11-03-2004 02:06									#241
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it should be illegal for the US government to run a deficit. If they do, for whatever reason (unless we are in a state of war with another country (AND I DONT MEAN WAR ON DRUGS, OR WAR ON GAYS)) we should cut all senator and US rep salaries in half that year.

	11-03-2004 02:12									#242
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quote: Originally posted by Imran Siddiqui quote: Never is the right answer. Oh lord... if you were running the economy, I'd flee the country. As interest rate increases to such a point that the country goes under, you'd still want a higher deficit! as el freako said: If nothing is done, and Bush's tax cuts are made permanent (as seems likely) then the US will face budget deficits of 10% to 15% of GDP 15 to 20 years time. I doubt we'll grow at 15% anytime soon.

I'm sorry, Imran. But did you simply IGNORE what I said and have been saying? Your condemnation assumes I said the OPPOSITE of what I did say.

	11-03-2004 02:15									#243
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quote: Originally posted by Lawrence of Arabia it should be illegal for the US government to run a deficit. If they do, for whatever reason (unless we are in a state of war with another country (AND I DONT MEAN WAR ON DRUGS, OR WAR ON GAYS)) we should cut all senator and US rep salaries in half that year.

Lawrence, exactly the traditional position of the Republican party that brought on the Great Depression, caused the balanced budget recession during Eisenhower's presidency, and force us into a near depression this time until Bush came to the rescue with tax cuts.

	11-03-2004 02:16									#244
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No, what you've been saying is a bunch of BS. When we hit a recession are you going to say that we should grow our deficit less than the negative GDP growth? Of course not. You'll want to deficit to explode. So you are being totally disingenous.

	11-03-2004 02:56									#245
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quote: Originally posted by Ned I just noted the timing of events. The wheels came off when we went into a surplus due to a large spike in tax revenues as a percentage of GDP. Saying the wheels came off because of x or y in the private economy is little better than saying he wheels came off because the wheels came off.

That is correlation, not causality.

As long as I've had my lucky mug, I've never had a lion in my apartment. On your position this means my lucky mug is the cause of never having a lion in my apartment.

Shall I assume then that you cannot demonstrate causality? If so, argument - Templar, because I do not accept your mere assertion of causality.

	11-03-2004 03:11									#246
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quote: Lawrence, exactly the traditional position of the Republican party that brought on the Great Depression, caused the balanced budget recession during Eisenhower's presidency, and force us into a near depression this time until Bush came to the rescue with tax cuts.

uh no. the great depression was brought on by a lack of loosing of the monetary policy. id never thought that id meet a keynsian republican.

	11-03-2004 03:23									#247
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quote: Originally posted by Imran Siddiqui No, what you've been saying is a bunch of BS.

You're such a turn-on when you're so blunt.

	11-03-2004 04:15									#248
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quote: Originally posted by Imran Siddiqui quote: Never is the right answer. Oh lord... if you were running the economy, I'd flee the country. As interest rate increases to such a point that the country goes under, you'd still want a higher deficit!

Ned is right. There is no reason to ever pay off the debt. And I think he is arguing for deficits while interest rates are low anyway, which makes sense. Low interest rates mean that cutting taxes or increasing spending will have a greater effect on the economy than leaving the capital in the private market.

	11-03-2004 04:17									#249
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quote: Originally posted by Lawrence of Arabia uh no. the great depression was brought on by a lack of loosing of the monetary policy. id never thought that id meet a keynsian republican.

Loosening the money supply is Keynesian. The orthodox economists wanted to stay on the gold standard.

	11-03-2004 04:55									#250
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Imran, what the Reagan boom showed is that sustained deficits can maintain growth for very long periods of time. True, I advocate "continuing" deficits during downturns. Any one who does not is a fool, given history. But surpluses are dangerous as they seem to cause or worsen recessions.

Your argument back to me speaks of "ruinous interest rates" and "exploding" deficits. No one here has argued for either. Yet you declare my ideas unreasonable because of both strawmen.

	11-03-2004 04:58									#251
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quote: But surpluses are dangerous as they seem to cause or worsen recessions.

This is an utterly silly statement. Can you name ONE surplus which 'caused' or 'worsened' a recession?

quote: Your argument back to me speaks of "ruinous interest rates" and "exploding" deficits. No one here has argued for either. Yet you declare my ideas unreasonable because of both strawmen.

It ain't a strawman because it is exactly what your plan offers. Run deficits during recessions, but continue to run deficits during prosperity! That is the road to ruin due to high interest rates and exploding deficits.

	11-03-2004 06:08									#252
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Ok, Imran, read it as weap,

http://www.levy.org/1/docs/pn/99-3.html

"History suggests that over the longer run, deficits stimulate the economy and surpluses are harmful.

"Since 1776 there have been six periods of substantial budget surpluses and significant reduction of the debt. From 1817 to 1821 the national debt fell by 29 percent; from 1823 to 1836 it was eliminated (Jackson's efforts); from 1852 to 1857 it fell by 59 percent, from 1867 to 1873 by 27 percent, from 1880 to 1893 by more than 50 percent, and from 1920 to 1930 by about a third. The United States has also experienced six periods of depression. The depressions began in 1819, 1837, 1857, 1873, 1893, and 1929. Every significant reduction of the outstanding debt has been followed by a depression, and every depression has been preceded by significant debt reduction. Further, every budget surplus has been followed, sooner or later, by renewed deficits. However, correlation—even where perfect—never proves causation. Is there any reason to suspect that government surpluses are harmful?"

There follows a detailed explanation on how deficits stimulate the exconomy and how surpluses harm it. The history of surpluses is far worse that I described.

	11-03-2004 06:10									#253
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Of course, Ned. When a gov spends more than it is receiving, it is actually borrowing money on behalf of the citizens. The question is, when will it be payback time?

	11-03-2004 06:20									#254
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Oncle, Just read the linked article first.

	11-03-2004 06:21									#255
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As I said, it is interesting how the parties seem to have switched on this issue. Historically, Republicans have been balanced budget/surplus freaks.

	11-03-2004 06:24									#256
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quote: Every significant reduction of the outstanding debt has been followed by a depression, and every depression has been preceded by significant debt reduction.

late 1990s? Are we in 'depression'? Nope.

quote: correlation—even where perfect—never proves causation.

Yep.

There is nothing which says that increasing surpluses, as a result of prosperity, correlates to depression. The ONLY reason that trend may exist is because the economy may have grown too fast and the resulting downturn is that much bigger (ie, the bubble has burst).

Since the Great Depression, there are safeguards in effect to prevent the huge depression. Therefore, what happened before it has no influence on what came afterwards.

---

O. Boris . Indeed. Sometime we'll have to pay the piper.

	11-03-2004 06:51									#257
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Imran, I don't have any idea why you ignore the basic principle that deficits stimulate the private economy and that surpluses harm it.

	11-03-2004 07:45									#258
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quote: Originally posted by Ned As I said, it is interesting how the parties seem to have switched on this issue. Historically, Republicans have been balanced budget/surplus freaks.

Its politics, Whoever can use it to discredit the other party at the time for purposes of re-election.

My gripe of course is the bloat of government and massive new wave of social entitlement programs under the current administration, that did not have to occur..

	11-03-2004 09:01									#259
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quote: Imran, I don't have any idea why you ignore the basic principle that deficits stimulate the private economy and that surpluses harm it.

Because there is NO basic principle that surpluses harm the private economy! If the economy does really bang up job and we get tax revenue surpluses, which we use to pay down the debt... that'll HURT our economy?

Sorry, that's just dumb. Show me some economic data which proves this (ECONOMIC date... not political articles.. seeing as I did graduate with an economics degree).

	11-03-2004 09:59									#260
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quote: Originally posted by Imran Siddiqui quote: Imran, I don't have any idea why you ignore the basic principle that deficits stimulate the private economy and that surpluses harm it. Because there is NO basic principle that surpluses harm the private economy! If the economy does really bang up job and we get tax revenue surpluses, which we use to pay down the debt... that'll HURT our economy? Sorry, that's just dumb. Show me some economic data which proves this (ECONOMIC date... not political articles.. seeing as I did graduate with an economics degree).

The only thing I have to rebut your bald statement are facts.

	11-03-2004 10:01									#261
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quote: Originally posted by Ogie Oglethorpe Its politics, Whoever can use it to discredit the other party at the time for purposes of re-election. My gripe of course is the bloat of government and massive new wave of social entitlement programs under the current administration, that did not have to occur..

Better the Republicans than the Democrats who would have introduced price controls. You know what that would have meant to the future of our pharmaseutical industry.

	11-03-2004 10:14									#262
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quote: The only thing I have to rebut your bald statement are facts.

Which facts? All you've shown is that there may be some correlation, which can be explained away by the boom/bust cycle before progressive taxation came into being. Causation anyone?

	11-03-2004 11:17									#263
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quote: Originally posted by Ned Imran, I don't have any idea why you ignore the basic principle that deficits stimulate the private economy and that surpluses harm it.

Tax revenue increases with economic growth, sometimes even as a percent of GDP. For example, some people move into higher tax brackets. That does not cause a decrease in spending, because peoples incomes are still larger. The principle you want to inforce is the principle that people's spending increases and decreases proportionally with their income, but that doesn't support the assertion you are making about surpluses.

	11-03-2004 11:19									#264
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quote: Loosening the money supply is Keynesian. The orthodox economists wanted to stay on the gold standard.

wtf? the use of monetary policy to influence the macroeconomy is a monetarist viwe. keynsians think that G should be used to increase AD.

	11-03-2004 11:24									#265
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quote: Originally posted by Lawrence of Arabia wtf? the use of monetary policy to influence the macroeconomy is a monetarist viwe. keynsians think that G should be used to increase AD.

No, I'm sorry you're wrong. Keynes was the first to advocate monetary policy to bring the economy to equalibrium. He also advocated fiscal policy, and said that sometimes monetary policy wouldn't work, in which case fiscal policy should be used. But he certainly never said that the money supply should be contracted during a recession.

edit: the monetartists didn't even come into the picture until after the GD.

	11-03-2004 11:27									#266
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no, actually YOU are wrong. Keynes is known for advocating public spending to increase AD. and where did i say the money supply should be contracted during a recession? what happened in the depression is that banks went bush, tightening the money supply. all they had to do is either a) decrease the rediscount rate or b) decrease the reserve requirement. no sweat. that is not keynsian, that is monetarist.

	11-03-2004 11:30									#267
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quote: Originally posted by Lawrence of Arabia no, actually YOU are wrong. Keynes is known for advocating public spending to increase AD. and where did i say the money supply should be contracted during a recession? what happened in the depression is that banks went bush, tightening the money supply. all they had to do is either a) decrease the rediscount rate or b) decrease the reserve requirement. no sweat. that is not keynsian, that is monetarist.

Wanna bet?

	11-03-2004 12:04									#268
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quote: Originally posted by Kidicious Tax revenue increases with economic growth, sometimes even as a percent of GDP. For example, some people move into higher tax brackets. That does not cause a decrease in spending, because peoples incomes are still larger. The principle you want to inforce is the principle that people's spending increases and decreases proportionally with their income, but that doesn't support the assertion you are making about surpluses.

All true. But this says nothing at all about whether there is a deficit or surplus.

	11-03-2004 12:11									#269
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quote: Originally posted by Ned All true. But this says nothing at all about whether there is a deficit or surplus.

Deficits and surpluses themselves do not determine spending, only total income determines spending. Is that what you mean?

edit: clarified first sentence.

	11-03-2004 12:15									#270
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Imran, you ignore the fact that all prior depressions followed a period of surpluses. You ignore that all prior recessions since WWII have followed a period of reductions of deficits even into surpluses. The longest period without a recession since World War II was a Reagan boom from 1982 to 1990, a period characterized by large deficits.

What caused the recession that began in 1990?

Does anyone remember a famous tax increase enacted by the Democrats with Bush's Dad's consent?

What structural reforms, other than guarantees of bank deposits, were implemented to stave off a depression caused by a collapse in asset values and rampant deflation?