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.
Addiction to anything is terrible. The addict never realizes, won't acknowldege, can't acknowledge, that enough is never enough. It threatens their very identity. Addiction and all of it's attendant justifications, scheming and pretzel logic is all aimed at just one thing. Getting 'away' from who they really are. At any cost.
The fact that in Ryan's budget proposal, spending still grows, just not as fast, is point on. Demagogues have to thwart conversation, just as the addict has to deny her addiction.
Wonder where the world would be if Edison had a proposed and idea for a different way to provide light, than a kerosene lamp, and his associates had refused to discuss it? Or Henry Ford's ideas on manufacturing had never been given consideration? Where would the world be if Woz had said to Steve, "Your crazy. It will never work. Just another one of your crackpot ideas."
Yet, we stand for this in political rhetoric from the left. Cynical power hates the light of day. Anything, anything to hold onto the power. Hmmm. Addictive power?
Indeed.
Quote:
Originally Posted by Loveshiscountry
You don't know what austere is. Show me actual cuts and not lowering of the increases. You didn't read the article or you have the retention of a zombie.
"Ryan notes in the budget that spending would continue to increase over the next 10 years under his plan, but at a slower pace than it is currently on. While current spending is projected to increase annually by 5.2 percent, the Ryan budget would slow that to 3.5 percent."
You don't know the effect of spending cuts either. And no, cuts are not detrimental. We got out of a mini depression in the early 1920's that saw unemployment go from over 12 to under 4 in 2 years when we lowered spending and taxes by 40 percent over those two years.
You don't know the effect of spending cuts either. And no, cuts are not detrimental. We got out of a mini depression in the early 1920's that saw unemployment go from over 12 to under 4 in 2 years when we lowered spending and taxes by 40 percent over those two years.
We absolutely know the effect of spending cuts. Spending cuts never help the economy.
Let me paint a rosy picture for you of how a "recovery" looks if we were dumb enough to "balance the budget."
Recession
Revenues fall, spending cuts follow (lays of thousands of public sector workers)
Revenues fall more (due to more unemployed), more spending cuts must follow (lays off more workers)
Revenues fall more, more spending cuts
This is economic contraction. Cutting does nothing to help the economy. Cutting lays off public sector taxpayers, which lowers revenue even more, which exacerbates the debt.
I agree with some of what you said. Speaking of ignorant and naive, do you have any proof that Greece actually tried austerity?
Austerity involves cutting government budgets by reducing salaries, employee benefits, and retirement benefits. It also involves selling government assets, decreasing taxes, and even repudiating government debt. Government has to live within its means is the kicker.
Nope. That is your misunderstanding. The government has no means to live beyond. No currency-issuing government can become insolvent. It can spend an infinite amount of its own made up money.
Quote:
Originally Posted by Loveshiscountry
Greece still had higher government expenditures. Their budget deficits as a percentage of GDP has risen since 2009. It was between 5-8 percent from 2005-2008. From 2009-2012 it was between 10-15 percent. That is not austerity.
Greece is not the United States. Greece ceded its currency issuing rights to the European Central Bank. Greece is like Chicago, Cook County, Rahm Emmanuel, or Illinois. All are currency users, not issuers.
Greece can be insolvent if the ECU decides not to lend it more money. The United States (along with Canada, Australia, United Kingdom, Japan, and China) can produce its own money limitlessly.
You didn't say anything different. All you did was bold some words. So you don't have any proof except because you said so. No examples but because you said so trumps fact.
I bolded twice so I must be twice as right as you.
Quit listening to the economists who have been wrong about the economy.
Seriously, at this point in the game, civil war would be easier. Just cut your losses and go.
Your federal debt is currently 21.5% of World GDP --- that's 1/5th for the morons.
When Obama leaves office, federal debt will be 25+% of World GDP --- that's 1/4th for the imbeciles.
8 years after that, it will be 1/3 of World GDP, and by ~2042 it will be 50% of World GDP.
None of that is relevant at all.
There is no relation between the United State's public debt and World GDP. All that means is that the world is addicted to purchasing U.S. treasury bonds.
Federal debt is practically meaningless. It just one side of the balance sheet in double entry bookkeeping.
Quote:
Originally Posted by Mircea
ow we all know that the governments of Canada, Australia, Britain, France and Germany are going to levy taxes on their citizens and bleed them into 3rd World Status just so their respective governments can have the money to buy US Treasury Notes to keep the Liberal feel-good spending spree alive.
Right?
Yeah, well in some NAMBLA fantasy or something.
Oh.....looky....
Tax Increases Reduce GDP
"Tax changes have very large effects: an exogenous tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent."
The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks (NBER Working Paper No. 13264)
Ya think?
That's why I kept saying Obamacare will cause a recession. May of last year, I said 2nd Quarter 2014, but that was before Obama went into total spastic panic mode and started delaying key provisions of Obamacare in September 2013.
He doesn't understand the effects are cumulative, and that you can delay, but not stop it -- unless you repeal Obamacare.
In fact, by delaying it, he may be making things worse economically.
Sucks to be you all...
Mircea
Where is your evidence that government spending is bad?
The times we spent like a drunken sailor (post WW2 and Reagan Administration) the economy expanded at unprecedented rates.
Government spending "stimulus" is a direct injection of wealth into the private sector, because all sectors (public, private, foreign) must be in balance.
Some people try to win their arguments by getting you to accept their faulty definition. If you buy into their definition, they’ve practically persuaded you already.
The mistake of treating different descriptions or names of the same object as equivalent even in those contexts in which the differences between them matter.
Equivocation is the illegitimate switching of the meaning of a term during the reasoning.
It is crucially important to recognize the distinction between government spending, and government investing. Investing is surely "spending," but spending is not always equate to investing.
One spends $5 on scratch-off Lotto tickets, while another invests $5 in 5 shares of stock --- which subsequently increase in value over a period of time, so that the "investors" now has $50 instead of $5.
The space programs, nuclear weapons research and such are examples of government investing.
Food Stamps is spending -- not investing -- and such spending does not increase GDP.
If I have $6 and government takes $4 of mine and hands out $2 in Food Stamps, spends $1 to pay $2 in Food Stamps and then pays $2 interest on federal debt, GDP did not increase to $15....it's still $6.
Moreover, this distinction between government investing and government spending is critical for austerity measures. You want to cut government spending, while leaving government investing intact. As I've said repeatedly, I could trim $1.5 TRILLION off your budget with no negative effects to your economy, but then I would be cutting spending, not investing.
Big difference.
Another crucial difference between spending and investing is Diminishing Returns or Input/Output Dead-Weight.
It's been known since the 1970s that once government spending --- not investing --- reaches a certain percentage of GDP, then for each 1% spent, GDP will decline 0.1%-0.15%.
Think of charcoal in your grill and your using charcoal lighter fluid. A little goes a long way and does the job. You can increase the Inputs --- pour more lighter fluid on the charcoal -- and it might cause the charcoal to burn faster, but as continue to increase the amount of lighter fluid, nothing happens --- you're just wasting lighter fluid, and then at the point of saturation, the lighter fluid has blocked all of the Oxygen and now inhibits combustion.
Same with wages. Wages are an Input, however, whether I pay you $1 or $1 Million will not increase your productivity level....which is fortunate that your wages are based on Supply & Demand not production.
Anyway, your assertion is correct, I just wanted you to understand why. Those are not the only reasons, there are others as well...
How Government Spending Slows Growth
Source: Fiscal Policy, Profits, and Investment (NBER Working Paper No. 7207)
Emphasizing....
OK those who say cutting spending is always bad are wrong. Those who say spending is always bad....are also wrong. There are times to cut spending, and times to spend more. And what you spend money on matters. Pouring more money into corporate coffers via defense spending is probably less useful then just handing it to random people.
Right now we're in a transition point. Its still a bad idea to do austerity, but its also a bad idea to increase spending without matching taxes. And Im hoping next year will be a good year to do austerity. And I think our insane spending on defense should be a #1 target-halving it would do us wonders...
You can argue taxes if you want, but the simplified models of tax X = Y GDP increase/decrease are oversimplified. Who you tax matters, as does how. And the numbers are debatable. Because again-what you do with the tax money matters as well.
Saying "e spent like drunken sailors-look at the awesome results" ignores the awesome long term damage via debt as well. We should have been focusing on paying DOWN that debt so we could spend like crazy later to stop our economy from having such a significant depression.
Additionally debt servicing is now taking up a significant % of our GDP.
Cutting spending and taxes do not stimulate the economy.
Yes, they do.....you'd know that if you had ever taken an Economics course.
How Government Spending Slows Growth
Source: Fiscal Policy, Profits, and Investment (NBER Working Paper No. 7207)
Quote:
Originally Posted by ErikBEggs
The economy is driven by demand, which is almost entirely population demographics, (technological and industrial) revolutions, and war.
That is not entirely true. To the extent that it may be true, you don't understand the meaning of "Demand" nor do you understand the scope or context of "Demand."
Quote:
Originally Posted by ErikBEggs
Cutting spending during a recession / recovery is suicidal. It is basically blocking your own recovery.
"Recovery" is neither automatic nor guaranteed.
In fact, there is no Law of Economics that says a given economy must recover.
There is no Law of Economics that says GDP must increase.
Quote:
Originally Posted by ErikBEggs
Where is your evidence that government spending is bad?
You can read the report from the NBER cited above, and when you finish with that, you can go back to the 1970s and read all of economic research done over that 40 year period that proves it.
Quote:
Originally Posted by ErikBEggs
Government spending "stimulus" is a direct injection of wealth into the private sector, because all sectors (public, private, foreign) must be in balance.
That is completely false. Balance does not equal "equality." A system may be unequal, but in equilibrium nonetheless.
You have equivocated "spending" with "investing" --- which is a fallacy, since they are not the same thing.
If I have $6 and government takes $4 of mine and hands out $2 in Food Stamps, spends $1 to pay $2 in Food Stamps and then pays $2 interest on federal debt, GDP did not increase to $15....it's still $6.
The ROI on spending is $0.
The ROI on investing is whatever it might be....and yes, it's an imperfect world, so sure, there is always the possibility the ROI could be $0 or even Negative.
The ROI on deficit spending is less than $0 ---Negative.....which differs from the ROI on deficit investing, which is usually Positive.
Quote:
Originally Posted by ErikBEggs
The times we spent like a drunken sailor (post WW2 and Reagan Administration) the economy expanded at unprecedented rates.
If you try to make a point about something by comparison, and if you do so by comparing it with the wrong thing, then your reasoning uses the fallacy of faulty comparison or the fallacy of questionable analogy.
The overall situations domestically and globally in those time periods are not even remotely similar to the present. Because that it is true, it results in other fallacies...
This fallacy occurs during causal reasoning when a causal connection between two kinds of events is claimed when evidence is available indicating that both are the effect of a common cause.
Suppose we notice that an event of kind A is followed in time by an event of kind B, and then hastily leap to the conclusion that A caused B. If so, our reasoning contains the post hoc fallacy.
You committed those fallacies in part, because you do not understand "Demand" and how it is applied contextually in Economics, plus you don't understand the root cause of recessions.
Every recession that ever occurred on Earth was caused by the inefficient use of Capital.
That's it. Period.
Cash is Capital, and if used inefficiently, will create a drag on the Economy leading to a recession. The inefficient use of Cash creating a drag on the Economy, would be government spending -- not investing --- spending.
Credit is Capital, and if used inefficiently, will create a drag on the Economy leading to a recession. The inefficient use of Credit creating a drag on the Economy, would be government deficit spending -- not investing.
Labor is Capital; so is equipment, machinery, tools, vehicles, aircraft, ships, trains, land (when used in production but not the land your house sit upon) are all Capital, and if used insufficiently, will cause a recession.
Let's look at some real examples.
The Bush Incorporated Recession:
Capital in the defense sectors of your economy becomes inefficient, and it must be shifted to other sectors of your economy to be used efficiently. For the stupid, this sift of Capital normally takes longer than sending a text message.
The Carter-Reagan Recessions:
Due to oppressive taxation policies by the New England States, and due to coercion from unions, Capital was used inefficiently, creating a drag, which resulted in a recession. Capital was shifted from the New England States to the Southeastern US where it could be used more efficiently.
For nearly the exact same reasons, an hostile business climate in the Midwest, combined with coercive unions and oppressive taxation by States, counties and cities, resulted in the creation of the Rust-Belt as Capital fled the Midwestern US to be used more efficiently in the Southern and Southwestern US.
At the same time, inefficient use of Capital by technology firms on the East Coast resulted in a shift of that Capital to the West Coast.
There were three recessions during Eisenhower's 8 years. Demand? No, inefficient use of Capital.
The Clinton Recession? Inefficient use of Capital.
The Bush & Co Recession? Inefficient use of Capital.
Obamacare causes the inefficient use of Capital, which will create a drag in your Economy, resulting in a recession.
Once you get your degree in Economics, you'll be able to answer the questions I keep asking but which you cannot answer...
Why does a 1st Phase Zero Level Economy have 0% UE?
Nope. That is your misunderstanding. The government has no means to live beyond. No currency-issuing government can become insolvent. It can spend an infinite amount of its own made up money.
Of course not. You can't make something up like this just because you said so. How'd hyperinflation work out for Germany?
Quote:
Originally Posted by ErikBEggs
Greece is not the United States. Greece ceded its currency issuing rights to the European Central Bank. Greece is like Chicago, Cook County, Rahm Emmanuel, or Illinois. All are currency users, not issuers.
Greece can be insolvent if the ECU decides not to lend it more money. The United States (along with Canada, Australia, United Kingdom, Japan, and China) can produce its own money limitlessly.
Again Greece did not in any way practice austerity.
Last edited by Loveshiscountry; 04-03-2014 at 08:25 PM..
Again austerity is living within your means and not some made up definition you pulled out of your backside. I've already shown you proof how Greece went further into debt and spent a higher percentage than it took in. You can lie to yourself but don't expect those who use facts to believe you. + Budget Deficits as a Percentage of GDP, PIIGS Nations, 2005-2012
Going from taking in 100 and spending 105 to taking in 95 and spending 104 isn't austerity. It's more than cutting spending. Hellloooooooo
Quote:
Originally Posted by ErikBEggs
The more you cut spending, the less growth you have. You cannot cut worker benefits and salaries and expect to grow the economy. Common sense 101.
We are talking about GOVERNMENT spending not cutting the private sectors benefits and salaries. Government spending is wasteful compared to the private sector. That has been proven time and time again with facts. Common Sense 101
Again you are incorrect as history and facts have taught us. We cut taxes and government spending in the early twenties by 40 percent over 2 years time. Unemployment went form 12 percent to 4 percent. These are facts and not some childish gibberish YOU made up.
Last edited by Loveshiscountry; 04-03-2014 at 08:26 PM..
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.
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.
