Congress Continues Debate Over Whether Or Not Nation Should Be EconomicallyRuined

[hamilton]

http://www.theonion.com/articles/congress-continues-debate-over-whether-or-not-nati,20977/

 

[Rich Grise]

This is funnier

http://www.theonion.com/articles/la...s-movie-alone-on,20969/?utm_source=recentnews

Ah, would that THIS were true:
http://www.theonion.com/articles/us-quietly-slips-out-of-afghanistan-in-dead-of-nig,20957/

Cheers!
Rich

 

[Les Cargill]

Our credit rating /will/ be downgraded--I wrote that here long ago--

Yeah, I don't buy that that is necessary or proper. We're a standalone
nation with a fiat currency and a moderately stable government. People
crash credit on nations when they are politically unstable, not because
they're short on revenue.

If what you say is true, then the bounden duty of Congrefs is to raise
taxes - a lot, and right frickin' now. Maybe you haven't been
following the thread out there, but spending cuts are not much even
possible. The people who think they can call for them just haven't
looked at the data.

The thing that ultimately led to the downfall
of the Whig Party was ... government spending. Arguments over it.
The South took the Jackson track and was enraged at the Hamilton thing
of big banks - felt like the big banks would eventually overrun the
political power of the South. A lot of the runup to the stuff before
the Civil War was extreme shortages of currency because of Jackson. A
peak was the censure of Polk; that was the beginning of the end for the
Whigs. It was over the debt form the Mexican War.

I might be a bit hair trigger about this, but we could easily
be facing just as harsh a split. It's quite similar, IMO.

not for lack of borrowing authorization, but because we're borrowing
and spending off a cliff.

There's no evidence for that. Look, I mean no offense, but
government debt is a *crazy* system. I don't have a title,
and the website that used to talk about it is long gone, but
there's a lot of data about the British Empire, and they
ran fantastic deficits.

There's no cliff here.

Our rating is already unrealistically
artificially high,

I... I just don't think you understand our system, then.
That debt? It can be pretty much rolled forever.

and interest rates are half the historical norm--
those will go up, naturally. That's expected.

Well, *IMO*, that's been more than half the problem. Had Clinton
insisted on a half point more interest rate and a half point
more inflation, then the 2000 crash would have been much more moderate.
Ditto Bush.

The *primary problem* is too *little* (what used to be called) M3. Now,
if Milton Freidman has been overturned ( and he hasn't - Greenspan
fell on his own sword ), then oops. But the Fed flinched in 2008, and
tightened, and they really haven't loosened since. So we're in a Japan
style death spiral, and it's going to be even harder.

But you can't save your way out of being broke. It doesn't work.

 

[amdx]

This is still my favorite
http://www.onionsportsnetwork.com/articles/barry-bonds-took-steroids-reports-everyone-who-has,1914/

I'll top your favorite with an Onion Video.

http://www.theonion.com/video/vh1-reality-show-bus-crashes-in-california-causing,14390/

Mikek

 

[Les Cargill]

Other than pathological situations, why on earth would someone invest
in a devaluing currency for a net negative return? That makes no
sense.

Devaluing relative to what? Oil? Gold? The Euro? Corn?

That really should answer the question. Right now, government bonds are
still much lower risk than those things. The liquidity preference
running rampant right now pushed back into government debt. Again.

People who make loans want to be repaid, with interest. When they're
afraid that won't happen, e.g. Greece, they first ask higher returns,
then stop lending altogether.

You can't compare Greece and the US. You can compare Greece and
California. Neither is truly sovereign w.r.t debt.

They'd have to raise revenue by a factor of 1.76. It can't be done.

I don't think it has to be that much, but you're right that it
*won't* be done.

(In effect, they've done that already by borrowing the money, payments
for which will come from future tax, but it's not at all certain we'll
pay, hence the looming crisis.)

No, the trade off is that we *won't* have to tax for it, if it's
kept as long term government debt. GDP growth eclipses it over
a span of several decades.

Of course they're possible, don't be absurd. Obama's raised spending
24% in two years.

No, he *really* hasn't. That's disingenuous, and whoever told
you that lied to you. I'm not defending Obama here, it's just that
what... $14T of that is internal, shadow-column stuff between the Fed
and Treasury. It never has to see the light of day.

He's baselined the stimulus and bailout spending
hikes--we could start by eliminating those.

SFAIK, there's little or no uncertainty with either the stimulus or
bailouts. Those are already factored in by the markets.

I have, but I just wonder if you have. Cutting big is dirt simple.
We have legions of absolutely useless or harmful agencies, to start.

That won't amount to much. Ezra Klein did a fairly detailed analysis
on what could be cut some months back, and it's just not much
at all. 'Course, Google is no help - too many posts...

The lion's share is SS and Medicare, followed by military obligations.

Qualification: when I say "can't", I mean that we're up against
something like the Hayek-calculation limit on doing anything to
change things. We possibly *could*, but nobody's really smart enough
to untangle it.

I agree. If people can't see that spending and borrowing has
consequences, that it wrecks employment and diminishes people's
savings, if we stick with the class warfare drivel--that can only end
badly.

I don't know what to tell you - spending and borrowing *don't* have
as severe of consequences as people want to beleieve. But I know it's
all but impossible to have a dialogue about this these days.

Good. Since money is free, let's borrow quadrillions and all be
rich. Since there's no limit, we can all vacation in Greece.

Heh. Just don't look down...

Of course it works. The /only/ way to accumulate wealth is to create
it faster than you spend it. So, either earn more or spend less.

For *you*, yes. For *us*, collectively, no. For the government, no
(iow). We've got our back to a deflationary cliff.

Right now we're repressing businesses and revenue, AND spending money
we don't have like no society has ever spent in human history. We're
penalizing productive people to encourage non-productive people not to
work--that's simply never going to work.

"We" being you and I not spending, I take it. Well, yeah. That last
sentence... I dunno what to say. I'm not even sure I count the "nots"

As to production... I don't see a problem - we're completely
blocked on the demand side. Google Arnold Kling and "corkball"...

Neither can we borrow our way out of debt, or spend ourselves to
prosperity. We've tried that big for two years, and it's not anywhere
close to working, it's damaging the nation. We're burying ourselves
in debt, for nothing.

Here's a simple test: Multiply the trillions we've spent on stimulus
by Keynes' multiplier, and divide that by the price of one reasonable
job. Compare that jobs-creation number that to the actual net gain in
employment over the period.

Oh, I know. What's weird is that no Keynsian jobs
creation has happened. Firms seem to have annealed around
just doing things with as little as possible.

 

[hamilton]

On 7/26/2011 8:43 AM, amdx wrote:
Republican solution to Social Security:
http://www.theonion.com/video/social-security-reform-bill-encourages-americans-t,21006/

 

[Rich Grise]

[http://www.theonion.com/articles/congress-continues-debate-over-whether-or-not-nati,20977/]

[It's] [already] ruined.

"A democracy cannot exist as a permanent form of government.
It can only exist until the voters discover that they can vote
themselves
largesse from the public treasury.
From that moment on, the majority always votes for
the candidates promising the most benefits from the public treasury
with the result that a democracy always collapses over loose fiscal
policy,
always followed by a dictatorship.
The average age of the world's greatest civilizations has been 200
years."

Alexis De Tocqueville
Democracy in America (1835)

That's supposed to be why we're supposed to be a Republic.

Hope This Helps!
Rich

 

[Rich Grise]

hamilton wrote:
[http://www.theonion.com/articles/congress-continues-debate-over-wheth...]

[It's] [already] ruined.

"A democracy cannot exist as a permanent form of government.
It can only exist until the voters discover that they can vote
themselves
largesse from the public treasury.
From that moment on, the majority always votes for
the candidates promising the most benefits from the public treasury
with the result that a democracy always collapses over loose fiscal
policy,
always followed by a dictatorship.
The average age of the world's greatest civilizations has been 200
years."

Alexis De Tocqueville
Democracy in America (1835)

The principles are sound but the quote's modern, not from DIA.
http://www.lorencollins.net/tytler.html

The Constitution had some pretty good protections against that process
though--the various checks and balances, and the use of layers of
representatives rather than direct democracy.

We've scuttled most of them, but they are why we've lasted as long as
we have.

Just for S&G, I did a text search in
http://www.usconstitution.net/const.html
on "democracy" and got two hits on "dem" --
"Article II, Section 4 - Disqualification

The President, Vice President and all civil Officers of the United States,
shall be removed from Office on Impeachment for, and Conviction of,
Treason, Bribery, or other high Crimes and Misdemeanors."

[the "dem" in "Miscemeanors"]

and

"Article IV - The States
....
Section 2 - State citizens, Extradition

The Citizens of each State shall be entitled to all Privileges and
Immunities of Citizens in the several States.

A Person charged in any State with Treason, Felony, or other Crime, who
shall flee from Justice, and be found in another State, shall on demand of
the executive Authority of the State from which he fled, be delivered up,
to be removed to the State having Jurisdiction of the Crime.

(No Person held to Service or Labour in one State, under the Laws thereof,
escaping into another, shall, in Consequence of any Law or Regulation
therein, be discharged from such Service or Labour, But shall be delivered
up on Claim of the Party to whom such Service or Labour may be due.) (This
clause in parentheses is superseded by the 13th Amendment.)"

[the "dem in "on demand"]

That's two occurrences of "dem," let alone "democracy."

But when I looked for "republic," I got this:
"Article IV - The States
....
Section 4 - Republican government

The United States shall guarantee to every State in this Union a Republican
Form of Government, and shall protect each of them against Invasion; and on
Application of the Legislature, or of the Executive (when the Legislature
cannot be convened) against domestic Violence."

Hope This Helps!
Rich

 

[Rich Grise]

The odd thing is that anyone believes we have to borrow more money to
save our credit rating, that more borrowing somehow staves off
default, or that default on $29B in interest payments is even remotely
possible when ongoing revenue is roughly $200B a month.

Other than the President saying it all the time, one wonders why
anyone believes it.

That's simple. It's because Our Glorious Beloved Infallible Leader said
it. You know, somewhat like, "Jesus loves me, this I know, for the Bible
tells me so..."

Yeah, I know, it makes me sick, too.

Thanks,
Rich

 

[Rich Grise]

Here's a simple test: Multiply the trillions we've spent on stimulus
by Keynes' multiplier, and divide that by the price of one reasonable
job. Compare that jobs-creation number that to the actual net gain in
employment over the period.

Hell look at the price of a loaf of freakin' bread!

Thanks,
Rich

 

[Rich Grise]

Not in any way you are prepared to contemplate.

OK, so try us.

Which way is this that you're so sure we're "[not] prepared to contemplate?"

Please, present _YOUR_ plan for digging the USA out of the bottomless pit of
practically infinite debt.

Thanks,
Rich

 

[[email protected]]

Not in any way you are prepared to contemplate.

OK, so try us.

Which way is this that you're so sure we're "[not] prepared to contemplate?"

Please, present _YOUR_ plan for digging the USA out of the bottomless pit of
practically infinite debt.

Spend even more!

 

[amdx]

That's simple. It's because Our Glorious Beloved Infallible Leader said
it.

She believes!

How's that working for ya, Peggy?
Mike

 

[[email protected]]

That's the same perpetual motion machine in sheep's clothing.
Shuffling money doesn't create more. Deferring the taking doesn't
change the taking. It fools some people, but only some.


You've just dug Keynes up by the root. The money doesn't go where he
thinks it will or have the effect he predicted. Without those he's
useless. Keynes was wrong, as we've seen today yet again.

He makes a nice cult figure though.

I wonder why you lament our "military-industrial complex." By your
theory it should be an absolutely fantastic pump-primer, a wellspring
of Keynesian stimulus and jobs.


Yes, of course. I predicted today's exact circumstance two years ago,
not because I'm such a flaming genius, but because it's perfectly
obvious.



By "pump-priming" you mean "coercion / repression," by "enthusiastic"
you mean "aggressive."

But, shooting your dog doesn't make him fetch better, it just kills
him. Firing more rounds doesn't improve the outcome.

Slowman's dog don't hunt.