Four more years of increasing deficits. Way to go America!

[maxiep]

I read it years ago.

i have trouble with it because govt. tries it (Keynesian stimulus) and it never works as they promise. It's also massively expensive. And I don't buy that govt. spending has a multiplier >= 1.

The definitive study on government multipliers in investment was performed by Robert Barro in 1974. He calculated it at 0.8, or $0.80 on the dollar. Keynes didn't really believe that you would get that amount (he later repudiated the figure as a function of selling it to the government as policy), but thought that when government intervention was the last resort, a multiplier of less than one was acceptable until the private sector got back on track.

 

[Denny Crane]

The $3T figure comes from the size of budget Obama inherited, minus ONE TIME TARP expense (and wasn't TARP paid back mostly anyway?).

The downside of this is that you're taking that $50B out of the economy. I'd expect a lower GDP for that.

A side note.

Since we've gone off the gold standard, the middle class cannot help but be squeezed. Even the tiniest amount of inflation guarantees it will shrink over time. Why? Because to keep up with inflation, 100% of the middle class needs a COLA and some number < 100% gets it.

I think this is important because the Fed has no real room to increase interest rates or the payments on the debt go through the roof. They may not be able to fight inflation as they think they should.

They're also printing money (QE) which ultimately has to lead to inflation. More dollars chasing less goods - GM might have been "saved" but the industry is a LOT smaller.

 

[Denny Crane]

The definitive study on government multipliers in investment was performed by Robert Barro in 1974. He calculated it at 0.8, or $0.80 on the dollar. Keynes didn't really believe that you would get that amount (he later repudiated the figure as a function of selling it to the government as policy), but thought that when government intervention was the last resort, a multiplier of less than one was acceptable until the private sector got back on track.

It has to be < 1.

How many guys making $100K do you have to tax 10% so you can pay a govt. worker $100K?

The answer to that question drives the multiplier < 1.

 

[maxiep]

It has to be < 1.

How many guys making $100K do you have to tax 10% so you can pay a govt. worker $100K?

The answer to that question drives the multiplier < 1.

Of course it does. If it didn't, the optimal scenario for a society would be to give the government every penny of our earnings and have them distribute it.

 

[donkiez]

If social issues are so unimportant compared to the debt then why was the repubican party so unwilling to compromise on some (or any) of those social issues to get their candidate elected? Adopting a stance of pro choice, and same sex marriage tollerance as well as a realistic immigration and healthcare reform might have swayed my vote.

Also our debit is a major issue but the last 4 years have been about stopping the bleeding from the Bush years, which has been done or at least slowed to a tickle. Now that Obama doesnt have to worry about reelection and the republican party has been beaten to submission I expect some real progress to be made..... unless the republicans are evern more stubborn and self destructive than I give them credit for.

 

[mook]

I asked you a question before. Maybe you overlooked it. I'm curious on how you believe this spending will generate fiscal growth in 4 years?

When nobody is willing to write a check, the government can. I know the GM bailout saved the jobs of many I know. I feel like drastic austerity right now could tip us back into recession.

And I suspect after this next term; they will lose your vote.

Could be. A lot can happen between now and then. I'm keeping an open mind.

 

[magnifier661]

If social issues are so unimportant compared to the debt then why was the repubican party so unwilling to compromise on some (or any) of those social issues to get their candidate elected? Adopting a stance of pro choice, and same sex marriage tollerance as well as a realistic immigration and healthcare reform might have swayed my vote.

Also our debit is a major issue but the last 4 years have been about stopping the bleeding from the Bush years, which has been done or at least slowed to a tickle. Now that Obama doesnt have to worry about reelection and the republican party has been beaten to submission I expect some real progress to be made..... unless the republicans are evern more stubborn and self destructive than I give them credit for.

About 30% of the Republican vote comes from church groups. Takng a 20% hit because they don't feel secure that the candidate supports their beliefs is a HUGE HIT.

http://www.christianpost.com/news/n...terests-of-churchgoing-christian-women-80728/

The research suggests that churchgoing Christian women will make up the largest category of voters come Nov. 6. While 79 percent of these women said they "definitely plan to vote" this fall, only 76 percent of churchgoing men, 60 percent of non-churchgoing men and 52 percent of non-churchgoing women said they plan to do the same.
Read more at http://www.christianpost.com/news/n...ng-christian-women-80728/#MF4Lr7Wp8KSzp55X.99

It is widely believed that Christian women care most about issues including abortion, gay marriage and education, the study says, but it indicates that Christian women today are more concerned with financial issues than family issues.
Read more at http://www.christianpost.com/news/n...ng-christian-women-80728/#MF4Lr7Wp8KSzp55X.99

 

[DaLincolnJones]

If social issues are so unimportant compared to the debt then why was the repubican party so unwilling to compromise on some (or any) of those social issues to get their candidate elected? Adopting a stance of pro choice, and same sex marriage tollerance as well as a realistic immigration and healthcare reform might have swayed my vote.

Also our debit is a major issue but the last 4 years have been about stopping the bleeding from the Bush years, which has been done or at least slowed to a tickle. Now that Obama doesnt have to worry about reelection and the republican party has been beaten to submission I expect some real progress to be made..... unless the republicans are evern more stubborn and self destructive than I give them credit for.

obama did a great job hyping the social issue aspect..I think the GOP felt that the big issues were more important..well, not so to the least informed

the bleeding is just beginning, the bandiads applied in trillions in spending and printing presses running 27/7 are going to come due on his watch..

 

[magnifier661]

When nobody is willing to write a check, the government can. I know the GM bailout saved the jobs of many I know. I feel like drastic austerity right now could tip us back into recession.


Could be. A lot can happen between now and then. I'm keeping an open mind.

Partisan aside.... I truly hope you are right. This country really needs a turn around. Personally I don't give a fuck what party can do it. Just as long as the movement is in the right direction.

 

[Denny Crane]

If social issues are so unimportant compared to the debt then why was the repubican party so unwilling to compromise on some (or any) of those social issues to get their candidate elected? Adopting a stance of pro choice, and same sex marriage tollerance as well as a realistic immigration and healthcare reform might have swayed my vote.

Also our debit is a major issue but the last 4 years have been about stopping the bleeding from the Bush years, which has been done or at least slowed to a tickle. Now that Obama doesnt have to worry about reelection and the republican party has been beaten to submission I expect some real progress to be made..... unless the republicans are evern more stubborn and self destructive than I give them credit for.

The religious right is the republicans' equivalent of the unions when it comes to electioneering. They are the feet on the street, the get out the vote guys, the stand around in malls handing out literature guys, etc.

They were during the Reagan years but republicans didn't kowtow to them so much. Then the religious right made it clear if their issues weren't addressed, they'd stay home on election day.

 

[Masbee]

I disagree with this because there are lots of people like me. Obama squeaked out a win because people like me are willing to live with current spending levels for the near term. If in 4 years it hasn't drastically changed, like I said, they'll lose my vote. And the votes of a lot of people like me.

Assume that just 1 in 5 Democrats think like I do. (I estimate that there's a lot more than that, but whatever. And that's not even factoring in Independents.) That's more than enough to completely overhaul the legislative and executive. If that were to happen, a lot of things that are politically unfeasible right now suddenly become very feasible.

There are three camps, not two:
#1. Cut deficits now
#2. Forget about deficits
#3. Cut deficits soon, but not now

That #3 group that I belong to is critical. We've cast our lot with the #2's, but it's not a deal that goes on forever. No matter what the #1's or #2's might think.

Yeah, that's great.

But, if Obama fucks it up so bad the next four years that he loses all of his voters like you, it will be too late to fix in a normal way politically. Game will be over. This country will be done.

 

[mook]

Yeah, that's great.

But, if Obama fucks it up so bad the next four years that he loses all of his voters like you, it will be too late to fix in a normal way politically. Game will be over. This country will be done.

We have about $116 trillion in net wealth in this country. That's a massive shock absorber that makes it unlikely, IMO, that it will fall to pieces in 4 years over federal debt. Especially when the vast majority of that debt is owed to ourselves. 8% is owed to China.

I don't see the system of government that protects and serves all that wealth suddenly crumbling to the earth in 4 years because of a mere president. I have more faith in things like power and money and inertia.

We won't be reduced to caves and cudgels by this. We'll slowly dig our way out, because Winston Churchill was right. Americans do the right thing after we try everything else.

 

[DaLincolnJones]

projected 20T by 2016, takes 1T just to service the interest..on a 3.5T "budget"...not digging our way out as I see it

 

[Denny Crane]

We have about $116 trillion in net wealth in this country. That's a massive shock absorber that makes it unlikely, IMO, that it will fall to pieces in 4 years over federal debt. Especially when the vast majority of that debt is owed to ourselves. 8% is owed to China.

I don't see the system of government that protects and serves all that wealth suddenly crumbling to the earth in 4 years because of a mere president. I have more faith in things like power and money and inertia.

We won't be reduced to caves and cudgels by this. We'll slowly dig our way out, because Winston Churchill was right. Americans do the right thing after we try everything else.

See what's going on in Greece for how a govt. can crumble in a short time.

 

[mook]

See what's going on in Greece for how a govt. can crumble in a short time.

A third of the net worth of the whole planet is in the USA. The vast majority of our debt is owed to Americans.
Greece accounts for .4% of the whole planet's net worth. I don't know who owns their debt, but I suspect it ain't Greeks.

Also, we can print money and they can't. Having your own currency is really handy, as the Greeks are sadly finding out.

Everybody take a deep breath and try to remember the county has been around a long time and will be for a lot longer. Abraham Lincoln would've soiled himself with glee to have our current problems.

 

[Denny Crane]

A third of the net worth of the whole planet is in the USA. The vast majority of our debt is owed to Americans.
Greece accounts for .4% of the whole planet's net worth. I don't know who owns their debt, but I suspect it ain't Greeks.

Also, we can print money and they can't. Having your own currency is really handy, as the Greeks are sadly finding out.

Everybody take a deep breath and try to remember the county has been around a long time and will be for a lot longer. Abraham Lincoln would've soiled himself with glee to have our current problems.

I disagree with a few things here.

The country hasn't been around a long time.

Those people in Greece are protesting because the govt. owes them money.

Printing money is no panacea. You'll end up paying a wheel barrow full of dollars for a loaf of bread at some point.

Net worth is fleeting (stock market crashes, you lose net worth, right?) and a bit more interesting if it's represented by govt. debt instruments (e.g. you buy T-Bills with your savings).

 

[Masbee]

We have about $116 trillion in net wealth in this country. That's a massive shock absorber that makes it unlikely, IMO, that it will fall to pieces in 4 years over federal debt. Especially when the vast majority of that debt is owed to ourselves. 8% is owed to China.

I don't see the system of government that protects and serves all that wealth suddenly crumbling to the earth in 4 years because of a mere president. I have more faith in things like power and money and inertia.

We won't be reduced to caves and cudgels by this. We'll slowly dig our way out, because Winston Churchill was right. Americans do the right thing after we try everything else.

It has never been like it is now.

In those times in the past there was signficantly more economic freedom, which is the framwork for "digging" your way out.

In those times in the past there were hardly any "entitlements". Now they are a huge burden (look at Social Security, Medicare, Medicaid, ObamaCare, Veteran's, Federal Employee Pensions and Medical, State and Local Pensions and Medical, Food Stamps, Unemployment Insurance, Disability, etc.).

You can't "dig" your way out by slashing benefits very drastically, otherwise, riots and voter revolt will happen.

You can't "dig" your way out by increasing taxes drastically, otherwise voter revolt will happen.

This will not end well.

 

[Denny Crane]

"hardly any" entitlements? Even in the days of big budget military spending under Reagan, just SS and Medicare cost $1T and/or half the budget.

The government has been, since FDR, a means to redistribute wealth. For the most part. Tax the rich. Direct payments to individuals.

 

[Masbee]

We have about $116 trillion in net wealth

On the West Coast of the U.S. millions of homeowners in 2005 had "net wealth" in the value of their homes of X. In a short peiod of time that was wiped out by half.

Where did it go?

No where.

It was bogus to begin with. But it seemed very real and solid at the time. Nothing has value in a vacumn.

If the U.S. starts a rapid decline period due to finally hitting that invisible "wall", Trillions of paper "wealth" will evaporate.

And the more hairy things get (reduced essential government services of protection and law and order and courts and protection of property rights and contracts) things can spiral out of control pretty quickly in terms of values.

 

[DaLincolnJones]

A third of the net worth of the whole planet is in the USA. The vast majority of our debt is owed to Americans.
Greece accounts for .4% of the whole planet's net worth. I don't know who owns their debt, but I suspect it ain't Greeks.

Also, we can print money and they can't. Having your own currency is really handy, as the Greeks are sadly finding out.

Everybody take a deep breath and try to remember the county has been around a long time and will be for a lot longer. Abraham Lincoln would've soiled himself with glee to have our current problems.

something else to ponder, 04 27 percent of the population was dependant upon the gov, now that figure is around 47..we have reached that tipping point where the populace realizes that they can vote themselves benifits..when the Gov can no longer support all the freebies, well thats what is happening in Greece..

 

[Masbee]

We won't be reduced to caves and cudgels by this.

No, of course not.

What I mean to say, is that if Obama has a poor second term with the budget - similar to the first term, (20Trillion+ debt), blah economy, that it will be too late too vote out the rascals and change couse. The die will be cast.

20 Trillion, plus the entrenchment of the newer entitlements (ObamaCare, expansion of welfare, extension of unemployment benefits, greatly expanded disability rolls, greatly expanded food stamp rolls, expansion of benefits to illegals), plus the long existing retirement and medical entitlements systems exploding with the baby boomer bulge,

you can't stuff that genie back in a bottle ater 4 more years.

Living in caves in 4 years? No. And not later either.

There will be no way out that isn't incredibly hard. Once the die is cast, it may take years more before it gets really bad, but there won't be any normal way out.

Most likely the government will try to inflate their way out of it. We will go into a long period of stagflation with chronic high unemployment and an economy that will make people dream of 2009. The bad economy will affect tax revenue, which will precipitate a crisis that will cause entitlements to be slashed, leading to civil unrest, and likely a Police State.

 

[maxiep]

Yeah, that's great.

But, if Obama fucks it up so bad the next four years that he loses all of his voters like you, it will be too late to fix in a normal way politically. Game will be over. This country will be done.

Masbee, the country is done. It's already too late. Obamacare was it. It's changed. The next battle will be over who can give you more healthcare. The government now controls life and death.

 

[maxiep]

A third of the net worth of the whole planet is in the USA. The vast majority of our debt is owed to Americans.
Greece accounts for .4% of the whole planet's net worth. I don't know who owns their debt, but I suspect it ain't Greeks.

Also, we can print money and they can't. Having your own currency is really handy, as the Greeks are sadly finding out.

Everybody take a deep breath and try to remember the county has been around a long time and will be for a lot longer. Abraham Lincoln would've soiled himself with glee to have our current problems.

Unreal. For a really smart person, you can be remarkably stupid. Money to Americans has to be paid back just as money to foreigners does. And last I checked, my wealth was mine, not the government's. As for our currency, how much longer do you think people will buy our debt given our fiscal situation? Sorry, Minstrel, but the well is dry.