Deckard and Pouhe -- I am not denigrating the accomplishments of FDR. I merely stated that the onset/outbreak of WWII, for better or worse, had a greater impact on the economy than his New Deal programs. FDR practically ensured our entry into the conflict by implementing policies like Lend-Lease, but IMO he had the country's economic plight in mind as he did so. Oddly enough, if I recall the history of the era correctly, the Republicans were the isolationists.
Now that the economy is finally healing and once it gets on firm ground - we should be running a surplus. What that means is that we cut spending and raise taxes, and begin entitlement reform. We need to address it...but not when the economy is sick. Especially when the cost of borrowing is ridiculously low right now and the world is gobbling up us treasuries like there is no tomorrow - eh...interesting choice of words. Seriously, we know there are 3 things we have to do to fix the debt issue. 3. Not 1, not 2, but 3. And when all parties finally can agree to that sane thing every non-partisan or bi-partisan commission has been saying, we can address the issue. And frankly, blaming Obama for this gets old. He put everything on the table. It was the Republicans who rebuffed him. So it's disingenuous to bash the current president and leave your party blameless in all of this.
No wai. Even the OMB's future projections expect recoveries not to push us in the black for a while. (8-10 years /w rosy scenarios) I agree with the rest of your post, but let's not put the figurative cart behind the 1000lb elephant in the room. We shouldn't placate with white lies just because some people don't know any better. Otherwise, they'll just look for other lies that fits their fear/worldviews and continue to elect morons that backload problems and hope they don't have to deal with it. We need to cut spending and raise taxes. Even if the President does get his second term, the people passing the spending bills don't have that "luxury" of a term limit. And if I could pinpoint President Obama's greatest failing, it's his inability to relate to and manage Congress. He distrusts them probably as much as we do, except it's his job to make them (his partisans) like him and trust that he'll pull through for them.
Debating economics is a miserable venture. Lots of dogma and advocacy, everything based on models and observation, no controlled experiments, effects can take years to manifest themselves. Climate change and many aspects of public health suffer from the same problems (for and against). Plus, those that are loudest and most sure of themselves get the fame and money.
Yes, because disputing the source, and rather the point of the argument is always something to strive for. though, besides that, using your own logic... By James K. Galbraith - January 21, 2009 You might want to check again, as the son and collaborator with one of the greatest economic minds to ever do research on the Great Depression does happen to hold some weight, more than that which a "random author" could be given. Of course, I also respect Oharian, and Lee. They are great economists in their own right. I especially agree with this prescription they hold in the article you cited, which could offer some insight into how to solve the debt problem, or to at least make sure that deficits of the kind ran in 2008-2011 never prop up again. Let's not forget the main reason why the deficit and subsequent debt has shot up in the first place. Fight for more banking reform. Make sure the Ron Pauls and Romneys of this world NEVER win their fight to deregulate even further.
You have never heard of Hyman Minsky in your life, yet you are probably fully indoctrinated by Rand, Friedman, and Hayek to deviate from Keynes. If you wish to seek truth, seek it in your own statements as well.
If we raise tAxes back to Clinton levels, trim spending and reform entitlements we can indeed run a surplus with a recovering economy. Not immediately, but in the next four years that needs to be a goal. Election has to be a statement with congress. It will be interesting. But can you imagine what would happen with a Romney presidency house and senate? We are back to bush 2.
I would argue the source as well as the argument from the WSJ outweighs the previous article. Holding prices artificially high to ensure profit/spending goes northward is not a good thing, which takes care of the previously posted graph of the rise in GDP. In the same boat, raising wages had an adverse effect on employment, people with jobs were paid more than they should and spent that extra income on the rise in the price in goods. But the people who didn't have work were at an even higher disadvantage. People were out of work at an unseemly high rate until the war started.
you've got the neo-classical view of perfectly efficient and perfectly rational/clearing markets, and wages and employment acting rapidly and rationally with each other, as well as the bias towards being an inflation hawk, so I gather you read the WSJ quite often. I'd say that debt deflation would be the main thing to worry about, in which case limited reflation which you are describing is a good thing, in actuality. -Irving Fisher, who as I seem to recall, is a WSJ favorite as well? Though perhaps not for this particular theory. This is the view the Fed has held since 2008. Incidentally, while I am an ardent believer that the Fed has in effect become deflation hawkish and is propping up way too many of those damn QEs, the essential fact remains that even if they gave too much medicine, at least they were giving the right type. The lost decade in Japan has kind of become the bogeyman of deflation, just as Wiemar Germany has become the bogeyman of inflation, but it is a case in mind of what can happen to an economy given the extreme on the other side of hyperinflation worries. All this to say: you can bring out statistics about how bad it was in the 1930s, but that doesn't necessarily reflect the fact that policy failed, it just indicated to which degree the painful de-leveraging of private debt (after the spectacular euphoria of the roaring 20s) had to proceed. Given a laissez-faire policy, such as one based on the Austrian cycle, I think the American economy would have been a lot worse off.
If your moral reasons are what I think they are (the whole dogmatic concept of liberty and free markets, liberty to fail and succeed, an unobtainable ideal of pure free markets etc.), it should be noted that Keynes has probably done more for the free market than any other individual in the 20th century. Keynesian theory after all, was meant to stabilize the free market, and not to replace it. That you have the liberty to debate for a pure free market is owed, at least in part, to Keynes.
I know you are but what am I? Yes, exactly, I am rubber. You are glue. Also, I'm not in on Occupy Wall Street or even Occupy Houston (I already live here). You, on the other hand, ARE a teabagger.
If we are not at war in the fall, then this will be the biggest issue of the race. If that's the case, then Obama is in trouble. Obviously as it stands today, Obama has huge disapproval ratings (or more importantly extremely low approval ratings), particularly in must win states for him such as Pennsylvania and Ohio. The only real way to fix a debt problem is to have an economy that is growing. Consumer confidence must also rise. Obama's desired policies of higher taxes, command-and-control top-down regulations, advancement of union participation, and out of control entitlement spending is extremely detrimental to building a healthy economic foundation for future growth. Investment must be encouraged by making the US a competitive place to do business globally. Unfortunately, Obama has moved us in the wrong direction in this respect. You can't improve an economy by focusing on social issues such as affirmative action, income redistribution and the environment -- and at a time when the US needed economic leadership, instead we have a President who is focused on partisan political motivations and division. We don't have a selfless leader -- we have a selfish politician singularly focused on his own reelection. It's a pity.
I'm guessing have "moral reasons" for opposing higher taxes on the wealthy, but in reality, higher taxes will be necessary to address the deficit and debt. Tax cuts are the single biggest reason we are in this mess (the deficit explosion began during Reagan's tax cutting and accelerated again after Bush's tax cuts), so it is not only moral, but necessary, to raise taxes to a responsible level. There are many other topics on which your "moral reasons" are diametrically opposed to how things work in the real world, but I won't detail them until you show that you can assess factual information and allow it to influence your beliefs. So far, you haven't shown me that you have that capacity.
In reality, we can't get revenues higher than 20% of GDP no matter what the rates are. Our spending is around 26% of GDP. Have to lower that if you want to lower the debt. Nope, tax revenues went up after the Bush tax cuts of 2003. You will never get the revenues you need without a growing economy, no matter what the rates are. As far as moral reasons, until the government stops spending money on things it shouldn't, there can never be any justification to confiscate additional wealth from Americans. There's also zero indication that taking more won't just lead to spending more.
Tax receipts went up only after a recession was ending. They went down first. Bush tax cuts are the reason we are in this mess. You can't just balance the budget by spending cuts as that will shrink GDP and receipts as well. Econ 101 man. This is textbooks stuff you aren't getting....
