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(Fox News)   Using the verbal equivalency of circling the wagons, top Dems claim balancing the budget now would actually be a bad idea   (foxnews.com) divider line 321
    More: Scary, Democrats, President Obama, balanced budgets, Los Angeles Mayor Antonio Villaraigosa, entitlement reform, David Axelrod  
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937 clicks; posted to Politics » on 03 Sep 2012 at 11:35 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-09-03 11:37:07 AM  
It would be a bad idea. You don't balance the budget in a recession. You need to spend the money to get you out of the recession.
 
2012-09-03 11:39:41 AM  

CPennypacker: It would be a bad idea. You don't balance the budget in a recession. You need to spend the money to get you out of the recession.


This. Europe's economy, for the most part, is still deep in the shiatter because they chose "austerity" over stimulating the economy.
 
2012-09-03 11:39:50 AM  
In before cons use household 'economy' as a model for a country.
 
2012-09-03 11:42:08 AM  
In before cons use "running a business" as a model for a country.
 
2012-09-03 11:42:26 AM  
Surpluses during good times, deficits during recessions. The government has the ability to defy the normal boom-bust cycle to dampen it and keep things more stable. Why is this so hard for people to understand?
 
2012-09-03 11:43:58 AM  
Technically we're not in a recession anymore, but I was always told that balancing the budget during an economic crisis would, at best, slow down recovery or, at worst, pull us down into a(nother) recession.
 
2012-09-03 11:45:02 AM  

jake_lex: This. Europe's economy, for the most part, is still deep in the shiatter because they chose "austerity" over stimulating the economy.


I'm not sold on Keynes, and I think that austerity might be something you need a little bit of during a recession.

But even still, balancing the budget during a recession just ain't gonna happen without crushing tax rates.
 
2012-09-03 11:45:55 AM  

Tusz: Surpluses during good times, deficits during recessions. The government has the ability to defy the normal boom-bust cycle to dampen it and keep things more stable. Why is this so hard for people to understand?


The problem arises when somebody runs a massive deficit (or starts a war or two) during times of economic growth.
 
2012-09-03 11:45:58 AM  

Tusz: Surpluses during good times, deficits during recessions. The government has the ability to defy the normal boom-bust cycle to dampen it and keep things more stable. Why is this so hard for people to understand?


because soshalism

Oh, and...

i154.photobucket.com
 
2012-09-03 11:46:50 AM  
I stopped reading at top Dems, just as I stop reading when I see Libs, leftists, communists, wingnuts. etc.

Tribalistic name calling.
 
2012-09-03 11:47:34 AM  

DarwiOdrade: Technically we're not in a recession anymore


It depends on how you look at the numbers. If you look at the economy as a whole including stock market and top income earners things don't look too bad. Look down the income scale a ways and things start looking pretty dire. Technically not a recession anymore but unemployment and underemployment are still high due to another jobless recovery.
 
2012-09-03 11:47:34 AM  
We should run the government like a household, or better yet, like a lemonade stand.
 
2012-09-03 11:47:44 AM  
But when a Republican told us "deficits don't matter" that was completely different.
 
2012-09-03 11:47:53 AM  

DarwiOdrade: Technically we're not in a recession anymore, but I was always told that balancing the budget during an economic crisis would, at best, slow down recovery or, at worst, pull us down into a(nother) recession.


That's the goal. If you're positioned right, there's big money to be made in a recession.
 
2012-09-03 11:48:35 AM  

andrewagill: I'm not sold on Keynes, and I think that austerity might be something you need a little bit of during a recession.


And why is that? How does austerity improve the economy?
 
2012-09-03 11:48:35 AM  

CPennypacker: It would be a bad idea. You don't balance the budget in a recession. You need to spend the money to get you out of the recession.


THIS. Economics 101. During a recession you spend (anyone remember this thing called the New Deal which got us out of the Great Depression????)
Obama actually cut Government jobs, which to me is a bad thing. It's part of the reason we aren't fully out of the recession yet. But of course the GOP wants you to believe that Obama is a big spender, which couldn't be further from the truth. It's quite confusing.
The actual Obama has enacted a few policies which may be bad for the economy (cutting Government jobs, lowering taxes), but are totally what the GOP wants. The fake Obama (the invisible one in the chair) enacts policies that the GOP hates, but are in reality what is good for the economy (spending, creating Government jobs). Real Obama can't enact certain good policies, because the GOP ties his hands whenever possible.
Now I'm confused.....
 
2012-09-03 11:49:25 AM  

andrewagill: jake_lex: This. Europe's economy, for the most part, is still deep in the shiatter because they chose "austerity" over stimulating the economy.

I'm not sold on Keynes, and I think that austerity might be something you need a little bit of during a recession.

But even still, balancing the budget during a recession just ain't gonna happen without crushing tax rates.



Evidence that Keynes works: Every single time it's been tried.
Evidence that trickle down doesn't work: Every single time it's been tried.
 
2012-09-03 11:49:41 AM  
Problem: Sluggish economy.

Democratic solution: borrow and spend.

Republican solution. tax cuts for the wealthy.
 
2012-09-03 11:49:52 AM  

vernonFL: We should run the government like a household, or better yet, like a lemonade stand.


And if we could just get rid of those pesky regulations, we could increase volume by pissing in the pitcher. It's free money, why is this so hard to understand?
 
2012-09-03 11:51:23 AM  
Going to Fox News for news is like going to a $2 whore for sex.
 
2012-09-03 11:51:37 AM  

vernonFL: Problem: Sluggish economy.

Democratic solution: borrow and spend.

Republican solution. tax cuts for the wealthy.


So what you're saying is Democrats understand economics way better than Republicans

Sweet, thanks for the confirm
 
2012-09-03 11:52:23 AM  

Monkeyhouse Zendo: DarwiOdrade: Technically we're not in a recession anymore

It depends on how you look at the numbers. If you look at the economy as a whole including stock market and top income earners things don't look too bad. Look down the income scale a ways and things start looking pretty dire. Technically not a recession anymore but unemployment and underemployment are still high due to another jobless recovery.


Hence, my use of the word "technically."
 
2012-09-03 11:53:02 AM  

jake_lex: CPennypacker: It would be a bad idea. You don't balance the budget in a recession. You need to spend the money to get you out of the recession.

This. Europe's economy, for the most part, is still deep in the shiatter because they chose "austerity" over stimulating the economy.


Isn't an unbalanced budget, spending more than what's coming in, how we got into this mess to start with?
 
2012-09-03 11:53:53 AM  

Cloudchaser Sakonige the Red Wolf: jake_lex: CPennypacker: It would be a bad idea. You don't balance the budget in a recession. You need to spend the money to get you out of the recession.

This. Europe's economy, for the most part, is still deep in the shiatter because they chose "austerity" over stimulating the economy.

Isn't an unbalanced budget, spending more than what's coming in, how we got into this mess to start with?


Uh, no. Not even close.
 
2012-09-03 11:54:35 AM  

blahpers: In before cons use "running a business" as a model for a country.


I love that one. As if businesses never incur debt. Hell, the debt levels of a lot of big companies in the US is absolutely shocking. But they still manage to rake in gobs of cash and pay massive salaries to their top executives. Go figure.
 
2012-09-03 11:54:49 AM  

SuburbanCowboy: The actual Obama has enacted a few policies which may be bad for the economy (cutting Government jobs, lowering taxes), but are totally what the GOP wants


Let's be clear, falling public sector employment is primarily due to losses at the state level rather than the federal level. Obama actually proposed more assistance to states to prevent these losses but those measures were blocked by congressional Republicans.
 
2012-09-03 11:54:51 AM  
Financial collapses like this one and the Great Depression always take longer to recover from than other kinds of recessions because there is a hangover effect from people paying off their debt and driving down aggregate demand. Reducing tax rates will only increase the debt payments...at least until people get out from under the umbrella. This is one of the very rare times where running enormous deficits is better than balancing the budget. And it's doubly better today because the federal government can borrow money for free right now; paying it off tomorrow will actually be cheaper than paying it off today.
 
2012-09-03 11:55:28 AM  

vernonFL: Problem: Sluggish economy.

Democratic solution: borrow and spend.

Republican solution. tax cuts for the wealthy.


Except in this case the stated Democratic solution is to end tax cuts for the wealthy so we dont have to borrow so much.
 
2012-09-03 11:56:00 AM  

vernonFL: Problem: Sluggish economy.

Democratic solution: borrow and spend.

Republican solution. tax cuts for the wealthy.


I miss the good old days of "tax and spend" - at least then we weren't getting ourselves up to our eyeballs in debt to China.
 
2012-09-03 11:56:01 AM  

Cloudchaser Sakonige the Red Wolf: Isn't an unbalanced budget, spending more than what's coming in, how we got into this mess to start with?


No, it isn't.
 
2012-09-03 11:56:07 AM  
If you snapped your fingers and balanced the budget for 2013, you would create a giant suck on the economy that would immediately throw us into another recession. This is a simple economic fact.
 
2012-09-03 11:56:16 AM  

CPennypacker: vernonFL: Problem: Sluggish economy.

Democratic solution: borrow and spend.

Republican solution. tax cuts for the wealthy.

So what you're saying is Democrats understand economics way better than Republicans

Sweet, thanks for the confirm


Yea, I was gonna say... "Democrats follow traditional proven economic principles and Republicans follow voodoo economics? Sounds about right."
 
2012-09-03 11:56:38 AM  
Three players in the economy:

Government, business, consumers.

1) Consumers - we borrow ALL the time, we're encouraged to by both sides of the aisle.
2) Business - we borrow ALL the time, and we get PLENTY of government loans and subsidies to do so.
3) Government - why can't we borrow, GOP? We haz a sad. Wouldn't us borrowing help businesses and consumers borrow and thus grow the economy?
 
2012-09-03 11:57:00 AM  

andrewagill:
I'm not sold on Keynes, and I think that austerity might be something you need a little bit of during a recession.



I agree. We should spend less on things we don't need more of, like bombs and bullets, and more on what we do need like food-stamps, unemployment, and job training.

Unless you meant the other way around. In that case all I have to say is, kick them in the balls while they're already down? Yeah, that'll help them catch their breath and stand up on their own faster.
 
2012-09-03 11:57:29 AM  

Cloudchaser Sakonige the Red Wolf: jake_lex: CPennypacker: It would be a bad idea. You don't balance the budget in a recession. You need to spend the money to get you out of the recession.

This. Europe's economy, for the most part, is still deep in the shiatter because they chose "austerity" over stimulating the economy.

Isn't an unbalanced budget, spending more than what's coming in, how we got into this mess to start with?


---------------------

No, unless you can explain how spending too much caused banks to package mortgages into unstable securities and rate those securities A+.
 
2012-09-03 11:58:35 AM  

Monkeyhouse Zendo: Cloudchaser Sakonige the Red Wolf: Isn't an unbalanced budget, spending more than what's coming in, how we got into this mess to start with?

No, it isn't.


Besides the fact it was lots of things that caused it including the housing bubble pop, just imagine how unbalanced it would have been if the 2 wars were actually ON the budget.
 
2012-09-03 11:58:43 AM  
5 year T-bond is like 0.6%. As a business owner, If I could borrow money at 0.6%, I would borrow as much farking money as I could.
 
2012-09-03 11:58:55 AM  
Aside from all the other comments here, pointing out (correctly) that this would be a terrible time to cut spending or raise taxes sufficiently to balance the budget, I will just add that real bond yields are negative right now, meaning that the federal government is actually profiting by borrowing. Anyone who thinks that the budget deficit is our biggest problem right now is too stupid to be left alone for extended periods.
 
2012-09-03 11:59:28 AM  

Tusz: Surpluses during good times, deficits during recessions. The government has the ability to defy the normal boom-bust cycle to dampen it and keep things more stable. Why is this so hard for people to understand?


The problem being that as it rule it ends with boom, elect right wing government, they spend like drunken sailors and reduce taxes on the rich, accelerating the boom, then the crash happens, they get ejected and a (more) left wing government comes in to fix things, further increasing the debt so all the poor people don't get too shafted, then when things are just about getting fixed the right wing government says "left wing governments suck at the economy, elect us - remember how goods things were (just before the bust)" and start the cycle again. 

/Keynesianism is probably right, but also impossible to implement in practise
 
2012-09-03 11:59:32 AM  

Cloudchaser Sakonige the Red Wolf: jake_lex: CPennypacker: It would be a bad idea. You don't balance the budget in a recession. You need to spend the money to get you out of the recession.

This. Europe's economy, for the most part, is still deep in the shiatter because they chose "austerity" over stimulating the economy.

Isn't an unbalanced budget, spending more than what's coming in, how we got into this mess to start with?


You're trolling, right?
 
2012-09-03 12:00:26 PM  

BMulligan: Aside from all the other comments here, pointing out (correctly) that this would be a terrible time to cut spending or raise taxes sufficiently to balance the budget, I will just add that real bond yields are negative right now, meaning that the federal government is actually profiting by borrowing. Anyone who thinks that the budget deficit is our biggest problem right now is too stupid to be left alone for extended periods.


So you're saying we should lock Republicans alone in rooms with sharp objects?
 
2012-09-03 12:01:24 PM  

xria: /Keynesianism is probably right, but also impossible to implement in practise


Not impossible, it just requires a rational and educated electorate.

Wait... I see where you were going with that now.
 
2012-09-03 12:02:25 PM  

DarwiOdrade: So you're saying we should lock Republicans alone in rooms with sharp objects?


I was thinking bottles of bleach labeled "Tax Cuts" but sharp objects work too.
 
2012-09-03 12:02:43 PM  
The problem with trillion dollar deficits is that you don't have that many trillionsjust lying around. Right now the government is crowding out private investment. Now, if we had a trillion dollar a year deficit to have the best roads, space program, school buildings etc. that would be justifiable. However, most of our money is going to (not in descending order) debt interest (totally unproductive), military spending (very wasteful and largely unproductive), and transfer payments (entitlements, which don't create economic acrivity).

The notion that literally any government spending works is foolish, money can be wasted on government spending or it can be spent well. Currently it's mostly the former, done at the expense of a trillion dollars a year in investable capital that could have been going to the private sector.
 
2012-09-03 12:03:59 PM  

xria: Tusz: Surpluses during good times, deficits during recessions. The government has the ability to defy the normal boom-bust cycle to dampen it and keep things more stable. Why is this so hard for people to understand?

The problem being that as it rule it ends with boom, elect right wing government, they spend like drunken sailors and reduce taxes on the rich, accelerating the boom, then the crash happens, they get ejected and a (more) left wing government comes in to fix things, further increasing the debt so all the poor people don't get too shafted, then when things are just about getting fixed the right wing government says "left wing governments suck at the economy, elect us - remember how goods things were (just before the bust)" and start the cycle again. 

/Keynesianism is probably right, but also impossible to implement in practise


Keynesianism isn't a recovery plan. Its economic theory. It explains how and why things occur in the economy. Implementing Keynesian policies just means you are properly reacting to that assessment of reality. It's not Keynes's fault if people are too stupid to do that. The theory is still correct whether we accept it and react in a thoughtful way or not.
 
2012-09-03 12:04:01 PM  
Oh and in addition to subby's other mental deficiencies already noted, I will mention that people who who the word "equivalency" when they mean "equivalent" are trying too hard to sound smart. In fact, they just sound like idiots.
 
2012-09-03 12:05:08 PM  

xria: Tusz: Surpluses during good times, deficits during recessions. The government has the ability to defy the normal boom-bust cycle to dampen it and keep things more stable. Why is this so hard for people to understand?

The problem being that as it rule it ends with boom, elect right wing government, they spend like drunken sailors and reduce taxes on the rich, accelerating the boom, then the crash happens, they get ejected and a (more) left wing government comes in to fix things, further increasing the debt so all the poor people don't get too shafted, then when things are just about getting fixed the right wing government says "left wing governments suck at the economy, elect us - remember how goods things were (just before the bust)" and start the cycle again. 

/Keynesianism is probably right, but also impossible to implement in practise


I wouldn't say it's impossible. It just requires strict rules based on multiple years of budgeting with an enforcement mechanism to make sure Congress does what they're required to do.
 
2012-09-03 12:05:48 PM  
"Balancing the budget" is Republican code for "cut spending we don't like". Budgets can never be balanced with any contribution on the revenue side.

If they're proposing a Constitutional amendment, they're trying to absolve themselves of the decision-making responsibility. Congress can pass a balanced budget any time they want. No amendment is necessary.

Who would enforce such an amendment, anyway?
 
2012-09-03 12:06:09 PM  

Cloudchaser Sakonige the Red Wolf: jake_lex: CPennypacker: It would be a bad idea. You don't balance the budget in a recession. You need to spend the money to get you out of the recession.

This. Europe's economy, for the most part, is still deep in the shiatter because they chose "austerity" over stimulating the economy.

Isn't an unbalanced budget, spending more than what's coming in during a period of economic expansion, how we got into this mess to start with?


There ya go son. Glad to help.

Also, lets not forget that that period of economic expansion was fueled by an engineered expansion of residential and commercial real estate construction that was completely unsustainable. And that its collapse in 2007/2008 triggered the largest increase in unemployment compensation and food stamp use (government spending) in recent American history.

Also, too...America's deregulated financial system took, what is normally a method of risk reduction, (derivatives trading) and turned it into an international casino with no rules, no monitoring and no ethics which enabled America's unregulated financial system to turn an American housing collapse into an international monetary crisis the likes of which the world had never seen before and has yet to recover from.

You sounded like you had a genuine curiosity, so I felt obliged to help you understand.
 
2012-09-03 12:06:35 PM  

Here'sJohnny: The problem with trillion dollar deficits is that you don't have that many trillionsjust lying around. Right now the government is crowding out private investment. Now, if we had a trillion dollar a year deficit to have the best roads, space program, school buildings etc. that would be justifiable. However, most of our money is going to (not in descending order) debt interest (totally unproductive), military spending (very wasteful and largely unproductive), and transfer payments (entitlements, which don't create economic acrivity).

The notion that literally any government spending works is foolish, money can be wasted on government spending or it can be spent well. Currently it's mostly the former, done at the expense of a trillion dollars a year in investable capital that could have been going to the private sector.


Transfer payments don't create economic activity? They do when you borrow the money.
 
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