TPS

Your post is full of it. I didn't vote for Obama. You made a big ASSumption there. The only political statement I made was that the coin could be used as a way to circumvent the Reps. That is a fact, not a political bias. I'd be happy to explain the impact if you'd like to learn it.

According to your previous analysis and statements, more money created leads people to purchase/invest in more real things (or something to that effect). Based on that, shouldn't each successive round of QE lead to higher commodity prices? Commodity prices are lower now than they were 2 years ago, and QE has been non-stop. Seriously, don't provide rhetoric, provide an explanation.

Btw, if your analysis is correct, shouldn't commodity prices also be currently higher than when QE2 started in nov 2010?

I think he missed the word "at" in your original question...

The demise of the dollar as reserve currency is old news...

I think everyone does understand it. How is it any different than saying he let the Bush tax cut for the top "lapse"? Those we "temporary" too, just lasted a little longer, and he fought to prevent the lower rates from increasing for another 5 years. You say tomato and I say tomato.

Yes, the imf data. Commodity futures are one of the primary determinants of the spot prices.

Just wanted to be clear that is what you meant.Yes, purposely chose the wording as my view is that it is driven by investors now that they dominate the commodity markets, and their actions influence measured inflation. This wasn't possible prior to the commodity futures modernization act of 2000.

I completely agree with you!

Nice to hear the bit about no empty backfields, I hate it. I'm sure there had to be some deep balls? His accuracy there?

No. The Fed only holds about $1.6 trillion in treasuries currently. It's a political solution that would allow BO to say FU to the reps when they hold the economy hostage over a politically imposed debt ceiling. A nominal debt ceiling is idiocy. If congress wants to impose a ceiling, then impose a debt/GDP ceiling on public debt outstanding because that is the real measure of of the burden of debt, one's ability to pay. By absorb, do you mean they took it off the books, or the fact that they were put on the books of their banking business so they could be bailed out if need be? Yes, and I believe that I questioned your starting point as well as saying that it amounted to a relatively small annual rate of return on their investments. Serious ?? When "at risk" is measured, is there any attempt to incorporate the risk of counter-party default on what is believed to be hedged? That is, have we learned anything from Lehman?

Yes, we've read that elsewhere. Do you understand the implications of swapping a trillion $ denominated coin with the Fed? The Fed's treasuries already injected $ reserves into the system, the swap adds nothing. What it does is reduce the outstanding debt HELD BY THE FED by $1 trillion, which gives the government room to continue to spend what congress already okayed. The spending going forward, over and above tax revenues, could then be finance with new debt issues, no different than if the debt ceiling was raised. The major impact is that the Fed now loses interest revenues, but those would've been transferred back to the treasury anyway. I'm not talking about the last QE, I'm talking about all of them. The response--as you and I discussed and agreed about a couple years ago--was an initial increase as "investors" poured into commodity investments, but since the demand fundamentals weren't driving the increases, the QE driven bubbles always burst.

And then they came back down...

Interesting, I was thinking about this earlier as a friend of mine just injured his achilles and may need surgery. I'll add another take on it, the new "football analytics" team. This will be KW's second surgery, though I think it's the other foot this time. Your question raises an important issue based on his injury history and the change in defense (again). What to do with someone who has been one of your best defensive players given his injuries and hit fit into the scheme? On another note, I wonder if the new DC puts that DT from Utah in play? We could use a good Samoan....

Rather than me rehashing the issues that have been discussed on various blogs, here's a summary by Roche: http://pragcap.com/explaining-the-silliness-of-the-debt-ceiling-and-platinum-coin-to-the-rest-of-the-world It's pretty clear most people totally misunderstand the concept of using this as a strategy to circumvent the debt ceiling. I'd suggest that Tasker (and Magox) read his views on hyperinflation too...

I am a fan of the new post-crisis Krugman, and I know he's endorsing it. The idea is to circumvent and "man-made" constraint, and it in now way is any more inflationary than if Congress raises the ceiling. Go ask Alice.

It's certainly not Krugman's idea. This has been debated on various blogs for the past year (one of the earliest to discuss the idea is Cullen Roche at Pragmatic Capitalism). It's only now going mainstream. It's a way to circumvent the stupid Congress-imposed debt ceiling.

I agree with your first point, and FWIW I am not a "member" of the 95% of economists who adhere to the unrealistic models that have done nothing to solve real world problems. If you are influenced by Austrians, I am somewhat sympathetic to the approach because they also incorporate the use of debt and reject the equilibrum approach. That said, since you have a particular definition of what supply-side is, it might be useful for me to understand your positions if you explain what you think it means??

For one season, he got Maybin to be more productive than in 4 seasons with the Bills, so yes is the answer.

You are the one who has a definition of supply side that is inconsistent with the rest of the world, so take a look in the mirror.And give me a break, the old "I used to think like you, but now I know everything" argument? Please.... I'm sure it is your view from atop the mountain that sees the coming of America's Weimar Republic moment, eh? Care to make any other predictions Mohamad?

You start out by saying it's not the case that payroll taxes are a bigger share relative to income, then you provide data they are. While of course employers pay an equal share of the tax, the point is there was an increase in the tax at the same time that Reagan cut taxes on the top. Also, as I said, the growing surpluses were generated by a combination of increase in the tax, a freeze in the cola, and an increase in the age. The point is to create a surplus on those off-budget accounts to offset the primary deficits. I agree completely that the employer portion is probably one of the worst possible forms of taxation, as it creates a penalty for hiring workers! Once again, I think the focus of the deficit conversation should be on establishing the size of government, then determine the best way to finance. E.g., G=20% of gdp with 3% dedicated to defense; 3% non-def discretion; and 14% to SS and Healthcare. Then decide how to best generate an = 20% of revenues. There is obviously a need to change the %s over time as the demographics change. All the BS would have to be set aside, I hope...

Once again, if that's what you believe is SS economics, then it says a lot about your lack of understanding and makes me wonder what sites provide you with those misunderstandings. Regarding the latest comment, from what I can tell you are influenced by Austrians, who rely on a few dead guys with dead theories...

Maybe through your looking glass Alice, but not by any economists I know.

I support the use of government deficits to stabilize the macro economy when private sector spending is insufficient to push the economy toward full employment. While deficits increase automatically in recessions, I do support additional deficit expansion (whether it comes from tax cuts, increased spending or both) in severe downturns like the current one.

By your logic you could also say those making over $400K did not get a tax increase; they simply let the Bush top rate "lapse."