Off Topic: The Flood
This topic has moved here: Subject: US To Avoid Fiscal Cliff
  • Subject: US To Avoid Fiscal Cliff
  • Pages:
  • 1
  • 2
  • of 2
Subject: US To Avoid Fiscal Cliff

no you cant have my gamertag

Posted by: cromy1
I hope you all enjoy Hyper-inflation in 2013!

Just like in 2009? And 2010? And 2011? And 2012?

Get over yourself. People have been predicting hyperinflation for years now and it hasn't come about because of the economic situation we're in.

I'm going to keep this as economic as possible without getting into politics because of that whole rules thing.

Spending cuts and tax increases would be detrimental to the economy. The structural budget deficit is actually very small. Our current deficit is mostly a product of the recession. So we need to follow pro-growth policies. Cutting spending and increasing taxes would be contractionary, which was the whole reason we were trying to avoid the fiscal cliff in the first place.

  • 01.02.2013 8:12 AM PDT

“If we will disbelieve everything, because we cannot certainly know all things, we shall do much what as wisely as he who would not use his legs, but sit still and perish, because he had no wings to fly.” - John Locke

"How can anyone be enlightened? Truth after all is so poorly lit." - Rush

Gotta love the mockery of politics that occurs in a two-party system.

  • 01.02.2013 8:12 AM PDT
  •  | 
  • Elder Mythic Member

There is just something magical about leaning your head back, letting your eyes roll into the back of your head, and taking a piss while floating in the swimming pool.


Posted by: Prophet0fValor
The level of intelligence in our nation's capitol:

We should take the DEBT, and PUSH it somewhere else!


I was reading that China has cut way back on how much they are lending us, because they are realizing they are never going to see a penny of it back. Because of that for the last two years we have been printing $45 BILLION dollars a DAY to spend on bull-blam!-.

For those that have taken a basic economics course in college, you know that economic doom is in our future do to this. It is only a matter of time before a loaf of bread is $12 and a gallon of gas is $20.

Both sides of the eisle are to blame too.

  • 01.02.2013 8:23 AM PDT
  • gamertag: [none]
  • user homepage:

Foman is my favorite moderator. <3


Posted by: ZiIch
Our current deficit is mostly a product of the recession.

I wouldn't consider $900 billion deficits a product of the recession. You'd have to be thinking that federal receipts would increase by 33% in order to close that gap - not going to happen.

But either way, the issue really isn't even really current budget deficits. I worry more about the growing unfunded liabilities within Medicare and Social Security.

Posted by: cromy1
I was reading that China has cut way back on how much they are lending us, because they are realizing they are never going to see a penny of it back.

You do realize they receive payments on their treasury holdings all the time already right? LOL. They've received billions.

[Edited on 01.02.2013 8:26 AM PST]

  • 01.02.2013 8:24 AM PDT

no you cant have my gamertag

Posted by: A Good Troll
Posted by: ZiIch
Our current deficit is mostly a product of the recession.

I wouldn't consider $900 billion deficits a product of the recession. You'd have to be thinking that federal receipts would increase by 33% in order to close that gap - not going to happen.

Why must the source of the deficit be on the revenue side? Look at increases in UI, Medicaid, SNAP, etc.

People much smarter than me have done the math so I don't have to

But either way, the issue really isn't even really current budget deficits. I worry more about the growing unfunded liabilities within Medicare and Social Security.
Long term problems don't need immediate solutions.

Current problems which can be turned into long term problems should be addressed first.

  • 01.02.2013 8:28 AM PDT

Better pissed off then pissed on

good for the government

  • 01.02.2013 8:43 AM PDT
  • gamertag: [none]
  • user homepage:

Foman is my favorite moderator. <3


Posted by: ZiIch
You can poke holes in Krugman's logic all day. But yes, I don't disagree that in a better performing economy, you'd have (theoretically) less government spending on aid programs. But that theoretical is part of the problem - plenty of people think we are in a "new normal" situation.

Start with receipts. Those assumptions on tax receipts that Krugman cites are based off the assumption of full employment by the CBO. We haven't had what anyone would consider real "full employment" (3-4% unemployment) but sporadically over the past twenty years. 1998 and 2005 are about the only years where we've been close, and those periods of full employment were almost immediately proceeded by recession. So why base assumptions on full employment when we are almost never at full employment?

And even then, we aren't going to see "historically normal" tax receipts of 20% GDP simply because of the new corporate reality over the past few years. That 20% GDP average has fallen for years and continues to fall. Corporate profits make up a relatively smaller share of receipts than personal taxes do, they pay smaller percentage rates relative to personal taxpayers due to breaks, and employers have continued to garner larger profits while not passing those on to the wage earner. Most of those profits are now routinely held off-shore and used to invest off-shore. AAPL, for instance, holds 70% of its cash profits - or $80 billion dollars - off shore and untaxed.

US wages as a percentage of GDP. What do you see?

I think it is a mistake to accept historical macroeconomic trends as fact to make forecasts on the future. I don't inherently dislike Krugman, despite some liberal bias in some of his work, - and I do believe we should borrow at the rates we have while we still can for worthy projects - but that doesn't change that there are a lot of issues that need to be addressed now rather than shrugging off trillion dollar deficits as a symptom of the recession and not a symptom of malinvestment.

[Edited on 01.02.2013 8:54 AM PST]

  • 01.02.2013 8:46 AM PDT

no you cant have my gamertag

Posted by: A Good Troll

Posted by: ZiIch
You can poke holes in Krugman's logic all day. But yes, I don't disagree that in a better performing economy, you'd have (theoretically) less government spending on aid programs. But that theoretical is part of the problem - plenty of people think we are in a "new normal" situation.

Start with receipts. Those assumptions on tax receipts that Krugman cites are based off the assumption of full employment by the CBO. We haven't had what anyone would consider real "full employment" (3-4% unemployment) but sporadically over the past twenty years. 1998 and 2005 are about the only years where we've been close, and those periods of full employment were almost immediately proceeded by recession. So why base assumptions on full employment when we are almost never at full employment?

And even then, we aren't going to see "historically normal" tax receipts of 20% GDP simply because of the new corporate reality over the past few years. That 20% GDP average has fallen for years and continues to fall. Corporate profits make up a relatively smaller share of receipts than personal taxes do, they pay smaller percentage rates relative to personal taxpayers due to breaks, and employers have continued to garner larger profits while not passing those on to the wage earner. Most of those profits are now routinely held off-shore and used to invest off-shore. AAPL, for instance, holds 70% of its cash profits - or $80 billion dollars - off shore and untaxed.

US wages as a percentage of GDP. What do you see?

I think it is a mistake to accept historical macroeconomic trends as fact to make forecasts on the future. I don't inherently dislike Krugman, despite some liberal bias in some of his work, - and I do believe we should borrow at the rates we have while we still can for worthy projects - but that doesn't change that there are a lot of issues that need to be addressed now rather than shrugging off trillion dollar deficits as a symptom of the recession and not a symptom of malinvestment.

While you're Krugman diatribe is lovely, I linked an article from Evan Soltas who passingly mentioned Krugman once.

There are plenty of people who think we're in a new normal. There isn't really any evidence for that.

I would suggest you revisit your definition of full employment. It's not a static percentage. It fluctuates. Part of your previous claim about this being a new normal rests on full employment being in the 7-8% range.

I'm not sure what the CBO's target for full employment is, but I'm sure it's not 4%. It's more likely in the range of 5.5%.

The idea of full employment is just about eliminating the structural unemployment from the conversation. And if a large part of this current situation is structural unemployment (a stupid thought in my opinion) then full employment would naturally be at a higher rate than at other times.

The point is we're chasing a state of the economy, not a random number.

Thirdly, I don't see where you get tax receipts of 20% GDP. Soltas specifically says his calculations point to somewhere in the neighborhood of 18.2% GDP. That's fully realistic.

And your idea that wages as a percentage of GDP somehow impact revenue is a little misguided.

I think we should do more to bring up wages, but that will not inhibit revenues.

So you've really said very little outside your (random) argument against Krugman.

  • 01.02.2013 9:21 AM PDT

  • Pages:
  • 1
  • 2
  • of 2