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Debt, Spending, & Keynesian Foolishness
#1
I dedicate this thread to being one of "Debt Watch", and I christen it with this:

http://www.washingtonpost.com/wp-dyn/con...id=topnews
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#2
OK,here's the bad news. Those proposed "middle class tax cuts" ain't never gonna happen. They're already in a frantic search for new tax revenue.

Which means that long term the deficit will be even worse than predicted due to lower economic growth/tax revenues.

I predict possibly in this term for our POTUS a measure transferring all retirement accounts into "super social security" accounts with a limited ROI(maybe 3%) guaranteed. That would give the state a couple of trillion overnight,then they would make the payouts like they do regular SS,via a Ponzi scheme.
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#3
http://www.cracked.com/phpimages/topic/4...1268254457

Banks cost us more than the Nazis...
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#4
Tait, please check your link. If it will not work properly, then change the "img" to "url", so we can link to it.
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"Falsehood flies, and truth comes limping after it" - Jonathan Swift, 1710
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#5
John L Wrote:Tait, please check your link. If it will not work properly, then change the "img" to "url", so we can link to it.

It's nothing seriously authoritative.
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#6
It is nice to see that people are getting alarmed by the debt/spending situation. They should be alarmed. Debt has become a way of life for governments and many citizens, and now it has become outrageous.

Long ago, Regan formed the Grace Commission to examine gummint waste, which they did, and then it made some proposals. Grace was quite angry that even Regan did not follow up, and founded the group "Citizens Against Gummint Waste". There was also a constitutional amendment that almost got enough state legislators to put it before the congress. However, both of these things just faded out.

Thanks to BHO et al, the issue is now a hot one.

We have Greece, NY, California and prime examples of the end game of excess debt to boot.
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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#7
They hope to send the debt to a parrallel universe. S2
Yet technicaly no parrallel universe has been discoverred so far...
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#8
And the Beat Goes On: Federal debt tops $13 trillion mark. But here is something that is a little easier to wrap one's mind around.

Quote:At $13 trillion, that figure has risen by $2.4 trillion in about 500 days since President Obama took office, or an average of $4.9 billion a day. That's almost three times the daily average of $1.7 billion under the previous administration, and led Republicans on Wednesday to place blame squarely at the feet of Mr. Obama and his fellow Democrats.

That's simply horrible. But note the excuse the S&Gs are giving. That's akin to saying that the next door neighbor is more terrible, because he screws around on his wife every week, while you only do it once a month. Jesus! This does notenhance credibility IMO. It only makes one just less terrible, but still terrible none the less.

In all honesty, this is where I come down on the side of the Austrians, and not on the Supply-Siders. S-Ss don't really worry much about debt. As long as they can keep ahead of the debt, by increasing revenues, they are as happy as a 'bug in a rug'. But you have to keep ahead of debt. And all it takes is for one Bush to come in, and start spending like the drunken Sail..........................sorry about that. didn't mean to malign sailors. And then if you follow it with a SpendThrift, like Obama, the defecation is going to strike the rotating oscillator. And you can definitely count on that one.

Austrains stress the spending part. Quit overspending, and then the incentives will make you even richer and healthier. And they are correct too.
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"Falsehood flies, and truth comes limping after it" - Jonathan Swift, 1710
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#9
$10T is more than $30K per person, young or old.

Lotsa debt. How could it be paid back?
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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#10
jt Wrote:$10T is more than $30K per person, young or old.

Lotsa debt. How could it be paid back?

Well, first of all, I understand that if the Feds would just freeze spending for about five or six years, we would be able to start operating in the black again.

Of course, that still doesn't address the real problem which the Austrians have been crying about for years. We over spend like Drunk.......................sorry there, I forgot we have a few 'apes' here on the site. No offense. :oops:

Incidentally, I forgot what the slang for engine room sailors happens to be. Could someone jog my memory here?
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"Falsehood flies, and truth comes limping after it" - Jonathan Swift, 1710
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#11
JohnL Wrote:Well, first of all, I understand that if the Feds would just freeze spending for about five or six years, we would be able to start operating in the black again.

That assumes the economy picks up and tax revenues don't fall. It also assumes politicians can wait 5 or 6 years before resuming their old habits.
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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#12
While back there was a chart of our debt to GDP ratios compared to Greece's. Ours was not as bad,but,alarmingly close.
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#13
Geece's debt per capita is $60K (€50K). Twice as much as the US with an economy twice as less performant.
Greece was technicaly in default. In that respect, being halfway to a Greek situation is alarming.
The PIIS (piigs less Greece) are also halfway to Greece. So is the US.
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#14
The greece debacle infuriates me because the US media loves to point a finger, but seems to forget that our own states are already going bankrupt one after the other. People should keep a watchful eye on California, Nevada and New York.

I also heard recently that the state of Idaho is also issuing IOUs because their cash ran out and their new budget had not yet been passed.

Do not underestimate how much money in state and municipal bonds are running around out there.
"And down through the centuries the robes have never failed to keep the public at a respectful distance, inspire a decent awe for the professions, and impart an air of solemnity and mystery that has been as good as money in the bank. The four faculties of theology, philosophy, medicine, and law have been the perennial seedbeds, not only of professional wisdom, but of the quackery and venality so generously exposed to public view by Plato, Rabelais, Molière, Swift, Gibbon, A. E. Housman, H. L. Mencken, and others. What took place in the Greco-Roman as in the Christian world was that fatal shift from leadership to management that marks the decline and fall of civilizations." - taken from a speech by Hugh Nibley
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#15
If you remember this graph,
[Image: wapoobamabudget1.jpg]

balance it with this new finding.

Folks we are screwed.
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#16
Debt is all over the place.

Countries across Europe are under pressure to tackle their deficits that were deepened by the financial crisis and governments own response to it. Some economists fear that moves by countries ranging from Britain to Spain to rein in public spending at the same time will set back a global recovery.

The party that ensued after the collapse of the Soviet Union is over. Cutting and saving will have to be done. That will affect trade unless the powers are intelligent enough to formulate a business/trade friendly environment, as Chile did after Allende was convinced to commit suicide. The notable fact in that case was that Chile brought home a number of business friendly economics PhD's from the U. of Chicago (M. Friedman's bailiwick) and one from Harvard. In addition, much of medical care and retirement plans were privatized. There were bumps in the transition, but Chile is a remarkable example how things can be done right. The sad fact is that they had a ruthless military government for a decade or so in order to do this.

ref: N. Ferguson "The Ascent of Money" p. 212ff.

Can elected officials perform the same magic? Regan and Thatcher did to a limited extent.
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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#17
WmLambert Wrote:If you remember this graph,
[Image: wapoobamabudget1.jpg]

balance it with this new finding.

Folks we are screwed.

If we could apply windings around John Maynard Keynes remains we could really generate a good deal of energy. His theories aside, he never EVER envisioned perpetual deficits. To hear a guy like Paul Krugman chastise Europe and Japan for pursuing austerity is simply breathtaking. The prodigious professor pleads and plies with prophesies and pontification. He is a preacher of promissory prosperity ... a virtual platypus of punditry. But what part of we won't EVER "start to save" if we NEVER get around to deciding to "start to save" does HE not understand? The hypocrisy is stunning. When an individual does dumb things that annihilate wealth (like taking on an unaffordable mortgage, not making payments, and then living for 'free' until the sheriff comes) that's BAD ... but when the Obama Administration and the F'ED does it it's somehow GOOD??? How is this even faintly possible for any reasonable human being to reconcile? The genuine absurdity here is that the $15-20+ Trillion under discussion is probably an order of magnitude less than the liabilities associated with Social Security and Medicare ... Shock Shock Shock Shock

I was planning a trip to the Home Depot today to pick up a load of bullsh*t for my garden, but on second thought maybe I could just get Tim Geither to talk to it?

The Elfin Wrote:"They (Europe) need to make the choice of what makes the best choice for their country -- it's going to differ across countries," Geithner said. "We're not in a position to figure out what the best mix of policies are, given what their politics are, that's the choice they have to make. But our job is to make sure we're all sitting there together, focused on this challenge of growth and confidence because growth and confidence are paramount."

Geithner, who will participate in the G20 summit this weekend in Toronto, said member countries all agree on the need to restore fiscal responsibility and bring down deficits to sustainable levels, but said the bulk of that should come after growth resumes.

"We've laid out very ambitious plans for doing that as well, and those will start to take effect as they are everywhere as the economy recovers and growth (is) restored," he said. "We're in a very good position now of being able to deliver relatively strong growth rates to what we're seeing in the other major economies, but I think the world understands now that the world, growth in the future around the world, can't depend on the United States as much as it did in the past."

Although Geithner has pressed the need for countries with fiscal capacity to keep spending to cement recovery, he said U.S. deficits were on track to decline "on a pace very rapid, very extreme relative to almost any other country around the world."

He said low U.S. interest rates and the relative strength of the dollar were a sign of investor confidence in America's ability to deliver a more sustainable fiscal position.

"Our deficit will fall dramatically as the economy recovers and as the emergency stimulus actions we put in place in crisis expire as they will," Geithner said. "So I think we have a very strong commitment to a responsible fiscal path for the future and you see that confidence in how investors, American and global investors, are behaving every day."
"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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#18
Yeah, that little Ferret faced prick needs to have his brain defragmented.

Here is what happens with certain concepts. Things written by Marx and Keynes. With Marx, he was a democrat, and would have been worse than appalled at the one hundred million plus victims his writings caused.

Same thing with Keynes. I'm certain he had no idea the the Collectivist Left would take his theories and apply it to their twisted ideology.

The problem with the idea is not necessarily the idea itself. it is the actions of true-blue believers, who take the ball and run with it, to all extremes. That's why those ideals need to be thoroughly discredited, and the systems they created thoroughly destroyed.
___________________________________________________________________________________________________
"Falsehood flies, and truth comes limping after it" - Jonathan Swift, 1710
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#19
Yeah, it's a case of the horse running the race, now, jockeys unnecessary.

It is said Keynes wrote his theory to cover his wish-list, so he definitely would not recognize its application today. It is now primarily used as a dictionary of terms to explain why things don't work the way they were predicted.

However; experts need some gobbledy-gook to distinguish themselves from run-of-the-mill people who are smarter at their jobs than they are.

It is like that in everything, and is a root cause of so much stupidity from elitists. They truly think what they say makes sense - even though they are constantly wrong. Their framework of interrelated ideology covers their mistakes, and they never seem to learn from their mistakes. This is the stuff they were taught in school by other elitists who didn't know any better, and is held religiously as fundamental principles.

Just because it doesn't work doesn't slow them down much.

I think the one course that should be taught in school is logical thinking.
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#20
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.
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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