10-03-2004 19:45									#61
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Consumers are getting to the point where they are strapped for cash. There just isnt much to spend when the 40% of the Country makes under a living wage. Soon this bubble will burst, very soon. Unless Workplaces actually begin dishing out more money for services worked by employee's, consumer spending will be an oxymoron.

	10-03-2004 21:42									#62
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quote: Originally posted by mrmitchell 21000 high paying jobs? Or 21000 "Would you like fries with that"?

Hi, I work at WAL-mart...
[/southern drawl]

	10-03-2004 21:45									#63
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Would you mind changing this $1 million bill for me, young man?

	10-03-2004 21:49									#64
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quote: Originally posted by Boris Godunov Would you mind changing this $1 million bill for me, young man?

I just inhaled coffee, and spit it over my keyboard.

	10-03-2004 22:00									#65
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quote: Originally posted by MrBaggins I just inhaled coffee, and spit it over my keyboard.

oh wait, I wonder if some of those 21,000 are burger manufacturing jobs!

	10-03-2004 22:02									#66
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Probably, and as MrBaggins reminds us, no doubt many are at recently-opened Starbucks.

	10-03-2004 22:15									#67
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quote: You are forgetting that the numerator in this equation (output) is also reduced as you decrease the denominator (hours). Imports subtract from output.

Not at all. The reason American companies are doing this is because they can buy the goods cheaper in China, yet sell them for the same price as goods made here. So the same value is being "produced" here, but less work in hours is being done here.

In the long run, this is obviously an unstable phenomenon. It is only supported by large deficits, both bugetary and trade. Eventually it will have to end, with good consequences for some people and bad consequences for others. But whoever wins or loses, it is simply disingenuous to say:

quote: "As you can see, we haven't had it this good for 40 years".

	11-03-2004 04:55									#68
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Whoopsie. Wrong button. Never mind.

	11-03-2004 05:11									#69
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quote: Originally posted by Sava I think that "demand-side" economics might be able to create jobs... i.e. empowering the consumer classes by providing things like low cost health care, better and lower cost education, and regulating industries that deregulation has damaged (telecommunications and energy). If consumers have more disposable income, they can spend more, thus fueling the economy and job growth. Even if that doesn't work, at least people will have health care and other costs alleviated. Progressive taxation

Sava, even if you are right about this, how does raising taxes enough to close the deficit, as advocated by the Democrats, thereby taking hundreds of billions out of the private economy to massively reduce disposible income going to help business to "expand" to meet this massively reduced demand so that they hire more Americans, particularly during a time of recession?

	11-03-2004 05:15									#70
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quote: Originally posted by el freako Yes I do support pump-priming to a certain extent (but a 5% swing in the structural budget balance is huge by any standards),

I don't believe the deficit is large enough, however I don't think the stimulus is very effective either. I would have tranfered money to the states and done some other things. I certainly wouldn't have cut taxes for the rich as much.

quote: Originally posted by el freako but I also support the opposite of raising taxes when the economy has recovered (do you?) - this the bush administration shows no sign of doing (indeed they are trying to make the 'temporary' tax cuts permanent)

I believe in raising taxes when the economy is getting hot, not recovering. If you raise taxes during recovery you might send the economy back down.

quote: Originally posted by el freako Are you seriously claiming the the US economy is still in recession?

I call it a recession, but I realize that others don't. We have a problem because we built up so much capacity, and replaced so much machinery in the late 90s. We have an output gap. It will take a lot more stimulation to close that gap.

quote: Originally posted by el freako Barring an external shock the next recession is due in around 6 to 8 years time by my reckoning.

Why not bar external stimulus, or some other factor. The fact is we don't have any idea what will happen between now and then.

	11-03-2004 06:01									#71
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Kid, you and I are really on the same page on this issue, it seems. Let me give the folks here a little lesson on what causes great depressions, which is where we would were headed if we did not cut taxes in the last few years:

"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?

.... [a detail explanation]

"[H]istory suggests that over the longer run, deficits stimulate the economy and surpluses are harmful."

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

	11-03-2004 06:26									#72
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Ned,

When you incur debts (like we are doing now), you must eventually either repay them or default on them.

Since you don't think that we should repay our debts (ever, apparently, if I read your post correctly), you must be in favor of eventual default. Is that correct?

Last edited by Vanguard on 11-03-2004 at 07:05

	11-03-2004 09:57									#73
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quote: Originally posted by Vanguard Ned, When you incur debts (like we are doing now), you must eventually either repay them or default on them. Since you don't think that we should repay our debts (ever, apparently, if I read your post correctly), you must be in favor of eventual default. Is that correct?

Vanguard, the way it works is that treasury notes and bonds are redeemed with money financed by the issuance of new treasury notes and bonds.

Here is a little more from the article:

"The economy emerged from World War II in 1945 with a record debt-to-GDP ratio. Since the war we have had the longest depression-free period in the nation's history. We have, however, had nine recessions, each of which was preceded by a reduction of deficits relative to GDP (see Figure 1). The deficit fell rapidly toward the end of the Carter presidency, preceding the deepest recession since the Great Depression. In spite of President Reagan's pledge to balance the budget, he presided over the largest deficits we had seen since World War II. To some extent, the deficits grew because of the economic slowdown; however, tax cuts and spending increases (primarily for defense) caused a discretionary increase of the deficit. The "Reagan boom" lasted from November 1982 to July 1990, the longest expansion in the postwar period..."

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

The article was written in 1999 just prior to knowledge that the wheels had come off. The charts in the article show us going into a surplus. The article suggest that we could have expected the greatest recession since the Carter recession based on history.

Well, we did nothing even though we should have been cutting taxes big time in 1999. We all paid the price of ignorance of our leaders.

	11-03-2004 12:04									#74
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quote: Originally posted by Vanguard Ned, When you incur debts (like we are doing now), you must eventually either repay them or default on them. Since you don't think that we should repay our debts (ever, apparently, if I read your post correctly), you must be in favor of eventual default. Is that correct?

That's not the way it works for govts. They go on indefintely in debt.

	11-03-2004 19:20									#75
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Oh, I see. Government debt isn't like other debt. You never have to repay it.

Terrific. And, hey. Wait a minute! I've got a great idea! Why don't we get rid of taxes altogether and just borrow whatever money we need for the government?

That would be incredible. We could invest in education, infrastructure and homeland security, and never have to pay it back. And think of the boost that lowering taxes would give to the economy!

Any comment?

	11-03-2004 19:57									#76
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I know my hours are underreported-but then, I don't think anyone places a monetary value on my work, since I do not produce goods, nor do we charge for our services directly (ie, they are paid out of the tax receipts)

	11-03-2004 20:42									#77
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quote: Originally posted by Vanguard Any comment?

Well, only that you keep claiming that people are saying things that they aren't saying.

	11-03-2004 21:54									#78
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Don't get me wrong. Doing away with taxes probably makes as much, or more, sense as wasting money collecting them.

But combining the costs of tax collection with the costs of borrowing money doesn't seem to offer many advantages.

	11-03-2004 22:13									#79
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quote: Originally posted by Ned Here is a little more from the article:

That's typical politically-biased 'economics' that, looking at causuality the wrong way and ignoring other factors that also contribute to the percieved effects.

quote: Originally posted by Ned "The economy emerged from World War II in 1945 with a record debt-to-GDP ratio. Since the war we have had the longest depression-free period in the nation's history.

That fails to mention two key facts:
1. The debt to GDP ratio fell sharply due to the government running budget surpluses in the 1950's
2. There might have been less boom or bust in the period since 1945 but the actual growth rate was around the same as before - I would say that the large increase in government spending had far more of an effect on 'smoothing' the path of GDP than increased borrowing.

quote: Originally posted by Ned We have, however, had nine recessions, each of which was preceded by a reduction of deficits relative to GDP (see Figure 1).

Total confusion of cause and effect here - the economy was booming in the period before the recessions, so it's hardly surprising that tax recipts went up and spending on things like unemployment went down - that would lead to a reduction in the deficit.

quote: Originally posted by Ned The deficit fell rapidly toward the end of the Carter presidency, preceding the deepest recession since the Great Depression.

And now you are ignoring other factors:
1. What about the doubling of oil prices in 1979-80?
2. Or the sharply rising interest rates in 1981-82? (these were mainly caused by the deficit and were only reversed when they threatened the international banking system)

quote: Originally posted by Ned Well, we did nothing even though we should have been cutting taxes big time in 1999. We all paid the price of ignorance of our leaders.

It's a bloody good job that US leaders aren't as ignorant of economics as you seem to be.

	11-03-2004 23:16									#80
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quote: Originally posted by Vanguard Don't get me wrong. Doing away with taxes probably makes as much, or more, sense as wasting money collecting them. But combining the costs of tax collection with the costs of borrowing money doesn't seem to offer many advantages.

The advantage is that, if it's done effectively, the economy is more stable and the govt is funded when taxing alone will not achieve the same goal.

	12-03-2004 00:08									#81
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el freako, are you another of the Imraniacs who deny that fiscal policys has any effect on the economy and that deficits and surpluses are completely devoid of influence?

If you do, it is not I who should be labeled ignorant here.

	12-03-2004 03:42									#82
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Ultimately it is true, in some sense, that it does not matter where the government gets its money. What matters is what it does with it.

But unfortunately this equivilency just moves the problem around. It means that you have to actually consider whether the government's spending and borrowing is benefiting the country as a whole or only a certain group of people. This almost impossible to do.

	12-03-2004 03:48									#83
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quote: Originally posted by Ned el freako, are you another of the Imraniacs who deny that fiscal policys has any effect on the economy and that deficits and surpluses are completely devoid of influence? If you do, it is not I who should be labeled ignorant here.

Ned, when it comes to econ and chosing whom is more likely to know their stuff-el freako wins 100% of the time.

But I do commend you on "Imraniac"

	12-03-2004 04:11									#84
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Why thanks, GePap.

	12-03-2004 05:24									#85
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quote: Originally posted by GePap Ned, when it comes to econ and chosing whom is more likely to know their stuff-el freako wins 100% of the time.

Ned's econ is improving, but I doubt that anyone will ever compare with el freako's stat production.

quote: Originally posted by GePap But I do commend you on "Imraniac"

Very impressive.

	12-03-2004 06:15									#86
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And more:

http://story.news.yahoo.com/news?tm...acturing_post_6

I love this:

"But the nomination had appeared in doubt after Kerry's campaign had raised questions of why the Bush administration was picking someone to guide government efforts to halt the hemorrhage of American manufacturing jobs who had laid off 75 of his own workers in 2002 after announcing he was constructing a $3 million plant in China."

Way to go, Bush!

	12-03-2004 12:22									#87
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My initial thinking on a "solution" would be to ask countries like China to lower any tarriff or other non tarriff barriers to trade so that we could sell more goods abroad. This would lead to increased manufacturing employment here in the US.

There was a real nasty debate on Lou Dobbs program tonight between a free trader and Dobbs. The free trader, I don't remember his name, was arguing that US companies had to constantly trying to become more efficient and cost-effective in order to compete in a global marketplace against non-US companies who themselves were competing with American companies by becoming more efficient and cost-effective. The free trader also pointed out that the growing economies in the Third World acted as markets for American goods and services which supported additional employment in the United States.

Lou Dobbs agreed in principle that American companies had to constantly become more efficient to meet their foreign competition. But he still went back to the theme that we had to somehow stop loss of American jobs offshore. The free trader said that if you crippled the American companies ability to compete that they would soon go out of business altogether.

	13-03-2004 06:04									#88
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Okay, I'm going to accept your argument that the deficit doesn't matter because government debt is just another type of spending. Bully for you! I tip my hat to you.

Now let's see if you really believe it. Since you don't think that a half a trillion dollar deficit is a problem, then I must assume that you are as disgusted as I am at the Bush campaign's false attack on Kerry for his $900 billion dollar health plan. After all, since the Bush deficit doesn't matter, it seems to follow ineluctably that spending $900 on a health care plan is actually a great idea, since it will almost certainly reduce the costs to the US of not having a such a plan. We save money, get health care and don't have to raise taxes. What could be better?

And since it is such a great idea, then why isn't the Bush administration doing it? Not only that, why are they actively opposing it?

If, as your argument on the current deficit proves, cost isn't an issue, then why are the Republicans opposed to this measure, which will easily pay for itself in the overall economy? Is it pure mean spiritedness? Or are they in the pocket of big drug companies and HMOS?

	13-03-2004 06:44									#89
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quote: Originally posted by Vanguard Okay, I'm going to accept your argument that the deficit doesn't matter because government debt is just another type of spending. Bully for you! I tip my hat to you. Now let's see if you really believe it. Since you don't think that a half a trillion dollar deficit is a problem, then I must assume that you are as disgusted as I am at the Bush campaign's false attack on Kerry for his $900 billion dollar health plan. After all, since the Bush deficit doesn't matter, it seems to follow ineluctably that spending $900 on a health care plan is actually a great idea, since it will almost certainly reduce the costs to the US of not having a such a plan. We save money, get health care and don't have to raise taxes. What could be better? And since it is such a great idea, then why isn't the Bush administration doing it? Not only that, why are they actively opposing it? If, as your argument on the current deficit proves, cost isn't an issue, then why are the Republicans opposed to this measure, which will easily pay for itself in the overall economy? Is it pure mean spiritedness? Or are they in the pocket of big drug companies and HMOS?

Vanguard, if you have read my posts over the last few months you will notice that I am in favor of national health care insurance -- but with deductibles and per visit costs, etc. In many ways, my views are consistent with the Democrat party under Kennedy.

I think the Republican Party has so long been in favor of balanced budgets that they cannot break a bad habit.

	13-03-2004 06:49									#90
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Vanguard, Back on the topic of national health insurance, Bush has shown that he is different from all prior Republicans in that he is willing to promote new social programs that have merit. I am willing to bet that Bush would favor national health insurance if he is reelected.