Government’s pockets thinning, I thought tax cuts increased revenue

[Tiny]

Originally Posted by Texas Contrarian

I agree with the observation in your first paragraph, though I'm generally a fan of keeping all rates as low as possible.

However, that's true if and only if we simultaneously cut spending, or at least strictly limit its growth.

Unfortunately, Republicans were big spenders in 2017-2018, though. During the Obama years, Paul Ryan spoke as though he intended to be the leading paragon of fiscal virtue, saying continually that we could be headed for a debt crisis. But with a Republican in the White House, he forgot all about that.

No wonder he got the fuck out of D.C. at the end of 2018!

Yes, we don't want to end up like Greece. It's the poster child for what happens when government spending far outpaces government revenues. And with debt held by the public at around 100% of GDP, we're starting to look more and more like Greece.

I suspect knowing he'd go from Speaker of the House to minority leader was the main reason Ryan got the hell out of Dodge. That and he lost the soul of the Republican Party to Donald Trump:

https://www.politico.com/magazine/st...n-feud-227360/

[Tiny]

Originally Posted by 1blackman1

I’m not sure how you come to that considering that she’s more likely to spend a higher percentage of her income than I am so she’s being taxed on every penny she earns since it gets spent. as a percent I suspect if she has a house rather than an appointment she’s more likely to spend more than me as well.

Sorry Blackman, TC upped the level of discourse in this thread so that I'm no longer interested in discussing your secretary. Unless she's hot and has big tits.

[Texas Contrarian]

Originally Posted by Tiny

Yes, we don't want to end up like Greece. It's the poster child for what happens when government spending far outpaces government revenues. And with debt held by the public at around 100% of GDP, we're starting to look more and more like Greece.

I suspect knowing he'd go from Speaker of the House to minority leader was the main reason Ryan got the hell out of Dodge. That and he lost the soul of the Republican Party to Donald Trump:

https://www.politico.com/magazine/st...n-feud-227360/

That's a good point, and a good article on the Trump-Ryan feud, I believe.

I'm not sure this is a good comparison, but wonder whether Ryan, who I believe spent years trying to "fight the good fight," got frustrated for largely the same reasons David Stockman did during Reagan's first term.

Stockman was a libertarian true-blue believer who entered office in 1981 ready to roll back the size, scope, and cost of government while trimming the welfare state to the maximum extent practicable. (Nothing of the sort happened, of course.)

He got bludgeoned by the powerful personalty and will of Jim Baker, who had long been a George H. W. Bush consigliere and really wasn't very conservative, just as Donald Trump is obviously not a conservative. (Notice the 2017-2019 debt accumulation trajectory?) In fact, Donald referred to himself more than once as "the king of debt." (Well, I suppose he does have a point there!)

[Tiny]

Originally Posted by Texas Contrarian

That's a good point, and a good article on the Trump-Ryan feud, I believe.

I'm not sure this is a good comparison, but wonder whether Ryan, who I believe spent years trying to "fight the good fight," got frustrated for largely the same reasons David Stockman did during Reagan's first term.

Stockman was a libertarian true-blue believer who entered office in 1981 ready to roll back the size, scope, and cost of government while trimming the welfare state to the maximum extent practicable. (Nothing of the sort happened, of course.)

He got bludgeoned by the powerful personalty and will of Jim Baker, who had long been a George H. W. Bush consigliere and really wasn't very conservative, just as Donald Trump is obviously not a conservative. (Notice the 2017-2019 debt accumulation trajectory?) In fact, Donald referred to himself more than once as "the king of debt." (Well, I suppose he does have a point there!)

Thanks, I didn't know that about Baker and Stockman.

Yes, if The Donald could do something with the national debt like what he did with his Atlantic City casino debt, we'd be sitting pretty! Not only did he manage to cancel most of the casino debt, he also ended up with a $900 million carried forward tax loss that he used to shield income in future years from taxes. You might remember that he bragged about "brilliantly" using bankruptcy laws.

[dilbert firestorm]

Originally Posted by Tiny

Yes, we don't want to end up like Greece. It's the poster child for what happens when government spending far outpaces government revenues. And with debt held by the public at around 100% of GDP, we're starting to look more and more like Greece.

I suspect knowing he'd go from Speaker of the House to minority leader was the main reason Ryan got the hell out of Dodge. That and he lost the soul of the Republican Party to Donald Trump:

https://www.politico.com/magazine/st...n-feud-227360/

greece???

I think we'd be more like japan with their zombie banks.

[Tiny]

Originally Posted by dilbert firestorm

greece???

I think we'd be more like japan with their zombie banks.

Japan's government debt is mostly owned by Japanese -- their central bank, pension funds, individuals, etc. Only 8% is owned by foreigners. This is in large part because Japan historically has mostly run current account or trade surpluses. They have sold more to the rest of the world than they have bought from it. As a result, there aren't lots of Yen held by foreigners and invested in Japanese government bonds. As a result, Japan can sustain a higher level of national debt than most other countries.

Greece and the USA have historically run current account deficits. When the shit hit the fan about 10 or 15 years ago, foreigners owned something like 70% of Greek government debt. The Greek national debt was around 130% of GDP and I'm not sure whether that was net of debt held by the Greek central bank. It went to much higher levels as Greek GDP shrunk, during their crisis and currently is around 170% of GDP.

National debt in the USA held by the public is less than Greece's and Japan's. Foreigners hold about 25% of our federal government debt.

So in terms of the level of government debt, we're better off than Greece and Japan. In terms of foreign holdings of our government debt, we're somewhere in between the two.

As to the banks, I think ours are in reasonably good shape. Yeah, some may be headed for problems as we go into recession and commercial real estate loans default. And the ratio of tangible equity to assets should be higher for a lot of them IMHO. But still I don't think we have to worry about Zombie banks. I may be wrong though. A knowledgeable friend of mine agrees with you.

I'm not familiar with the solvency of Japanese banks.

From their past writings, Lusty Lad will tell you we don't have to worry as much about debt levels as other countries, because we have the worlds reserve currency. And Texas Contrarian has pointed out the pernicious effects of high government debt and high government interest payments on the economy, even if we're not headed for a crisis.

[Ducbutter]

So, the conversation has turned highfalutin eh? Tiny, you should read Stockman's 'The Great Deformation'. You"d like it.
As for Blkmn, I don't share your optimism. That garbage about how he should pay a higher rate at his income level is bullshit. You can write a check the the US treasury any time you want.
And I'm certain that at one point he boasted about "making a ton " of money but that seems to have been edited.

[Why_Yes_I_Do]

But if I may remind ya'll where all this pocket change comes from.



Remember Paul Ryan left government service (sic) and joined the board at FOX.
Wonder how that's working out?

[Ducbutter]

Originally Posted by Tiny

Japan's government debt is mostly owned by Japanese -- their central bank, pension funds, individuals, etc. Only 8% is owned by foreigners. This is in large part because Japan historically has mostly run current account or trade surpluses. They have sold more to the rest of the world than they have bought from it. As a result, there aren't lots of Yen held by foreigners and invested in Japanese government bonds. As a result, Japan can sustain a higher level of national debt than most other countries.

I have an Australian friend who constantly complains about Japanese trade policies. He claims they won't buy imported goods and that they manipulate the value of their currency to keep their products affordable. He also claims they've bought up massive amounts of natural resources around the world (ie. Aussie copper and coal). On top of all that they are unscrupulous in business.
I tend to attribute some of attitudes to being unfluenced by WW 2 vets and they're resentment to Japanese brutalities, when he was young. Would be interested in your opinions along with TC and others in the forum. I had upper division econ but only in pursuit of a marketing degree. Don't mean to hijack the thread.

[Why_Yes_I_Do]

We have nothing to fear, well... except for about everything you mention below...

Originally Posted by Tiny

...As to the banks, I think ours are in reasonably good shape. Yeah, some may be headed for problems as we go into recession and commercial real estate loans default. And the ratio of tangible equity to assets should be higher for a lot of them IMHO. But still I don't think we have to worry about Zombie banks. I may be wrong though. A knowledgeable friend of mine agrees with you.
...
From their past writings, Lusty Lad will tell you we don't have to worry as much about debt levels as other countries, because we have the worlds reserve currency. And Texas Contrarian has pointed out the pernicious effects of high government debt and high government interest payments on the economy, even if we're not headed for a crisis.

Our hegemony of world reserve currency is being tunneled under from many fronts, thanks in no small part to the current regime's games causing new teams being forged faster out side of our currency control. The idea of a BRICS, with a dash of House of Saud and maybe a couple others, currency is no longer as far fetched as previously predicted possible by 2050 (Objects in the mirror may be closer than they appear) as it was just a a few shorts years ago.

If I remember my history correctly, a lot of our debt was acquired under near zero interest rates and now, those rates are not where they were then.

As to banks, I expect consolidation via the tried and true method of the government picking the winners and subsequent loosers. Same as '08-'09. But rest assured, career politicians will profit from it.

Otherwise, every thing looks ducky. Well... almost, except for two little, tiny even, hardly worth mentioning:

• The Sword of Damocles (Commercial real estate loans) hanging over our heads seems heavier and sharper than we realize
• The Oracle of Omaha suggesting a duck-n-cover strategy for the rest of the year

I guess I'm just say'n that we Proper-Fooked the economy when we shut it down and our antiquated ways of dealing with bumps in the road don't seem adequate, i.e. unintended consequences

[1blackman1]

Originally Posted by Ducbutter

So, the conversation has turned highfalutin eh? Tiny, you should read Stockman's 'The Great Deformation'. You"d like it.
As for Blkmn, I don't share your optimism. That garbage about how he should pay a higher rate at his income level is bullshit. You can write a check the the US treasury any time you want.
And I'm certain that at one point he boasted about "making a ton " of money but that seems to have been edited.

Edited? Maybe youre conflating threads. I may have actually said shit ton but that’s all relative.

Why would I write a check that exceeds what I required to pay. I’ll never. Do that. But I won’t cry paying more as long as we all get stuck doing the same.

[Tiny]

Originally Posted by Ducbutter

I have an Australian friend who constantly complains about Japanese trade policies. He claims they won't buy imported goods and that they manipulate the value of their currency to keep their products affordable. He also claims they've bought up massive amounts of natural resources around the world (ie. Aussie copper and coal). On top of all that they are unscrupulous in business.
I tend to attribute some of attitudes to being unfluenced by WW 2 vets and they're resentment to Japanese brutalities, when he was young. Would be interested in your opinions along with TC and others in the forum. I had upper division econ but only in pursuit of a marketing degree. Don't mean to hijack the thread.

Good point Ducbutter, we don't want to hijack Blackman's thread. I'll reply by PM. If you don't get one from me please give me a shout.

[Tiny]

Originally Posted by Why_Yes_I_Do

We have nothing to fear, well... except for about everything you mention below...Our hegemony of world reserve currency is being tunneled under from many fronts, thanks in no small part to the current regime's games causing new teams being forged faster out side of our currency control. The idea of a BRICS, with a dash of House of Saud and maybe a couple others, currency is no longer as far fetched as previously predicted possible by 2050 (Objects in the mirror may be closer than they appear) as it was just a a few shorts years ago.

If I remember my history correctly, a lot of our debt was acquired under near zero interest rates and now, those rates are not where they were then.

As to banks, I expect consolidation via the tried and true method of the government picking the winners and subsequent loosers. Same as '08-'09. But rest assured, career politicians will profit from it.

Otherwise, every thing looks ducky. Well... almost, except for two little, tiny even, hardly worth mentioning:

• The Sword of Damocles (Commercial real estate loans) hanging over our heads seems heavier and sharper than we realize
• The Oracle of Omaha suggesting a duck-n-cover strategy for the rest of the year

I guess I'm just say'n that we Proper-Fooked the economy when we shut it down and our antiquated ways of dealing with bumps in the road don't seem adequate, i.e. unintended consequences

Another good post WYID. There's not much if anything I'd disagree with. Your thoughts about an emerging market currency are interesting.

[lustylad]

Originally Posted by Tiny

Another good post WYID. There's not much if anything I'd disagree with. Your thoughts about an emerging market currency are interesting.

Well, I find the idea of a single BRICs currency to be preposterous. A single currency issued and administered by a single Central Bank for Brazil, Russia, India and China? Replacing the real, ruble, rupee and renminbi all at once?

"C'mon man!"

I can think of 500 reasons that will never happen!

[Tiny]

Originally Posted by lustylad

Well, I find the idea of a single BRICs currency to be preposterous. A single currency issued and administered by a single Central Bank for Brazil, Russia, India and China? Replacing the real, ruble, rupee and renminbi all at once?

"C'mon man!"

I can think of 500 reasons that will never happen!

You forgot Saudi Arabia, from WYID's post.

You know more about money and the Fed than the rest of us put together, TC excepted. But I'll argue, why not. Like Jews at Masada or Texans at the Alamo, I'll lose. But maybe I'll learn something in the process.

I'm going to kick out India, as I see about "0" chance of them going into a currency union with China.

The USA and Europe have confiscated Russia's foreign reserves to the extent they could, and are debating spending them on the reconstruction of Ukraine. So the Russians are likely to see hundreds of billions in dollar and Euro financial assets go up in smoke. Some Russian financial institutions have been banned from SWIFT, and the USA and Europe have otherwise made it difficult for the Russians to transact in the dollar and the Euro.

China sees the writing on the wall, and is moving money out of dollars, perhaps with a view towards invading Taiwan some day. Or perhaps just because they rightly believe that would make them less subject to U.S. and European pressure.

China and Russia have set up a mechanism to trade between themselves without using dollars.

Prince Mohammed bin Salman, effectively the leader of Saudi Arabia, figures the Biden administration would like to see him in jail for the Khashoggi killing and other crimes against humanity. Now, with the help of China, the Saudi's are negotiating peace with Iran, while leaving the USA and Israel out in the cold. Furthermore, the Saudi's recently announced they would like to start trading in additional currencies, besides the dollar. Like Russia and China, they likely see the risks associated with the dollar and the Euro if they get crossways with the USA and Europe.

So, there's lots of political motivation, especially on the part of Russia and China, to come up with an alternative currency to the dollar and Euro.

There's a lot of trade between the countries, a lot more than between some EU member countries.

The Chinese have invested tons in Brazil, and are by far their biggest customer. Annual Brazilian exports to China are $90 billion, compared to $38 billion for the USA. While we're on Brazil, I'll note the current president is a Socialist. While he appears benign, who knows. At one time Chavez, Ortega and Morales probably appeared benign as well, and they all became good buddies with Russia. Admittedly, I'm stretching a bit including Brazil in this currency union.

The Saudi's and the Russians sell lots of oil to China. And Russia, Brazil and Saudi Arabia all import more from China than from any other country.

All the countries have long coastlines (ok, maybe a little problematic for European Russia) so can trade cheaply among themselves.

Finally, China in terms of purchasing power is the largest economy in the world, and probably set to become largest in nominal terms sometime in the future. China, Russia and Saudi Arabia perennially run current account surpluses and have large foreign reserves. And Brazil, well, maybe forget about Brazil for a minute. Collectively, this group of countries would be a force to be reckoned with, economically.

So, my question for you. If Europe could do it, why couldn't China, Russia, Saudi Arabia and Brazil?

Admittedly from the Chinese perspective it would probably make more sense to loosen exchange controls on the Renminbi and try to make it an alternative to the dollar. And any country entering into a currency union with Russia might be concerned about getting shut out of trading outside of the union.