Another help for those mortgages underwater.

[WTF]

Originally Posted by Marcus Aurelius

Now don't confuse people with facts.

TTH clearly said England. PJ gave a graph of the EU....

[Rudyard K]

Originally Posted by WTF

And our growth was built on a housing bubble.

That is the point you seem to be missing pj.

Is the unregulated free market system the one the world want to emulate? Is it even what we want to go back to? Greenspan sure seems to have seen the error of its ways.

What I think both you and TTH seem to miss is not “Does stimulation need to occur?” (I think we all agree with that), but how to achieve stimulation.

You and TTH seem to think that raising taxes and having the efficiency of our federal government spread those revenues around to stimulate the economy is the way to go. PJ and I think that the gov’s ability to tax, and ability to incent private industry, is the way to go. You want to create jobs? Come up with a tax credit that tells private industry it gets a tax credit of some sort for each dollar of new jobs it creates. You want to encourage long term investment? Incent with investment tax credits or a real (3-5 year) long term capital gain rate (not this 1 year BS). Industry (i.e. the money) will follow wherever you lead. That’s what it does. That is its whole purpose of existence.

At the end of the day, it is the same tax dollar being utilized to stimulate. Under one scenario the government takes the tax dollar and spreads it around as it sees fit. Under the other scenario the government does not take the tax dollar if industry can show that it was spent how government wanted it spent. I think the latter is more efficient.

But somebody, actually a lot of somebody’s, is going to get filthy rich along the way. And that’s where we run into the problem. Because in reality…job creation, stimulus, the economy, etc…are just side lights to you all. What you really want is the tax revenue to fund social programs that you think are befitting the world as you see it. So, you use all that “group hug - job creation” argument to sell a tax increase so that you can then allocate that tax revenue to social programs. The stimulus package did not do jack shit about creating jobs. Instead it simply kept (or softened the blow) of a meltdown of the economy. It probably needed to happen, things could have gotten much worse, but let’s don’t beguile ourselves that it stimulated anything. The health care reform just passed also doesn’t stimulate anything. It’s a social program. So, now we need to figure out some way to stimulate something because we have the impending cost of that program as a yoke around our necks. It’s hard to do that with income tax, because there is not enough income to tax…so now we move to the VAT. Do whatever you want to the rich! They are still going to be rich and all the social programs you cram down our throats are going to be borne on the backs of the middle class…cause that’s where there is enough volume to make a difference.

You don’t like what occurred over the course of the last 15 years? I don’t either. (And I am sure at this point, you are going to run off into a discussion about republicans or democrats and who caused what…which, of course, is just a BS diversion to discussing what happened) But both industry and government sat at the food trough lapping up the vittles. Industry got to book billions of dollars of loans, build houses, expand its various industries, and line its pockets. Government got to feel good about itself by a good economy, programs that encouraged lending money to folks who should not have been lent the money and feeling like they were giving the “American Dream” to some folks who have now found out that it was just that…a Dream. Frankly, industry should have known better. Government and the social liberals who run it?...hell, I have no more expectation out of them than I do from my 3 year old granddaughter.

But putting the inmates in charge of the asylum is not the way out of this (IMHO). Back up…Regroup…And try and educate government to understand its population and what motivates them. Then use that motivation for the advantage of society…not try to brow beat that motivation out of them. The natives are getting restless, and they are looking at both the democrats and the republicans and saying…a pox on both your houses.

[pjorourke]

Originally Posted by WTF

TTH clearly said England. PJ gave a graph of the EU....

With apologies to MA for inserting facts:

EU-15: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom.

For the record, the USA compound GDP growth over that period is 3.1%; UK is 2.3%.

Happy now WTF?

[pjorourke]

Originally Posted by Rudyard K

The natives are getting restless, and they are looking at both the democrats and the republicans and saying…a pox on both your houses.

Word!!!!

[Texas Contrarian]

Originally Posted by TexTushHog

Krugman wasn't proposing "massive" increases in the deficit. He wanted the stimulus to be $1.2 -1.4B, up from $700M. Just an extra $500 - 700M in spending.

Wow.

In what universe would $1.4 trillion (Krugman's stimulus proposal) not be considered a massive increase in the already huge deficit? For that matter, in what universe would the actual bill ($787 billion) not be considered pretty massive? Have our senses simply left the planet? (Remember, even WITHOUT the bailouts and the stimulus package, our federal budget grew by close to 70% in nominal dollars between 2001 amd 2008.)

Originally Posted by TexTushHog

And it's not the deficit that creates the jobs, it's the spending.

Spending per se does not create jobs! Isn't that self evident from the abject failure of the "stimulus" package? Of course, it was not designed to create jobs or real benefits for the economy, but rather to pass out lots of goodies to favored constituencies.

It would have been better to spend less money but to target it at needed infrastructure. Instead, most of the money was simply wasted. We got very little for it, and people like Joe Biden are out twisting in the wind trying to defend this lemon.

We need to spend money more wisely, not just more liberally.

Originally Posted by TexTushHog

And for what? To keep taxes low for the wealthy few.

Compare the tax burdens on different parts of the income strata in the U.S. with those in France, Germany, or the U.K. It's true that the tax burden on the top earners that you guys on the left seem to resent so much is lower in the U.S. -- but expressed as a percentage of income, the burden on Americans of modest means is lower than that on their European counterparts by a far larger margin. In Europe, even the working poor get socked with pretty high income taxes, while in the U.S. they have largely been relieved of the income tax burden.. In some countries, people making as little as $35-40K/yr. aleady find themselves in 30% or higher income tax brackets. Plus they pay a high value-added tax and gasoline taxes of typically $4/gal. or more.

You cannot possibly eliminate more than a small sliver of the budget deficit without very large tax increases of some type on the middle class.

Originally Posted by pjorourke

So you and TTH want to fix this bubble with one based on out of control government debt -- a public spending bubble. Fricken brilliant!

That seems to be the plan!

But the essential problem is that a big increase in government spending acts as an economic retardant, not a stimulant. All that spending has to be digested, like too much food after a bad overeating binge. History is very clear on this.

For instance, note that Richard Nixon declared himself a Keynesian and later said this in his 1971 State of the Union Address:

"The tide of inflation has turned. The rise in the cost of living, which had been gathering dangerous momentum in the late sixties, was reduced last year. Inflation will be further reduced this year.

But as we have moved from runaway inflation toward reasonable price stability and at the same time as we have been moving from a wartime economy to a peacetime economy, we have paid a price in increased unemployment.

We should take no comfort from the fact that the level of unemployment in this transition from a wartime to a peacetime economy is lower than in any peacetime year of the sixties.

This is not good enough for the man who is unemployed in the 70s. We must do better for workers in peacetime and we will do better.

To achieve this, I will submit an expansionary budget this year—one that will help stimulate the economy and thereby open up new job opportunities for millions of Americans.

It will be a full employment budget, a budget designed to be in balance if the economy were operating at its peak potential. By spending as if we were at full employment, we will help to bring about full employment.

I ask the Congress to accept these expansionary policies—to accept the concept of a full employment budget. At the same time, I ask the Congress to cooperate in resisting expenditures that go beyond the limits of the full employment budget. For as we wage a campaign to bring about a widely shared prosperity, we must not reignite the fires of inflation and so undermine that prosperity.

With the stimulus and the discipline of a full employment budget, with the commitment of the independent Federal Reserve System to provide fully for the monetary needs of a growing economy, and with a much greater effort on the part of labor and management to make their wage and price decisions in the light of the national interest and their own self-interest—then for the worker, the farmer, the consumer, for Americans everywhere we shall gain the goal of a new prosperity: more jobs, more income, more profits, without inflation and without war.

This is a great goal, and one that we can achieve together."

(end of excerpt)

Can you believe that? Nixon actually said that if we were spend as though we were at full employment, we would "help to bring about full employment." He was a big fan of "stimulus packages!"

Of course, the Democratic majority in congress was more than eager to comply. For a couple of years, social spending actually increased more than during the LBJ era! It surpassed the defense budget for the first time in the mid 1970s.

How'd that one work out? Well, the 1973-75 recession was the worst (at that time) since the Great Depression, and the unemployment rate rose by almost 4%.

Only after the Volcker Fed undertook the painful steps to restore sound money did we get out of the long, painful aftermath of the spending binge of the late '60s and '70s.

Isn't it ironic that Paul Volcker, just as he did 30 years ago, seems to be the one chosen to deliver the message to America that we need to take some very bitter medicine?

http://www.reuters.com/article/idUSTRE6355N520100406

[Rudyard K]

Originally Posted by pjorourke

Happy now WTF?

Somehow I'm betting against a response of...

Wow! Yes, PJ. I now see the point you were making!

BTW, I hear there is a bandwidth shortage in Houston today. It seems some yokel is using it all up looking for links of some sort.

[nevergaveitathought]

i never cease to be amazed at how facts, real life experience, man's human nature, right and wrong, common sense, the understanding of what has made America great, reason and liberty are constantly slain at the altar of ideology. it leaves but one conclusion, there are ulterior motivations.

[discreetgent]

Originally Posted by nevergaveitathought

it leaves but one conclusion, there are ulterior motivations.

[WTF]

Originally Posted by Rudyard K

Somehow I'm betting against a response of...

Wow! Yes, PJ. I now see the point you were making!

BTW, I hear there is a bandwidth shortage in Houston today. It seems some yokel is using it all up looking for links of some sort.

I been getting laid!

[nevergaveitathought]

Originally Posted by discreetgent

surprised eh?

[WTF]

Originally Posted by pjorourke

With apologies to MA for inserting facts:

EU-15: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom.

For the record, the USA compound GDP growth over that period is 3.1%; UK is 2.3%.

Happy now WTF?

Ok here goes, so RK don't get his panties in a wad.

PJ could you post what China's growth is over the last eight years. . .

Shall we assume their economic model ?

[WTF]

Originally Posted by Rudyard K

What I think both you and TTH seem to miss is not “Does stimulation need to occur?” (I think we all agree with that), but how to achieve stimulation.

You and TTH seem to think that raising taxes and having the efficiency of our federal government spread those revenues around to stimulate the economy is the way to go. PJ and I think that the gov’s ability to tax, and ability to incent private industry, is the way to go. You want to create jobs? Come up with a tax credit that tells private industry it gets a tax credit of some sort for each dollar of new jobs it creates. You want to encourage long term investment? Incent with investment tax credits or a real (3-5 year) long term capital gain rate (not this 1 year BS). Industry (i.e. the money) will follow wherever you lead. That’s what it does. That is its whole purpose of existence.

At the end of the day, it is the same tax dollar being utilized to stimulate. Under one scenario the government takes the tax dollar and spreads it around as it sees fit. Under the other scenario the government does not take the tax dollar if industry can show that it was spent how government wanted it spent. I think the latter is more efficient.

But somebody, actually a lot of somebody’s, is going to get filthy rich along the way. And that’s where we run into the problem. Because in reality…job creation, stimulus, the economy, etc…are just side lights to you all. What you really want is the tax revenue to fund social programs that you think are befitting the world as you see it. So, you use all that “group hug - job creation” argument to sell a tax increase so that you can then allocate that tax revenue to social programs. The stimulus package did not do jack shit about creating jobs. Instead it simply kept (or softened the blow) of a meltdown of the economy. It probably needed to happen, things could have gotten much worse, but let’s don’t beguile ourselves that it stimulated anything. The health care reform just passed also doesn’t stimulate anything. It’s a social program. So, now we need to figure out some way to stimulate something because we have the impending cost of that program as a yoke around our necks. It’s hard to do that with income tax, because there is not enough income to tax…so now we move to the VAT. Do whatever you want to the rich! They are still going to be rich and all the social programs you cram down our throats are going to be borne on the backs of the middle class…cause that’s where there is enough volume to make a difference.

You don’t like what occurred over the course of the last 15 years? I don’t either. (And I am sure at this point, you are going to run off into a discussion about republicans or democrats and who caused what…which, of course, is just a BS diversion to discussing what happened) But both industry and government sat at the food trough lapping up the vittles. Industry got to book billions of dollars of loans, build houses, expand its various industries, and line its pockets. Government got to feel good about itself by a good economy, programs that encouraged lending money to folks who should not have been lent the money and feeling like they were giving the “American Dream” to some folks who have now found out that it was just that…a Dream. Frankly, industry should have known better. Government and the social liberals who run it?...hell, I have no more expectation out of them than I do from my 3 year old granddaughter.

But putting the inmates in charge of the asylum is not the way out of this (IMHO). Back up…Regroup…And try and educate government to understand its population and what motivates them. Then use that motivation for the advantage of society…not try to brow beat that motivation out of them. The natives are getting restless, and they are looking at both the democrats and the republicans and saying…a pox on both your houses.

Damn, to much info and miss info! LOL

Look without breaking it all down I agree with damn near everything you said. It has always come down to the rich at least attempting to appease the poor on their way to the bank. I do not believe in the fairy tale crap about everyone having a fair shake. That is not how life is or how it will ever be. But the pendulum swung to far right, just as it did in the thirties.


Uncle Milton's Chicago BS just grabbed power from governments and privatized it. That has not worked out like he thought it would. Why? Oh because power is power and whomever has it abuses it. Again that is just human nature. So I agree it is all just a power grab and the rich will settle in and run things no matter what form of governance it is called.

Right now the Chinese's have it going on according to PJ's view of growth. Again I ask...shall we adopt their form of government?

Now I am off to go get laid again, you boys try and have this solved before I'm done.
















Is 10 minutes time enough?

[WTF]

Originally Posted by CaptainMidnight

It surpassed the defense budget for the first time in the mid 1970s.

Accounting trick

http://www.warresisters.org/pages/piechart.htm
The government practice of combining trust and federal funds began during the Vietnam War, thus making the human needs portion of the budget seem larger and the military portion smaller.

[Texas Contrarian]

Originally Posted by WTF

Accounting trick

http://www.warresisters.org/pages/piechart.htm
The government practice of combining trust and federal funds began during the Vietnam War, thus making the human needs portion of the budget seem larger and the military portion smaller.

I have no idea whether the data used in that pie chart are accurate and properly interpreted, but certainly have no doubt that a website called "warresisters" must be a paragon of objectivity!

But what is your point? Are you attempting to deny that there was a huge increase in social spending between the mid '60s and the mid '70s, and that it was a bitter pill for the American economy to swallow? Or are you simply a fan of huge, budget-busting spending initiatives (such as the present ones) as long as they don't involve military spending?

[WTF]

Originally Posted by CaptainMidnight

I have no idea whether the data used in that pie chart are accurate, but certainly have no doubt that a website called "warresisters" must be a paragon of objectivity!

It's really not that hard to dispute it if you could. The reason you can't is because it is true. Who cares what they call the site as long as the facts are in fact facts!

Originally Posted by CaptainMidnight

But what is your point? Are you attempting to deny that there was a huge increase in social spending between the mid '60s and the mid '70s, and that it was a bitter pill for the American economy to swallow? Or are you simply a fan of huge, budget-busting spending initiatives (such as the present ones) as long as they don't involve military spending?

My point is that EVERYTHING should be spelled out so people actually know just WTF their taxes are being spent on.

Accounting tricks suck.

Welfare spending in the military is no different than welfare spending in the public sector. They are both spending OUR taxes. Draping one in the flag does not make it any more right than draping one in the name of charity.


Personally I wish ALL (Fed, state, local) taxes were combined and each person could direct which program they went to. Talk about getting rid of politicians!