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(The Atlantic Wire)   Paul Krugman swats down every Tea Party/GOP argument on the economy ever made. Bonus: On live TV   (theatlanticwire.com) divider line 489
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7573 clicks; posted to Politics » on 12 Jul 2012 at 10:47 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-07-12 01:39:24 PM

MFL: ordinarysteve
I enjoy reading how right-wing trolls think they've got it all figured out and Krugman won a nobel prize by accident.

Nobel prizes have become nothing more than lib political BS anymore. They gave one to Obama for.........showing up?


The Nobel Prize for Economic Sciences is a Lib conspiracy.
 
2012-07-12 01:42:03 PM

bartink: MattStafford: I would agree that the direct action of paying down debt does not lead to prosperity. It does, however, eventually lead to a situation where real growth can occur.

Well, looking at the rate of spending in many European countries, despite proclaiming austerity they have paid down relatively little. Perhaps the Baltic nations. Either way, this is a logical argument, not empirical. Empiricism is useful, but it is very complex trying to find a situation that matches up exactly with what you are looking for.

Doesn't it bother you that you can't find someone that is even going that direction and having positive results? It would me.


No, not particularly. I have great confidence in the logic that my beliefs are based on.

It is very unsurprising that Austrian economics isn't utilized very often. Politicians want to be able to do something, so they get elected, so naturally they chooses Keynes of Mises. Also, the Baltic economies are experiencing growth after some serious austerity, but I don't like to point out countries as specific examples, as there is far more going on there than what can be explained in a few paragraphs (or equations, for that matter).
 
2012-07-12 01:42:38 PM

MattStafford: Gold has been around for thousands of years, the fiat dollar around 40. I'll put my wealth on gold, thank you very much.


International economics aren't regulated by an overarching body, yet in the history of financial markets fiat currencies have consistently taken the market. Why do you think this is?

That's not to mention the fundamental fallacy you're asserting: similarly, antibiotics have been around for a much shorter time than trepanation.
 
2012-07-12 01:43:00 PM

MattStafford: The Fed does a great job of restarting growth whenever there is a recession. However, those recessions are necessary corrections, and without letting those necessary corrections occur, you set yourself up for one massive correction. Which will be occurring shortly.


The thing you should ask yourself is, corrections for what, exactly? The market forces that cause these corrections don't just poof straight into existence from the ether. These "corrections" as you put it are symptoms of a greater problem, and the heart of the matter is correcting the problem itself.

Which is, of course, the financial sector is egregiously under-regulated -- which created the landscape in which the 2008 crisis and the S&L crisis which served as its prototype and precedent could occur -- and hedged by the guarantee of federal bailouts, while the Fed is equally under-regulated, unaccountable, and opaque.
 
2012-07-12 01:43:31 PM

bartink: MattStafford: Was Greece's debt sustainable? How about Spain's?

Spain had very low debt prior to the crash. Apples and oranges.


Well, if they had low debt, shouldn't that make them more sustainable? You aren't seriously arguing that US debt is more sustainable because there is more of it, are you?
 
2012-07-12 01:44:09 PM

MattStafford: Gold has been around for thousands of years, the fiat dollar around 40. I'll put my wealth on gold, thank you very much.


This is a terrible argument. If you were to be asked, would you rather be born in the last 40 years or some random point in all of history, are you saying you'd rather live before 40 years ago? Because that is what you are implying. The explosion of the world's middle class, the dramatic increase in new technologies, the massive reduction in violence experienced by the average person, etc. Its all better now than then.
 
2012-07-12 01:44:33 PM

Fart_Machine: MFL: ordinarysteve
I enjoy reading how right-wing trolls think they've got it all figured out and Krugman won a nobel prize by accident.

Nobel prizes have become nothing more than lib political BS anymore. They gave one to Obama for.........showing up?

The Nobel Prize for Economic Sciences is a Lib conspiracy.


The grown-ups and math geniuses behind the conservative movement understand that economic policies require a death squad or two in order to succeed.
 
2012-07-12 01:45:05 PM

that bosnian sniper: This may just be me, but I'd attribute our inability to produce a surplus less to deficit spending during busts and more to the waterheads on Capitol Hill who, at any time the economy has been decent in the past thirty years and been in a solid position to pay down our debt, decided what we really need to do is cut taxes, dole out rebates, and increase spending because the economy's doing good right then. And the kind of lunatic who decides that since we're in a recession, we really, really need to cut taxes while running around the Middle East smashing windows.


I'll agree with that 100%. Remember the main justification of the Bush Tax Cut? It was because all of that money the federal government would soon be swimming in. Might as well give some of it back right? Plus lets go play with our toys in the sand. Didn't work out too well, did it?

Though many of the democrats are not much better. Right now you get the argument for eliminating the tax cuts (which I do agree with) but then the turn around and start dreaming about things to do with all that extra money. That causes me to facepalm.
 
2012-07-12 01:45:46 PM

HeadLever: If I am reading this correctly, you are assuming that we can easily dispose of said debt in an easy fashion once the economy gets better. I would disagree with this. We have shown that it is nealy impossible for us to produce a surplus let alone pay off huge chunks of that debt.


Well, true, if we assume it's impossible to reduce the debt then we'll never reduce the debt. That leads to the question: Why is cutting back going to be easier or better now (with high unemployment) than later? I guess if unemployment's just as bad later than now, it won't be any easier to cut back. But then we have bigger problems.

HeadLever: Don't forget the booming costs of Medicare/Medicaid and SS.


Oh, I haven't, believe me. Our long-run projected government debt problem, such as it is, is 100% driven by medical inflation. Get that under control and debt will stabilize and/or drop as a % of GDP, even without big changes in spending or taxes. If we don't get it under control, we're all screwed regardless of government finances (we could just kill Medicare and Medicaid, but then the unsustainable cost burden just shifts to individuals and/or States, who are even less able to deal with it).
 
2012-07-12 01:46:50 PM

MattStafford: Well, if they had low debt, shouldn't that make them more sustainable? You aren't seriously arguing that US debt is more sustainable because there is more of it, are you?


No, I'd argue that Germany isn't our central bank, as has already been pointed out to you. But you said that Spain had a debt problem that caused this and that statement is factually false.Their problem is a direct result of the European union leading to their bubble that, when it burst, left them unable to devalue their currency. Greece is a different matter.
 
2012-07-12 01:48:01 PM

Gaseous Anomaly: MattStafford: If the US government borrows 100 dollars/yr to pay people to dig a ditch and fill it back up, that action is going to boost the economy.

...

MattStafford: However, we are massively distorting the economy towards the ditch digging profession.

...

MattStafford: Even if you can borrow at extremely low rates, unless you spend it on something with an ROI greater than one, the end game is a necessary correction. The longer and more extreme the borrowing is, the more extreme the collapse.

You seem to be assuming full employment, that is, that the employment of the ditch diggers is "crowding out" employment elsewhere.

Currently we have 4 unemployed per job opening (admittedly better than the 8 we had when things went sideways in 2008). So you can add a lot of jobs without distorting anything, and come out ahead as long as the ROI is greater than zero (since the unemployed produce nothing).

Admittedly there's no jobs program that can 100% target the unemployed.


So do you disagree with what would happen? You didn't mention anything at all about what would happen once the government can no longer afford to pay the ditch diggers.

Also, if we follow the implications of your argument, every time anyone is laid off from a job anywhere, we should immediately hire them on as a ditch digger.

Or, perhaps a better idea is to let the market dictate what should happen with those unemployed people, and dictate their wages. Perhaps there are some people with great ideas out there but no start up capital, and they can't invest because the government is paying every recent engineer tons of money to build bombs, and keeping car manufacturing plants on life support so those people can buy factories either. Ya know, maybe it could be something like that.
 
2012-07-12 01:48:46 PM

MFL: Nobel peace prizes have become nothing more than lib political BS anymore. They gave one to Obama for.........showing up?


FTFY... and it's obvious. The Peace Prize is inherently political, how could it not be?

The Ig Nobel Peace Prize is more sound... they awarded one to the inventor of karaoke for promoting cross-cultural acceptance.
 
2012-07-12 01:49:12 PM

bartink: MattStafford: The fact that he supports creating a fake alien invasion simply to spur government spending certainly lends credence to his first sentence, however.

And now you have gone off the derp end. It was a thought experiment.


I'm not positive what you mean with this. Krugman posited it as a thought experiment? He has said that faking an alien invasion would be beneficial to our economy. That is a fact. Are you disagreeing with that easily verifiable fact?
 
2012-07-12 01:49:22 PM

Gaseous Anomaly: Well, true, if we assume it's impossible to reduce the debt then we'll never reduce the debt. That leads to the question: Why is cutting back going to be easier or better now (with high unemployment) than later? I guess if unemployment's just as bad later than now, it won't be any easier to cut back. But then we have bigger problems.


I'd add that the stimulus has been allowed to expire and has zero to do with increasing government spending projections, which are almost completely the inconvenient baby boomer retirement costs on all of us. So the notion that increased spending in dire times always stay high has just been put to the sword by an actual example, and very recently.
 
2012-07-12 01:49:32 PM
(Skipping here to the end...)

Typical news people, ask a question and interrupt the answer they asked for but don't want to hear.
The look on Krugman's astonished face at the end like he's watching a bunch of children cackling back and forth.

/Not sure if I want to sit through the debate.
 
2012-07-12 01:50:09 PM

Fart_Machine: MFL: ordinarysteve
I enjoy reading how right-wing trolls think they've got it all figured out and Krugman won a nobel prize by accident.

Nobel prizes have become nothing more than lib political BS anymore. They gave one to Obama for.........showing up?

The Nobel Prize for Economic Sciences is a Lib conspiracy.


The Female Orgasam! THAT'S THE REAL LIE!

/what?
//you KNOW someone was thinking it...
 
2012-07-12 01:51:29 PM

Gaseous Anomaly: If we keep the long-run debt growth rate around or under the long-run economic growth rate we'll be fine.


Correct. The issue is that this may be very, very difficult to keep debt growth on par with economic growth. Expecially if interest becomes as big as the CBO projects.

Per the CBO Alternative Baseline estimate:
lh3.googleusercontent.com
 
2012-07-12 01:52:06 PM

MattStafford: I'm not positive what you mean with this. Krugman posited it as a thought experiment? He has said that faking an alien invasion would be beneficial to our economy. That is a fact. Are you disagreeing with that easily verifiable fact?


You said he advocated this.

MattStafford: The fact that he supports creating a fake alien invasion simply to spur government spending certainly lends credence to his first sentence, however.


No, you said that he supports such a thing. That's just nonsense. He is saying that in the abstract that belief in such a thing would be beneficial. No where is he advocating actually doing it. That's just typical anti-Krugman derp.
 
2012-07-12 01:54:24 PM

MattStafford: Gold has been around for thousands of years, the fiat dollar around 40. I'll put my wealth on gold, thank you very much.


Leaches have been around for thousands of years, antibiotics around 60. I'll put my health on the leaches, thank you very much.
 
2012-07-12 01:55:20 PM

HeadLever: Correct. The issue is that this may be very, very difficult to keep debt growth on par with economic growth. Expecially if interest becomes as big as the CBO projects.

Per the CBO Alternative Baseline estimate:


This is directly due to health care costs, however. So, to parrot Krugman, we don't have a debt problem, we have a health care problem. If we had France's health care costs we would be solvent to infinity.
 
2012-07-12 01:55:41 PM
This thread should have had a math warning.
 
2012-07-12 01:56:07 PM

Philip Francis Queeg: MattStafford: Gold has been around for thousands of years, the fiat dollar around 40. I'll put my wealth on gold, thank you very much.

Leaches have been around for thousands of years, antibiotics around 60. I'll put my health on the leaches, thank you very much.


Horses have been around for thousands of years, cars around 110. I'll put my transportation needs on horses, thank you very much.
 
2012-07-12 01:56:23 PM

Stoker: /Not sure if I want to sit through the debate.


Watch the longer debate, its pretty damn thoughtful. Its amazing what happens when the debate is conducted by learned participants in an intellectual forum.
 
2012-07-12 01:59:03 PM

MattStafford: Was Greece's debt sustainable? How about Spain's?


Greece and Spain have massive problems because tax evasion is the national sport in those countries. Their tax gaps as a result of the shadow economy keeping money hidden from the government are among the biggest on the planet at close to a third of the national GDP. Beyond that, if too much government spending is what's causing their economies to crash, then why are France, Belgium, Denmark, Germany, Austria, Finland, and Sweden's economies all performing far better than Greece and Spain's economies despite the fact that they all spend at least 5% of GDP more on social spending?
 
2012-07-12 01:59:59 PM

MattStafford: Also, if we follow the implications of your argument, every time anyone is laid off from a job anywhere, we should immediately hire them on as a ditch digger.


Basically, yes. Leave enough behind to keep unemployment at "full employment" levels.

MattStafford: Or, perhaps a better idea is to let the market dictate what should happen with those unemployed people, and dictate their wages. Perhaps there are some people with great ideas out there but no start up capital, and they can't invest because the government is paying every recent engineer tons of money to build bombs, and keeping car manufacturing plants on life support so those people can buy factories either. Ya know, maybe it could be something like that.


If you're saying that's happening now, you're saying we're at or above full employment. What's your natural unemployment rate estimate, then? 15%? What happened to shoot it up there? If we're below the NAIRU, where's the "AI" part of that?

Again, there's a buttload of unemployed people not currently working for the government, and a buttload of idle capital being parked in negative-yield Treasuries. Why is the private sector not putting these together? (I probably shouldn't ask, because I can predict your answer... it's the nearest government program's fault, regardless of nature. Probably Barney Frank's fault somehow (yes, I do see Farkers that argue this)).
 
2012-07-12 02:00:45 PM

HeadLever: Though many of the democrats are not much better. Right now you get the argument for eliminating the tax cuts (which I do agree with) but then the turn around and start dreaming about things to do with all that extra money. That causes me to facepalm.


F*ck I hate this.

We really need

1) To get out of this deficit slowly and surely, by cutting spending and increasing revenues over time. This will take probably 10 years at least.
2) On the eve of getting out of the deficit, pass a debt reduction amendment that forces the government to budget a surplus every year it is in debt and a balanced budget in non-debt years (with some VERY narrow provisions for not surplussing/balancing the budget). The amendment would contain some sort of reduction parameters, I'm sure we could figure out the language of the provision. Something like a 30 year time period would be fine by me.
 
2012-07-12 02:01:10 PM

Gaseous Anomaly: Well, true, if we assume it's impossible to reduce the debt then we'll never reduce the debt. That leads to the question: Why is cutting back going to be easier or better now (with high unemployment) than later?


It is not impossible, just very difficult. Right now, then entire federal revenue is consumed by the manditory spending of Interest, Medicare/Medicaid, Social Security plus the Department of Defense. The deficit is 1.3 Trillion per year. That is a huge hole to dig out of before we can even think about reducing the debt.

Regarding your question - The thought is that it would be easier to pay the debt down now because the manditory spending on Interest, Medicare/Medicaid and Social Security are as low right now as it will be for a very long time (this is provided that we can get the revenue numbers out of the cellar). The increases in these items are likely going to outstrip our ability to keep up on the economic or revenue side. Especially if Hauser's Law proves to be somewhat accurate.
 
2012-07-12 02:02:33 PM

MFL: ordinarysteve
I enjoy reading how right-wing trolls think they've got it all figured out and Krugman won a nobel prize by accident.

Nobel prizes have become nothing more than lib political BS anymore. They gave one to Obama for.........showing up?


While most people thought a Peace Prize was a bit much, the rest of the world was pretty relieved when you guys voted in someone who was articulate and didn't run around saying "with us or against us".
 
2012-07-12 02:04:11 PM

Gaseous Anomaly: Basically, yes. Leave enough behind to keep unemployment at "full employment" levels.


You could even assign them to do things other than dig ditches.
 
2012-07-12 02:05:16 PM

bartink: This is directly due to health care costs, however.


More accurate - is is due to total governemnt spending, whose increases are going to be dominated by health care costs. The total spending begets the debt and the debt begets problems through interest.

Overall, if we can find a way to stabilize these health care costs, it would go a long way to helping our debt problem.
 
2012-07-12 02:05:56 PM

HeadLever: bartink: This is directly due to health care costs, however.

More accurate - is is due to total governemnt spending, whose increases are going to be dominated by health care costs. The total spending begets the debt and the debt begets problems through interest.

Overall, if we can find a way to stabilize these health care costs, it would go a long way to helping our debt problem.


That ignores that fact that we would be just fine if we had health care costs in line with Europe.
 
2012-07-12 02:07:14 PM

HeadLever: Gaseous Anomaly: Well, true, if we assume it's impossible to reduce the debt then we'll never reduce the debt. That leads to the question: Why is cutting back going to be easier or better now (with high unemployment) than later?

It is not impossible, just very difficult. Right now, then entire federal revenue is consumed by the manditory spending of Interest, Medicare/Medicaid, Social Security plus the Department of Defense. The deficit is 1.3 Trillion per year. That is a huge hole to dig out of before we can even think about reducing the debt.

Regarding your question - The thought is that it would be easier to pay the debt down now because the manditory spending on Interest, Medicare/Medicaid and Social Security are as low right now as it will be for a very long time (this is provided that we can get the revenue numbers out of the cellar). The increases in these items are likely going to outstrip our ability to keep up on the economic or revenue side. Especially if Hauser's Law proves to be somewhat accurate.


I don't buy into Hauser's law. Why have several European countries been able to sustain tax rates far above what America has consistently had? They have a socio-political climate that accepts you need to pay for stuff you want to buy. We don't have that nearly as much. Change that way of thinking and the law will break.
 
2012-07-12 02:10:13 PM

Gaseous Anomaly: MattStafford: I assume you mean it doesn't have to be paid back since we can print money?

Not necessarily, the ability to print just makes it a safer loan (from the lender's point of view) than others. We're never forced to default (though we can choose to, and are pretty certain to if Obama wins, when the next debt ceiling clusterfark hits in 2013).

It's because the time horizon is infinite. The government doesn't die, retire, etc. We still have debt from WWII. If we keep the long-run debt growth rate around or under the long-run economic growth rate we'll be fine.


Sure, just push everything off into the future. Good luck with that man. I'm sure the dollar will be the first fiat currency to buck the trend of disappearing. it's gotta be, right!?


MattStafford: Issuing more, presuming that the issuers subsequently spend it on goods, does in fact crowd out private industry. Suppose you have an unused factory and unemployed factory workers. If the US government issues debt and hires those people to use the factory to build tanks, it preclude some private investor from offering a lower price to those employees and buying the factory at a lower price to produce electric cars, or whatever.

What about when private industry is not, you know, doing that? Like now?


Well maybe you have to wait until the price of people and capital comes down a bit. We passed the fiscal stimulus, what, a year after the economy crashed? You think that was enough time to have the economy correct? Look, corrections aren't easy. They aren't fun. Depending on how they are handled, they aren't quick. But they are necessary. If you prevent a correction from happening, it is only going to come back ten fold down the road.

MattStafford: Was Greece's debt sustainable? How about Spain's?

Does Germany control our monetary policy?


So inflation, then? There are two options, neither are fun.
 
2012-07-12 02:10:26 PM

HeadLever: Per the CBO Alternative Baseline estimate:


The "without future policy changes" is key. Of course if we continue to run deficits at or above current levels forever (note the flat "receipts" line) then the debt and interest thereon will get scary big.
 
2012-07-12 02:10:34 PM

HeadLever: Gaseous Anomaly: If we keep the long-run debt growth rate around or under the long-run economic growth rate we'll be fine.

Correct. The issue is that this may be very, very difficult to keep debt growth on par with economic growth. Expecially if interest becomes as big as the CBO projects.

Per the CBO Alternative Baseline estimate:
[lh3.googleusercontent.com image 512x373]


You see how that thick black line (receipts) bounces back up to horizontal (about 19% GDP) in 2010ish? Yeah, that didn't happen.

All of these projections show that line bouncing back up to 19%, as that's the historical average %GDP that the government collects in revenue. The problem is that no one in Congress or the Executive Branch has done anything that might cause that bounce.

Obama's paying lip service to the idea (letting the bottom bracket rate reductions expire), as are some Congressional Dems, but everyone's projections (including CBO's) show that rise. How do we get there?
 
2012-07-12 02:11:01 PM

randomjsa: You mean "Krugman spews liberal talking points that they want to hear"? Yeah I thought so. This is the guy who with zero evidence what so ever came out within hours of the Giffords shooting to blame the Tea Party/Right for it. Then in a stunning show of journalistic integrity never retracted those statements or admitted he was wrong about his assumptions.

Because that's just the kind of honestly and objectivity we expect from Krugman and it lends itself so well to taking him seriously on everything else when he can't even admit to such a minor mistake and apologize for it.

But... but... he has a Nobel Prize! Yes, we're well aware of just how completely meaningless the Nobel Prize is now as it has become little more than the worlds biggest liberal reach around as they praise each other for brilliance.

This is after all the guy who said that the stimulus worked just fine and dandy but it just wasn't big enough. As we now know for a fact that even under the most perfect of perfect conditions it would have been absolutely impossible to spend more than 250 billion dollars on the so called 'shovel ready' projects that were going to save the economy we can also safely say that Krugman was talking out of his rear just as much as Obama was on the issue.

But it's not like either of them didn't know what the stimulus package actually was, which was a slush fund for unions. Krugman is like many other "brilliant" liberal minds, in that he stays safely in places where he won't be challenged on his garbage and if by chance he finds himself in another setting... say... having to go up against even somebody as simple as Bill O'Reilly, he gets absolutely destroyed in arguments.

He's just another idiot in a long line of liberal idiots who insist that no matter how many times their ideas fail and produce horrible results, that it was only because it wasn't done right and we just need more time and more money then it will work.


I'm going to repeatedly ask you this until you stop being a post-and-run coward, even though you'll never answer it, because as we've proven repeatedly, you're a coward.

Do you ever get tired of being nothing but a hateful asshole here?

And you are one of the last people who should ever bring up what happened to Rep. Giffords. I recall you taking extreme joy and pleasure the day that happened to her.
 
2012-07-12 02:12:33 PM
LOL @ people calling Paul Krugman a liberal.

If y'all want to see a real liberal you're welcome to come out to my house and chat with me. I got some awesome Bourbon whiskey and great micro-brews to drink (or Budweiser if that's your pleasure), shoot some guns and discuss why ALL people should be treated equally as well as why current Republican plans to balance the budget are horrendous.
 
2012-07-12 02:14:44 PM

sprawl15: MattStafford: Gold has been around for thousands of years, the fiat dollar around 40. I'll put my wealth on gold, thank you very much.

International economics aren't regulated by an overarching body, yet in the history of financial markets fiat currencies have consistently taken the market. Why do you think this is?

That's not to mention the fundamental fallacy you're asserting: similarly, antibiotics have been around for a much shorter time than trepanation.


Perhaps you meant to say, "fiat currencies have temporarily taken the market"? They continually spring up because a fiat currency allows the government to spend beyond its means. Governments that spend beyond their means are popular. People are too dumb to realize what is actually going on.

There is a reason that every attempt at fiat currency in history, all the way back to the 10th century (yeah, 10th century. They've been trying this shiat for 1000 years, and it still isn't working), has failed, save this iteration. This one will fail too. They all do.
 
2012-07-12 02:18:08 PM

bartink: MattStafford: Gold has been around for thousands of years, the fiat dollar around 40. I'll put my wealth on gold, thank you very much.

This is a terrible argument. If you were to be asked, would you rather be born in the last 40 years or some random point in all of history, are you saying you'd rather live before 40 years ago? Because that is what you are implying. The explosion of the world's middle class, the dramatic increase in new technologies, the massive reduction in violence experienced by the average person, etc. Its all better now than then.


How is that what I am implying? Are you implying that fiat currency somehow created the industrial revolution, and all subsequent technological gains? Guess what, they had fiat currency in 10th century China. Are you implying that you would rather live in 10th Century China than 1900s America?
 
2012-07-12 02:18:12 PM

Serious Black: I don't buy into Hauser's law. Why have several European countries been able to sustain tax rates far above what America has consistently had?


Yeah, I'll agree it is kind of just an observation rather than a hard law. However, it seems to be pretty accurate, looking backward. That being said, I would argue that it is more of a socioeconomic characterization of the US population, rather than something that extends to all countries of the world.

While it may not be a hard law, I do typically have to bring it up when the CBO Baseline Scenario is presented as they show revenues skyrocketing to 25% and 27% of GDP. Those numbers seem to be very optimistic to me no matter what type of tax policy you assume.
 
2012-07-12 02:20:27 PM

bartink: MattStafford: Well, if they had low debt, shouldn't that make them more sustainable? You aren't seriously arguing that US debt is more sustainable because there is more of it, are you?

No, I'd argue that Germany isn't our central bank, as has already been pointed out to you. But you said that Spain had a debt problem that caused this and that statement is factually false.Their problem is a direct result of the European union leading to their bubble that, when it burst, left them unable to devalue their currency. Greece is a different matter.


So central banks determine debt sustainability? If you just keep printing, the problem will go away? Sometimes it amazes me how smart some people can be, yet completely refuse to accept the reality of economics. What you're implying is, if our lenders stop giving us money, instead of collapsing we will just print the money for all of our public sector workers, and everything will work out fine? Seriously?
 
2012-07-12 02:21:02 PM
Was "spending" and "more" involved?
 
2012-07-12 02:21:03 PM
I hate listening to all these ignorant, stupid, elitist, shills that abound in the media.

GIVE THEM HELL PAUL!
 
2012-07-12 02:23:19 PM

bartink: MattStafford: I'm not positive what you mean with this. Krugman posited it as a thought experiment? He has said that faking an alien invasion would be beneficial to our economy. That is a fact. Are you disagreeing with that easily verifiable fact?

You said he advocated this.

MattStafford: The fact that he supports creating a fake alien invasion simply to spur government spending certainly lends credence to his first sentence, however.

No, you said that he supports such a thing. That's just nonsense. He is saying that in the abstract that belief in such a thing would be beneficial. No where is he advocating actually doing it. That's just typical anti-Krugman derp.


This is the same Krugman thing with the housing bubble. Oh he just said it, he didn't really mean it.

The fact of the matter is, Krugman believes that going massively into debt to build unnecessary space defenses would be beneficial to our economy. If you can't understand how dumb and backwards that is, I'm sorry, there may not be hope for you.
 
2012-07-12 02:24:20 PM

Gaseous Anomaly: The "without future policy changes" is key. Of course if we continue to run deficits at or above current levels forever (note the flat "receipts" line) then the debt and interest thereon will get scary big.


With the shiat we get from our politicians right now, 'without future policy changes' may be a pretty good assumption. I hope I am wrong.

And the CBO's ABS does assume some reduction in deficits and you can see this where the black revenue line climbs back up toward the top of the graph before leveling off around 18.5% of GDP. For comparison, right now, revenue is about 15.1% of GDP.
 
2012-07-12 02:24:34 PM

Philip Francis Queeg: d for thousands of years, the fiat dollar around 40. I'll put my wealth on gold, thank you very much.

Leaches have been around for thousands of years, antibiotics around 60. I'll put my health o


Have various forms of antibiotics popped up for the past 1000 years, only to be proven as worthless? No? Oh, so it really isn't the same thing.
 
2012-07-12 02:24:42 PM

MeinRS6: I don't think Krugman did what you think he did, subby.

He just spouted his usual, tax "the rich" and more gov't spending argument. Nothing new there. He writes that in almost every one of his columns.


Every post above yours was a strawman argument.....then you cam along. lol
 
2012-07-12 02:26:20 PM

MattStafford: They continually spring up because a fiat currency allows the government to spend beyond its means.


Which implies a value to spending beyond its means. Like, say, during wartime or catastrophe. An economy that has no capacity to react to unexpected events is one that is doomed to fail. You are mixing up 'irresponsible spending beyond means' with the simple capacity to spend beyond means.

MattStafford: People are too dumb to realize what is actually going on.


This is a particularly silly comment unless you're asserting that the only acceptable government is oligarchal.

MattStafford: There is a reason that every attempt at fiat currency in history, all the way back to the 10th century (yeah, 10th century. They've been trying this shiat for 1000 years, and it still isn't working), has failed, save this iteration. This one will fail too. They all do.


You're arguing that a vast scope of currencies based on an arbitrary value will always fail, yet currencies based on physical objects with an arbitrary value somehow are immune to this, with absolutely no justification for such a broad statement.
 
2012-07-12 02:27:37 PM

Dr Dreidel: You see how that thick black line (receipts) bounces back up to horizontal (about 19% GDP) in 2010ish? Yeah, that didn't happen.


Correct. Revenue has bounced back some but not to the magnitude of this CBO estimate (dated 2009).
 
2012-07-12 02:28:37 PM

HeadLever: Serious Black: I don't buy into Hauser's law. Why have several European countries been able to sustain tax rates far above what America has consistently had?

Yeah, I'll agree it is kind of just an observation rather than a hard law. However, it seems to be pretty accurate, looking backward. That being said, I would argue that it is more of a socioeconomic characterization of the US population, rather than something that extends to all countries of the world.

While it may not be a hard law, I do typically have to bring it up when the CBO Baseline Scenario is presented as they show revenues skyrocketing to 25% and 27% of GDP. Those numbers seem to be very optimistic to me no matter what type of tax policy you assume.


Yeah, revenues at 25% of GDP is rather optimistic. To be fair though, almost every budget scenario laid out by Congress and/or the CBO is rather optimistic in some fashion. Remember Paul Ryan's budget that claimed unemployment would drop to 2.8%, lower than it's been at any time since probably the writing of the Articles of Confederation?
 
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