The National Deficit (easily explained)

[fraga]

http://i.imgur.com/d0RsV.jpg

:bang

[greyforest]

its okay though they are just printing up money to fix it! that works, right???

[Yonivore]

And, the head of the household will be getting a pay cut if our fiscal policy continues. Expect that salary to drop below $20,000.

[ElNono]

Let me preface what I'm going to say with: the situation definitely needs to be corrected.

Comparisons between government and household are always pretty retarded because there's quite a few fairly huge differences between them. As a matter of fact, I find such comparisons really a poor scare tactic for the average joe that has no clue about economics, so they dilute it to a case that seemingly they can understand, but really has no connection with reality.

Differences:
- Government controls the monetary flow, and can print money. No household can do that.
- Government control it's salary (taxes) and can raise it or lower it. No household can do that.
- Under the current fiscal scenario, a household would have a hard time finding a lender. The Government right now, under this fiscal scenario, has no problem finding a willing lender (ie: China).

[Yonivore]

Let me preface what I'm going to say with: the situation definitely needs to be corrected.

Comparisons between government and household are always pretty retarded because there's quite a few fairly huge differences between them. As a matter of fact, I find such comparisons really a poor scare tactic for the average joe that has no clue about economics, so they dilute it to a case that seemingly they can understand, but really has no connection with reality.

Differences:
- Government controls the monetary flow, and can print money. No household can do that.
Inflation. Bad.


- Government control it's salary (taxes) and can raise it or lower it. No household can do that.
Government has no idea how to control its salary. Well, this government, anyway. Everything they've tried has driven their salary down. Bad.


- Under the current fiscal scenario, a household would have a hard time finding a lender. The Government right now, under this fiscal scenario, has no problem finding a willing lender (ie: China).
There's concern the government will encounter a similar difficult without demonstrating some fiscal restraint.

Funny you should leave out the one strategy that might actually bear fruit.

The government can stop spending so fucking much.

[coyotes_geek]

The household comparison is certainly an imperfect one, but that doesn't mean we wouldn't be much better off if Washington tried to approach the situation in that way.

[ElNono]

Inflation. Bad.

Household can't do it, and that's the point.


Government has no idea how to control its salary. Well, this government, anyway. Everything they've tried has driven their salary down. Bad.

Not really true, for a number of reasons. First off, it's Congress that dictates tax policy, not the executive. Second, raising taxes on millionaires has been proposed more than once, IIRC (including the latest job bill). The GOP and certain democrats oppose it. So, it's not that it can't be done, there's simply opposition to it. Notice that I'm not arguing whether it's a good idea or not, but government certainly has the capacity to regulate their income up to an extent in a whim, and households certainly cannot (short of getting another job where they still have no control over their salary).


There's concern the government will encounter a similar difficult without demonstrating some fiscal restraint.

Not by lenders. China has a direct interest in keeping lending to the US.


Funny you should leave out the one strategy that might actually bear fruit.
The government can stop spending so fucking much.

If you wouldn't be senile, you would have noticed I was pointing out the differences between government economy and household economy. They both can stop spending so fucking much, thus there's no difference there.
And I did point towards that in my preface.

[boutons_deux]

Critics Still Wrong on What’s Driving Deficits in Coming Years

http://www.cbpp.org/images/cms//12-16-09bud-rev6-28-10-f1.jpg

===

A country isn't a for-profit corporation, a country isn't a family. Your simile stinks

[scott]

The government can stop spending so fucking much.

Can you list your $1.65 Trillion in spending cuts?

[scott]

For further reference: in 2003, Federal Spending was 2.16 Trillion - which would give us a balanced budget right now. Not that I particularly support this plan, but I would at least think ONE member of Congress would just say "Why don't we just use this budget?" and see where the conversation goes from there.

[RandomGuy]

For further reference: in 2003, Federal Spending was 2.16 Trillion - which would give us a balanced budget right now. Not that I particularly support this plan, but I would at least think ONE member of Congress would just say "Why don't we just use this budget?" and see where the conversation goes from there.

So what you are saying is that Bouton's graph made a good point.


:stirpot:

[RandomGuy]

Inflation. Bad.


Government has no idea how to control its salary. Well, this government, anyway. Everything they've tried has driven their salary down. Bad.


There's concern the government will encounter a similar difficult without demonstrating some fiscal restraint.

Funny you should leave out the one strategy that might actually bear fruit.

The government can stop spending so fucking much.

Recessions reduce tax revenues, and increase demands on social safety net programs, automatically increasing spending. That is hardly evidence of some kind of runaway spending binge, it is a rather predictable event.

That it seems to surprise people is more indicative of people's general ignorance of economics and finance.

We just need to bite the bullet, increase taxes for a while, until we pay down the debt to something more manageable.

If the debt is bothering you, then perhaps the next time some Republican president gets all rah-rah about cutting taxes, you can grow a pair and ask him how he is going to pay for it, instead of sucking up the cool-aid of debunked supply-side economics.

[101A]

Recessions reduce tax revenues, and increase demands on social safety net programs, automatically increasing spending. That is hardly evidence of some kind of runaway spending binge, it is a rather predictable event.

That it seems to surprise people is more indicative of people's general ignorance of economics and finance.

We just need to bite the bullet, increase taxes for a while, until we pay down the debt to something more manageable.

If the debt is bothering you, then perhaps the next time some Republican president gets all rah-rah about cutting taxes, you can grow a pair and ask him how he is going to pay for it, instead of sucking up the cool-aid of debunked supply-side economics.

Liberals love to say "debunked" supply side economics.

When do we get to say "debunked" war on poverty.

or

"debunked" Keynesian theory

hell, every entitlement program ever enacted costs exponentially more than it's designers and proponents ever claimed it would .... can we say all of those are "debunked"?

AT LEAST with supply side there are SOME graphs that show increased revenues after taxes are cut (I am not a proponent, btw, just have a problem with the word "debunked" coming from the side that has yet to get anything, ever, right.)

[MannyIsGod]

Anything ever right?

:lol

Yeah - liberals have never gotten anything, ever, right.

[scott]

So what you are saying is that Bouton's graph made a good point.


:stirpot:

Well... not really, because "tax cuts" and "economic downturn" are not expenditures.

I'm saying take our current level of revenue (which includes those two items) and apply a budget that fits, and see what works and what doesn't work out it. The different between the expenditure today and the expenditure in 2003 is much more than the other 3 items listed on that chart.

In the exercise I'm proposing, the results will be predictable: both Republicans and Democrats will find some things that exist in the current budget, that didn't exist in 2003, that they simply can't live without.

My point is that I don't think any politician is capable of producing a budget with only $2.17 trillion in spending - and I'm even giving them the benefit of the doubt and assuming revenues will remain completely unaffected as a result of those cuts.

[101A]

Anything ever right?

:lol

Yeah - liberals have never gotten anything, ever, right.

Economically, yeah, pretty much.

[DUNCANownsKOBE]

Economically, yeah, pretty much.
Yeah, except Democrats called bullshit on trickle down economics from day 1.

[MannyIsGod]

Economically, yeah, pretty much.

:lmao

[scott]

"debunked" Keynesian theory

I see this quite a bit, and I'd just like to point out that Keynesian thought hasn't been the prevailing school in monetary policy or economic theory in general for a very long time. The "neoclassical synthesis" school really began to take over in the mid-50s, early 60s, where 90% of Economics stopped identifying themselves as either Keynesians or anti-Keynesians. From that point, all but the fringes generally acknowledged that the carte blanche acceptance of any single school of thought was a mistake and that to some degree, they all had something to offer (ground breaking, right? Almost 60 years later and Politicians have yet to come to the same realization).

Today, there is a growing school of thought called the "New Neoclassical Economics" school which attempts to overcome some of the normative bias found in Neoclassical Economics.

[101A]

I see this quite a bit, and I'd just like to point out that Keynesian thought hasn't been the prevailing school in monetary policy or economic theory in general for a very long time. The "neoclassical synthesis" school really began to take over in the mid-50s, early 60s, where 90% of Economics stopped identifying themselves as either Keynesians or anti-Keynesians. From that point, all but the fringes generally acknowledged that the carte blanche acceptance of any single school of thought was a mistake and that to some degree, they all had something to offer (ground breaking, right? Almost 60 years later and Politicians have yet to come to the same realization).

Today, there is a growing school of thought called the "New Neoclassical Economics" school which attempts to overcome some of the normative bias found in Neoclassical Economics.

No idea whether to say, "Yeah" or "Bullshit" to this post. Have a feeling I'm supposed to disagree, but not really sure.

Just being honest, no economics classes in my quiver whatsoever.

Oh, and isn't the liberal icon Krugman a big proponent of Keynes?

[RandomGuy]

[Liberals have never gotten anything economically right]

http://spurstalk.com/forums/picture.php?albumid=219&pictureid=1579

Come on, man, you know better than that.

Always be skeptical of sweeping, blanket statements.

yeah, that was intentional irony/paradox.

That has about as much validity as saying that conservatives have never gotten anything economically right.

[101A]

http://spurstalk.com/forums/picture.php?albumid=219&pictureid=1579

Come on, man, you know better than that.

Always be skeptical of sweeping, blanket statements.

yeah, that was intentional irony/paradox.

That has about as much validity as saying that conservatives have never gotten anything economically right.

You're no fun.

Conservatives, at least the modern version, haven't gotten anything right (that's actually become policy), either. I don't have a problem with the tax cuts, but they MUST come with spending cuts. If we are going to invade countries, we've got to pay for it...etc....etc....

I've got 15,000,000,000,000 reasons why neither of our blanket statements are far off the mark.

[scott]

No idea whether to say, "Yeah" or "Bullshit" to this post. Have a feeling I'm supposed to disagree, but not really sure.

Just being honest, no economics classes in my quiver whatsoever.

Oh, and isn't the liberal icon Krugman a big proponent of Keynes?

Don't know why you're supposed to disagree, or anyone for that matter. I'm not making an argument, or even saying that the New Neoclassical School is the right one, just telling you the way things are in Economics these days.

Krugman isn't a monetary economist, where these schools of thought are typically applied, but he could probably be pegged as a Neoclassicist based on his influences (which do include Keynes, but also Hicks and Tobin).

I think it's all too easy for folks to want to peg a certain economist into a certain school based on certain arguments they make - but that would be just as foolish as saying Ron Paul is a far lefty because he believes the government should have no say in gay marriage or marijuana.

Also, while Krugman (or anyone else) may be part of the New Neoclassical School (or the Neoclassical School) that isn't to say they epitomize or are a good representative of that school. These schools merely lay the critical framework for analysis; they don't come up with conclusions. The vast majority of economists these days come from the same school of theoretical foundation - but come up with EXTREMELY divergent ideas of the way to tackle issues.

[101A]

Don't know why you're supposed to disagree, or anyone for that matter. I'm not making an argument, or even saying that the New Neoclassical School is the right one, just telling you the way things are in Economics these days.

Krugman isn't a monetary economist, where these schools of thought are typically applied, but he could probably be pegged as a Neoclassicist based on his influences (which do include Keynes, but also Hicks and Tobin).

I think it's all too easy for folks to want to peg a certain economist into a certain school based on certain arguments they make - but that would be just as foolish as saying Ron Paul is a far lefty because he believes the government should have no say in gay marriage or marijuana.

Also, while Krugman (or anyone else) may be part of the New Neoclassical School (or the Neoclassical School) that isn't to say they epitomize or are a good representative of that school. These schools merely lay the critical framework for analysis; they don't come up with conclusions. The vast majority of economists these days come from the same school of theoretical foundation - but come up with EXTREMELY divergent ideas of the way to tackle issues.

Ah. Thanks.

[RandomGuy]

I see this quite a bit, and I'd just like to point out that Keynesian thought hasn't been the prevailing school in monetary policy or economic theory in general for a very long time. The "neoclassical synthesis" school really began to take over in the mid-50s, early 60s, where 90% of Economics stopped identifying themselves as either Keynesians or anti-Keynesians. From that point, all but the fringes generally acknowledged that the carte blanche acceptance of any single school of thought was a mistake and that to some degree, they all had something to offer (ground breaking, right? Almost 60 years later and Politicians have yet to come to the same realization).

Today, there is a growing school of thought called the "New Neoclassical Economics" school which attempts to overcome some of the normative bias found in Neoclassical Economics.

If you laid all the economists in the world end to end, they still wouldn't reach a conclusion.--J.B. Shaw

[scott]

If you laid all the economists in the world end to end, they still wouldn't reach a conclusion.--J.B. Shaw

This is a very true statement - and one you can say about any field that requires normative analysis in addition to positive analysis. The mistake I think most people want to make it to discredit the positive analysis done in a field because of disagreements that occur in the normative analysis.

[coyotes_geek]

Yeah, except Democrats called bullshit on trickle down economics from day 1.

Really? Because the legislation they've passed suggests otherwise.

[fraga]

Probably because trickle down economics is BULLSHIT. The Rich AND Corporations have had big tax breaks and lower taxes for several years...so where are all those jobs they are supposed to produce...after all...they're the job makers right???

[Yonivore]

Probably because trickle down economics is BULLSHIT.
So, your paycheck just magically appears? If your personal revenue doesn't "trickle" down from the rich, you're either self-employed or stealing.


The Rich AND Corporations have had big tax breaks and lower taxes for several years...so where are all those jobs they are supposed to produce...after all...they're the job makers right???
Who employs the 90% that have jobs?

If you ask the rich and corporations where the jobs are, they'll tell you, that $535 million the government gave to Solyndra to blow before going belly up could have been kept in the private sector to fund real jobs.

[fraga]

Let's say your a wealthy individual...not rich...wealthy...you have a fuck load of money...you're not a rap star who buys bullshit houses and cars...you own companies and corporations...when times are tough...what do you do...

I'll tell you what I would do...I'd cut costs as much as possible in a shitty economy...take my plants overseas where you can have your product made for pennies on the dollar...do I invest creating jobs...fuck no...I keep all my money stashed away earning interest and buying stocks from my buddies pick who I know that works in Wallstreet...sheeeeeeeeeeeeet...times are too damn risky to be spending my money...let some other motherfucker make jobs...

[ElNono]

So, your paycheck just magically appears? If your personal revenue doesn't "trickle" down from the rich, you're either self-employed or stealing.

Who employs the 90% that have jobs?

If you ask the rich and corporations where the jobs are, they'll tell you, that $535 million the government gave to Solyndra to blow before going belly up could have been kept in the private sector to fund real jobs.

At what cost? Basically the check you're collecting today is the check you're going to have to write tomorrow to pay off the debt accumulated by giving up those tax breaks so they can keep accumulating wealth and shifting jobs to Asia.

Don't forget that you're a taxpayer, but the truly rich are not.

[Yonivore]

At what cost? Basically the check you're collecting today is the check you're going to have to write tomorrow to pay off the debt accumulated by giving up those tax breaks so they can keep accumulating wealth and shifting jobs to Asia.

Don't forget that you're a taxpayer, but the truly rich are not.
So, your paycheck goes 100% to taxes?

Anyone, able to pass costs on to another, will do so. If you somehow manage to satisfy yourself by closing the loopholes and tax abatements enjoyed by the corporations what do you think will happen?

The cost of their products will go up, the salary of their employees will go down in order to pay for it.

Companies don't pay taxes -- even when they pay taxes.

[ElNono]

Liberals love to say "debunked" supply side economics.

When do we get to say "debunked" war on poverty.

or

"debunked" Keynesian theory


The problem is that 'Keynesian theory' is only brought up and used when the shit hit the fan already. There's a part of 'Keynesian theory' for the good times too, but when the good times swing around this country switches to monetarism (tweaking the interest rates to control the money flow), which is a different theory altogether.

Actually, the reason you end up with Keynesian theory is because monetarism, which has been the economic tool of choice in the past few decades, effectively failed (in a nutshell, when interest rates are driven so low on a recession that you can't tweak them anymore).

Milton Friedman, who is commonly associated with monetarism due to the work he did on it, used to be originally a Keynes fanboy who eventually turned around and criticized it. You could probably take that as "debunked Keynesian theory" I guess.

[ElNono]

So, your paycheck goes 100% to taxes?

No. But the debt accrued by the government is going to have to get paid, by taxpayers no less. You know that much, right?


Anyone, able to pass costs on to another, will do so. If you somehow manage to satisfy yourself by closing the loopholes and tax abatements enjoyed by the corporations what do you think will happen?

The cost of their products will go up, the salary of their employees will go down in order to pay for it.

Which is fine. Because there's a limit on how high their prices can go (especially when salaries are low), until they price themselves out of the market. Eventually, they're going to have to price what the market will bear.
I much prefer their profits take a hit rather than the taxpayer subsidizing those profits long term.


Companies don't pay taxes -- even when they pay taxes.

Companies need to sell what they make. But on this point I'll add one more thing: For the truly rich companies, no tax rate low enough is good enough. Companies like GE or Google play no or much lower than the nominal corporate tax rate, and get away with it. Meaning, there's no tax rate low enough to make them pay the taxes, since they're not paying them anyways. So the first order should be to close the loopholes they use, and then we can talk about cutting tax rates for those guys.

[ElNono]

Really? Because the legislation they've passed suggests otherwise.

You don't think the stimulus was completely opposite to trickle down?

Truth is, both this guy and the previous guy tried both. Neither really did shit. We can probably argue why, but that was the end result.

[coyotes_geek]

You don't think the stimulus was completely opposite to trickle down?

Seems to me like the tax credits in the stimulus would be consistent with trickle down, so no I don't think the stimulus was completely opposite.

Even beyond the stimulus, how many different times has Obama & Co passed some kind of package that use tax cuts to businesses under the hopes that will trickle down to others in the form of hiring?


Truth is, both this guy and the previous guy tried both. Neither really did shit. We can probably argue why, but that was the end result.

Oh I agree. My point was just to point out that it's a false statement to claim that democrats "called bullshit on trickle down from day 1".

[Yonivore]

You don't think the stimulus was completely opposite to trickle down?

Truth is, both this guy and the previous guy tried both. Neither really did shit. We can probably argue why, but that was the end result.
Unless the goverment was doling stimulus money out to individuals, it was trickle down.

Instead, they were cutting block checks for millions and billions to companies in the hopes it would filter down to those the companies would employ, increase employment and jump start the economy.

Sounds a lot like trickle down to me. Unfortunately, the government doesn't know how to invest. They should leave it to the professionals.