
    By Paul Simons
    The Guardian - London
    7-6-2

    The Earth could be about to turn upside down. The planet's magnetic field is showing signs of wanting to make a gigantic somersault, so that magnetic north heads towards Antarctica, and magnetic south goes north. Compasses will point the wrong way, and migrating birds, fish and turtles are going to be very confused.

    Just when this will happen, how long it will take and what the consequences will be, is difficult to fathom. What is not in doubt, though, is that it will happen.
    http://www.rense.com/general26/poles.htm
     
    #11     Jun 2, 2012
  2. BSAM

    BSAM

    LOL
     
    #12     Jun 2, 2012
  3. Ricter

    Ricter

    #13     Jun 2, 2012
  4. Ricter

    Ricter

    Now that is a fair point. As we can see today, the experts do make errors. Undoubtedly they will again.

    So for evidence, what do you need? Examples from our own history which demonstrate that government spending on the private sector, during a balance sheet recession, in an environment where significant capital is idle, created jobs and got a virtuous circle of consuming and supplying going again?
     
    #14     Jun 2, 2012
  5. Mav88

    Mav88

    Errors? Mistyping libiral, that's an error, what we are talking about is a fundamentally flawed way of approaching economic policy.


     
    #15     Jun 2, 2012
  6. Ricter

    Ricter

    Massive inflation...

    http://www.usinflationcalculator.com/inflation/historical-inflation-rates/

    I think so...

    <img src="http://www.usgovernmentdebt.us/usgs_line.php?title=US%20Gross%20Domestic%20Product%20GDP%20History&year=1950_2010&sname=US&units=b&bar=0&stack=1&size=m&col=c&spending0=293.7_339.3_358.3_379.3_380.4_414.7_437.4_461.1_467.2_506.6_526.4_544.8_585.7_617.8_663.6_719.1_787.7_832.4_909.8_984.4_1038.3_1126.8_1237.9_1382.3_1499.5_1637.7_1824.6_2030.1_2293.8_2562.2_2788.1_3126.8_3253.2_3534.6_3930.9_4217.5_4460.1_4736.4_5100.4_5482.1_5800.5_5992.1_6342.3_6667.4_7085.2_7414.7_7838.5_8332.4_8793.5_9353.5_9951.5_10286.2_10642.3_11142.2_11853.3_12623_13377.2_14028.7_14369.1_13939_14526.5">

    and

    <img src="http://4.bp.blogspot.com/-cOLHaJP2uBw/TaEkvR06ZrI/AAAAAAAAPLI/23zHYVsID7s/s400/productivity.gif">
    "The chart above shows the "Productivity change in the nonfarm
    business sector, 1947-2010" (Source: BLS).... Instead of the
    "Great Stagnation," maybe we're in the "Great Accelerating
    Productivity Surge"?"">

    Given the growth of GDP, and particularly productivity, one would think the working man's lot would have improved over the past 30 years, but it has not. Why? Because he has to OWN those things to receive the benefits of those things. As for two incomes, that started with the surge of consumerism, families want more stuff and it takes two to get it. Is that all of the reason? No--see my point above about ownership.

    Crowding out... a real possibility, it does occur. How to discover likely environments? Interest rates are one way:

    <img src="http://www.ritholtz.com/blog/wp-content/uploads/2010/08/1790-Present.gif">

    Big competition for money back in the 80s, but we knew that. Lately? Nothing out of the ordinary.

    They inflated, yes, but as the history indicates, at an easy to take rate, ie. a targeted rate. The alternative? Playing with deflation, or at least everyone just sitting on capital.
    Spending has been rising, yes, and one could (and many do) argue that our entitlements have grown too large, though clearly that's mainly a cultural "norm" argument, until the mathematics, which we're discussing, indicate differently. Belt tightening? It works for a family budget, because ordinarily cutting spending doesn't mean the wage earners of that family have their pay cut as a further result of those spending cuts. For the government budget, during a demand-constrained recession (to put it another way), cutting spending basically does nothing more than reduce sales which immediately cuts income, hence, the death spiral. Maybe those sales need to be reduced, we'll look to interest rates for signs of excessive competition from government.

    Greedy bastards shipping jobs overseas? Those are responsible corporate decisions based on the mandate to return to investors. I don't entirely like those rules, I'd like to change those rules, but they are the rules today.

    Edit: sorry about the wide chart, I hate side-scrolling.
     
    #16     Jun 2, 2012
  7. jem

    jem

    Ridiculous article. Riddled with faulty assumptions.

    1.The first one being... assume the debt is never paid off.
    2. The second being debt has not remained a constant share of GDP.
    3. Suppose all the debt is owned domestically...

    and more.

    Plus, it sort of admits govt sector could crowd out. I think it neglects the insidious tax and destruction of standard of living which is inflation.


     
    #17     Jun 2, 2012
  8. jem

    jem

    1. you don't believe those inflation numbers do you.
    gas, food, and everything you spend money on have been taken out of the inflation numbers.

    Using the 1980 measure we are averaging 10 percent inflation a year.

    http://www.shadowstats.com/alternate_data/inflation-charts

    2. If you put GDP in real terms it is negative...

    http://www.shadowstats.com/alternate_data/gross-domestic-product-charts

    This spending and these policies have really destroyed our economy.
    Now we got fools like Krugman saying spend more.

    25 years of no growth.
    Have we not had enough over spending yet?





     
    #18     Jun 2, 2012
  9. Lucrum

    Lucrum

    Actually it's a fucking fairy tale intended to keep people like you living in never never land.
     
    #19     Jun 2, 2012
  10. Nothing taxing rich people can't solve.
     
    #20     Jun 3, 2012