
TPS
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The "recent policy" of printing mega money? The Fed has been pumping billions of liquidity into the system for 5 years now, where's the super inflation? So many people here have been squawking about money printing and super inflation over the past 4-5 years, so where is it? The best you get is some conspiracy about fudged numbers. I'm not giving anyone a rosy picture, I'm simply telling you the fact that current deficits will come down as the economy recovers--that's the way the budget works. Regarding the FC, since you conservatives are so worried about the deficits, why are you concerned about the FC which will cut spending and raise taxes and lower the deficit? You guys should be supporting it. The problem with the current argument is that people are using the FC to solve future deficit issues caused mainly by the Medicare gap. Gee thanks for telling us the sky will fall 20 years from now....
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The CBO uses expected wages and profits generated each year to estimate revenues, but they also provide the projected u-rate. They project a 5.6% u-rate in 2017 with a deficit of $220 bil (which assumes all changes in the FC take effect). The primary deficit is projected to be in surplus, so it's the growing interest expense that generates the deficit in the later years.
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See my other response, but a back of the envelope here, the deficit was $1.55 tril in 09, and is projected at $1.1 trillion this year. Given those numbers, it should be about about $400 billion at 5%. Not too far off my other projections.
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Hanging out at PPP too long seems to make you unruly and irritable. Hugely in the red--what exactly does that mean? $1.5 trillion per year? $200 billion per year? Here's the issue: When Bush2 cut taxes in 2002-3, he increased the structural deficit by some $150-$200 billion. The structural deficit is the deficit that you'd have at full employment. You can essentially compare the structural deficit under different tax structures by looking at the deficit for similar levels of unemployment. The average unemployment rate during 1998 was about 4.5%, and it was about 4.5% in 2007. With the economy operating at roughly the same level, there was a surplus of $69 billion in 1998 and a deficit of -$161 bil in 2007. There was a swing of $230 billion, and about 3/4 of that was due to Bush's tax cuts, the rest higher spending. So, yes, if or when the economy recovers, and unemployment falls to levels of 2007, then elimination of the Bush tax cuts will create a balanced budget, and elimination of tax cuts for only the rich will lower it, but still leave a structural deficit of about $150 billion; but that's a number that is sustainable as long as the economy is growing at its long run average. (Sustainable meaning the debt-gdp ratio will stay stable or fall over time)
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Bit of an exaggeration on his part. About 2/3s pf those days of government spending are already covered by current revenues. Second, once the economy is back at a more normal level of unemployment, say 5%, then we are looking at a structural deficit of about $200 billion (+/-50), which leaves about 20 days of spending yet to be covered. Throw in taxing the rich, and we get it down to 10 days. Taxing the rich reduces the structural deficit by 1/2, and that is the real issue.
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Hmmm, if the top 20% earns 50% of all income, please tell me where that "real money in the middle" is hiding... Also, a real doozy from Krauthammer this past week, http://www.adn.com/2012/12/01/2710198/charles-krauthammer-republicans.html Charles, if you admit that the money isn't there, which means that the government views SS taxes like all of its other sources of revenue, then there goes your 47% argument. If income and payroll taxes are viewed the same, then stop the BS about the 47% who pay no taxes! What's worse Charles, if you admit those taxes were used to fund government expenditures all along, then the Reagan-Greenspan increase in payroll taxes in the mid-1980s, supposedly done then to pay for deficits expected in the future, was really done to pay for Reagan's supply-side tax cuts that mainly went to benefit of the rich. Back then, a conservative was a true conservative, afraid of big deficits, so somebody had to pay for the tax cuts. It's pretty clear that there has been a class war going on since the 1980s, and it's the top who is engaging in it. Read more here: http://www.adn.com/2012/12/01/2710198/charles-krauthammer-republicans.html#storylink=cpy
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Enough with the Greece analogy. Greece gave up monetary sovereignty; the US has not.
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Bruce Bartlett: A good story for conservatives
TPS replied to TPS's topic in Politics, Polls, and Pundits
My views have been pretty consistent since first setting foot in TBD land some, what, 15 years ago? -
I'm betting a deal gets done: if it does, then I'm in for the rally; if it doesn't, you haven't lost anything if you don't sell.
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Bruce Bartlett: A good story for conservatives
TPS replied to TPS's topic in Politics, Polls, and Pundits
Countercyclical deficits are always about putting a floor on demand--automatic stabilizers are designed to prevent a recession from becoming a depression. They are always temporary, as the deficit will contract once the private sector picks up spending. Most of the debate now is about whether we should pursue austerity now or later. Any sane economist realizes you need to wait until the private sector becomes the engine again of growth again. (That's what your CEOs seem to think too! They don't want short term austerity imposed by the FC.) Btw, CEOs realize that they "managed fine" precisely because big deficits also put a floor on profits. Wages high in the run up? That's a laugh. Have you seen the data on productivity and wages? Labor has been on the run since 1981. Employment won't come back because the two sectors that facilitated the bubble aren't coming back to where they were in 2007--housing and finance. As long as China, Japan and our other large trade deficit partners continue to rely on the US market for their exports, they will buy treasuries. Once they stop, a falling dollar will help balance the trade account and reduce the need for government deficits. That, along with an improving economy, and the defict will come down to a sustainable level. -
Bruce Bartlett: A good story for conservatives
TPS replied to TPS's topic in Politics, Polls, and Pundits
Who is talking about QE? -
Bruce Bartlett: A good story for conservatives
TPS replied to TPS's topic in Politics, Polls, and Pundits
Rob, I would appreciate it if you provided me with a link so I can read up on where you are getting your views from. I'd really like to figure out what religion you belong to.... The most effective policy over the past 4 years has been the permanent stimulus that's resulted from automatic stabilizers and extensions of unemployment insurance that are the largest contributors to the deficits of the last 4 years.. I am sure your ceo's are also all begging for the fiscal cliff to take effect so there's another $600 billion of demand wiped out next year... -
Bruce Bartlett: A good story for conservatives
TPS replied to TPS's topic in Politics, Polls, and Pundits
Ahhh...the downfall of one of the former saints...Interesting how the former SSers have become such ultra, dare I say, liberals? Bartlett and Roberts...whatever happened to the Reagan conservatives? -
You said, I'm not sure why you even think my response is a "counter argument"? You simply wondered when was the last time "my school of thought" predicited an event? I provided you with some memory...
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From one of the original supply-siders: http://www.theameric...ased-community/ For some reason this quote reminds me of PPP... This is pretty good too:
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I guess you never heard of Nouriel Roubini, Steve Keen, Wynne Godley or the Levy Institute.
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As I said, I didn't vote for him. However, I also don't base my analysis on political bias. Had it been McCain, things wouldn't have been much different. Until we have real choices politically, nothing will be materially different in this country...
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Yes, there is a reason this one is weaker. The report you include compares this one to all post-war recessions. Here's one that does a better comparison. As i said, it's because of the level of debt that was used to build up this bubble that makes it longer to recover. http://www.voxeu.org...N9of0ptiU.email Their conclusion: Also, regarding the CBO report you posted, here's what they had to say about consumer debt: It's interesting that the CBO report also says that government spending has held back growth. I certainly can't predict war in the middle east but, all else constant, it won't exceed 4% on an annual basis. I'd say 2.5-3%, which is way better than it has been. I didn't vote for him (this time). Ps. That was a lot of work...trying to get you to respond...
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You guys are too biased to come up with a decent reason. Where's Magox when you need him? The conditions underlying this economy are not unlike the 1930s. The private sectore Debt/Gdp ratio was 240% in 1929, and it was 300% in 2008. The economy contracted from 1929-33 then, and it's been fairly stagnant for the past four years. As Richard Koo says, this is a balance sheet recession, and households may now be done repairing their balance sheets. Barring unforeseen chaos externally, the US economy should grow faster than it has the past couple years. Regarding BO and his promises, my take is he had to be re-elected so that he could force the bottom 90% to pay the major part of any deficit reduction. While he feigns support for the middle, the dems money comes from Wall Street, and they want SS and Medicare cut, not their taxes. That's why I don't vote for the major parties, it's all a show. Keep us all fighting each other for the crumbs.
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I thought SM played the run very well in the few games he played last year, and he is showing that same ability this year. He sets the edge well, and does not get faked out of position as much as Kelsay does. With Kelsay coming back, I hope Merriman gets the starting nod.
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While he has 12TDs and 12Ints, at home he has 8-2. They will be a dangerous team at home.
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Obama To Unleash Racial-Preferences Juggernaut
TPS replied to DaveinElma's topic in Politics, Polls, and Pundits
In the real world, since many of your neighbors are unemployed, one of them would be willing to peddle for $20/day, so that you'd have a positive net return.I agree with what you said about having to pay the labor, materials and energy to cover the costs, but where we disagree is that you don't think a firm can sell more output and recover their costs. That simply ignores how the majority of firms produce and price their output in the real world. -
Obama To Unleash Racial-Preferences Juggernaut
TPS replied to DaveinElma's topic in Politics, Polls, and Pundits
You're describing a process where a business would not make a profit in producing something--no one produces more if they can't cover their costs. Prices are set as a mark-up over average total costs. As long as you meet your sales target, you meet your profit target. If you sell less, your profits are lower; and if you sell more your profits are even higher. There does come a point when resources become scarce that costs will rise and passing along the costs could actually lower sales. But not when firms are operating at low capacity and there is high unemployment. They can hire workers at the same wage rate, if not lower. -
Def on Byrd, but for Levitre, as long as you don't overpay. While he has been valuable and an iron man, guards are easier to come by.
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Obama To Unleash Racial-Preferences Juggernaut
TPS replied to DaveinElma's topic in Politics, Polls, and Pundits
I would say the same thing back to you. Money is simply a claim on real things. Sometimes we store those claims in longer term paper claims, but in the end you don't eat paper (I hope not at least). I agree with you when the economy is at full employment; then, any resource claim by government must be offset by a decrease in the claims by the private sector. This is why rationing and Patriotism were used to get people to buy less (use fewer claims) during the war, so resources could be marshalled toward war production. It is simply not the case when resources are unemployed. Resources, labor and physical capital, are what create value, and money is an instrument that allows "economic agents" (including governments) to make claims on resources. If too many claims are created relative to your ability to produce things, then you have a problem. The key is to regulate those claims consistent with the ability to produce real things. Historically, the problem has been that governments have abused their power of the printing press, and they have tended to create more claims on resources then what the real economy can produce. That's why most countries went to an independent central bank, to take the power of the printing press away from uncontrollable politicians. I (serioulsy) look forward to your response to this.