In defense of Krugman, he didn't come out and say the stimulus (as passed) would save the economy, only to later say we need more stimulus. IIRC, he spoke out from the very beginning against the stimulus that was passed, saying it needed to be much larger and that too much of it was in tax cuts.
Yep 30 years of deregulation and moving in the Milton Friedman direction has failed and led to the problems it did in the 1930's. Fortunately massive government intervention stopped it fro being a full blown Great Depression. The elite had to stop briefly in their libertarian economic stuff they benefit from so much to save the system..
Let's say we do another $700 billion stimulus. What are you going to say to those same young and hopeful people when their dollars are worth vastly less due to the weakening of the dollar and commodities (oil and food products) are going through the roof as a hedge against said dollar devaluation? That is not exactly a good situation for them either.
A one-time stimulus won't have much impact on the long-term value of the dollar. Unlike other more structural problems, it's a one-off spending that goes away after a couple of years and has no real long-term drawbacks (except the 1-time increase on the debt). Overall, it's fairly minor in terms of all the things affecting the dollar. On a side note, for all the talk about trillions in new debt, etc... the dollar is about where it was in the summer of 2008 before the collapse ever happened.
Refman. Ultimately those kids are screwed if the US economy does not grow. See Japan and Argentina before they told the international banks to bug off. Hording, hedging, wealthy folks taking their money overseas etc. can be controlled by the government if the Tea Party leaves us with one. BTW I assume you are going to be buying a hundred thousands barrels of oil or a few poinds of gold as a hedge to protect yourself. Or is it just a year's supply of canned goods? Maybe you can put it on a credit card since the worthless money will make it easy to pay back? What type of canned goods can last 10 plus years till the American public gets tired of waiting for trickle down?
Buffet thinks we need to raise taxes on the rich to heplp the deficit and the economy. I know what does Buffet know? ***************** November 22nd, 2010 2:05 am ET By Ryan Witt, Political Buzz Examiner ... According to Buffett, the theory of "trickle down" economics, in which the wealth of the rich trickles down to the middle-class and poor, has not worked over the last decade. Buffett argues that the rich have benefited greatly from tax cuts over the last decade while the poor and middle-class continue to struggle. Buffett was a prominent Obama supporter during the 2008 campaign, and as such many conservatives are likely to dismiss his comments as more "liberal propaganda." However, it is worth noting that Buffett stands to lose millions, if not billions, if the country follows his advice. More importantly, Buffett assertions are supported by the facts regarding income disparity over the past ten years. The last decade has generally been dominated by policies which benefit the wealthier Americans. For example, the Bush tax cuts of 2001 and 2003 cut tax rates for almost every American, but the rich got the largest piece of the pie from the Bush tax cuts. ... When the tax cuts for the rich were sold to the American public they were told that the middle-class and poor should want to the rich to get richer. Over time, as the argument went, the rich would spend their riches and create more wealth for everyone. However, the last three decades have shown that nothing really "trickles down" when the rich get richer. The following facts demonstrate this pattern better than anything: •In 1981 the top 1% of the American population owned 24.8% of the wealth. In 2007 the top 1% owned 34.6% of the wealth. Meanwhile, the bottom 99% went from owning 75.2% of the overall wealth to 65.4%. •From 2002 to 2007 the top 1% captured over two-thirds of the overall income gains in America. •From 1992 to 2007 the average income of the top 400 earners in America increased by 399%. Meanwhile, the bottom 90% of households saw their income increase by just 13% over the same period. The wealthy have benefited greatly from the policies of the Reagan and Bush administration, however the income growth of the middle-class and poor has not even kept up with inflation. In the past it was not uncommon for a middle-class family to support itself one income. Today more families find it necessary to have both the spouses work simply to get pay the everyday bills. .http://www.examiner.com/political-b...ich-need-to-pay-more-taxes-video?render=print
If you want to dishearten a young and hopeful populace, deflation is your answer. There's a reason why inflation is a GOAL and part of the federal reserve's mandate.
It's not that Inflation is good, it's that deflation is really bad since it squeezes business margins. It also kills exports. Imagine you are a business that sells something for $100 bucks and makes 30% margin, you clear 30 bucks in revenue say. Now let's say that $100 price drops to $90 but your costs don't drop to $63 dollars since wages are sticky so business get squeezed hard by deflation. Secondly, people don't borrow in a deflationary environment since your debt burden actually increases. The $100 you borrowed on credit will be tough to pay off as the value of $100 goes up and up. Thirdly, and perhaps most importantly, when people expect prices to fall, they have no incentive to make a purchase. This kills sales and results in further panic and deflation. 4% inflation is far more ideal than 4% deflation. The latter is a kiss of death to an economy.
except your costs drop as well as it costs less to manufacture your products. Wages aren't the only factor of production. People don't need to borrow in a deflationary environment beccause their money goes farther. People always have an incentive to purchase things. Why? Because peoples time frames are immediate. People still buy HDtvs for 3000 dollars even though they know the price will inevitably drop. At any rate, deflation is a drop in the money supply. Falling prices aren't deflation because there is a corresponding increase in savings. unless the banks burn the money in their vaults it won't kill you.
the biggest component cost is always labor for a U.S. producer. So no matter what, margins will get squeezed and at the very least, employers will need to layoff more employees and try to squeeze out more from less which is not good for the economy (further drop in demand). People will not be buying HDTV's when the 5,000 they have on credit cards becomes a lot harder to pay off. I'm sorry, but your rationale is spurious. Studies show the contrary, people put off everything from college to medical procedures, to even necessary durable good purchases. Minor luxuries collapse the quickest. Everything from candy bars to cars get hit. And when you say "Falling prices arent' deflation" i hate to tell you, the definition of deflation is "Falling Prices". So that statement is nonsensical. Try again please.
This couldn't be because the upper class generally has less progeny then the lower class could it? This also couldn't be because failed immigration law has left less jobs for the lower income class? This also couldn't be because our education system has failed us repeatedly? This has to be because every rich person in the United States has old money and is attempting to subjugate the poor to enact their master evil plan right? The government on both sides of the fence has failed the people. The citizens of the US are hurting and hurting bad at this point, but the government's solution is to strive to have more spending to stimulate the economy. It happened after 9/11 when Bush implored the people and it's happening now with Bernanke appealing to the government. The only real way to deal with these issues long term is to drastically reduce federal government spending and government intervention in failed US corporations and allow the federal government to be a watchdog/protector rather then a non-invisible hand influencing the economy in a manner that may or may not be the natural progression of our economy. We continue to send money and weapons to other countries and promote wars that lead us to situations where we're unable to return without amassing large costs. We continue to fund bloated unsuccessful federal programs such as the IRS. We continue to think that the federal government has all of the answers and couldn't possibly lead us astray. Promote state's rights to choose their own manner of dealing with education/health care/etc and allow failed experiments to fall by the wayside and successful experiments to be emulated by other states. Promote a savings nation rather then a consumption nation so that our citizens have money in the bank for hard times such as this rather then promoting spending and leading our people to debt. These are of course unpopular ideas politically and so will probably never see the light of day, but one can dream. I love some of the things Obama has done such as ensuring that credit card interest rates aren't obscene, but at some point there's a certain accountability that needs to be held by each American especially in this day of shared information and the pride that made America so great needs to come back so that we can rise again and prove to the rest of the world how resilient we really are.
Wrong, and this is just the kind of mis-speak that media outlets and politicians love to keep people confused. History shows that hoarding (which historically is akin to another type of monetary manipulation) not savings is dangerous to market forces. There has never in history been a nation or government that was rich in asset wealth that wasn't prosperous. Anyways I didn't say anything about savings I addressed reducing debt by increasing debt which is our current strategy. Spending within your means, prices set by market forces, wealth creation through industry, innovation, natural resources and product demand have forever driven prosperity until central bankers gained enough power to create and manipulate global currency markets. Mr. SamFisher you are a very smart person, like Bernanke you believe that another trillion in debt is going to cut government spending, that another trillion in debt is going to flood liquidity into mainstreet like the last 1.2 trillion didn't. That another trillion $$$ of debt is going to force investors away from bonds and back into Wall Street... wait a minute that is actually happening. Well as long as Wall Street is climbing above 10,000 (DJIA) let's borrow our way right out debt. If you are in college and not considering a job with someone like Goldman Sachs or the Govt. rethink your future.
glynch, thanks for the open candor. I didn't mean to be as vehement with my points as I did so if you had stronger then intended reprisals in your argument due to it, I'll assume it was my fault. Great argument thus far. [This has not changed so it cannot explain the increase from 9% to approx 25% for the top 1%.] Well, I definitely didn't mean to say that it was the only factor playing in here, but figures such as the ones you pulled can be for many reasons beyond the rich subjugating the poor. I'm not saying they're all saints. I'm sure many of them have run Ponzi schemes or have just done unethical things to gain their wealth and that's where the government is most needed. At the same time, I'm sure it's not the same 1% from year to year but rather a rotating whose who of who made it big amongst the millionaire/billionaire community that year. Also, the jobless situation at the moment probably also skews it into the favor of the top 1% of this year. Also, these pdfs from the census bureau are pretty interesting if you have the time to look through them. The birth rate for women receiving public assistance vs those not receiving public assistance is what I found the most revealing. http://www.census.gov/population/www/socdemo/fertility.html [This may possibly play a minor role, but even factories replacing white or black non-union workers with immigrants who make less are still closing down because they pay for example 20 cents an hr in Bangladesh to sew clothes for Ambercrombie and Fitch etc. Certainly much more imporant is the outsourcing of jobs to benefit the corporate elite with NAFTA and other agreements, tax breaks to subsidize this etc.] I completely agree here. I think the US should take a stand on countries who don't abide by the same labor laws and regulations as we do and refuse imports from these countries and place restrictions on the corporations in doing business there. I especially despise the fact that China disregards all patents and continues to act as if they're above the regulations that are in place. It definitely puts companies at an uneven playing field. [Well the wealthy no longer send their kids to the public schools and don't like to fund the public schools.] That's not entirely true. There are still a subset of public schools here in Houston such as Memorial High School, Clements, etc. that do pretty well and keep the local populace happy. It's just sad that these high schools happen to be in the affluent areas. I would love to see the same dogma from these successful programs transposed to schools in the inner city. Although, I guess it would need to be adopted at the earliest grades. My opinion here is that cycles of un-education are similar to cycles of poverty. It's difficult to break and I'm not sure what the best manner is to deal with it. I just hope that we can continue to instill confidence in students and provide skill sets for them to be successful in the world. [This is a silly straw man. BTW why do you identify with the rich so much? Are you aspiring to be so or do you know lots of them personally who care deeply about economic inequality in the US?] I know a few successful individuals and I aspire to be one I hope as well. I do care about economic inequality, but I think it's a different take then you have. I really really want everyone in the world, but especially in the US to have the best skill set to be appreciated as an individual and be successful in the economy without any government intervention whatsoever. As far as the "rich" as you say, let me give you an example of one. My best friend's dad is a retired surgeon. He grew up in Nebraska with nothing and worked very hard to go through a plethora of schooling to get his myriad of degrees and help people in the process as well. He saved wholeheartedly and invested wisely making good and bad decisions in the process. He lost quite a bit in the Enron fiasco and a failed restaurant venture, but in the end he came out way ahead because of his hard work. No one handed him anything. He attended public schools and took school loans. I come from a family of physicians, my mom, multiple aunts and uncles, but all of them had nothing when they came here, but an education which they clawed tooth and nail to get while they were in India. Studying under lamp lights. Tutoring other children instead of going to class in order to pay for school. Odd jobs that you would think were just plain creepy =) Ultimately they came here, studied, passed the American Medical Boards in a timely fashion, and for the most part have been successful. They are the American dream in my eyes. I didn't grow up with much because my parents had nothing when they came here and I was born, but I did have the luxury of having educated parents. No help in English, but great nonetheless =) [Bush asked people to go out and shop with their money. Other than that he proposed lots of unfunded war activities.] Excellent. We agree here. Now, just out of curiosity, are you an ardent democrat, Bush is bad, Obama is good sort of guy, or do you feel Obama has made mistakes as well? [True, but this is different. Not all government spending is equally bad or good. Some for infrastructure is what made this country propserous.] True. I'm happy to leave some things in the government's hands. A few of my libertarian friends obviously feel otherwise. [So I guess you think letting GM fail would have created more jobs and a better economy.] I think if GM was a viable company, someone would purchase it and find a way to make it successful. There's quite a few investors in the world. I don't think the government wants to be the one responsible for all failed ventures. -We continue to fund bloated unsuccessful federal programs such as the IRS- [This is silly. Are you an anarchist or merely a lo info Ron Paul follower?] http://www.timesonline.co.uk/tol/money/tax/article1996735.ece Warren Buffet had a great quote that said "The 400 of us pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you're in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent." He intended the quote to berate people for their thoughtlessness towards income disparity, but he was only able to achieve such a low % because of the complexity of the tax law and dividend taxing as well. If we simplified it and taxed everyone a flat % returning money to those in need in the form of cash, health care, and other vital needs, I feel like we'd save a bit in cost. Of course, the IRS has trouble collecting these taxes so switching to a consumption tax might simplify that as well. This is a page I found at the IRS site and it looks like the IRS costs our government approximately 11.7 billion dollars each year. http://www.irs.gov/taxstats/compliancestats/article/0,,id=132165,00.html [I guess I have the answer on the Ron Paul thing. So you would be down with still having no voting for blacks in Mississippi and Alabama. Didn't Rand Paul recently say private restaurants in states that don't want to should have the right not to serve blacks?] Really, did I even mention Dr. Paul or his son? I like some of the things they fight for, but of course, I'm an individual with my own thoughts. I also think Rand Paul was taken out of context. He was merely talking about business rights; I don't think he meant to make a statement detracting from individual rights. He's just expressing his views that people should be free to express themselves even if it is in a ridiculous hate mongering sort of way. http://voices.washingtonpost.com/right-now/2010/05/rand_paul_telling_the_truth.html [I certainly believe in personal frugality and save quite a bit. Of course it is much easier if your income if higher. I suspect Buffet and Gates and Murdoch and other very rich people save a huge percentage of their income.] That's great. They definitely do save quite a bit and are taking on great philanthropic causes. The Gates foundation is a great place for their massive wealth to be directed. Especially as the alternative would be for half of the wealth to be controlled by the government upon their death. [I agree, but defunding the government and the IRS seems to be at odds with your support here. How could it be enforced with no government agency to do it? The libertartian idea of basically billions of private law suits?] Read above regarding the IRS. I'm not against the government putting in rules and regulations to protect consumers and the enforcing can be done by a much smaller organization then the IRS, but I would much rather see it done on an individual state level rather then at the federal level. Experimentation at the federal level with rules and regulations leads to one prime directive and thus no way to tell if there are alternatives that could be more effective. [Well Americans need to be accountable for taking back their government from the corporate elite that brainwashes them. I think it sad to see libertarian types caught in a vicious cycle. The government is controlled by a corporate elite so it doesn't help the people like it did previously. Libertarians decry the government for not doing so and then try to strenghten the corporate elite which is the cause of this. Libertarians have no answer other than fantasy abstractions for controlling the corporate elite as they seek to remove the only existing arena (the government) in which the people through their vote and sheer numbers have at time contested successfully for power.] I don't really understand who you were lambasting here. Are you worried about corporate lobbies in the government? I'm on the same page there. At the same time, you mention that the government "doesn't help the people like it did previously". In what way do you mean? Sorry for the verboseness of my argument, but I love open discourse. Honestly, I think the most difficult part of these political arguments regarding the federal government is in the manner in which both sides perceive the government as "helping" for the long term.
We need a stimulus, but don't need an Obama stimulus. Or we can stay status quo for a couple more years. I'm sure you will see a change we can believe in then.
<object width="480" height="385"><param name="movie" value="http://www.youtube.com/v/Si5uGG_s-6w?fs=1&hl=en_US"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/Si5uGG_s-6w?fs=1&hl=en_US" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="385"></embed></object>
Smartassed, meaningless retorts such as yours are what people resort to when they have no real argument. I realize that you believe that the government is a panacea, but it is not. There needs to be a balance between reasoned government involvement and capitalism. When your first answer to any problem is more government, it is a problem. Sometimes you will be right, and other times you will be wrong.
