The Reality of Gov't. Deficits

[Drek]

http://www.c-spanarchives.org/clip/4161813

Watch, learn, grow.

[L.A. BRONCOS FAN]

The "reality" of deficits for right-wingers:

When a Republican is in the WH: "Deficits don't matter."

When a Democrat is in the WH: "OMG! The sky is falling!"

[Drek]

The "reality" of deficits for right-wingers:

When a Republican is in the WH: "Deficits don't matter."

When a Democrat is in the WH: "OMG! The sky is falling!"

Dude, come on. Watch the video. It is damned insightful **** from a real PhD in economics and underscores the inherent flaw in how our nation approaches it's gov't. v. private sector relationships.

[pricejj]

Could you also post a clip regarding compounding interest, it's rapid increase over time, and it's cumulative burden on a countries finances? A current video of Greece, would suffice.

Maybe a clip showing effects of inflation over time, and it's propensity to widen the gap between the rich and the poor, and destroy the middle class? No need to look any further than Zimbabwe.

[pricejj]

Dude, come on. Watch the video. It is damned insightful **** from a real PhD in economics and underscores the inherent flaw in how our nation approaches it's gov't. v. private sector relationships.

Did you miss the memo that both Democrats and Republicans agree that the deficit needs to be closed (for reasons that are obviously over your head)?

[L.A. BRONCOS FAN]

Dude, come on. Watch the video. It is damned insightful **** from a real PhD in economics and underscores the inherent flaw in how our nation approaches it's gov't. v. private sector relationships.

I plan to watch - just couldn't resist a jab at the forked-tongued ones. ;)

[pricejj]

Of course, one of the most important effects of massive government deficits, is that many governments over the world have now instituted zero interest rate policies, so that they can borrow money for cheap.

This, of course, means that you will not see any reasonable rates of return on savings (or SS) in our lifetimes.

Couple that with the Fed's stated policy of 30% inflation over 20 years...and Drek, could you please tell us how we are going to retire with our money losing so much value between now and retirement with no real opportunities for growth of savings, SS, or 401k?

As you can see, the only thing massive deficit spending creates, is a flat-lining private sector (just like you are seeing today). Thoughts?

[L.A. BRONCOS FAN]

As you can see, the only thing massive deficit spending creates, is a flat-lining private sector (just like you are seeing today).

Then how do you explain the fact that people like you were FOR massive deficit spending under Reagan, Bush I and Bush II?

[Drek]

Of course, one of the most important effects of massive government deficits, is that many governments over the world have now instituted zero interest rate policies, so that they can borrow money for cheap.

This, of course, means that you will not see any reasonable rates of return on savings (or SS) in our lifetimes.

Couple that with the Fed's stated policy of 30% inflation over 20 years...and Drek, could you please tell us how we are going to retire with our money losing so much value between now and retirement with no real opportunities for growth of savings, SS, or 401k?

As you can see, the only thing massive deficit spending creates, is a flat-lining private sector (just like you are seeing today). Thoughts?

Did you actually watch the video?

Did you comprehend any of it?

Real resources are what matters, our nation has abundant supplies on that front. You could even say we're the breadbasket of the world.

Private sector growth only happens when we run trade surpluses or we run a gov't. deficit of some kind. Clearly explained mathematically in the video. This is an either/or equation. Want real private sector growth you live with public deficits.

The effect that has on our currency is irrelevant as long as we 1. control our own currency and 2. control the resources we need to continue growth as a nation.

Further underscores how the most justified taxes are those on estate transfers and moving wealth outside the U.S.. Both take away from this nation's prosperity by removing wealth from an equation that has to balance out. End result is the sum we get to play with on how to balance said equation is reduced so the super wealthy can be hoarders of "wealth". At the expense of their fellow citizens.

[pricejj]

Then how do you explain the fact that people like you were FOR massive deficit spending under Reagan, Bush I and Bush II?

Didn't vote for any of those guys, nor have I ever been in favor of deficit spending.

[L.A. BRONCOS FAN]

Didn't vote for any of those guys, nor have I ever been in favor of deficit spending.

You didn't start posting here until 2009.

What a coincidence.

[Drek]

Didn't vote for any of those guys, nor have I ever been in favor of deficit spending.

Who did you vote for then? If you don't mind such disclosure that is.

Only thing more irritating than someone always bitching about politicians is someone bitching about politicians who doesn't get involved in the political process.

[L.A. BRONCOS FAN]

Who did you vote for then? If you don't mind such disclosure that is.

He says he's "never been in favor of deficit spending," but where was he between 2000-2008?

That tells me all I need to know.

[pricejj]

I guess you think ZIRP can sustain the U.S. forever...along with 3% annual inflation?

Here's a couple facts:
1. Our money we make now will be worth a lot less when we retire.
2. There are no viable options for growth other than purchasing assets (which are now too expensive), or gambling it away on the stock market.
3. Hope you're stashing at least 15% of your take home pay under the mattress. If you're lucky, you'll be able to live off of it for a few years before you die.

How long do you think this can go on before collapse? If the answer isn't 'indefinitely' then you have a serious problem on your hands.

[pricejj]

He says he's "never been in favor of deficit spending," but where was he between 2000-2008?


Well, I wasn't on this board teaching grown men simple math...if that answers your question.

[L.A. BRONCOS FAN]

Well, I wasn't on this board criticizing the previous administration and voicing my objections to "massive deficit spending"...if that answers your question.

Fixed.

[Drek]

I guess you think ZIRP can sustain the U.S. forever...along with 3% annual inflation?

Here's a couple facts:
1. Our money we make now will be worth a lot less when we retire.
2. There are no viable options for growth other than purchasing assets (which are now too expensive), or gambling it away on the stock market.
3. Hope you're stashing at least 15% of your take home pay under the mattress. If you're lucky, you'll be able to live off of it for a few years before you die.

How long do you think this can go on before collapse? If the answer isn't 'indefinitely' then you have a serious problem on your hands.

You clearly don't even get the argument at hand here.

What does interest rate matter when you can print more money to pay the interest? What does inflation rate matter when money is just a theoretical medium we conduct barter in?

The value of the dollar is irrelevant as long as the U.S. produces enough real resources (read: food, water, etc.) to provide for it's populous. Which we do and then some, as a net exporter of agriculture (one of the few things we are an exporter of). Should that start to become a problem we can simply outlaw the export of food resources much like we currently disallow the export of oil. This will drive the price of food low, but not so low as to make agriculture an unsustainable business (as it will remain profitable within the bubble of America only supply and demand, since their labor force would be Americans with salaries commensurate with said economic practices).

The U.S. is blessed with all the resources it needs and no obligation to another foreign body's value of our currency. There is no such thing as default or bankruptcy for the U.S. government. So why worry about a boogie man when we've got real things to deal with? Like national under employment resulting in an unproductive economy.

[pricejj]

Fixed.

I have strongly voiced my objections to the "war on terror", and previous administrations housing policies.

Bush's 2% spending deficits weren't sustainable, and we all knew that. What makes you think Obama's 7.5% spending deficits are?

[Jetmeck]

Did you miss the memo that both Democrats and Republicans agree that the deficit needs to be closed (for reasons that are obviously over your head)?


It sure as hell does need to be reduced but which way it is done is the important thing.

Rich ****s paying their fair share and not dumping all this on the middle class.

We won on this premise....get with the program.

[Jetmeck]

Well, I wasn't on this board teaching grown men simple math...if that answers your question.


Bill Clinton agrees ...... simple math and don't blame the black guy for problems created by the good ole boy....ok ?

[pricejj]

You clearly don't even get the argument at hand here.

What does interest rate matter when you can print more money to pay the interest? What does inflation rate matter when money is just a theoretical medium we conduct barter in?

The value of the dollar is irrelevant as long as the U.S. produces enough real resources (read: food, water, etc.) to provide for it's populous. Which we do and then some, as a net exporter of agriculture (one of the few things we are an exporter of). Should that start to become a problem we can simply outlaw the export of food resources much like we currently disallow the export of oil. This will drive the price of food low, but not so low as to make agriculture an unsustainable business (as it will remain profitable within the bubble of America only supply and demand, since their labor force would be Americans with salaries commensurate with said economic practices).

The U.S. is blessed with all the resources it needs and no obligation to another foreign body's value of our currency. There is no such thing as default or bankruptcy for the U.S. government. So why worry about a boogie man when we've got real things to deal with? Like national under employment resulting in an unproductive economy.

The problem is real wages are dropping and prices are skyrocketing. What you are left with is a vanishing middle class. Basically, an enormous permanent lower class (who can't even afford to put food on their table or own their own house), and a few wealthy elites who own all the resources. That isn't the American dream, and it isn't a recipe for success. In fact, it's eerily reminiscent of a fuedal system.

[pricejj]

Now, we are faced with either: 1. Doubling the taxes on the middle class or 2.running 7.5% of GDP deficits (or more, once the Obamacare entitlement hits in 2014)

Basically, you are creating the future for the world which you profess to hate. A 1% who own everything, and a 99% who own nothing.

[pricejj]

Drek, the term for ZIRP is actually called "financial repression"...and is being used all over the world by governments to contain their debt servicing costs, and stimulate their economies.

It basically amounts to a tax on everyone equalling what rate they would have been able to get in a normal economy (3% - 5%) + the rate of inflation (CPI is 3%, asset inflation is much higher). Basically, you're looking at at least a 8% tax on everyone across the board. And this is something that the U.S., will take 20 years to grow out of...and that's only if ZIRP stops once Obama's gone, and deficits are brought down to reasonable levels again.

That's why the Obama plan is so dumb. A minor recession that the U.S. could have gotten out of in a couple years, now turns into a multi-decade fiasco, and permanent low growth (if at all).

[Drek]

The problem is real wages are dropping and prices are skyrocketing. What you are left with is a vanishing middle class. Basically, an enormous permanent lower class (who can't even afford to put food on their table or own their own house), and a few wealthy elites who own all the resources. That isn't the American dream, and it isn't a recipe for success. In fact, it's eerily reminiscent of a fuedal system.

It also isn't based on federal budget deficits.

Very fixable by instituting a higher minimum wage and empowering unions.

[pricejj]

It also isn't based on federal budget deficits.

Very fixable by instituting a higher minimum wage and empowering unions.

Yes, it sure is based on federal budget deficits. Deficits lead to increasing prices for everyone, and zero-ability for personal financial growth.

Instituting a higher minimum wage would kill more full-time jobs than Obamacare, and that's not a laughing matter.

Empowering unions also leads to higher prices, and lower employment (see Hostess).

[Odysseus]

America’s political landscape is infested with many zombie ideas — beliefs about policy that have been repeatedly refuted with evidence and analysis but refuse to die. The most prominent zombie is the insistence that low taxes on rich people are the key to prosperity. But there are others.

http://www.nytimes.com/2012/11/16/opinion/life-death-and-deficits.html?src=ISMR_AP_LO_MST_FB

[Cito Pelon]

Did you miss the memo that both Democrats and Republicans agree that the deficit needs to be closed (for reasons that are obviously over your head)?

So why are you constantly complaining Dems don't "get it"?

[pricejj]

So why are you constantly complaining Dems don't "get it"?

Saying the deficit needs to be closed, and doing it are two different things.

Obama's only plan is to raise tax rates about 5% on "rich" people, and let the rate cut to SS expire. That would only generate $82B + whatever is generated from the SS rate increase. When in reality, letting the "fiscal cliff" happen is the only way to start getting revenues high enough to pay for his level of spending. That's his dirty littly secret, that most Americans don't understand.

So why don't we all just shut up, and pay the same tax rates we did during the Clinton years? Well it's not that simple. For starters, wages have dropped, and prices have drastically increased. Second, even with a major tax increase...we'd still be running a $700B-$800B deficit, and would be squarely in another recession.

The problem is, the U.S. economy isn't growing, and hasn't been growing since 2000. We are in the decline. Outsourcing is destroying American jobs, and has been since the dot com bust. The only way to fix it, is to fundamentally change the attitude of American business going forward. We will never get those jobs back. Unfortunately, none of this is being talked about in the Mexican Standoff going on Capitol Hill.

[Arkie]

Bill Clinton agrees ...... simple math and don't blame the black guy for problems created by the good ole boy....ok ?

The problems were created under every President since FDR. Every one of these 13 Presidents put us further in the red. Truman, Ike, and Clinton may have had some surplus years, but not enough to equal their deficit years. Nice race-bait, btw ;)

[Requiem]

Then start putting excessive regulations and levy heavy fines for United States businesses who outsource their job overseas to increase their profits, while pissing on the backs of every worker.

[L.A. BRONCOS FAN]

https://sphotos-b.xx.fbcdn.net/hphotos-ash3/579114_10151245304492908_1054718516_n.jpg

[Odysseus]

Bernie Sanders speaks the truth.

[Odysseus]

Saying the deficit needs to be closed, and doing it are two different things.

Obama's only plan is to raise tax rates about 5% on "rich" people, and let the rate cut to SS expire. That would only generate $82B + whatever is generated from the SS rate increase. When in reality, letting the "fiscal cliff" happen is the only way to start getting revenues high enough to pay for his level of spending. That's his dirty littly secret, that most Americans don't understand.

So why don't we all just shut up, and pay the same tax rates we did during the Clinton years? Well it's not that simple. For starters, wages have dropped, and prices have drastically increased. Second, even with a major tax increase...we'd still be running a $700B-$800B deficit, and would be squarely in another recession.

The problem is, the U.S. economy isn't growing, and hasn't been growing since 2000. We are in the decline. Outsourcing is destroying American jobs, and has been since the dot com bust. The only way to fix it, is to fundamentally change the attitude of American business going forward. We will never get those jobs back. Unfortunately, none of this is being talked about in the Mexican Standoff going on Capitol Hill.

What do you think of tax breaks or incentives for companies to create jobs for American workers?

[Odysseus]

Then start putting excessive regulations and levy heavy fines for United States businesses who outsource their job overseas to increase their profits, while pissing on the backs of every worker.

What if we provided the companies tax breaks or incentives? What do you think about this idea?

[houghtam]

It's not real money.

We're not Greece.

We're not Zimbabwe.

We're the USA, and we're one of 2 or 3 countries in the world that could completely sustain ourselves on our own resources, if we needed to.

Considering that every other nation in the world depends on our economy to survive, something tells me there's no need to worry.

[TonyR]

Didn't vote for any of those guys...

GWB must have been elected by immaculate election since apparently nobody voted for him. Miracles do happen. God bless us, every one.

[Odysseus]

Did anyone actually watch the video?

[Odysseus]

It's not real money.

We're not Greece.

We're not Zimbabwe.

We're the USA, and we're one of 2 or 3 countries in the world that could completely sustain ourselves on our own resources, if we needed to.

Considering that every other nation in the world depends on our economy to survive, something tells me there's no need to worry.

Despite being "able" to sustain ourselves on our own resources we have commitments to keep. It would be like Colorado deciding to shut off the Colorado river and starving poor California out.

[houghtam]

Despite being "able" to sustain ourselves on our own resources we have commitments to keep. It would be like Colorado deciding to shut off the Colorado river and starving poor California out.

Never said we didn't have commitments to keep. I'm simply saying that some are more important than others. If we know that we're not playing with real money, then we can do things like put a priority on people's health rather than making money.

[Odysseus]

Never said we didn't have commitments to keep. I'm simply saying that some are more important than others. If we know that we're not playing with real money, then we can do things like put a priority on people's health rather than making money.

The problem with globalism is we keep selling out our own best interests when, as you've stated, we do not need to.

The problem is corporations are not held to the standards as common citizens how exactly do put American profits ahead of corporate profits?

[Drek]

The problem with globalism is we keep selling out our own best interests when, as you've stated, we do not need to.

The problem is corporations are not held to the standards as common citizens how exactly do put American profits ahead of corporate profits?

Taxation.

Simplified corporate tax rates of 25%, no exceptions but one. That exception is a 1% reduction in your tax rate for every 1% of your work force, subs, and suppliers are U.S. citizens, companies, etc.

Employ U.S. citizens and buy your materials from only U.S. companies and you pay 0% taxes. Outsource all your manufacturing to China via FoxCon like Apple chooses to do and those 50,000 Chinese workers are weighted against the ~2,000 U.S. citizens you employ. End result you pay damn near full freight.

Simple solution to a complex problem. Hell, even for budget hawks that would be a big win, as corporate taxes make up on 6% of government revenue due to existing loop holes and subsidies.

[Arkie]

It's not real money.



What a relief! That's one less thing I have to worry about. I was beginning to think they would raise our taxes. Since the money isn't real, does that mean the interest isn't real either?

[houghtam]

What a relief! That's one less thing I have to worry about. I was beginning to think they would raise our taxes. Since the money isn't real, does that mean the interest isn't real either?

Pretty much.

[Odysseus]

Taxation.

Simplified corporate tax rates of 25%, no exceptions but one. That exception is a 1% reduction in your tax rate for every 1% of your work force, subs, and suppliers are U.S. citizens, companies, etc.

Employ U.S. citizens and buy your materials from only U.S. companies and you pay 0% taxes. Outsource all your manufacturing to China via FoxCon like Apple chooses to do and those 50,000 Chinese workers are weighted against the ~2,000 U.S. citizens you employ. End result you pay damn near full freight.

Simple solution to a complex problem. Hell, even for budget hawks that would be a big win, as corporate taxes make up on 6% of government revenue due to existing loop holes and subsidies.

It would be nice if common sense were common.