[Obama's economy] US GDP shrinks in Q4 2012, despite $165 B Fed stimulus

I'm saying the deficit is decreasing, as government expenditures are coming down, and revenues are coming up. A documented, verifiable fact that you don't wish to be true, but are pretending to be otherwise, a la unskewed polls. It's amusing to see you whining about how this is hurting economic growth, when as I've stated many times, it's exactly what you asked for.



But actually since you asked yes - we can easily push it higher and have a healthier economy due to historically low borrowing costs. Of course, if you subscribe to the idiot "WHY GOVERNMENT NO BALANCE LIKE MY CHECKBOOKZ!!!!" this is going to be hard for you to accept - again, an unskewed polling reality in which you live, rather than actual reality, begets this confusion on your part....

 

maybe you should adjust for inflation

http://www.google.com/publicdata/ex...end=1391061600000&hl=en_US&dl=en_US&ind=false

<iframe width="400" height="325" frameborder="0" scrolling="no" marginwidth="0" marginheight="0" src="http://www.google.com/publicdata/embed?ds=z6tggkh2adod2s_&amp;ctype=l&amp;strail=false&amp;bcs=d&amp;nselm=h&amp;met_y=surplus_deficit_2005&amp;scale_y=lin&amp;ind_y=false&amp;rdim=country&amp;idim=country:US&amp;ifdim=country&amp;tstart=1201672800000&amp;tend=1391061600000&amp;hl=en_US&amp;dl=en_US&amp;ind=false"></iframe>

But if you don't pay it off (which we aren't) you have to refinance all the enormous debt you are accumulating, when borrowing costs may not be historically low.

 

Public debt holders have recourse through default, as well, and it's not like the end of the world as some would have it be. (case study: Argentina, currently growing at 8.9% GDP year-on-year).

I'm laying the blame on American consumption culture and this flagrant American Dream vision for the reason why Americans are so compelled to consume in the first place. Austrians argue back and forth that it's interest rates, and Keynesians just want to encourage consumption. They both ignore the fundamental truth that Americans will spend, and spend irrationally. I point to credit cards, and credit card debt as Exhibit A. If Americans were sensitive to interest rates, they sure aren't showing it!

Both schools probably have an aversion to discussing why Americans spend because the cause is rooted in psychology rather than economics (and because psychology is focused under the cognitive revolution with finding ways to describe humans as irrational, which is a clear middle finger to economics as a field).

In any case, moving forward from that---I do not blame Reagan-era policies for creating this dream. This has been a dream that has been rooted in America for as long as apples, baseball, and pie. It has woven its' way through Miller, and back again. It might be a burden now, but it has also been a wondrous blessing at times.

I blame Reagen-era policies of liberalization and the stuffing of the middle class and lower classes for not fulfilling the dream.

How do you hide stagnating middle class wages and the loss of opportunity from the shadow of the American dream? The easiest way is to ply credit as a temporary fix. And my, did the American people gobble that up. Credit not only enriches usurious banks, it acts as a great temporary fix to social strife caused by a lack of proper safety nets, and poor policy choices.

That consumption is so fixed on these credit cycles is the cause of much of the chaos in the financial system these days. You are right that there have always been credit cycles. They just never have been quite this large (at least not in the modern American experience)---





As a concluding note, I'm a bit confused---you claimed that this was a balance sheet recession, and yet referred to the debt pay-down as a future event? It's happening now. And yes, it's devastating. It's slowing down the recovery. but somewhere along the line private debt and to a lesser extent public debt will have to be paid. One can only hope that at that time, a proper healthcare system (unexpected medical costs are the cause of about 50% of personal bankruptcies), social safety net, and good public policy choices that enrich the middle class through skills training, and educational support prevail, rather than the encouragement of private bank leverage, and deregulation of credit to cover over deep failures in American public policy.

 

We didn't even have "pedal to the metal" stimulus in 2009, we had a milquetoast facsimile of a stimulus package that RAN OUT A YEAR AGO, we don't have much stimulus spending right now.

For someone who claims to have a degree from Rice, you certainly don't strike me as educated.

 

Maybe you should adjust for reality.

http://www.cbo.gov/publication/43754

Except that they ARE historically low despite the fact that you wish otherwise and are the type of poster who's dumb enough to have predicted wrongly otherwise, talking about nonsequiturs like Greece on the way to being as wrong on this as you were on polling unskewery.

Again you can live in idiot fantasy land but just keep it away from the rest of us.

 

earlier you said government expenditures are coming down, but your link says outlays increased by $87 billion

 

Some are going up (mostly nondiscretionary), some are going down. The deficit is decreasing which is all you profess to care about; is decreasing and there is no budget crisis.That is the real world we live in; not the fake Ron Paul hyperinflation Zimbabwe world or the we are Greece world.

Btw regarding your question regarding inflation, do you actually understand how it works? A nominal deficit of 300 mm in that shrinks to 200 mm nominally the next year understates the amount of deficit reduction, brah

 

<blink>President Obama’s popularity surges to three-year high</blink>

link

 

Has that poll been unskewed?

 

hee hee

 

Folks, this is real

 

Ohhh Mr Fisher you are just a tad on fire sir.

 

So now you're in favor of more government spending? Got it.

 

Robert Shiller has spent part of his career trying to understand the pschology behind home buying. According to his recent surveys on attitudes towards homeownership, he does not see a very optimistic (upward) near-term (10-15 years) future for house prices. So I completely understand the need to identify cultural beliefs - which may influence economic bahviour.

I believe the credit cycles since the late 1970s have been enormous due to the US trade deficit. Particularly, oil imports - the largest component of net exports - have had a huge impact on the household budget and the ability of businesses to increase profit margins, and of course, hire workers. This money is not completely lost, it eventually comes back because the US is the most profitable and safest place to invest the dollar.

So, looking at the trade deficit as a percent of GDP, it was about -6% just before the recession - the largest it has been on such a scale in American history. The only reason I think it wasn't larger is because the money from the second largest component of imports - trade with China - was not reinvested in the US for credit consumption. Instead it was invested in commodity projects in around the world in places like Australia, Brazil, South Africa, Zambia, Iraq, US, and elsewhere. I think this is why many economists and commodities analysts expect to see a drop in commodity prices over the next few years. The most recent credit cycle could have been more severe.

As far as a debt paydown, QE is an asset reflation program which helps households and businesses offset the need to save cash to paydown debt. That is because their assets rise back to their original levels, negating much of the need to paydown the debt.

Asset reflation should benefit homeowners who took out mortgages within the past 5 years and went upside down. This reduces the 'debt paydown' amount during a balance sheet recession - at least in theory. Businesses and households are getting a kind of reprieve from most of the world's central banks.

 

You're the one who needs a clue. The Fed doesn't provide "stimulus," they increase the money supply, money which doesn't necessarily get spent in this quarter or even at all. Most of that money likely went directly to bank reserves.

It wasn't "stimulus," your ideology is overriding what you should have learned at Rice again.

 

I want to see the transcript.

 

However bad our economy is, it would be worse with Mitt in the WH.