How are we going to pay for all this shit?

[adav8s28]

Originally Posted by Tiny

As to AOC, it bears repeating that the woman has a degree in economics.

I knew she had a college degree. I didn't know that she majored in economics. From degree in economics to bartender to congresswoman, not a bad career path.

[adav8s28]

Originally Posted by CaptainMidnight

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Hey, adav8s28! How's everything out in the Sacremento area these days? I just got back yesterday from a couple of days semi-camping out in a remote rural area of Texes with little internet connectivity, so I'm just now getting caught up with the news.



Apparently you didn't read the article to which I posted this link:

https://www.nationalaffairs.com/publ...he-rule-of-law

If you're going to try to coherently discuss this issue, you need to begin by understanding the key points Professor Zywicki makes here -- or, absent that, offer a reasoned argument as to why you disagree.

One obvious point that seems to be lost on you is that the GM "bailout" initiated by Bush was accomplished in an arguably illegal fashion but with funds diverted from the $700 billion TARP legislation passed in October of 2008. Barack "You didn't build that!" Obama dithered for ideological reasons while he was trying to figure out how to shower his political supporters with tons of cash. (Since his chief of staff was Rahm "Don't let a crisis go to waste!" Emanuel, what else would you expect?)

GM should have gone into a Chapter 11 reorganization long before it did, but it tried to play sort of a "game of chicken" with the government for as long as it could. Obama dorked around with the whole fucking process until he could figure out how to bail out the UAW by egregiously wasting about $26 billion on the project of paying off Democratic Party campaign donors. So he bailed out the unions, not GM. The process was well-described here:

https://www.wsj.com/articles/SB10001...62650268680454

Obama's corrupt "bailout" was probably seen as a fine thing for left-wingers in the AOC/Bernie camp.

But you're an AOC fanboy, aren't you? Maybe you've studied the works of the 20th-century economist whose legacy she famously mentioned a year or so ago, the iconic Milton Keynes.

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Captain, glad you had a nice weekend. I can't read the wall street journal link, you have to be a subscriber. Going with the first link, I don't agree that GM should have been forced to go through a normal bankruptcy. It would have been a disaster if GM was forced to do that and be forced to liquidate. Even the author(in the first link) could only say that it was "not likely" that GM would have been forced to liquidate. I am okay with the way things played out, (Chapter 11 reorganization). A new GM was formed that was leaner and meaner. Plus 100,000 people got to stay on the job and not go on unemployment for a year. (Remember in 2009 unemployment benefits was for a year). Multiply 100,000 * 52 * 380 you get 1,976,000,000. The taxpayer (you and me) would be on the hook for that. Liquidation of GM and the effect it would have had on the parts business and other suppliers would not have been a good thing for the economy. Team Obama did the right thing. Also, it's not Obama's fault that the chapter 11 did not happen sooner. From your first link:

On December 11, 2008, the House of Representatives buckled under the automakers' demands, voting (largely along party lines) in favor of a $14 billion bailout. The next day, however, the Senate voted down the legislation. A week later, lame-duck President George W. Bush and Treasury Secretary Henry Paulson intervened. Announcing that the administration would offer the automakers loans with terms similar to the ones Congress had voted down, Bush gave GM and Chrysler three months to develop restructuring plans and prove they could become viable companies. To help the automakers through that phase (and a possible Chapter 11 bankruptcy), the administration extended them $17.4 billion from the Troubled Asset Relief Program, which had originally been set up to buy assets and equities from the financial sector in the wake of the mortgage crisis.

In March 2009, when the lifeline extended by the Bush administration had run out, President Obama stepped in. The administration forced out the CEO of General Motors, Rick Wagoner, and gave Chrysler 30 days to finalize a merger with the Italian automaker Fiat. In exchange, the companies received another (and even larger) round of government loans. In the end, almost $77 billion in TARP funds was diverted to GM and Chrysler.

[rexdutchman]

Hmm print mo money

[adav8s28]

Originally Posted by rexdutchman

Hmm print mo money

If GM had been forced to liquidate, the Federal Government would have had to print even more money for TARP. There would have been even more "troubled assets" to bail out.

[rexdutchman]

Give the country ( used only on sundays ) To china ,Beijing needs more people to control just saying

[Texas Contrarian]

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Originally Posted by adav8s28

Captain, glad you had a nice weekend. I can't read the wall street journal link, you have to be a subscriber. Going with the first link, I don't agree that GM should have been forced to go through a normal bankruptcy. It would have been a disaster if GM was forced to do that and be forced to liquidate. Even the author(in the first link) could only say that it was "not likely" that GM would have been forced to liquidate. I am okay with the way things played out, (Chapter 11 reorganization). A new GM was formed that was leaner and meaner. Plus 100,000 people got to stay on the job and not go on unemployment for a year. (Remember in 2009 unemployment benefits was for a year). Multiply 100,000 * 52 * 380 you get 1,976,000,000. The taxpayer (you and me) would be on the hook for that. Liquidation of GM and the effect it would have had on the parts business and other suppliers would not have been a good thing for the economy. Team Obama did the right thing. Also, it's not Obama's fault that the chapter 11 did not happen sooner.

For crying out loud, is it too much to ask that you at least make a rudimentary effort to learn something about this issue before replying? Or, at the very least, to try to comprehend what I posted?

No one suggested that GM cease operations and liquidate. Did you even follow the debate at the time? Other than the usual suspects in the panic-porn-pushing presstitute brigade, no one even said they thought a liquidation was remotely likely.

The funds diverted for the bailout had already been approved in October of 2008, and Obama simply followed the Bush blueprint at first. The problem was that he corruptly bailed out the UAW at great cost to the taxpayers. And you're OK with that? Good grief!

In a normal Chapter 11 reorganization, everyone gets clipped -- yes, even the unions (along with just about everyone else). That's the way this has worked for generations in America, not just decades.

But not in Obama's world! Union campaign contributors come first, and everyone else can fuck themselves. If you had read the WSJ piece, you would understand that.

Progressives like Obama view a large business or successful entrepreneur or investor the way Mongol raiders viewed a populous city -- that is, as something to be sacked and plundered.

.

[lustylad]

Originally Posted by lustylad

The Bond Market used to be smart, but that was back in the (pre-QE) days when you could still extrapolate meaningful data on inflationary expectations by dissecting the yield curve.

Nowadays, with the Fed hungrily buying up every scrap of every US debt maturity in sight, price, yield and inflation signals are hugely distorted by the 800-pound gorilla in the market.

The only sense in which private bond traders are still smart is in following the old adage "don't fight the Fed". Don't even try to sell bonds and push up yields to where they might actually offer real, inflation-adjusted returns to savers and investors. If you do, you'll quickly find yourself being body-slammed by that 800-pound gorilla.

This guy explains it better than I did...


How the Fed Rigs the Bond Market

Sales by ‘vigilantes’ used to serve as a warning of inflationary policies. The signal has been muted.

By Lawrence Goodman
Nov. 17, 2021 12:50 pm ET

High inflation should no longer be surprising, nor should it be labeled “transitory.” Its existence should prompt serious reflection on policy decisions and spur action to avoid a financial crisis.

The big issue is financial stability. Inflation hasn’t been this high relative to Treasury bond yields since the 1970s. Then as now, real bond yields—the gap between the 10-year Treasury and inflation—signaled distress for policy makers and market participants.

Since 1970, negative real Treasury bond yields typically have corresponded with a plunging stock market. Example: Yields reached a low of negative 4.9% in 1974. During that year, the S&P 500 fell 37%. Today, real yields of negative 4.7% are the second-lowest since 1970, yet the S&P 500 has risen nearly 30% over the past year.

What is different today?

First, the U.S. Treasury bond market has been rigged and manipulated since the Federal Reserve’s second quantitative-easing program began in 2010. Since then, Fed purchases of Treasury debt have funded as much as 60% to 80% of the entire government borrowing requirement. In other words, Fed actions have crowded out private-sector price discovery for more than 10 years, pushing yields to lows and stock prices to record highs. The consequence of this blurred line between Fed and Treasury responsibilities—“monetizing the debt”—is inflation.

Second, the infamous bond vigilantes, who sold bonds to protest inflationary policies, are relics of the past. They were driven by opportunity, not ideology. These investors voted on government budget deficits and debt management by buying or selling bonds every day. But active Fed intervention has silenced them. “Fighting the Fed” has always been fraught with risk, but fighting a Fed operating with such force will result only in big and consistent losses.

Now this odd phenomenon of record-low real interest rates and a soaring stock market is in danger of reversing. With rising inflation and big government borrowing, a spike in Treasury yields or a market-driven tightening could trigger a financial crisis. Favorable funding flows will vanish, no longer shielding Treasury yields from large budget deficits.

In fiscal 2021, the Fed purchased $1 trillion in Treasury debt, and the Treasury drained $1.6 trillion from its savings account at the Fed. These actions covered nearly the entire budget deficit, equal to 12% of U.S. gross domestic product, and nearly all the pandemic-related government borrowing. Based on monthly estimates, there was actually a funding surplus this past summer. It is no wonder the 10-year Treasury yield reached a low of 1.17% in August despite high inflation rates.

In fiscal 2022, less pandemic-related spending will likely mean a smaller budget deficit. Yet with Fed purchases ending and the Treasury savings account at the Fed depleted, new government borrowing could still reach $2 trillion, or 8% of GDP. In addition, the Treasury will need $500 billion in fresh funding to rebuild its Fed bank account.

Some suggest that the Fed has no choice but to keep interest rates low and allow inflation to erode the value of government debt. But this course of action would keep real yields shockingly low and allow asset-price inflation to remain a powerful force driving both wealth creation and inequality. More painful and unpredictable financial-market volatility would restrain growth and job creation. Worse, if the Fed has delayed a financial crisis, the fallout will be even more damaging when it does come.

Now, while economic growth is strong, is the time for officials to defuse imbalances and gradually restore market dynamics to bond yields. The Treasury and Congress should develop a credible path for sustainable government borrowing below 4% of GDP a year. This target is consistent with the upper limit for budget deficits observed by many emerging-market economies and in excess of the 3% of GDP fiscal convergence criteria in the European Union’s Maastricht Treaty.

The Fed must prepare markets for a lift in interest rates. The Fed’s tapering of Treasury purchases is an essential start, but may be too little too late. For financial stability, there is no choice but to act.

Mr. Goodman is president of the Center for Financial Stability.

https://www.wsj.com/articles/how-the...ry-11637165868

[Tiny]

Originally Posted by lustylad

This guy explains it better than I did...


How the Fed Rigs the Bond Market

Deficits as a % of GDP in excess of 5% were considered to be in the danger zone. Now 8% is the new normal??

Now I don't really understand how the Fed works or how money is created, but this was interesting:

"In fiscal 2021, the Fed purchased $1 trillion in Treasury debt, and the Treasury drained $1.6 trillion from its savings account at the Fed. These actions covered nearly the entire budget deficit, equal to 12% of U.S. gross domestic product, and nearly all the pandemic-related government borrowing."

So the Fed would be injecting money into the system when it buys Treasury debt. Then in addition the federal government draws another $1.6 trillion from the Fed, instead of raising the money through taxes. And it spends it on COVID relief and whatever else. So the Fed is injecting another $1.6 trillion into the system. This does indeed look like a recipe for inflation.

I'm not sure what the federal debt held by the public is right now. Probably over $20 trillion. Anyway if interest rates have to go to, say 5% to control inflation, that's around $1 trillion a year in interest payments. This may be getting out of control.

[WTF]

WWDJTD...

https://finance.yahoo.com/news/trump...121700558.html

President Donald Trump on Wednesday called for the Federal Reserve to engineer interest rates to zero “or less,”

[WTF]

Originally Posted by lustylad

Some suggest that the Fed has no choice but to keep interest rates low and allow inflation to erode the value of government debt. But this course of action would keep real yields shockingly low and allow asset-price inflation to remain a powerful force driving both wealth creation and inequality.

Do you even know wtf this means?....now one might be a day late and a dollar short but it meant to buy stocks in April of 2020.

Don't fight the Fed.

Are you just now figuring this out?

Originally Posted by lustylad

This guy explains it better than I did...

A short bus riding Orangutan could explain it better than you.

[Tiny]

Originally Posted by WTF

Do you even know wtf this means?....now one might be a day late and a dollar short but it meant to buy stocks in April of 2020.

Don't fight the Fed.

WTF, You're missing the point. Inflation screws the working man, who keeps his money in cash and bank deposits. The wealthy elites have all sorts of other options, including converting to foreign currencies and buying assets in other countries. And that's exactly what happened during hyperinflationary periods in Argentina and Brazil. The wealthy gained at the expense of the poor and middle class, and people became more unequal.

I had a friend with benefits in Argentina who owned an ice cream shop. She had to take her income from selling ice cream and go across town at least once a day to buy raw ingredients before the prices went up. The value of her money was falling literally while she was going to buy milk, sugar, etc. People like that get screwed.

We're not to that point. But same principle. And, as you imply in a post above, Trump bears some responsibility, as do Biden, Congress and, in particular, the Fed. The Republicans in Congress however did recognize the problem by the end of last year, thus their refusal to support a $2000 payment per person to most Americans at the end of 2020, or Biden's American Rescue Plan in the first quarter of 2021.

[WTF]

Originally Posted by Tiny

WTF, You're missing the point. Inflation screws the working man,.

The working man has been getting screwed since 1980. Some say since 1970. Let's take a look at the Gini Coefficient...

https://www.pewresearch.org/social-t...th-inequality/

More tepid growth in the income of middle-class households and the reduction in the share of households in the middle-income tier led to a steep fall in the share of U.S. aggregate income held by the middle class. From 1970 to 2018, the share of aggregate income going to middle-class households fell from 62% to 43%. Over the same period, the share held by upper-income households increased from 29% to 48%. The share flowing to lower-income households inched down from 10% in 1970 to 9% in 2018.

These trends in income reflect the growth in economic inequality overall in the U.S. in the decades since 1980

[Tiny]

Originally Posted by WTF

The working man has been getting screwed since 1980. Some say since 1970. Let's take a look at the Gini Coefficient...

https://www.pewresearch.org/social-t...th-inequality/

More tepid growth in the income of middle-class households and the reduction in the share of households in the middle-income tier led to a steep fall in the share of U.S. aggregate income held by the middle class. From 1970 to 2018, the share of aggregate income going to middle-class households fell from 62% to 43%. Over the same period, the share held by upper-income households increased from 29% to 48%. The share flowing to lower-income households inched down from 10% in 1970 to 9% in 2018.

These trends in income reflect the growth in economic inequality overall in the U.S. in the decades since 1980

If we’re going to get all academic, here’s a highly cited paper on the relationship between inflation and inequality, which I’m too cheap to buy and too lazy to read,

https://scholar.google.com/scholar?q...3DQZOBCZst4QQJ

But the abstract supports the belief that higher inflation is correlated with greater inequality.

As to your paper, which I’m also too lazy to read, it stops at 2018. Yes median household income stagnated and I imagine the Gini coefficient went up, during the George W Bush and Obama administrations. The Ryan/McConnell/Trump tax cuts at the start of 2018 and Trump’s deregulation were part of why the trend changed radically in 2019. Median household income jumped and unemployment went to the lowest level since 1969. For the first time in years THE WORKINGMAN did substantively better than the higher income earners

Under the Biden administration and Democratic control of Congress, THE WORKINGMAN is losing ground. Inflation in goods and services has outpaced inflation in wages. Now a lot of that is coincidence, but Biden’s American Rescue Plan, which Larry Summers warned against, probably didn’t help.

[WTF]

Originally Posted by Tiny

If we’re going to get all academic, here’s a highly cited paper on the relationship between inflation and inequality, which I’m too cheap to buy and too lazy to read,

https://scholar.google.com/scholar?q...3DQZOBCZst4QQJ

But the abstract supports the belief that higher inflation is correlated with greater inequality.

As to your paper, which I’m also too lazy to read, it stops at 2018. Yes median household income stagnated and I imagine the Gini coefficient went up, during the George W Bush and Obama administrations. The Ryan/McConnell/Trump corporate tax cut at the start of 2018 and Trump’s deregulation were part of why the trend changed radically in 2019. Median household income jumped and unemployment went to the lowest level since 1969. For the first time in years THE WORKINGMAN did substantively better than the higher income earned.

What the graphs show is that the trends started BEFORE the start of 2018 but did continue after. Until the Covid shutdown.

So it is a stretch to say the tax cuts and deregulation was the cause. In fact....it might even be a huge distortion of the facts.

What can truthfully be stated is that those two things (tax cuts-deregulation) did not ,short term,
negatively effect those trends.

But an decent analog in this case would be that that Sunrise had been out for a couple of hours, the Rooster crowed, the Sun continued its trajectory until clouds and an afternoon thunderstorm named Covid ruined a perfectly good day.

I do not concede the Rooster was the reason for sunshine after crowing and I dang sure would not give him credit for the sunshine before the Roostet took to crowing!

[bambino]

https://t.me/rrndaily/112868