But I was told government employees never get laid off, and that Obama was growing the size of government faster than the waist of a teapartier trapped inside a Twinkie factory.

Census workers!

AND JOB CREATORS WHO GET MASSIVE TAX CUTS SHOULD CREATE F*CKING JOBS

/ahem... thank you

coincidentally the same rate as Canada which (until recently) had not cut any Government jobs.

But I was told austerity will yank us out of recession.

I'm pretty sure that the unemployment rate "should" be about 1% lower than it is at any given time that a Democrat is president.

Well it is 11.2% here and that is with all the fudging that goes on. Let's cook the books people.

Oh and the people who stopped looking, just means they just aren't in the system anymore. Trust me they are looking.

Ceteris Paribus is not license to pretend a change in one thing does not affect anything else. Not cutting government (and I am not ascribing cuts as good or bad here) means government would have to borrow more, and that affects the loanable funds market, and that affects businesses getting loans, and that affects their ability to keep of hire workers. Maybe in the short-run, the delay in feeling the effects might have made a difference. But we're 4 years into the recession, and odds are that the unemployment rate today would still be around 8.1%.

Fear_and_Loathing: Oh and the people who stopped looking, just means they just aren't in the system anymore. Trust me they are looking.

When an economist talks about people who aren't looking, they MEAN people who aren't looking. For example: the 67 year old who wouldn't have retired this year but got laid off so decided to go ahead and retire. He's out of the job market. Not looking. Another example: a guy who got laid off but decided to go back to school to finish his degree rather than look for a job. He's out of the job market. Not looking.

cameroncrazy1984: Ricardo Klement: Not cutting government (and I am not ascribing cuts as good or bad here) means government would have to borrow more, and that affects the loanable funds market

What's cute is you think issuing a T-Bill or a bond is like a business asking for a revolving line of credit from BoA.

For every dollar loaned, there has to be a dollar saved. If I have $1000 to loan, and I can buy a t-bill with it, I no longer have that $1000 to loan to a business. This is true if I have $1,000,000,000. If the T-bills offer a better combination of interest rates and security than loaning to a t-shirt company, the t-shirt company isn't getting BoA's money.

RicardoKlement

So far you've said we've been in recession for four years and that 'for every dollar loaned a dollar must be saved'.

Look you sound like you're actually quite interested in economics so I'm begging you PLEASE go and read something about it.

cameroncrazy1984: Ricardo Klement: For every dollar loaned, there has to be a dollar saved.

I don't think you understand how fiat currency works...

I don't think you ever took a macroeconomics class.

Ricardo Klement: Not cutting government (and I am not ascribing cuts as good or bad here) means government would have to borrow more, and that affects the loanable funds market

Treasury bond interest rates are already as low as ever. This is a nonsense objection.

Tigger: RicardoKlement

So far you've said we've been in recession for four years and that 'for every dollar loaned a dollar must be saved'.

Look you sound like you're actually quite interested in economics so I'm begging you PLEASE go and read something about it.

Feel free to be explicit with your problem.

DamnYankees: Ricardo Klement: Not cutting government (and I am not ascribing cuts as good or bad here) means government would have to borrow more, and that affects the loanable funds market

Treasury bond interest rates are already as low as ever. This is a nonsense objection.

Except someone still needs to buy the bond. If I buy a bond, I simply have less money to lend elsewhere.

I see that we have at least one person ITT not recognizing that undersupplying demand for public services (like, say, cutting gov't jobs for the sake of cutting short-term gov't expenditures, just to make the books look all sparkly neato) is an inefficiency in its own right.

Major league allocative bungling.

Ricardo Klement: DamnYankees: Ricardo Klement: Not cutting government (and I am not ascribing cuts as good or bad here) means government would have to borrow more, and that affects the loanable funds market

Treasury bond interest rates are already as low as ever. This is a nonsense objection.

Except someone still needs to buy the bond. If I buy a bond, I simply have less money to lend elsewhere.

Yes, we all have money we could be investing and we aren't doing so. That's why the government needs to do it instead. That's how recessions work.

The My Little Pony Killer: So vote Republican*!

*if you don't mind watching that number climb higher


Considering that the lead Republican nominee is responsible for destroying more jobs than almost any one individual in the country and Bush is proudly responsible for thousands of outsourced jobs, yeah that actually funny.

cameroncrazy1984: Ricardo Klement: cameroncrazy1984: Ricardo Klement: For every dollar loaned, there has to be a dollar saved.

I don't think you understand how fiat currency works...

I don't think you ever took a macroeconomics class.

I don't think you remember yours. Money is not a finite resource.

Except that the value that the currency represents is. Arguing about this aspect of currency does not address the findamental nature of the problem. Sure, you can double M-2 and double the number of dollars available to be loaned. But you're not doubling the amount of employees that can be hired. They just cost twice as much now.

Don't get hung up on things that don't affect the issue at hand, which is that when government has to boroow money, it removes a certain amount of wealth available for lending from the aggregate pool of available wealth.

Ricardo Klement: Don't get hung up on things that don't affect the issue at hand, which is that when government has to boroow money, it removes a certain amount of wealth available for lending from the aggregate pool of available wealth.

Yes. That's the point. In a recession, people don't invest and don't spend money. That's why the government is the one that needs to step in.

DamnYankees: Ricardo Klement: DamnYankees: Ricardo Klement: Not cutting government (and I am not ascribing cuts as good or bad here) means government would have to borrow more, and that affects the loanable funds market

Treasury bond interest rates are already as low as ever. This is a nonsense objection.

Except someone still needs to buy the bond. If I buy a bond, I simply have less money to lend elsewhere.

Yes, we all have money we could be investing and we aren't doing so. That's why the government needs to do it instead. That's how recessions work.

But the government has to borrow money to do the spending. They have to borrow it from somewhere, and you've added demand on the loanable funds market. This is an issue.

Some forms of government spending, like education, are worth the extra spending because that will eventually affect the Long-Run Aggregate Supply.

cameroncrazy1984: Ricardo Klement: Not cutting government (and I am not ascribing cuts as good or bad here) means government would have to borrow more, and that affects the loanable funds market

What's cute is you think issuing a T-Bill or a bond is like a business asking for a revolving line of credit from BoA.

What? The guy who is an undisputed expert on every farking thing?

Ricardo Klement: But the government has to borrow money to do the spending. They have to borrow it from somewhere, and you've added demand on the loanable funds market. This is an issue.

Yes, people are willing to lend money to the US government because its an incredibly safe investment.

You still have not explained in any way why this is a bad thing.

cameroncrazy1984: Ricardo Klement: DamnYankees: Ricardo Klement: Not cutting government (and I am not ascribing cuts as good or bad here) means government would have to borrow more, and that affects the loanable funds market

Treasury bond interest rates are already as low as ever. This is a nonsense objection.

Except someone still needs to buy the bond. If I buy a bond, I simply have less money to lend elsewhere.

Which would be true, if there was only one person allowed to buy bonds. Also, if you only ever had a fixed amount of capital.

It's true no matter how many people you have, and the amount of wealth available for loans is limited.

DamnYankees: Ricardo Klement: Don't get hung up on things that don't affect the issue at hand, which is that when government has to boroow money, it removes a certain amount of wealth available for lending from the aggregate pool of available wealth.

Yes. That's the point. In a recession, people don't invest and don't spend money. That's why the government is the one that needs to step in.

You're saying the solution to people not investing is to have them invest in government bonds?

Ricardo Klement: DamnYankees: Ricardo Klement: Don't get hung up on things that don't affect the issue at hand, which is that when government has to boroow money, it removes a certain amount of wealth available for lending from the aggregate pool of available wealth.

Yes. That's the point. In a recession, people don't invest and don't spend money. That's why the government is the one that needs to step in.

You're saying the solution to people not investing is to have them invest in government bonds?

No, the solution to people not investing is to have the government do the investing. How they get that money - by issuing debt or by printing money or some other scheme, is a separate issue. But if people are willing to lend the government money at 2% interest, all the better.

Ricardo Klement: Fear_and_Loathing: Oh and the people who stopped looking, just means they just aren't in the system anymore. Trust me they are looking.

When an economist talks about people who aren't looking, they MEAN people who aren't looking. For example: the 67 year old who wouldn't have retired this year but got laid off so decided to go ahead and retire. He's out of the job market. Not looking. Another example: a guy who got laid off but decided to go back to school to finish his degree rather than look for a job. He's out of the job market. Not looking.


Yeah, but the BLS stats on the percent of the working-age population that is employed has remain virtually unchanged from the bottom-out point in late 2009. It was 58.2% then and it's 58.4% now.

cameroncrazy1984: Ricardo Klement: Don't get hung up on things that don't affect the issue at hand, which is that when government has to boroow money, it removes a certain amount of wealth available for lending from the aggregate pool of available wealth.

A) That assumes the aggregate pool of available wealth is constant and B) that also assumes that the money would be lent in the first place.

Neither of which are true when QE is in place, or when there is very little being lent to the private sector, as was the case in 2008-09.

The aggregate pool of available wealth is modified by things like interest rates, but generally speaking, in the short-term, it's relatively constant. If the money isn't being spent, and if it's not being stuffed into mattresses, and if it's not part of the reserve requirement that banks have (stuff they need to keep in their vaults to hand out to customers who want their money), it's being lent. QE is just another form of OMO, which is going on all the time.

DamnYankees: Ricardo Klement: But the government has to borrow money to do the spending. They have to borrow it from somewhere, and you've added demand on the loanable funds market. This is an issue.

Yes, people are willing to lend money to the US government because its an incredibly safe investment.

You still have not explained in any way why this is a bad thing.

I'm not saying that this is a priori bad, but you have to recognize that if I am lending money to the US government, I am not a) spending it or b) saving it. And savings are money the bank uses to lend to people. So unless you feel there's a horde of stuffed mattresses that government spending frees up, it's going to reduce funds available to be lent elsewhere.

cameroncrazy1984: Ricardo Klement: It's true no matter how many people you have, and the amount of wealth available for loans is limited.

Limited, sure, but not static.

I'm not sure where you think additional wealth comes from. If government decides it can create wealth by spending, it first has to negatively impact the loanable funds market before it can spend, so wealth isn't created until after the fact at best.

Ricardo Klement: I'm not saying that this is a priori bad, but you have to recognize that if I am lending money to the US government, I am not a) spending it or b) saving it.

Yes, you are saving it. You're saving it by investing it with the US government.

cameroncrazy1984: Ricardo Klement: DamnYankees: Ricardo Klement: Don't get hung up on things that don't affect the issue at hand, which is that when government has to boroow money, it removes a certain amount of wealth available for lending from the aggregate pool of available wealth.

Yes. That's the point. In a recession, people don't invest and don't spend money. That's why the government is the one that needs to step in.

You're saying the solution to people not investing is to have them invest in government bonds?

Are you saying they're an unsafe investment? As in, holy crap all these banks are failing we can't invest anywhere...oh wait, T-Bills are a good bet.

What were people doing with that money before T-bills became available? Money that sits in a vault or a shoebox somewhere loses value every day because of inflation. They look for someone to loan it to every day, and if t-bills weren't available, they'd take risks to loan it to people and businesses instead. Conversely, if they're buying t-bills, they're not loaning it to people and businesses.

Sybarite: Ricardo Klement: Fear_and_Loathing: Oh and the people who stopped looking, just means they just aren't in the system anymore. Trust me they are looking.

When an economist talks about people who aren't looking, they MEAN people who aren't looking. For example: the 67 year old who wouldn't have retired this year but got laid off so decided to go ahead and retire. He's out of the job market. Not looking. Another example: a guy who got laid off but decided to go back to school to finish his degree rather than look for a job. He's out of the job market. Not looking.


Yeah, but the BLS stats on the percent of the working-age population that is employed has remain virtually unchanged from the bottom-out point in late 2009. It was 58.2% then and it's 58.4% now.

[data.bls.gov image 600x300]

So the U3 only indicates when Obama is doing a bad job. When the U3 is dropping, you shift to another measurement. Got it. What happens when you run out of metrics showing that things are getting worse?

DamnYankees: Ricardo Klement: I'm not saying that this is a priori bad, but you have to recognize that if I am lending money to the US government, I am not a) spending it or b) saving it.

Yes, you are saving it. You're saving it by investing it with the US government.

All the money I save is being lent out (except for the few exceptions I discussed earlier). So if I "save" it in a bank account instead of investing it in the US government, that money is being lent out to people and businesses (except for reserve requirements and so on).

So if I lend it to the government, I'm not buying products or I am not lending it to someone else by saving it.

Ricardo Klement: So if I "save" it in a bank account instead of investing it in the US government, that money is being lent out to people and businesses (except for reserve requirements and so on).

This would be nice if it was true. But its not. Private lending is down. That's sort of the problem.

Ricardo Klement: Fear_and_Loathing: Oh and the people who stopped looking, just means they just aren't in the system anymore. Trust me they are looking.

When an economist talks about people who aren't looking, they MEAN people who aren't looking. For example: the 67 year old who wouldn't have retired this year but got laid off so decided to go ahead and retire. He's out of the job market. Not looking. Another example: a guy who got laid off but decided to go back to school to finish his degree rather than look for a job. He's out of the job market. Not looking.

Okay, I am 51 and looking. When I got laid off the grey hair looked at me and said "You're screwed."

DamnYankees: Ricardo Klement: So if I "save" it in a bank account instead of investing it in the US government, that money is being lent out to people and businesses (except for reserve requirements and so on).

This would be nice if it was true. But its not. Private lending is down. That's sort of the problem.

If money isn't being lent, it's being spent. On goods and services.