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Debt, Spending, & Keynesian Foolishness
#21
jt Wrote:The spenders always like to tell us that things will be better economically tomorrow than today. The public buys the line or does not care. Thus we have high spending when the economy is good and higher when it is bad.

There is no penalty for politicians lying about economics or such things, except being defeated in the next election. For most of them, that never happens in spite of their record. It is too bad that there cannot be a more tangible immediate penalty, such as congressmen loosing all of their property at the end of the fiscal year if the deficit is larger than inflation + legal population growth. This confiscated property could be given to the poor, e.g.

Curse my slackardly hide, but sadly, I've set my standards pretty low. I'd be more than willing to settle for a bunch of them losing their jobs in November. I'd gladly trade the tar and feathers for a card board box so they can haul their sh*t back back from Washington to where ever the heck they came from ... I think I posted a link here somewhere for a web site that offers just such a service.

... on that note, I think the fact that Rory Reid has followed in the footsteps of people like Cher and Prince and is now just "Rory" bodes particularly well. S2
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#22
I'll tell you what else bodes well too, with "Rory". He's about 21 percentage points behind his opponent. S6

Opps: My Bad! It's 22 points. Kick out the Entire Family, I say. :twisted:
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#23
John L Wrote:Yeah, that little Ferret faced prick needs to have his brain defragmented.

Just for clarity was that Paul "Drink yourself sober" Krugman or the over-sized garden gnome that runs the Obama slush fund? ... er ... I mean Treasury. :oops:
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#24
mr_yak Wrote:
John L Wrote:Yeah, that little Ferret faced prick needs to have his brain defragmented.

Just for clarity was that Paul "Drink yourself sober" Krugman or the over-sized garden gnome that runs the Obama slush fund? ... er ... I mean Treasury. :oops:

Yeah, that's the critter.

[Image: paul-krugman.jpg]

I believe that what we have here is someone seriously attempting to become the successor to John Kenneth Galbraith, and his leftist thinking.
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#25
[Image: ferret.jpg]

An insult to ferrets, Krugman.
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#26
This is beginning to get worse than old: President Obama urges G-20 nations to spend

Quote:TORONTO -- President Obama warned Sunday that the world economic recovery remains "fragile" and urged continued spending to support growth, an expansionist call at the end of a summit marked by an agreement among developed nations to halve their annual deficits within three years.

This is just beyond the pale, unless you are a rabid keynesian. And even after having been chastised by other Euros, who are finally getting the message, he just can't wrap his brain around the fact that frugality is the most important part of fiscal responsibility.

And here is something eles. Remember how much trouble Carter has been, since being ousted from the WH? He does nothing but spout nonsense, and violates the unwritten presidential rule of not second guessing new presidents. Do you honestly believe, for one minute, that this president, no matter how disgraced, will leave office and not continue to spout mindless economic feces to everyone?

Here is a classic from our friends over at FEE, on the issue of spending one's way into prosperity.

And note the Date of the essay.

Quote:Does Government Spending Bring Prosperity?

by Percy L.Greaves Jr.

June, 1975

Professor Greaves is a free-lance economist and lecturer. His recent books include Understanding the Dollar Crisis and Mises Made Easier (Glossary for Human Action).

Many leaders in high places now promise us that our government will never again permit poverty and depression to devastate our land. They propose more government spending as a cure for every economic evil. And millions of people believe that such a program will work.

The underlying philosophy behind political spending is not new. Similar ideas have appeared throughout all history. They came to full flower shortly after the economic collapse of 1929, when unbalanced budgets were generally accepted as necessary economic measures for relieving those in distress. You could not let innocent people starve, could you?

People pointed to idle factories, unemployed workers and their unsatisfied wants. All we need to do, they said, is to get the government to start priming the pump. A little government spending would provide the would-be workers with the wherewithal to buy the things they desperately need. This would encourage businessmen to put the unemployed to work in the idle factories. This solution sounded so simple, and its political appeal was apparent. So we tried it.

People just plumb forgot all that economists had ever taught. Many desperate persons reached for whatever share they could get of the apparent prosperity that followed. Until war changed the picture, the price they paid was chronic unemployment by the millions. Are we now asking for a repeat performance?

Most people seem to forget that the government can pay out only what it borrows or collects in taxes. They also forget one of the most elementary facts of a free economy —men who will not accept going wage rates must remain unemployed. Likewise, they fail to understand the real causes of depressions. A logical examination of pertinent data would show them that it was Federal Reserve money manipulation that brought on the depression we all deplore. We Americans truly need to know some very simple economic facts.

No free man works, buys or sells unless he fully believes that such action will bring him greater satisfaction than he could enjoy if he did not take that action. This means that in a free economy no man ever takes a job at any wage unless he believes he is better off working at that wage than he would be if he did not take it. Likewise, no employer ever employs a man at any wage unless the employer feels that he will better his situation by employing that man at that wage. So, in a free economy, employees and employers believe that they have the best available terms. When they feel otherwise, they shift jobs or employees.

In the same vein, no woman ever buys a dress unless she believes that dress will bring her more satisfaction than any other use she could make of the same amount of money. On the other side of the transaction, no storekeeper ever sells a dress unless he places a higher value on the money he receives than he does on the dress he sells. As a result of the sale, both buyer and seller are happier.

Thus, in a free economy, every freely made transaction benefits all participants. Consequently, any interference with freely made transactions must result in a decrease in the satisfaction and happiness of all persons concerned. An economy that is free from restricting regulations thus permits its people to enjoy the greatest happiness they are capable of producing.

The Proper Sphere of Government

However, in order to enjoy the full pleasures of prosperity, it is necessary for peaceful people to be protected from all robbers, thieves and fraudulent schemers who seek something for nothing at the expense of their fellow-men. For this protective purpose, men have instituted governments. Governments, like all valuable assets, have a price. This price is collected in some form of taxes. Reasonable taxes are a legitimate expense for all protected persons, property and production. Taxes are like insurance premiums. In fact, a good government might be called a form of life, fraud and robbery insurance. It is as necessary for modern society as accident insurance is for every car driver of moderate means. Without it, the risk of living, owning property and driving might well involve financial risks that only a few could afford. Good governments permit people to pursue their pleasures and production while protected from the rascals who would infringe on their rights by force or fraud. Taxes paid for this protection are an investment which permits men to pursue their personal satisfaction and prosperity as each one sees fit.

When governments spend money for other than protective purposes, they must first get that additional money. They can only get such funds by one or more of three different methods. They can amass such funds by collecting more ordinary taxes, borrowing from private savers, or simply printing the extra money they want to spend. Most modern governments use all three methods. Can such government spending increase the transactions and satisfactions of individuals and, thus, the happiness and prosperity of the people as a whole?

Hidden Costs

A most common economic error is the failure to see or realize the complete price of what one buys. People are too apt to reach for something they want now, without weighing the costs they cannot visualize at the moment. Many fail to realize that more beer and merriment today may well mean no bread or meat tomorrow.

So it is with government spending. We see the results of government spending all around us. Government services are sold at bargain rates below cost. The bureaucrats are good steady customers, and the subsidy receivers spend money more freely than those who earn it. But many do not see the complete price. They do not see the schools, homes, hospitals and factories that could have been erected if the same funds had been left in private hands. They do not see that present bureaucrats could be private citizens producing goods not now available, and that such an increase in marketable goods would tend to reduce all prices and thus increase the satisfactions and living standards of every buyer. They do not see the taxes that creep into the prices of every loaf of bread and pair of shoes, placing the prices of such necessities beyond the reach of the most needy.

When the government raises the money it spends by borrowing savings or taxing its citizens, it merely transfers spending power from private owners and to political spenders in power. This creates no new wealth. It reduces the amount private citizens can spend while increasing the amount government can spend. With less money in their pockets and bank accounts, private individuals and corporations must reduce the amounts they spend or invest. Assuming prices and wages remain the same, they must buy fewer goods and employ fewer workers on private payrolls producing what people want most.

Money spent by governments cannot create any more jobs or produce any more wealth than it can when spent by private persons. In fact, it creates less, because both the tax collectors and tax spenders must be paid a commission. Their labors add nothing to the wealth of society. The shift of the money from private citizens to political spenders must result in fewer productive jobs, and thus a smaller amount of goods and higher prices than if the money had been left in private hands.

Pattern of Production Changed

Political spending also changes the whole pattern of the nation’s productive forces. If the government spends its money by giving out subsidies to one privileged group, the productive facilities of the country are then partially directed toward satisfying the desires of that group instead of the desires of those who originally earned the money. Many workers and investors must shift from producing goods and services for customers who earn their money, to producing goods and services for those who first receive the dollars distributed during the government’s spending spree.

Then, too, much government spending is not based on the economic principle of getting the most for the least. This permits political spenders to grant privileges to their friends. Such political plums provide more satisfaction and prosperity for nonproducers at the expense of producers. The net result must always be a reduction in the production of wealth. Any such reduction in the quantity of goods and services available in the market tends to raise all prices and thus reduce the satisfactions and living standards of every buyer in that market. So spending to help one group, laudable as it may seem, does not, and cannot, create general prosperity.

Diversion to War

If the government spending is for war or defense, then some of the nation’s investors and workers must go to work producing munitions and military supplies. All the savings and workers so engaged are withdrawn from industries satisfying the private needs and wants of individual consumers. The end result, of course, is a reduction in the satisfaction of the needs and desires of all those who prefer consumer goods over war goods. The nation may have full employment, but individuals must certainly get along with fewer consumer goods. Such lower personal satisfactions have never been considered greater prosperity.

The only reason men and factories are ever unemployed is that they will not produce what consumers want most at prices consumers can and will pay. Both men and factories can always be employed, if they will accept market wages and prices. When they consider these too low and rely on government to pay higher than market wages and prices with funds obtained from private citizens, the immediate result must always be unemployment or lower wages for those formerly engaged in satisfying the desires of those whose money the government now spends. Unless supported in idleness, these workers will soon gravitate to those industries or pursuits that benefit most from the increased government spending. Their competition will bring wages down to market levels, and then no workers will any longer benefit from the increased government spending.

Any switch of money from private owners to political spenders can only result in a redirection of the nation’s productive forces and temporary gains for those who first receive the government orders or subsidies. In the end, a readjustment of the nation’s productive forces will become necessary. During the interim, total human satisfactions will be reduced and the general welfare will suffer.

Danger of Depression?

The question now asked is whether a substantial reduction in present government spending would create a depression. Under the present restrictive labor and monetary laws, the painful readjustment might well be long and severe. Under a free economy, with free market wages and interest rates, the necessary readjustment could be quickly made and soon everyone would be enjoying a much higher living standard.

If the government reduces both taxes and spending, it will leave more money in private hands. This money then can, and will, employ more people at higher real wages to make more of what people want most. The nation’s productive forces would be redirected toward satisfying the wants of productive persons, rather than satisfying those who were the recipients of government expenditures. In a free market economy, every worker and investor tends to seek those outlets which will produce what consumers want most, as indicated by the wages and prices consumers will pay. So workers and investors now engaged in satisfying political spending would soon find more profitable outlets satisfying the increased spending of private producers. Everyone would soon have more. That is not a depression. That is prosperity.

Results of Inflation

In cases where the government prints the money, either directly or indirectly, by first printing bonds and then issuing new money with only its own bonds as security, the result is inflation. Inflation is a tax on everyone who owns or is owed a dollar. Its effects are more hidden than those of other taxes. Another important difference is that inflation transfers economic wealth from one group of people to another group, as well as from private citizens to their government. The inflation tax is a boon to all who owe dollars and a burden on all who are owed dollars. It changes the values of every contract that specifies a future payment in dollars. It reduces the value of the money involved. This is a temporary boon to the payer but, in effect, a tax on the recipient.

Under such inflationary conditions, wise businessmen become hesitant about signing long-term contracts, so necessary for our present-day complicated production system. Government inflationary spending thus places an additional damper on prosperity, over and above all drawbacks and redirection of productive forces brought about by government spending of funds amassed by taxes or bond sales.

Those who first receive the newly printed money are able to buy a part of the nation’s production without having made any contribution. They must profit at the expense of all those who have contributed to the total production offered on the market place. Since the rewards of productive contributors are less, some will retire or reduce their future contributions to the market. Production will be further reduced by the fact that some of the printed money recipients are supported in nonproductive pursuits. Total production must, therefore, be lower. This means there will be less for everyone who spends dollars in the market place.

Taxes which raise prices or curtail private spending cannot increase total human satisfaction. Increased taxes reduce the voluntary transactions of a free people and thus reduce their total satisfactions. Contrariwise, any reduction in government spending and taxing will increase the individual transactions of a free people and thus their individual satisfactions and prosperity.

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#27
Rather than start a new thread on Obamanomics and his refusal to acknowledge the importance of fiscal responsibility, I have added to the title in order to wrap in more territory.
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#28
No our little ferret faced Keynesian loudspeaker is using the one word that his fellows rarely admit exists. It's the dreaded "D" word: Deflation. And he is using this, in order to inject a little truth to run interference for the kooky ideal of more taxes and higher spending.

You have to admit, no matter how things disprove him, he never gives up.
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#29
We've had Obama making the G20 "spending plea",Obama make the domestic political "agree to raise taxes or we'll kick your can in 2010 on the deficit" challenge yesterday and today Steny Hoyer repeats the challenge.

It is co-ordinated and it is awesome they have chosen to take the raise taxes and spend side of the domestic economic issue.

NOW,if the Republicans simply allow intellectuals like Paul Ryan to frame the counter side of the argument there could truly be a massive turnover in 2010.
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#30
Palladin Wrote:NOW,if the Republicans simply allow intellectuals like Paul Ryan to frame the counter side of the argument there could truly be a massive turnover in 2010.

I hope you are not holding your breath Patrick.
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#31
John, sometimes you disappoint me. Who do you expect to speak out if not people like Paul Ryan. He made the call early on that he is not ready to run for a higher office yet, and is satisfied to frame the debate, and give support to all those trying to take back the GOP.

Many, many Tea Party candidates point to Paul Ryan's website, when asked about how they view the issues. Many incumbents on all sides, including the RINOs in the GOP, will fight the movement, but it is the GOP, in the end, which will prosper from the candidates running on the Ryan platform.

At the present, I see no better place to put my support, because these are the issues that matter.
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#32
WmLambert Wrote:John, sometimes you disappoint me. Who do you expect to speak out if not people like Paul Ryan. He made the call early on that he is not ready to run for a higher office yet, and is satisfied to frame the debate, and give support to all those trying to take back the GOP.

Many, many Tea Party candidates point to Paul Ryan's website, when asked about how they view the issues. Many incumbents on all sides, including the RINOs in the GOP, will fight the movement, but it is the GOP, in the end, which will prosper from the candidates running on the Ryan platform.

At the present, I see no better place to put my support, because these are the issues that matter.

Bill, sometimes you disappoint me. If you will go back and look at my post, you will clearly see that I was not using Mr Ryan as the subject, but the Republican Party. Ryan was the 'object'.

Let's revisit Patricks statement, which I responded to.

Quote:NOW,if the Republicans simply allow intellectuals like Paul Ryan to frame the counter side of the argument there could truly be a massive turnover in 2010.

Did you get that? Bill, like me, you need to slow down sometimes.

S6
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#33
No, John, I understood your post. You never can resist the opportunity to tear down all the GOP RINOs who need to be replaced - but at the expense of the pro-Paul Ryan types who could bring the party back to what it could be.

I'm disappointed because you could have encouraged the Tea-Party types in their attempts to win, but instead focus on those we want to defeat being too strong to take on.

I see no hope for third party candidates, and think those pushing for them will just take two to five percent away from those running against Democrats and keep them in power.
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#34
WmLambert Wrote:No, John, I understood your post. You never can resist the opportunity to tear down all the GOP RINOs who need to be replaced - but at the expense of the pro-Paul Ryan types who could bring the party back to what it could be.

I'm disappointed because you could have encouraged the Tea-Party types in their attempts to win, but instead focus on those we want to defeat being too strong to take on.

I see no hope for third party candidates, and think those pushing for them will just take two to five percent away from those running against Democrats and keep them in power.

No Bill, I am not against Tea Party candidates. I am against the Republican establishment. I thought you already understood this.
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#35
Newt Gingrinch is also a very,very effective spokesman for free enterprise,low tax regime,restrained spending,etc.

I think Mitch Daniels probably is,Pawlenty probably is.

Bottom line,can the GOP unite around a counter position of spending restraints(doesn't need to be radical,just do away with most of ObamaCare and offer to reform SS in a long term fashion),tax rate lowering,stable monetary policy?

If so,I am optimistic come 2010 and 2012. The weird thing is the democrats typically run away from their statist stuff come election time,they have now chosen to run on it as a legitimate offering to the people.

BRING IT!!
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#36
Palladin Wrote:...Bottom line,can the GOP unite around a counter position of spending restraints(doesn't need to be radical,just do away with most of ObamaCare and offer to reform SS in a long term fashion),tax rate lowering,stable monetary policy?
No. The GOP will never unite totally about anything - which is a large part of its problems. Let's face it. The Left doesn't really care about individual issues. They are collectivists on issues as well as policy. A tree-hugger has different issues than a simple Statist, but when it comes to garnering power, they are all on the same page.

Knowing that, the Right needs to recognize they can accomplish most of their issues and do away with most of ObamaCare - even if they have differences in some areas. What kills the Right is the hubris of "my way or the highway" and losing in detail what they could win with teamwork.
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#37
Palladin Wrote:Newt Gingrinch is also a very,very effective spokesman for free enterprise,low tax regime,restrained spending,etc.
Gingrich likes the role of wise pontificator, hero of the contract with America.

I am not so sure his message will stir the voters. Too dry, too intellectual, some fire or something else seems missing to me. Perhaps I am wrong. He certainly has impressed Fox News, which has been paying him big bucks.

Ryan makes his points very well on Fox. More conviction, more fire.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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#38
jt Wrote:...Too dry, too intellectual, some fire or something else seems missing to me.
Ever heard any of Gingrich's many lectures to his students? Hardly dry or too intellectual. He was one of the few professors I've heard who made his classes interesting, and on point.

The two greatest things that took down Gingrich was Bonior going after him in the Ethics committee, and the media steamrolling him. They made the estrangement with his wife appear to happen on her deathbed, and misrepresented every single thing he said or did for two long years. No one is perfect and Gingrich has his flaws, but the Satanic representation of him by the media destroyed his effectiveness. I think he was so thoroughly reduced that he has zero chance at nationwide office.
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#39
No, I never heard any of his lectures. I just listen to him occasionally on Fox.

Being a dynamic lecturer in academia is not the same as being a dynamic campaigner.

Yes, he was tarred and feathered by the MSM, but he quit. Like Gore and Clinton, he has found that life is better, easier and more remunerative out of office. Adulation (even by a few) is easier to endure than a tough fight.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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#40
jt Wrote:Yes, he was tarred and feathered by the MSM, but he quit. Like Gore and Clinton, he has found that life is better, easier and more remunerative out of office. Adulation (even by a few) is easier to endure than a tough fight.

Agreed. However, what Bill will not state here is that what really brought Gingrich down was Hubris, and poor political leadership skills. Getting to the Big Dance is one thing, as Obama has discovered. But being a good dancer is another. Gingrich is a great thinker, but not a great leader. Huge difference.
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