Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 05-28-2012, 04:48 PM
 
28,896 posts, read 54,023,080 times
Reputation: 46668

Advertisements

Quote:
Originally Posted by user_id View Post
While you're telling people to "learn economics", you didn't even bother to fact check your politically motivated commentary. The United States has reduced total government spending (federal, state and local) during the recession more than both Sweden and Germany. In the US, the increases in federal spending have been offset by cuts in state and local spending. Both Germany and Sweden have a lot of automatic stabilizers that kick in when a recession hits, so there is less of a need to pursue additional stimulus spending.

Its funny that conservative pundits are trying to use two countries with strong social models and high taxes to push for cutting government spending. These countries haven't cut taxes, they haven't cut government services. What do they do that the US doesn't? They have high enough taxes to cover their government spending....
First, I'm not conservative. Second, it's amazing how little you know as witnessed by the chart provided by the Congressional Budget Office. If anything, total Federal spending skyrocketed at the beginning of the recession and has yet to drop back to pre-recessionary levels. What's more, there hasn't been any major drop in overall state or local spending, certainly not enough to offset increased federal expenditures:

File:CBO - Revenues and Outlays as percent GDP.png - Wikipedia, the free encyclopedia

Second, my example of Germany and Sweden actually had a point to it, namely as a nice rebuttal to the the Keynesian belief that massive amounts of deficit spending is necessary to ensure economic stability and growth. It is no coincidence that Merkel's policy of no debt has coincided with better economic prospects than the rest of the continent. What's more, you seem to be terribly misinformed about German taxation rates or, at the very least, seem behind the times. German corporate tax rates have dropped to 29.8% from 51.6%, and the top personal income rate dropped from 53.8% to 47.5%. What's more, Germany's budget deficit is expected to narrow to 0.9% chiefly because of an adherence to austerity principles. If you blindly adhere to Keynesianism, this would be an impossibility. Sweden has adopted similar measures with similar results, precisely the opposite of what Krugman would recommend.

Last edited by cpg35223; 05-28-2012 at 05:15 PM..
Reply With Quote Quick reply to this message

 
Old 05-28-2012, 11:47 PM
 
Location: Conejo Valley, CA
12,460 posts, read 20,022,485 times
Reputation: 4365
Quote:
Originally Posted by cpg35223 View Post
. Second, it's amazing how little you know as witnessed by the chart provided by the Congressional Budget Office. If anything, total Federal spending skyrocketed at the beginning of the recession and has yet to drop back to pre-recessionary levels.
Funny, perhaps you should work on your reading comprehension? Reread what I said, or heck, repeat for you:

"The United States has reduced total government spending (federal, state and local) during the recession more than both Sweden and Germany"

And yet, you're glibly responding to me with a chart of federal spending...


Quote:
Originally Posted by cpg35223 View Post
Second, my example of Germany and Sweden actually had a point to it, namely as a nice rebuttal to the the Keynesian belief that massive amounts of deficit spending is necessary to ensure economic stability and growth.
Yes you had a point...and it was mistaken on many levels. Firstly, Keynesian don't think you need "deficit spending to ensure economic stability and growth".....instead they purpose that deficit spending is a solution to a liquidity trap. Germany was never in a liquidity trap, therefore bringing up the nation in an attempt to refute Keynesian theory shows a basic misunderstanding of Keynesianism.

As for government debt, Germany's public debt is 80% of GDP.....not exactly small.

Quote:
Originally Posted by cpg35223 View Post
What's more, you seem to be terribly misinformed about German taxation rates or, at the very least, seem behind the times. German corporate tax rates have dropped to 29.8% from 51.6%, and the top personal income rate dropped from 53.8% to 47.5%.
You once again try to call me out, yet follow it with something wrongheaded. Are you under the impression that corporate and income taxes are the only taxes in Germany? Of course, like the US, they are just part of the tax picture.

German taxation, as a whole, has been relatively consistent over the last 3~4 decades. Today its around 40% of GDP, compared to around 28% in the US.

So, I guess the idea here is that the US needs to dramatically increase taxes and increase social services to match those found in Germany?
Reply With Quote Quick reply to this message
 
Old 05-31-2012, 03:42 PM
 
20,622 posts, read 19,271,044 times
Reputation: 8224
Quote:
Originally Posted by Novadhd5150 View Post
This guys has been around along time. He was on Cspan this morning preaching more spending and borrowing to get us out of a recession.
He claims it worked in WW11 and beyond but those were different times.
Hid ideology seems pretty far left..I dont believe more debt will get us to a better company despite having low inflation./ interest rates.
The problem with Krugman and WWII comparisons is simple. We are not a creditor nation of hard goods thus handing out credit is fraught with much more peril than it was during WWII. In short, when the US was full of its own stuff no one was buying, all you needed to do was give people the money to buy it. The problem now is Americans import a lot of stuff so it does much less for employment than it used to do. The debt was also much more recyclable. So its not really our stuff the moment our debt ceases to be in demand.

So its much more complicated. Still, given this pitiful lot, our money is debt either in the form of da guberment loans of bank credit. Does increasing liquidity with more private debt seem like a good idea? So what he is talking about is rolling the money supply from bank credit to public debt to bring the consumer out of debt saturation. Ideally, the middle class needs to be prevented from rolling their private debt onto more foreign debt. So roll private debt onto public debt, but not onto foreign debt. That conversation begins with energy policy and the FIRE sector which has raised the cost of production causing us to import from countries that do not have to pay a FIRE sector for the dirt underneath them. .

What we have, as I have said for quite some time, is not a national debt problem. The national debt is the least of our problems. We have a private debt problem and a foreign debt problem.


All debts are someone else's asset. So what happened?

As Middle Class Shrinks, P&G Marketing Aims High and Low - WSJ.com

Someone has more assets. Unfortunately these assets happen to be the debt of the middle class..

That would be the wealthy who has them,

Nordstrom Outlook Strong for 2012 | SGN Group

the result of the great wealth pump to the wealthy, the real estate-finance, guberment to the rescue, ponzi scheme.

However at some point the wealthy will only have the advantage in relative terms because, in absolute terms, they may be eating the seed corn of the working class, especially as more enlightened solutions loose credibility because of botched execution or the mere pretense that it was implemented . Then they will just ask for a welfare state. Is that not already happening?
Reply With Quote Quick reply to this message
 
Old 06-01-2012, 12:43 AM
 
30,874 posts, read 36,825,967 times
Reputation: 34462
Quote:
Originally Posted by cpg35223 View Post
First, I'm not conservative. Second, it's amazing how little you know as witnessed by the chart provided by the Congressional Budget Office. If anything, total Federal spending skyrocketed at the beginning of the recession and has yet to drop back to pre-recessionary levels. What's more, there hasn't been any major drop in overall state or local spending, certainly not enough to offset increased federal expenditures:

File:CBO - Revenues and Outlays as percent GDP.png - Wikipedia, the free encyclopedia

Second, my example of Germany and Sweden actually had a point to it, namely as a nice rebuttal to the the Keynesian belief that massive amounts of deficit spending is necessary to ensure economic stability and growth. It is no coincidence that Merkel's policy of no debt has coincided with better economic prospects than the rest of the continent. What's more, you seem to be terribly misinformed about German taxation rates or, at the very least, seem behind the times. German corporate tax rates have dropped to 29.8% from 51.6%, and the top personal income rate dropped from 53.8% to 47.5%. What's more, Germany's budget deficit is expected to narrow to 0.9% chiefly because of an adherence to austerity principles. If you blindly adhere to Keynesianism, this would be an impossibility. Sweden has adopted similar measures with similar results, precisely the opposite of what Krugman would recommend.

Actually, I would say that Germany & Scandinavia actually FOLLOW Keynesian economics whereas most of the rest of the world doesn't. Keynes advocated for budget SURPLUSES when times were good. Most other countries run up debt in good times and bad. The Scandinavian countries, in particular, ran significant budget surpluses from 2004-2007. Spain did, too. Unfortunately, Spain's economic growth during that period was mostly a mirage because of a property bubble that was even worse than what we had in the US.
Reply With Quote Quick reply to this message
 
Old 06-01-2012, 07:36 PM
 
Location: Conejo Valley, CA
12,460 posts, read 20,022,485 times
Reputation: 4365
Running a deficit during bad times and then running a surplus and paying down the deficit during good times is the government equivalent of an emergency fund. The government can't "save" in the traditional sense, it can just adjust its deficit.

After the Clinton tax increases there was a surplus, but that surplus was quickly turned into a deficit once Bush became president. So then, the question is whether deficit spending will still have a positive long-term effect on the economy even-though previous presidents pursued irresponsible fiscal policies...

Spain's property bubble was caused by capital flows from Germany, similar to how Chinese $$ helped fuel the property bubble in the US. Both the US and Spain face somewhat similar issues, they are dealing with trading partners that refuse to make any meaningful adjustments. Though, the US is in a better position because it can, in principle, fuel inflation and thus force a devaluation against other currencies.

Its actually pretty amazing the degree to which Keynes is attack since his theories are the basis of much of what you'll find in macroeconomic textbooks. Politics, especially within the general public, has so infected economic discourses that people mistake their politic beliefs for serious economics....

Last edited by user_id; 06-01-2012 at 07:44 PM..
Reply With Quote Quick reply to this message
 
Old 06-02-2012, 10:24 AM
 
20,622 posts, read 19,271,044 times
Reputation: 8224
[quote=user_id;24564394]Running a deficit during bad times and then running a surplus and paying down the deficit during good times is the government equivalent of an emergency fund. The government can't "save" in the traditional sense, it can just adjust its deficit.
[quote]


That was true when Keynes created his theory and when gold still had sway over credit. In that case he is just talking about momentum. It is much more vulnerable to criticism and debate against the effect of Say's law. Now its beyond debate since gold is out of the picture and all that is left is da guberment debt functioning as the money supply. Increasing it dilutes the obligations of debtors plain and simple and debt saturated debtors is our problem. This is beyond Keynsian theory and any benefit in increasing "effective demand" is an additional benefit. People clumsily apply Keynsian theory on vastly different contexts. Its just as bad when they compare the dollar to the euro which are tow entirely difference currencies. They do not monetize sovereign debt in Europe which means the hard good creditor will own all of Europe which is to say in one one as "Germany". However the finance cartel there for a time allowed German goods to appear far too cheap.


Quote:
After the Clinton tax increases there was a surplus, but that surplus was quickly turned into a deficit once Bush became president. So then, the question is whether deficit spending will still have a positive long-term effect on the economy even-though previous presidents pursued irresponsible fiscal policies...
The reason why there was a surplus, as I once explained in an ancient thread, is that bank credit was being issued at a record pace which effectually rolled da guberment debt onto the private sector. To avoid depressions debt must always increase. if da guberment debt decreases it means private debt must increase considerably as it did during the housing bubble.

Quote:
Spain's property bubble was caused by capital flows from Germany, similar to how Chinese $$ helped fuel the property bubble in the US. Both the US and Spain face somewhat similar issues, they are dealing with trading partners that refuse to make any meaningful adjustments. Though, the US is in a better position because it can, in principle, fuel inflation and thus force a devaluation against other currencies.

Its actually pretty amazing the degree to which Keynes is attack since his theories are the basis of much of what you'll find in macroeconomic textbooks. Politics, especially within the general public, has so infected economic discourses that people mistake their politic beliefs for serious economics....
What is worse is they don't even really know what the theory is. da guberment spending has nothing to do with it.
Reply With Quote Quick reply to this message
 
Old 06-05-2012, 10:31 PM
 
Location: State of Transition
102,100 posts, read 107,266,232 times
Reputation: 115908
Quote:
Originally Posted by Novadhd5150 View Post
This guys has been around along time. He was on Cspan this morning preaching more spending and borrowing to get us out of a recession.
He claims it worked in WW11 and beyond but those were different times.
Hid ideology seems pretty far left..I dont believe more debt will get us to a better company despite having low inflation./ interest rates.
The problem is that the US entered the recession already with an overwhelming debt, due to large tax cuts and involvement in foreign wars. So it's very risky in a situation like that to do what needs to be done: stimulate the economy. FDR was in a much stronger fiscal position when he did it. One thing Krugman is absolutely right about: austerity measures destroy what's left of an economy. Hmm...didn't we already discuss that on one of the other Krugman threads?
Reply With Quote Quick reply to this message
 
Old 06-07-2012, 08:42 AM
 
20,622 posts, read 19,271,044 times
Reputation: 8224
Quote:
Originally Posted by Ruth4Truth View Post
The problem is that the US entered the recession already with an overwhelming debt, due to large tax cuts and involvement in foreign wars.
Overwhelming debt? Zat why da guberment bond market has 1.5% yields? Da guberment spends what it likes. What we have is private debt saturation that can only be relieved, in this system, by government going into debt since all money is debt. Mortgage debt, now in circulation as money is now in support of prices but continues to shrink. Your brain has been wiped clean by the financial media to concentrate on the wrong debt like a fire hose blowing leaves off the driveway.



Quote:
So it's very risky in a situation like that to do what needs to be done: stimulate the economy. FDR was in a much stronger fiscal position when he did it. One thing Krugman is absolutely right about: austerity measures destroy what's left of an economy. Hmm...didn't we already discuss that on one of the other Krugman threads?
About the only good thing is if the foreign debt channel is closed we have lots of idle people standing around, who will unfortunately lack skill having been idle for so long.

Look at the type of debt and the total debt and stop focusing on "the national debt. Do you think middle class Americans that owe the 12 trillion in mortgage debt at relatively high interest rates to banks, backed by declining assets instead of taxing power, is not the real national debt? That does not even include school, car and consumer loans which is even worse in kind. And to pay it off, where is the credit supposed to come from if not more national debt? More private debt is going to do it? Money does not drop from the sky. Its loaned out by banks with interest. You want to help? Borrow a trillion dollars and spend it. Good luck paying the interest on it though, you are on your own.
Reply With Quote Quick reply to this message
 
Old 06-07-2012, 02:45 PM
 
Location: 3rd Rock fts
762 posts, read 1,096,737 times
Reputation: 304
Default Austerity: trickle up pain

Quote:
Originally Posted by gwynedd1
Do you think middle class Americans that owe the 12 trillion in mortgage debt at relatively high interest rates to banks, backed by declining assets instead of taxing power, is not the real national debt?
This is why I’m for austerity; the pain trickles up through ALL income classes; & eventually (my presumption) ends up on Big Business/the TBTF banks doorstep.

This is all anecdotal but lets be real here--Big Business/Banks are waiting/relying on Gov’t/taxpayer deficit spending. This creates just in time demand for them (profits), while the Gov’t/taxpayers go into more debt! Also, the low Gov’t borrowing costs are analogous to putting cheese on a mouse trap IMO.

Many of the top Economists feel that the Gov’t should provide fiscal stimuli for roughly 15 years to balance the economy(balance sheet recession thread). The way I see it, the Gov’t has been supplying fiscal stimuli since 2002. Here’s a partial list:

Bush tax cuts
Business tax incentives/waivers
PORK
Stock market/bank freedoms
Lowering of capital gains
The quasi-Gov’t policy (the FED) of extended low interest rates
TARPs
Auto bailouts
2% SS tax cut

10 years of serious Gov’t deficit spending already! This has got to stop; we're not in Kansas anymore!
Reply With Quote Quick reply to this message
 
Old 06-08-2012, 09:48 AM
 
20,622 posts, read 19,271,044 times
Reputation: 8224
Quote:
Originally Posted by DSOs View Post
This is why I’m for austerity; the pain trickles up through ALL income classes; & eventually (my presumption) ends up on Big Business/the TBTF banks doorstep.

This is all anecdotal but lets be real here--Big Business/Banks are waiting/relying on Gov’t/taxpayer deficit spending. This creates just in time demand for them (profits), while the Gov’t/taxpayers go into more debt! Also, the low Gov’t borrowing costs are analogous to putting cheese on a mouse trap IMO.

Many of the top Economists feel that the Gov’t should provide fiscal stimuli for roughly 15 years to balance the economy(balance sheet recession thread). The way I see it, the Gov’t has been supplying fiscal stimuli since 2002. Here’s a partial list:

Bush tax cuts
Business tax incentives/waivers
PORK
Stock market/bank freedoms
Lowering of capital gains
The quasi-Gov’t policy (the FED) of extended low interest rates
TARPs
Auto bailouts
2% SS tax cut

10 years of serious Gov’t deficit spending already! This has got to stop; we're not in Kansas anymore!

Austerity will just hammer the middle classes. The over leveraged rich are usually the nouveau riche which isn't going to do much about the old guard. The Fed interest rate, ZIRP is the problem which provides relief to the wealthy. Much of the so called stimulus measures you speak of has been thwarted by ZIRP while others are just more succor to the wealthy. ZIRP money pumping into rental properties means stimulus will just become bigger rent receipts. I know renters this very moment who are in this spot. Rents are raised because of having to service debt and the debt is calculated to the existing salary levels when utilizations rise to levels where competition cannot contain it.

I was amazed to see someone else catch on to the real problem. Closest I have seen in a long time to how I think, if not quite entirely.

U.S. debt load falling at fastest pace since 1950s - Yahoo! Finance
The rapid rise in federal debt over the past four years has distracted us from the big picture. The level of public debt is indeed worrisome, but it’s not as big a worry as the economy’s total level of debt — public and private.
Well, dah.

But in reality, since a national debt placed in say the hands of ordinary people or even the FED for that matter , some of it is faux-debt all together and the cheapest money to use.
National debt is a composite of many different debts where one is very unlike the other.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Similar Threads

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top