RE: Ultimately it's the democrats

Collarchat.com

Home Login Search

RE: Ultimately it's the democrats

View related threads: (in this forum | in all forums)

Logged in as: Guest

All Forums >> [Community Discussions] >> Dungeon of Political and Religious Discussion >> RE: Ultimately it's the democrats

Page: << < prev 1 2 [3]

Message

<< Older Topic Newer Topic >>

RE: Ultimately it's the democrats - 1/5/2013 5:49:21 PM

Yachtie

Posts: 3593
Joined: 1/18/2012
Status: offline

quote:

ORIGINAL: mvc333

Anyway realistically speaking I have concerns about our debt levels. I just think the first mistake was the unfunded wars. The second is not supporting the economy as it recovers from a deflationary bubble.

It's still deflating. (Evidence... QE^n ) And we have a long way to go.

Look at Japan. It's still in its quagmire of deflationary support, and they're described as having been in 20 years of stagflation.

_____________________________

“We all know it’s going to end badly, but in the meantime we can make some money.” - Jim Cramer, CNBC

“Those who ‘abjure’ violence can only do so because others are committing violence on their behalf.” - George Orwell

(in reply to mvc333)

Profile

Post #: 41

RE: Ultimately it's the democrats - 1/5/2013 5:51:12 PM

Yachtie

Posts: 3593
Joined: 1/18/2012
Status: offline

My error... got confused...

< Message edited by Yachtie -- 1/5/2013 5:54:52 PM >

_____________________________

“We all know it’s going to end badly, but in the meantime we can make some money.” - Jim Cramer, CNBC

“Those who ‘abjure’ violence can only do so because others are committing violence on their behalf.” - George Orwell

(in reply to cloudboy)

Profile

Post #: 42

RE: Ultimately it's the democrats - 1/5/2013 5:59:51 PM

Yachtie

Posts: 3593
Joined: 1/18/2012
Status: offline

quote:

ORIGINAL: DarkSteven

The GOP is breaking the machinery that makes the country able to operate. They don't seem to understand that any deal will ultimately be arrived at by working with the Democrats, not by throwing tantrums.

I would not characterize it that way. The GOP are soft bellied weenies, and have caved to the democrats time and time again. Mostly, IMO, because the dems let them have their wars.

The tantrums are how they placate their base. I've noticed that there is always enough Rs or Ds who cross over to get where the deal allows they shall go. It's been this way since...

_____________________________

“We all know it’s going to end badly, but in the meantime we can make some money.” - Jim Cramer, CNBC

“Those who ‘abjure’ violence can only do so because others are committing violence on their behalf.” - George Orwell

(in reply to DarkSteven)

Profile

Post #: 43

RE: Ultimately it's the democrats - 1/5/2013 6:06:02 PM

mvc333

Posts: 22
Joined: 6/16/2009
Status: offline

QE anything isn't going to fix the problem. Bernanke certainly isn't getting it.

In a liquidity trap further increases to the money supply fail to affect interest rates. That is precisely what the Japanese tried to do.

The way to combat a liquidity trap is through stimulus (and round we go with this convo)

http://krugman.blogs.nytimes.com/2012/05/17/spending-and-growth/?pagewanted=all

(in reply to Yachtie)

Profile

Post #: 44

RE: Ultimately it's the democrats - 1/5/2013 6:46:19 PM

Yachtie

Posts: 3593
Joined: 1/18/2012
Status: offline

quote:

ORIGINAL: mvc333

QE anything isn't going to fix the problem. Bernanke certainly isn't getting it.

In a liquidity trap further increases to the money supply fail to affect interest rates. That is precisely what the Japanese tried to do.

The way to combat a liquidity trap is through stimulus (and round we go with this convo)

http://krugman.blogs.nytimes.com/2012/05/17/spending-and-growth/?pagewanted=all

OMG, Krugman strikes again.

Lets begin here. QE is stimulus. Now you might wish it were more akin to the old FDR "put en to work" kind, but stimulus is stimulus.

But it's QE were getting. Keynesian economics.

Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest bond fund, said investors should be alert to the longer-term inflationary risks of stimulus programs such as quantitative easing.

Now lets have some fun -

Here, perhaps you'll enjoy this. Perhaps not. Krugman's own words - (follow the links)

Does this mean that fiscal policy should be ignored as part of the policy mix? Surely not. On the general Brainard principle – when uncertain about the right model, throw a bit of everything at the problem – one would want to apply fiscal stimulus. (Even I wouldn’t trust myself enough to go for a purely “Krugman” solution). However, it seems unlikely that a mainly fiscal solution will be enough.

Yes, it is said Krugman stated that prior to changing his mind. But, wow! Perhaps he'll change his mind again?

Lets look further- Krugman himself, March 17, 2008, 10:49 am

Here’s one way to think about the liquidity trap — a situation in which conventional monetary policy loses all traction. When short-term interest rates are close to zero, open-market operations in which the central bank prints money and buys government debt don’t do anything, because you’re just swapping one more or less zero-interest rate asset for another. Alternatively, you can say that there’s no incentive to lend out any increase in the monetary base, because the interest rate you get isn’t enough to make it worth bothering.

Normally it doesn’t matter which short-term interest rate you choose — the Fed funds rate, which Uncle Ben sets, is usually very close to the interest rates on US government debt. But right now we’re in a situation in which Treasury bills yield considerably less than the Fed funds rate; to at least some extent this may reflect banks’ nervousness about lending to each other, even in the overnight market. And to the extent that’s true, Treasuries — not Fed funds — are the interest rates to look at.

As of 10:38 this morning, the one-month Treasury rate was 0.57; the three-month rate was 0.825.

Are we there yet? Pretty close.

Here's the FED's own Charles Evans -

"The U.S. economy is best described as being in a bona fide liquidity trap," and given the challenges now faced by the nation, "much more policy accommodation is appropriate today," Federal Reserve Bank of Chicago President Charles Evans said.

The money supply is being increased. One of the effects is inflation. Been to the store lately? Care to invest in sub-zero bonds?

edit: cut off all QE and soon interest rates will begin to rise as is needed. But the effect on the economy, given what has been done, will be devastating. No matter, that will happen once every dollar of injection buys no rise in GDP. We're under a dollar, somewhere

edit: from your Krugman link -

So Japan, which is spending heavily for post-tsunami reconstruction, is growing quite fast, while Italy, which is imposing austerity measures, is shrinking almost equally fast.

There's that G component again. What will happen when it ends?

The world's economies are being trashed.

< Message edited by Yachtie -- 1/5/2013 6:57:26 PM >

_____________________________

“We all know it’s going to end badly, but in the meantime we can make some money.” - Jim Cramer, CNBC

“Those who ‘abjure’ violence can only do so because others are committing violence on their behalf.” - George Orwell

(in reply to mvc333)

Profile

Post #: 45

RE: Ultimately it's the democrats - 1/5/2013 7:12:00 PM

mvc333

Posts: 22
Joined: 6/16/2009
Status: offline

I would take issue from the start with the statement

"Stimulus is stimulus"

I find that to be a completely untrue statement. Let's do some reductio ad absurdum.

$787 Billion used to create manufacturing capacity to make say more cars, trains, planes, computers, etc.
Contrast that with
$787 Billion used to bring milk men back to every corner, delivering your weekly milk.

Which one is going to have a bigger impact on short, medium, and long term GDP growth?

Now I agree that example is absurd, however it is to illustrate the point that stimulus is NOT stimulus. In this case expansion of the money supply in the midst of a liquidity trap is the wrong kind of stimulus.

As far as the comment about
"Does this mean that fiscal policy should be ignored as part of the policy mix? Surely not."
I think Krugman has held true to that. He is in support of the 2% reduction in payroll taxes on the consumer side. That is definitely throwing in fiscal policy.

I'm not sure what the 2nd quote is meant to indicate. Unless you are confusing fiscal policy (the first link) with monetary policy (the second link). Fiscal policy(Tax cuts) and stimulus(Temporary spending) can have an affect in a liquidity trap, monetary policy is not effective (QE).

If QE is cut off or continued it is not going to have an impact on inflation. Inflation is not caused by money sitting banks, inflation is caused by money being loaned and spent, which it isn't. This is why QE is nonsense in this situation. What is far more important is how it is rolled back at this point once consumer spending and loans do pick up. It is going to have to be tightened very carefully, because on that part I agree. Once the recovery hastens the excess of money due to monetary policy is problematic. Right now via QE we're just setting up for a future problem while not even fixing the current one. See the start of my post, we need the right kind of stimulus.

***Edit***

In response to what happens when it ends. Well, that goes back to what kind of stimulus did you do. In the case of Japan their stimulus spending, which was necessary repairs, will put them in a better position than if they hadn't done any repairs or did the wrong kind of stimulus. Their stimulus was the kind that creates things, and allows their country to create more things and hence produce wealth. They should continue doing that, as should we, until private industry is capable of standing on it's own two feet again. I say capable despite their massive profits because they simply don't need to pick up the slack right now. They have sufficient productivity for consumer demand. Obviously, or we'd be in a supply side recession not a demand side.

< Message edited by mvc333 -- 1/5/2013 7:15:25 PM >

(in reply to Yachtie)

Profile

Post #: 46

RE: Ultimately it's the democrats - 1/5/2013 8:15:52 PM

DomKen

Posts: 19457
Joined: 7/4/2004
From: Chicago, IL
Status: offline

QE is the worst kind of stimulative government action in the present situation. The big financial institutions are not lending, probably because they are still sitting on giant piles of bad debt. So making them more liquid doesn't result in money moving in the economy like it needs to.

Fundamentally this economy is struggling because of a lack of demand. Consumers simply do not have money to spend. That is because of high debt loads, insecure jobs and the ripple effects of the housing bubble. The best stimulus would be putting money directly in the hands of consumers and the second best option would be government spending on infrastructure. Austerity right now is pretty much the worst possible strategy and would lad us into the financial quagmire being experienced by the Eurozone.

(in reply to mvc333)

Profile

Post #: 47

RE: Ultimately it's the democrats - 1/6/2013 7:42:03 AM

cloudboy

Posts: 7306
Joined: 12/14/2005
Status: offline

Keep in mind you are trying to pound a nail into a rock or tossing a stone into a pool hoping that it will float.

(in reply to mvc333)

Profile

Post #: 48

RE: Ultimately it's the democrats - 1/6/2013 8:04:38 AM

Owner59

Posts: 17033
Joined: 3/14/2006
From: Dirty Jersey
Status: offline

Santelli is a hot head who was part of the crowd that ran our economy into the ground....

Never heard him spouting during the three years of decline that preceded the melt-down.....

Only after....when WE ALL were/are paying the price for his industry`s maleficence.

And to our cons and cons in general......we ,the middle class,are not going to go on half-rations all of a sudden because ya`ll are on a new saving kick.

We`re NOT going to get rid of the safety net or social security/medicaid etc.(ie. privitize).....we are going to find ways to keep them.

The economic disaster your party brought on us is not going to be an opportunity to inflict your social/political agenda on America.We just made that clear.

< Message edited by Owner59 -- 1/6/2013 8:06:55 AM >

_____________________________

"As for our common defense, we reject as false the choice between our safety and our ideals"

President Obama

(in reply to mvc333)

Profile

Post #: 49

RE: Ultimately it's the democrats - 1/6/2013 8:29:56 AM

DesideriScuri

Posts: 12225
Joined: 1/18/2012
Status: offline

quote:

ORIGINAL: mvc333
$787 Billion used to create manufacturing capacity to make say more cars, trains, planes, computers, etc.
Contrast that with
$787 Billion used to bring milk men back to every corner, delivering your weekly milk.
Which one is going to have a bigger impact on short, medium, and long term GDP growth?
Now I agree that example is absurd, however it is to illustrate the point that stimulus is NOT stimulus. In this case expansion of the money supply in the midst of a liquidity trap is the wrong kind of stimulus.

quote:

While it is true that increasing manufacturing capacity will increase productivity, but, who is going to buy the stuff? What happens when that stuff doesn't get sold? Yep, the prices will drop, but that doesn't mean that CoG drops, leading to reduced profits and a short-term uptick in demand. Cash for Clunkers resulted in increased car sales through the program. But, resulted in a reduction in car sales for a short term afterwards. Taking money from A so it can be spent on B might cause increases from the sales of B, but what would that money have done by A? Why isn't there an increase in production capacity now? Because there isn't anyone there to buy it. Even if you give money to people to buy the stuff you're paying to increase capacity to make, what happens when that all has to be paid back? It does have to be paid back.

And, there were two reasons Bush passed his tax cuts. One was to stimulate the economy after two recessionary forces (dot com bubble bursting and the post 9/11 economic drop) and the other was to keep Congress from increasing spending to suck up the budget surplus. Yes, that part is ironic, in that spending was still jacked up ridiculously.

And, your comment about this being a demand side recession, you are assuming that demand has to be higher; that consumption needs to increase beyond where it is now (outside of stimulating the economy discussion). Who says consumption has to rise, or that we need to consume more? Isn't that up to the Market? Who says our current level of production isn't too high already?

_____________________________

What I support:

A Conservative interpretation of the US Constitution

Personal Responsibility

Help for the truly needy

Limited Government

Consumption Tax (non-profit charities and food exempt)

(in reply to mvc333)

Profile

Post #: 50

RE: Ultimately it's the democrats - 1/6/2013 4:03:47 PM

mnottertail

Posts: 60698
Joined: 11/3/2004
Status: offline

quote:

ORIGINAL: Yachtie

quote:

ORIGINAL: tazzygirl

LOL... do some think the Democrats did that alone?

Of course not. And neither does Santelli. But most social programs are of Democrat origin.

Land grant colleges? No child left behind? PUBLIC EDUCATION?

_____________________________

Have they not divided the prey; to every man a damsel or two? Judges 5:30

(in reply to Yachtie)

Profile

Post #: 51

RE: Ultimately it's the democrats - 1/6/2013 5:20:09 PM

jlf1961

Posts: 14840
Joined: 6/10/2008
From: Somewhere Texas
Status: offline

The socialist president of france had an idea. a 75% tax rate on the wealthy....

Granted it was declared unconstitutional, and I think it was stupid, but hey it is an idea.

_____________________________

Boy, it sure would be nice if we had some grenades, don't you think?

You cannot control who comes into your life, but you can control which airlock you throw them out of.

Paranoid Paramilitary Gun Loving Conspiracy Theorist AND EQUAL OPPORTUNI

(in reply to mnottertail)

Profile

Post #: 52

RE: Ultimately it's the democrats - 1/7/2013 11:34:21 AM

GotSteel

Posts: 5871
Joined: 2/19/2008
Status: offline

Over the course of my life, time and again I've watched Republicans break the ability of the Federal government to function so they can then turn around and scream about how it doesn't work, just like Steven was saying.

I'm done putting up with the GOP's dishonest and idiotic benavior, I call bullshit.

(in reply to Yachtie)

Profile

Post #: 53