On August 20 2012 07:17 Danglars wrote: I'll weigh in a little on the topic of "Corporations are people and Money isn't speech."
I hear often about raising taxes on corporations and stopping money from entering politics, buying elections. But you can't raise taxes on corporations.
Yes you can. That's why they're corporations in the first place - to distinguish them from the people running them.
What he's saying is you can't raise taxes on corporations and businesses because they pass the cost of those tax increases on to the consumer every time in order to maintain safe margins. The consumer pays for the tax increase in the form of an increased cost of goods. In this way (taxes only!) they're effectively just a collection agency for the government.
Except that's a much too simplistic analysis because the tax burden does not reverberate entirely (or, sometimes, at all), on the price paid by the consumer, the wage of the worker, and/or the shareholder. To try to equate a corporation being taxed to a direct tax on people is fallacious.
When you tax a corporation, the amount of the tax burden paid by the corporation and the amount passed on to consumers is determined by the tax incidence. So it would really depend on each corporation and each type of good being made by that coroporation.
"For example, United States Social Security payroll taxes are paid half by the employee and half by the employer. However, some economists think that the worker is bearing almost the entire burden of the tax because the employer passes the tax on in the form of lower wages. The tax incidence is thus said to fall on the employee."
Just feeling free to tax whatever coroporation you want and then patting yourself on the back because you aren't hurting any "people" is ignorant. Its more complicated than that.
EDIT: And yes, even if for a specific corporation, the tax incidence falls mostly on the employer, that still just means that you are taxing a different group of people because a corporation is a group of people. Its not like it is a group of robots or animals. People of some kind or other always are hurt by the tax. You can try your hardest to make it hurt the "right" people but market forces ultimately determine who is harmed by the tax.
On August 20 2012 13:42 sam!zdat wrote: How does taxing capital gains fit into that? That would have a different effect from an increase in corporate taxes, right?
(this is a learning-type question not a rhetorical question)
I don't think that capital gains tax is determined by tax incidence. Tax incidence exists because there is a market interaction between a supplier and a buyer where the seller gets to choose the price and the buyer determines how many units are sold. When a tax is laid on the seller (and even when it is laid on the buyer) that alters the market interaction in a way that harms 1 or both of them. The amount of harm each takes is determined by the demand elasticities for that good.
Capital gains taxes are just 1 person (or company) making a profit on their investment. They aren't really setting a price or selling something to a consumer who can then determine who much of something to buy.
This is what I think, but if someone knows more than me, feel free to step in and enlighten.
On August 19 2012 16:11 Kenpachi wrote: a friend of mine said he prefers Romney because Ryan has a good economic plan. i havent been really paying all that much attention to this election because i predict Obama to win with ease but what exactly is this plan that he proposed?
It cuts a ton of spending and cuts a ton in taxes at the same time. Supposedly, fiscally responsible, but the tax cuts being proposed end up nullifying any savings (and then some) of the cuts to government.
Theoretically, couldn't the tax cuts stimulate the US economy?
Yes they did, just not very much. Obama's fiscal policy has stimulated the economy too, just not very much as well.
For whatever reason the usual Keynesian fixes don't seem to be working too well. Personally I think there's just too much debt in the economy and so trying to blow the debt bubble bigger just isn't working this time around.
Now you're just making things up.
And even if you were correct, that for some reason, when there's high debt, stimulus magically stops working, who's fault is that? Who built up all that debt?
There's so much stimulus that public employment and infrastructure spending (which you've confused with housing construction) is falling to unprecedented levels. You're solution is to declare that there's too much stimulus in the face of falling indicators that stimulus should have boosted. It was not just small by these economic measures, but also compared to the size of other successful stimulus packages like in China, South Korea and Australia. Also, looking at government spending as a % of GDP is a bad indicator because GDP is down due to the recession.
I also posted a bit back some research that points to deficit spending being less effective following a debt crisis.
I don't understand your logic that the stimulus wasn't / isn't large because it could have been bigger. Those aren't mutually exclusive descriptors. It was both large and could have been bigger. Yes China's was bigger, but much of it was malinvestment that has lead to their economy slowing down now. So I don't view that as a recipe for long-term success. Nor do I view bad spending as a worth while tradeoff between more economic activity now and less later.
Using government spending as a % of GDP should be fine since real GDP has surpassed the pre-recession peak.
I don't see why you are so opposed to redirecting poor quality government spending to better uses - the main thing I was advocating for.
If you want to disagree, fine. Just don't be a dick about it and post crap like "now you're just making things up."
I'm not at all too familiar with stacked graphs, so correct me if I'm wrong here. But to me it seems that government debt is actually remaining flat, that the graph is almost completely influenced by financial and household debt. I thought a stacked graph compares each item to the one underneath it, and not actually overlayed on top of each other.
On August 19 2012 16:11 Kenpachi wrote: a friend of mine said he prefers Romney because Ryan has a good economic plan. i havent been really paying all that much attention to this election because i predict Obama to win with ease but what exactly is this plan that he proposed?
It cuts a ton of spending and cuts a ton in taxes at the same time. Supposedly, fiscally responsible, but the tax cuts being proposed end up nullifying any savings (and then some) of the cuts to government.
Theoretically, couldn't the tax cuts stimulate the US economy?
Yes they did, just not very much. Obama's fiscal policy has stimulated the economy too, just not very much as well.
For whatever reason the usual Keynesian fixes don't seem to be working too well. Personally I think there's just too much debt in the economy and so trying to blow the debt bubble bigger just isn't working this time around.
Now you're just making things up.
And even if you were correct, that for some reason, when there's high debt, stimulus magically stops working, who's fault is that? Who built up all that debt?
There's so much stimulus that public employment and infrastructure spending (which you've confused with housing construction) is falling to unprecedented levels. You're solution is to declare that there's too much stimulus in the face of falling indicators that stimulus should have boosted. It was not just small by these economic measures, but also compared to the size of other successful stimulus packages like in China, South Korea and Australia. Also, looking at government spending as a % of GDP is a bad indicator because GDP is down due to the recession.
I also posted a bit back some research that points to deficit spending being less effective following a debt crisis.
I don't understand your logic that the stimulus wasn't / isn't large because it could have been bigger. Those aren't mutually exclusive descriptors. It was both large and could have been bigger. Yes China's was bigger, but much of it was malinvestment that has lead to their economy slowing down now. So I don't view that as a recipe for long-term success. Nor do I view bad spending as a worth while tradeoff between more economic activity now and less later.
Using government spending as a % of GDP should be fine since real GDP has surpassed the pre-recession peak.
I don't see why you are so opposed to redirecting poor quality government spending to better uses - the main thing I was advocating for.
If you want to disagree, fine. Just don't be a dick about it and post crap like "now you're just making things up."
I'm not at all too familiar with stacked graphs, so correct me if I'm wrong here. But to me it seems that government debt is actually remaining flat, that the graph is almost completely influenced by financial and household debt. I thought a stacked graph compares each item to the one underneath it, and not actually overlayed on top of each other.
Yeah, its hard to read. Government debt has increased but not by an enough amount to offset the decline in household and business debt and so the overall debt level has fallen.
Pre-crisis ('07) government debt was 80% of GDP and is 122% of GDP in 2012.
EDIT: And yes, even if for a specific corporation, the tax incidence falls mostly on the employer, that still just means that you are taxing a different group of people because a corporation is a group of people. Its not like it is a group of robots or animals. People of some kind or other always are hurt by the tax. You can try your hardest to make it hurt the "right" people but market forces ultimately determine who is harmed by the tax.
And, in a further sense, the portion of the tax born by the employer is a disincentive to hire on new workers in order to grow his business, since he has less money with which to pay that worker, and continues to bear the risk that growing the business may not lead to increased revenue. The disincentive is there, though the actual action of the employer may be swayed by other factors. I say this to address another common point brought up in these debates: an increase in corporate income taxes may lead to an increase in unemployment as normal business growth is stunted, creating fewer new jobs) and firing employees may present a more attractive option for shouldering the burden than passing it off on the customer. The mechanics of these are partially wrapped up in the previously mentioned tax incidence.
The tax incidence provides a way politicians dishonestly sell their policies to uninformed citizens, by presuming to say employer/employee split the tax 3%-3%, when in reality, the tax functions as a 6% tax on the employee. It is important to judge a law or policy decision not by how it is sold, or the harms it is meant to correct, but its actual effect it will have on people and budgets.
On August 20 2012 08:38 Souma wrote: I suppose that's the biggest difference between us in this debate. You throw your faith blindly behind rights. I'm more of an analyze-the-status-quo kinda guy.
I also thought that rights were supposed to be equal and treat everyone fairly. I guess the founding fathers never took massive income inequality to mind.
Equality under the law gets to be a tricky concept when you take shifting tide of public opinion. Maybe the status quo today really makes it look like $1 million dollars is plenty, and now we have the right to take away every dime you made over it. Next year, $800,000 dollars is that level, because the poor were all crying out, and there's this one disabled guy that has earned minimum wage for his entire life. You see, rights get trod on when legal protections on them are flimsy or nonexistent. Private property rights being generally chief amongst these, but further on free speech, assembly, arms, and imprisonment.
Consider again, people in the drafting of the constitution had real fears about what the national government could do, and how their lives may be less free because of it. Why not have just federal government and no state governments. It's confusing with who manages which government program. My representatives live in Washington D.C. most of their time; how will they stay apprised of the concerns of me as a Californian when all their buddies are in the federal seat?
The natural progress of government is to encroach on what the people originally assumed were rights to them, but can be written out of existance with the stroke of the pen. That IS why the bill of rights was formed originally and that IS why it's important that they are not interpreted out of existence, much as the tenth amendment has been in today's age. If laws are subject to the whims of current society, then they are nothing but good suggestions and carry no weight. It wasn't too long ago when the laws were interpreted to mean blacks had no rights and equal protections under the laws was not violated when separate facilities were given for whites and blacks. What protects you today may not do so tomorrow if you lose out in the next election and national opinion. Some rights are fundamental to good governance and deserve to be carefully weighed when those opposed to them pass laws. There is nothing new to factions striving to deprive essential rights because they disagree with what you do with them!
You kind of went on a tangent there which is confusing me. Can you explain to me how all of this relates to money = speech and why unfair campaigns should remain in the status quo?
If I were to use your example of blacks and no rights/equal protection, it seems like many of you currently believe that it’s perfectly okay for the poor to not have an equal voice in shaping elections (because if money = speech, then speech is not equal as portrayed by our massive income inequality), and that it’s protected under law. Now, should I just say, “Oh well, that’s the law,” or should I stand up and try to protect a group that is having their own voice squelched and their livelihood stepped on by the privileged minority?
On August 20 2012 12:47 Romantic wrote: Why shouldn't some ideas have unequal platforms? I don't particularly think Nazism deserves equal platform and I am glad nobody donates to Nazi political groups lol
And why shouldn’t Nazis or Communists or Socialists get equal platforms? What if someone felt as much aversion towards Republican or Democratic ideals as much as you feel towards Nazis? And that is why ideas should be equal.
And besides, we're addressing two parties who have a pretty even split in voters. I would think we could at least ensure them equal platforms.
It is just untrue that all that matters is rich people. There are dozens of interest groups I can name that politicians pander to, xDaunt listed a bunch of them. There aren't even that many "Rich People Issues". For every rich person you find that wants lower taxes you can find a hundred poor people who want the same thing. There are plenty of "Rich People" who donate to social democrat platforms too because they want gay marriage or whatever they are after.
The issue here is not specific issues and specific donors. The issue here is that those with money have more of a political edge than those without. I don’t care if you’re Republican or Democrat, or if you’re a gay basher or a gay lover. The truth holds true on both sides: money speaks louder.
Fundamentally I don't think political speech is a threat to democracy, even if I don't care about democracy. Even if I thought it were dangerous I wouldn't propose the government controlling who is allowed to say what as a solution, I would want a more educated population.
I actually agree that an educated population would be ideal, and that education is the backbone to any society. But before we can even bring up that issue, let’s fix that education problem that’s been haunting us for god-knows-how-long.
On August 20 2012 13:00 jdseemoreglass wrote: If you accept the premise that the public is so easily manipulated and that money has such a huge influence in politics, then you can't really be pro-democracy in the first place. If people are so stupid and so easily manipulated, why should they be making the decisions for the country? When you are calling for the government to regulate the realm of ideas so that the public can make better decisions, then you are effectively negating the entire purpose of democracy, you are advocating state control under the false guise of popular control.
I personally reject this premise. And if you want evidence why, just take a look at the recent republican nominations. Compare the amount of money Perry spent, and the amount of money Santorum spent. Then look at how many votes they ended up getting. Divide the "cost per vote" for Perry and Santorum and compare... You will see that money is not as important in elections as everyone makes it out to be.
Wait, what? I’m the one that’s not pro-democracy when you’re the one that’s saying people who are stupid should not be voting?
I don’t generally like to quote historical people, especially those who are quoted on a daily basis, but Winston Churchill did say, "The best argument against democracy is a five-minute conversation with the average voter." It’s because the average voter is ignorant to the complexities of politics that it is especially vital that we must present them with fair elections so that they can make the best choices for themselves. No one is saying let the state control ideas, we’re saying do not let those with money control ideas. If money was not important in elections corporations wouldn’t be shoving tens of millions into the pockets of candidates and candidates would not have to raise hundreds of millions of dollars to stand a chance. Money may not be the end-all-be-all but it sure as hell helps, and there’s no way you can deny that. It's like two boxers, one with brass knuckles and one without. Sure, the one with brass knuckles isn't necessarily going to win, but it sure does help, and it sure isn't fair.
On August 20 2012 13:25 coverpunch wrote: However, I do share the concern that politicians can be leveraged into avoiding certain policies, often at the expense of citizens. It's a good reason to constantly limit government power, for moments like this when corporations start to worm themselves in very tightly with politicians. I find it very strange on TL that the people most concerned about corruption from corporations seem to also be people who want the government to have more power and more control over society.
We don’t want more power and control over society. We’re the ones saying let the woman decide if she wants to abort or not, let gays get married, and do not let corporations manipulate the masses. What we WANT is more regulation over corporations and banks that like to play with our economy and people’s lives.
You acknowledge the corruption that stems from corporations, so for once in our lives can we agree to do something about that and not place the sole responsibility on the people?
When people have an unequal platform to spread their ideas? When all that matters is the ideas of the rich and not the majority? When massive amounts of funding from a handful of rich and powerful of organizations starts to swing policy to protect the interests of the rich to gain and maintain political power. When the rich corporations or unions can bankroll politicians. They may be voluntarily contributing, but if what they get in exchange is a push towards an oligarchal state, then some limits may be in order. (Like a cap across the board on individual donations rather than dodging it through superpacs.)
Edit Money may not be the end all and be all of politics, but reasonable limitations are prudent I think. On both corporations and unions. Why else were those limitations on individual donations put in the first place? Was there a concern in past American politics that the idea of superpacs are now trying to circumvent? Why else has a country like Canada almost completely shut out corporate and union dollars from their federal elections? In addition, politicians may make a lot of promises, but I suspect some of the ones they pay most attention to are the ones to whom they received donations from. Isn't your tax code a mess with exceptions due to special interest groups?
The primary means of combating an uneven platform for spreading ideas is precisely letting opposition mount their own advertisements from however much money they can raise to persuade voters. The politically powerful also have a vested interest in using their platform to campaign for reelection just as rich people have larger personal funds to donate for the same purpose. Unions, while not offering much freedom to their members as to where they want the funds to go (which has had some voter initiative challenges in California), are a good example of using money for political purposes. If they truly are spreading unpopular ideas, it is incumbent on the opposition to form an even bigger political collection to raise money and oppose this through running of ads and donations to campaigns.
Speaking of unequal platforms, consider the perceived liberal bias in the vast majority of mass media in the US. For those of you that think bias allegations are hogwash, imagine the scenario where major news outlets favorably reported on the political undertakings of one party, and cast every argument of the other party in a negative, jeering light. If federal laws prohibit or limit the spending of money on ads before an election, the information that the TV-viewing public receives is larges the tinctured ones filtered down through the media. Free advertising so to speak. With removed restrictions, the money may be spent on those stations deemed important to promote their views. Suddenly, a collection of biased news organizations are not the only political force allowed the freedom to operate in the weeks leading up to the election.
So your idea of a fair election is, “If the guy points a gun at you, find yourself a bazooka?” How about both candidates settle for water guns? (I’m sorry, I’d elaborate on my post here but I’ve already clarified my position a few times already).
I really laugh at reasonable restrictions, but I really should not for the well-meaning out there that think politics may generate fair restrictions on the free spending of money. I'm a big believer in structural protections of freedom from government, as you may have gathered. The government that is tasked with presenting fair restrictions has the power to decide what's fair or not. If Congress gets a majority in House and Senate to say that $1,000 dollars a month per individual is a fair amount to spend on political ads to get their view out, then that's now the law. If they get majorities in each house to say that 50$ or $0.50 is a fair limit, then it'll be so. And what are the political motivations of the party in power to set a fair limit? Are they going to set the limit out of a detached view of fairness to all concerned or based on their own political future?
Now THIS is a good argument and it’s an issue that would indeed require careful examination. So why don’t we let some third-party nonpartisan organization decide what is a “fair” amount, like the FEC?
On August 20 2012 07:24 Souma wrote: If you see the Constitution as sacrosanct then you do not truly understand the Constitution. And once again, money = speech is a Supreme Court mandate, not a Constitutional right.
Um, the Supreme Court is the body who determines what Constitutional rights are through its "mandates." Citizens United was expressly a Constitutional rights case.
What you're basically saying is, "It's okay for us to spend as much as we want to swing the election in our favor. We'll try to convince you with senseless propaganda, twisted rhetoric, and even outright lies, but [i]you[/] have to still be virtuous enough to see through all of that. It's not our fault if you fall for our strategies conducted by many professionals hired to cause humans to act in certain ways. It's entirely your fault if you fall for our trap."
Crudely, yes.
Instead of trying to implement fair(er) and more efficient elections, it's so much more convenient to blame it on the masses.
Convenience has nothing to do with it. It's the governing philosophy upon which the country was founded. You may want to go re-read history if you're not familiar with it.
But doesn't that seem rather contrary to representative democracy? And before you say US is a Republic, not a democracy, doesn't that so-called freedom to spend endless amounts of money push the US more towards an Oligarchy? I don't even understand the purpose of Super Pacs anymore. If they aren't coordinating then, it actually muddies the message of the politician because has to keep begging them to take down all these extremely crude and insensitive attacks. And if they are coordinating, then it becomes a sneaky way to fire out all your dirty arguments and then retreat to plausible deniability. "I can't control super pacs." Either way it seems a lose lose and swinging the election more and more to the playground of the rich.
Heck the fact that from primary to election takes two years is ridiculous for the amount of time and money spent on changing on the government. And this is coming from a country that supposedly loves small government and hates wasteful spending.
A good portion of the Commonwealth countries inherited an Upper House made up of rich landlords and the colonial equivalents of aristocrats. The Upper House was originally designed keep the rabble of democracy in check. Who knows what the masses will come up with. I feel like giving corporations and unions absolute freedom to spend as much money as they please is several steps back into that old way of thinking, giving the rich new ways to curtail democracy. Which is why I bring up Oligarchy.
It does and it doesn't. Both sides have good points on this issue.
Conservatives (and the Supreme Court majority) were correct to say that the government doesn't have the power to ban corporations from exercising free speech or to stop them from making political statements. Given that the New York Times is a corporation, what stops the government from shutting them down and essentially neutering the First Amendment?
Liberals (and the Supreme Court dissent) were correct to warn about the dangers of abuse with money in politics and that large corporations could lord disproportionate leverage over politicians. There's hardly a distinction in practice in the corrupting effect of donating to a pro-Obama Super PAC and donating to Obama himself.
But in terms of oligarchy, it is worth pointing that voters still ultimately wield the decision-making power in elections. One reason that people are free to talk is because people are also free to not listen. And it happens with regularity that companies will throw millions of dollars to advertise their product into every possible media and you still won't care.
However, I do share the concern that politicians can be leveraged into avoiding certain policies, often at the expense of citizens. It's a good reason to constantly limit government power, for moments like this when corporations start to worm themselves in very tightly with politicians. I find it very strange on TL that the people most concerned about corruption from corporations seem to also be people who want the government to have more power and more control over society.
I dont understand this whining about corruption in politics, and then everyone points to various funds for election campaigns and things of that nature. The money spent on elections in the united states, all the adverts etc in any given year, pays for like one hour of the U.S Government. You want to see real corruption, follow the money. It's not in super pacs, its in the bills passed in the house and senate every single day.
Moneys been in politics alooooot longer than corporations having first amendment rights.
On August 20 2012 07:17 Danglars wrote: I'll weigh in a little on the topic of "Corporations are people and Money isn't speech."
I hear often about raising taxes on corporations and stopping money from entering politics, buying elections. But you can't raise taxes on corporations.
Yes you can. That's why they're corporations in the first place - to distinguish them from the people running them.
What he's saying is you can't raise taxes on corporations and businesses because they pass the cost of those tax increases on to the consumer every time in order to maintain safe margins. The consumer pays for the tax increase in the form of an increased cost of goods. In this way (taxes only!) they're effectively just a collection agency for the government.
Except that's a much too simplistic analysis because the tax burden does not reverberate entirely (or, sometimes, at all), on the price paid by the consumer, the wage of the worker, and/or the shareholder. To try to equate a corporation being taxed to a direct tax on people is fallacious.
When you tax a corporation, the amount of the tax burden paid by the corporation and the amount passed on to consumers is determined by the tax incidence. So it would really depend on each corporation and each type of good being made by that coroporation.
"For example, United States Social Security payroll taxes are paid half by the employee and half by the employer. However, some economists think that the worker is bearing almost the entire burden of the tax because the employer passes the tax on in the form of lower wages. The tax incidence is thus said to fall on the employee."
Just feeling free to tax whatever coroporation you want and then patting yourself on the back because you aren't hurting any "people" is ignorant. Its more complicated than that.
Good, because nobody's arguing that. In fact, I'm the one who argued that Budmandude's assertion that tax increases were paid for by the consumer was much too simplistic. There are many factors at play (elasticity of supply, elasticity of demand, etc.), the costs can be distributed evenly or not among many different people and/or can be absorbed by the company itself if no changes are made and only its profit margin is reduced (of course, this leads to it having less capital to invest and so there are repercussions down the line, but that's my point - it's certainly way more complicated than a direct tax on the consumer).
In general, the answer to free speech issues should be more speech, not less. Restricting speech gets into muddy waters, imo.
I think it's more sensible just to ensure that other parties are also able to get their message out. You can do that through reasonable legislation without getting into free speech issues.
On August 19 2012 16:11 Kenpachi wrote: a friend of mine said he prefers Romney because Ryan has a good economic plan. i havent been really paying all that much attention to this election because i predict Obama to win with ease but what exactly is this plan that he proposed?
It cuts a ton of spending and cuts a ton in taxes at the same time. Supposedly, fiscally responsible, but the tax cuts being proposed end up nullifying any savings (and then some) of the cuts to government.
Theoretically, couldn't the tax cuts stimulate the US economy?
Yes they did, just not very much. Obama's fiscal policy has stimulated the economy too, just not very much as well.
For whatever reason the usual Keynesian fixes don't seem to be working too well. Personally I think there's just too much debt in the economy and so trying to blow the debt bubble bigger just isn't working this time around.
Now you're just making things up.
And even if you were correct, that for some reason, when there's high debt, stimulus magically stops working, who's fault is that? Who built up all that debt?
There's so much stimulus that public employment and infrastructure spending (which you've confused with housing construction) is falling to unprecedented levels. You're solution is to declare that there's too much stimulus in the face of falling indicators that stimulus should have boosted. It was not just small by these economic measures, but also compared to the size of other successful stimulus packages like in China, South Korea and Australia. Also, looking at government spending as a % of GDP is a bad indicator because GDP is down due to the recession.
I also posted a bit back some research that points to deficit spending being less effective following a debt crisis.
I don't understand your logic that the stimulus wasn't / isn't large because it could have been bigger. Those aren't mutually exclusive descriptors. It was both large and could have been bigger. Yes China's was bigger, but much of it was malinvestment that has lead to their economy slowing down now. So I don't view that as a recipe for long-term success. Nor do I view bad spending as a worth while tradeoff between more economic activity now and less later.
Using government spending as a % of GDP should be fine since real GDP has surpassed the pre-recession peak.
I don't see why you are so opposed to redirecting poor quality government spending to better uses - the main thing I was advocating for.
If you want to disagree, fine. Just don't be a dick about it and post crap like "now you're just making things up."
I'm definitely not opposed to redirecting "poor quality government spending" to better uses. You say that this is the main thing you're advocating for, but it's not obvious from any of your writings that that's your view. The standard Republican view is to gut all spending (apart from tax cuts to the rich, of course).
The "making stuff up" comment was directed at your factoid that stimulus is ineffective when debt is high. I can't accuse you of making stuff up now that you have given a source (probably the most random and no-name source that's been linked this thread). However, I still don't agree with the content in your link.
In the link, it says:
This line of reasoning also provides an important corollary. If the effects of excessive indebtedness (low growth and low interest rates) are addressed by additional debt, or by debt utilized for investments that cannot produce an income stream to repay the obligations, then this even higher level of debt will serve to perpetuate the period of slow economic growth and unusually low bond yields. This proposition has importance for investors since the quarter end 2.75% yield on long-term U.S. Treasury bonds may, in the future, look as attractive as the 5% yields registered back in 2007.
Now, while you're source is quite no-name, it does cite some more reputable studies (in the "Recent Academic Evidence" section) to come to the view quoted above, that being Reinhart, Reinhart, Rogoff. But your source has misinterpreted the finding of this paper, which is that recessions caused by debt overhangs are long, and that high debt (the magical 90% number) is correlated with slow economic growth.
It even calls it a "corollary", because it's the implication they drew from the evidence. But it does not follow from the Reinhart, Reinhart, Rogoff paper that was cited, that even higher debt, in the form of stimulus, will cause even slower economic growth. This Hoisington paper confuses correlation with causation. The original source says that prolonged levels of high debt is correlated with slow economic growth.
But, let's see what Reinhart and Rogoff actually have to say about stimulus:
The U.S. must reduce its debt or suffer economic stagnation, they said in interviews with McClatchy, but in the short term they also favor more government stimulus to boost the economy, even if that raises the debt a bit more.
"We may need another stimulus bill just to decompress from the previous one, a smaller one to cushion the landing," said Kenneth Rogoff, a Harvard University economist and a co-author of the book.
Added his fellow co-author, Carmen Reinhart, a University of Maryland economist: "I'm not one of those deficit hawks. ... I'm not saying you run out and pull the plug and have an adjustment that could derail what fragile recovery we do have."
However, she cautioned, "the whole thing that we can disregard debt because we're the U.S. is really grasping at straws. Taxpayers need to understand the tradeoff, and that is, we're going to be paying for this in terms of lower growth in the future."
As for Reinhart, I asked her about this for a retrospective I did on the Obama administration’s economic policy. “The initial policy of monetary and fiscal stimulus really made a huge difference,” she told me. “I would tattoo that on my forehead. The output decline we had was peanuts compared to the output decline we would otherwise have had in a crisis like this. That isn’t fully appreciated.”
This seems to be a very reasonable economic position: stimulus now, cut spending later. In fact, it's pretty much the position of Barrack Obama. Note that the first link is from 2010, these days I believe Rogoff has become a typical "cut everything, now, now, now!!" Republican.
On August 19 2012 16:11 Kenpachi wrote: a friend of mine said he prefers Romney because Ryan has a good economic plan. i havent been really paying all that much attention to this election because i predict Obama to win with ease but what exactly is this plan that he proposed?
His supposedly radical, draconian plan is to not grow the government quite as much as Obama plans to. Certainly better than Obama, but it also shows how weak the right and how far left the left is when not growing the government enough is considered radical.
Are you joking? America has moved so far to the right that even someone as centrist and corporatist as Obama is considered a radical leftist and socialist.
Obama is the most left wing president ever. Hes the most Authoritarian since Wilson. He's never done a single centrist thing in his life, on any stage of politics.
Are any of these things leftist to you? Pick any of his policies, and we can discuss why you're wrong.
Sorry, I consider you about as reasonable and worthy of a discussion as you take that "obama is a fascist" guy. Anyone who imagines Obama is a centrist in the American political spectrum is hilariously delusional.
Care to elaborate? I'm always very confused in this regard. Some of those policies are completely bipartisan. Healthcare Reform is probably the most centrist things he's done, because it's basically a massive compromise between trying to keep healthcare viciously corporate but still trying to reduce the absolute absurd costs to the consumer.
I'm not sure why people think that Obama is a "socialist," or a "leftist." He's been in favor of corporatism and corporate interests since he got into office. It all seems like strange hollow rhetoric against the insane anarcho-capitalist conservatives. Can someone explain to me where this attitude is coming from?
Um.... lol? If you fail to see how Obama is a leftist, you clearly don't have any understanding of American politics.
I didn't say Healthcare was bipartisan, because the Republicans were blocking everything (even conservative things like the mandate). Repealing of DADT was. I'm not sure about financial reform.
Care you explain how he's a leftist though? Go for a policy. I mean I'm sure if it's so blatantly obvious you should be able to come up with SOMETHING of his that's not totally centrist.
The whole "you didn't build that" is a perfect example. He hasn't gotten anything through congress because of the republicans blocking him. However, he views the world in a very "commune" type way. He wants to use public power to force "good" actions or behavior. This is fundamentally leftist.
On August 19 2012 16:11 Kenpachi wrote: a friend of mine said he prefers Romney because Ryan has a good economic plan. i havent been really paying all that much attention to this election because i predict Obama to win with ease but what exactly is this plan that he proposed?
His supposedly radical, draconian plan is to not grow the government quite as much as Obama plans to. Certainly better than Obama, but it also shows how weak the right and how far left the left is when not growing the government enough is considered radical.
Are you joking? America has moved so far to the right that even someone as centrist and corporatist as Obama is considered a radical leftist and socialist.
Obama is the most left wing president ever. Hes the most Authoritarian since Wilson. He's never done a single centrist thing in his life, on any stage of politics.
Are any of these things leftist to you? Pick any of his policies, and we can discuss why you're wrong.
Sorry, I consider you about as reasonable and worthy of a discussion as you take that "obama is a fascist" guy. Anyone who imagines Obama is a centrist in the American political spectrum is hilariously delusional.
Care to elaborate? I'm always very confused in this regard. Some of those policies are completely bipartisan. Healthcare Reform is probably the most centrist things he's done, because it's basically a massive compromise between trying to keep healthcare viciously corporate but still trying to reduce the absolute absurd costs to the consumer.
I'm not sure why people think that Obama is a "socialist," or a "leftist." He's been in favor of corporatism and corporate interests since he got into office. It all seems like strange hollow rhetoric against the insane anarcho-capitalist conservatives. Can someone explain to me where this attitude is coming from?
Um.... lol? If you fail to see how Obama is a leftist, you clearly don't have any understanding of American politics.
I didn't say Healthcare was bipartisan, because the Republicans were blocking everything (even conservative things like the mandate). Repealing of DADT was. I'm not sure about financial reform.
Care you explain how he's a leftist though? Go for a policy. I mean I'm sure if it's so blatantly obvious you should be able to come up with SOMETHING of his that's not totally centrist.
The whole "you didn't build that" is a perfect example. He hasn't gotten anything through congress because of the republicans blocking him. However, he views the world in a very "commune" type way. He wants to use public power to force "good" actions or behavior. This is fundamentally leftist.
No I still don't get it. Unless you think government doesn't have a fundamentally important role in the economy, this is simply not leftist. Once again, you seem to be advocating a anarcho-capitalist idea (which is extreme right wing). The idea that we work together to create a better society is basic solidarity.
Besides, even if you were to argue that his rhetoric is leftist, that is not his policy.
On August 20 2012 21:03 paralleluniverse wrote: I'm definitely not opposed to redirecting "poor quality government spending" to better uses. You say that this is the main thing you're advocating for, but it's not obvious from any of your writings that that's your view. The standard Republican view is to gut all spending (apart from tax cuts to the rich, of course).
The "making stuff up" comment was directed at your factoid that stimulus is ineffective when debt is high. I can't accuse you of making stuff up now that you have given a source (probably the most random and no-name source that's been linked this thread). However, I still don't agree with the content in your link.
If it seems random and no-name it was mentioned on CNBC a few weeks back (randomly) and so I took a look at it then. It is also reflective of the views and opinions of quite a few guests they have had on the channel over the last couple years. It is not wise to ignore what market participants are telling you. Plenty are saying that the high level of government debt and deficits are leading to less investment - that's not a good thing and it needs to be noted.
Now, while you're source is quite no-name, it does cite some more reputable studies (in the "Recent Academic Evidence" section) to come to the view quoted above, that being Reinhart, Reinhart, Rogoff. But your source has misinterpreted the finding of this paper, which is that recessions caused by debt overhangs are long, and that high debt (the magical 90% number) is correlated with slow economic growth.
It even calls it a "corollary", because it's the implication they drew from the evidence. But it does not follow from the Reinhart, Reinhart, Rogoff paper that was cited, that even higher debt, in the form of stimulus, will cause even slower economic growth. This Hoisington paper confuses correlation with causation. The original source says that prolonged levels of high debt is correlated with slow economic growth.
They are not arguing that stimulus is causing slow growth. The argument is that government stimulus is far less effective following a debt overhang than normal and that high levels of government debt (in general) leads to slower growth. Because of that higher and higher levels of stimulus will not lead to added growth (or very little of it) because the added growth from stimulus will be offset by the private sector reacting negatively towards it.
We know that excessive debt is an issue for both households and businesses and leads to lower economic growth. Now, government debt is a bit different but not exceedingly so. Ultimately the cost of that debt will be paid for by households and businesses through higher taxes or lower government spending or a prolonged period of negative real rates. So it is not a huge leap in logic to say that a huge pile of government debt will have a similar impact as private debt.
Maybe the 90% number isn't a good number. But according to usgovernmentspending.com we'll be at 122% of GDP this year. To a lot of people in the economy that's a scary number, and because of that many have already pared back their spending and investment plans... which has slowed growth.
But, let's see what Reinhart and Rogoff actually have to say about stimulus:
The U.S. must reduce its debt or suffer economic stagnation, they said in interviews with McClatchy, but in the short term they also favor more government stimulus to boost the economy, even if that raises the debt a bit more.
"We may need another stimulus bill just to decompress from the previous one, a smaller one to cushion the landing," said Kenneth Rogoff, a Harvard University economist and a co-author of the book.
Added his fellow co-author, Carmen Reinhart, a University of Maryland economist: "I'm not one of those deficit hawks. ... I'm not saying you run out and pull the plug and have an adjustment that could derail what fragile recovery we do have."
However, she cautioned, "the whole thing that we can disregard debt because we're the U.S. is really grasping at straws. Taxpayers need to understand the tradeoff, and that is, we're going to be paying for this in terms of lower growth in the future."
As for Reinhart, I asked her about this for a retrospective I did on the Obama administration’s economic policy. “The initial policy of monetary and fiscal stimulus really made a huge difference,” she told me. “I would tattoo that on my forehead. The output decline we had was peanuts compared to the output decline we would otherwise have had in a crisis like this. That isn’t fully appreciated.”
This seems to be a very reasonable economic position: stimulus now, cut spending later. In fact, it's pretty much the position of Barrack Obama. Note that the first link is from 2010, these days I believe Rogoff has become a typical "cut everything, now, now, now!!" Republican.
Sure they praise the stimulus back during the recession and at first into the recovery. But that was years ago. We're now talking about continued stimulus, and even added stimulus years after growth resumed and government debt has piled up to higher levels. We're getting to the point where perpetual stimulus is being called for as has happened in Japan over the past few decades.
I think Obama's plan is to spend more now, and cut more later. He wants additional stimulus like the American Jobs Act. I don't think the cost of new stimulus like that is worth the benefits. We might get a bit more growth now, but it will just set us up for a new fiscal cliff in the future and then need a new stimulus plan to offset it.
Now, maybe additional stimulus is the best plan out there. But there's no 100% certainty to that. There's a risk that the added stimulus won't be very effective and will just make the future more painful. In light of that risk the prudent thing to do is redirect the garbage spending.
On August 20 2012 21:03 paralleluniverse wrote: I'm definitely not opposed to redirecting "poor quality government spending" to better uses. You say that this is the main thing you're advocating for, but it's not obvious from any of your writings that that's your view. The standard Republican view is to gut all spending (apart from tax cuts to the rich, of course).
The "making stuff up" comment was directed at your factoid that stimulus is ineffective when debt is high. I can't accuse you of making stuff up now that you have given a source (probably the most random and no-name source that's been linked this thread). However, I still don't agree with the content in your link.
If it seems random and no-name it was mentioned on CNBC a few weeks back (randomly) and so I took a look at it then. It is also reflective of the views and opinions of quite a few guests they have had on the channel over the last couple years. It is not wise to ignore what market participants are telling you. Plenty are saying that the high level of government debt and deficits are leading to less investment - that's not a good thing and it needs to be noted.
Now, while you're source is quite no-name, it does cite some more reputable studies (in the "Recent Academic Evidence" section) to come to the view quoted above, that being Reinhart, Reinhart, Rogoff. But your source has misinterpreted the finding of this paper, which is that recessions caused by debt overhangs are long, and that high debt (the magical 90% number) is correlated with slow economic growth.
It even calls it a "corollary", because it's the implication they drew from the evidence. But it does not follow from the Reinhart, Reinhart, Rogoff paper that was cited, that even higher debt, in the form of stimulus, will cause even slower economic growth. This Hoisington paper confuses correlation with causation. The original source says that prolonged levels of high debt is correlated with slow economic growth.
They are not arguing that stimulus is causing slow growth. The argument is that government stimulus is far less effective following a debt overhang than normal and that high levels of government debt (in general) leads to slower growth. Because of that higher and higher levels of stimulus will not lead to added growth (or very little of it) because the added growth from stimulus will be offset by the private sector reacting negatively towards it.
We know that excessive debt is an issue for both households and businesses and leads to lower economic growth. Now, government debt is a bit different but not exceedingly so. Ultimately the cost of that debt will be paid for by households and businesses through higher taxes or lower government spending or a prolonged period of negative real rates. So it is not a huge leap in logic to say that a huge pile of government debt will have a similar impact as private debt.
Maybe the 90% number isn't a good number. But according to usgovernmentspending.com we'll be at 122% of GDP this year. To a lot of people in the economy that's a scary number, and because of that many have already pared back their spending and investment plans... which has slowed growth.
But, let's see what Reinhart and Rogoff actually have to say about stimulus:
The U.S. must reduce its debt or suffer economic stagnation, they said in interviews with McClatchy, but in the short term they also favor more government stimulus to boost the economy, even if that raises the debt a bit more.
"We may need another stimulus bill just to decompress from the previous one, a smaller one to cushion the landing," said Kenneth Rogoff, a Harvard University economist and a co-author of the book.
Added his fellow co-author, Carmen Reinhart, a University of Maryland economist: "I'm not one of those deficit hawks. ... I'm not saying you run out and pull the plug and have an adjustment that could derail what fragile recovery we do have."
However, she cautioned, "the whole thing that we can disregard debt because we're the U.S. is really grasping at straws. Taxpayers need to understand the tradeoff, and that is, we're going to be paying for this in terms of lower growth in the future."
As for Reinhart, I asked her about this for a retrospective I did on the Obama administration’s economic policy. “The initial policy of monetary and fiscal stimulus really made a huge difference,” she told me. “I would tattoo that on my forehead. The output decline we had was peanuts compared to the output decline we would otherwise have had in a crisis like this. That isn’t fully appreciated.”
This seems to be a very reasonable economic position: stimulus now, cut spending later. In fact, it's pretty much the position of Barrack Obama. Note that the first link is from 2010, these days I believe Rogoff has become a typical "cut everything, now, now, now!!" Republican.
Sure they praise the stimulus back during the recession and at first into the recovery. But that was years ago. We're now talking about continued stimulus, and even added stimulus years after growth resumed and government debt has piled up to higher levels. We're getting to the point where perpetual stimulus is being called for as has happened in Japan over the past few decades.
I think Obama's plan is to spend more now, and cut more later. He wants additional stimulus like the American Jobs Act. I don't think the cost of new stimulus like that is worth the benefits. We might get a bit more growth now, but it will just set us up for a new fiscal cliff in the future and then need a new stimulus plan to offset it.
Now, maybe additional stimulus is the best plan out there. But there's no 100% certainty to that. There's a risk that the added stimulus won't be very effective and will just make the future more painful. In light of that risk the prudent thing to do is redirect the garbage spending.
People are cutting back their investments because there is little to invest in. Consumers stopped trying to borrow money while they attempt to lower their debt levels. Businesses don't want to invest in increasing output because people are using their income to pay off debt, meaning there isn't rising demand. Then, there's no strong economy out there to carry the torch. EU has touched into another recession, China's growth has slowed tremendously (since its exports have slowed), and South America is being South America.
The result? Shove your money into countries that can't or won't realistically default. AKA, countries that print their own money and have a diversified economy. Or shove your money into gold and "safe" businesses.
If we use government borrowing to put idle private sector workers back to work, we're investing in a better chance to pay off any extra debt. By sitting on high unemployment and an unvoluntary mass exodus from the workforce, we're eroding worker skills and experience and lowering the potential for growth in the long run, which takes a dump over any plan to repay debt we have.
On August 20 2012 12:47 Romantic wrote: Why shouldn't some ideas have unequal platforms? I don't particularly think Nazism deserves equal platform and I am glad nobody donates to Nazi political groups lol
As far as the Super Pacs and corporations are people go, I think Stephen Colbert has done a fine job in showing why this is a ridiculous idea. Sometimes it takes satire to make people realize why something is wrong.
On August 20 2012 21:03 paralleluniverse wrote: I'm definitely not opposed to redirecting "poor quality government spending" to better uses. You say that this is the main thing you're advocating for, but it's not obvious from any of your writings that that's your view. The standard Republican view is to gut all spending (apart from tax cuts to the rich, of course).
The "making stuff up" comment was directed at your factoid that stimulus is ineffective when debt is high. I can't accuse you of making stuff up now that you have given a source (probably the most random and no-name source that's been linked this thread). However, I still don't agree with the content in your link.
If it seems random and no-name it was mentioned on CNBC a few weeks back (randomly) and so I took a look at it then. It is also reflective of the views and opinions of quite a few guests they have had on the channel over the last couple years. It is not wise to ignore what market participants are telling you. Plenty are saying that the high level of government debt and deficits are leading to less investment - that's not a good thing and it needs to be noted.
Now, while you're source is quite no-name, it does cite some more reputable studies (in the "Recent Academic Evidence" section) to come to the view quoted above, that being Reinhart, Reinhart, Rogoff. But your source has misinterpreted the finding of this paper, which is that recessions caused by debt overhangs are long, and that high debt (the magical 90% number) is correlated with slow economic growth.
It even calls it a "corollary", because it's the implication they drew from the evidence. But it does not follow from the Reinhart, Reinhart, Rogoff paper that was cited, that even higher debt, in the form of stimulus, will cause even slower economic growth. This Hoisington paper confuses correlation with causation. The original source says that prolonged levels of high debt is correlated with slow economic growth.
They are not arguing that stimulus is causing slow growth. The argument is that government stimulus is far less effective following a debt overhang than normal and that high levels of government debt (in general) leads to slower growth. Because of that higher and higher levels of stimulus will not lead to added growth (or very little of it) because the added growth from stimulus will be offset by the private sector reacting negatively towards it.
We know that excessive debt is an issue for both households and businesses and leads to lower economic growth. Now, government debt is a bit different but not exceedingly so. Ultimately the cost of that debt will be paid for by households and businesses through higher taxes or lower government spending or a prolonged period of negative real rates. So it is not a huge leap in logic to say that a huge pile of government debt will have a similar impact as private debt.
Maybe the 90% number isn't a good number. But according to usgovernmentspending.com we'll be at 122% of GDP this year. To a lot of people in the economy that's a scary number, and because of that many have already pared back their spending and investment plans... which has slowed growth.
But, let's see what Reinhart and Rogoff actually have to say about stimulus:
The U.S. must reduce its debt or suffer economic stagnation, they said in interviews with McClatchy, but in the short term they also favor more government stimulus to boost the economy, even if that raises the debt a bit more.
"We may need another stimulus bill just to decompress from the previous one, a smaller one to cushion the landing," said Kenneth Rogoff, a Harvard University economist and a co-author of the book.
Added his fellow co-author, Carmen Reinhart, a University of Maryland economist: "I'm not one of those deficit hawks. ... I'm not saying you run out and pull the plug and have an adjustment that could derail what fragile recovery we do have."
However, she cautioned, "the whole thing that we can disregard debt because we're the U.S. is really grasping at straws. Taxpayers need to understand the tradeoff, and that is, we're going to be paying for this in terms of lower growth in the future."
As for Reinhart, I asked her about this for a retrospective I did on the Obama administration’s economic policy. “The initial policy of monetary and fiscal stimulus really made a huge difference,” she told me. “I would tattoo that on my forehead. The output decline we had was peanuts compared to the output decline we would otherwise have had in a crisis like this. That isn’t fully appreciated.”
This seems to be a very reasonable economic position: stimulus now, cut spending later. In fact, it's pretty much the position of Barrack Obama. Note that the first link is from 2010, these days I believe Rogoff has become a typical "cut everything, now, now, now!!" Republican.
Sure they praise the stimulus back during the recession and at first into the recovery. But that was years ago. We're now talking about continued stimulus, and even added stimulus years after growth resumed and government debt has piled up to higher levels. We're getting to the point where perpetual stimulus is being called for as has happened in Japan over the past few decades.
I think Obama's plan is to spend more now, and cut more later. He wants additional stimulus like the American Jobs Act. I don't think the cost of new stimulus like that is worth the benefits. We might get a bit more growth now, but it will just set us up for a new fiscal cliff in the future and then need a new stimulus plan to offset it.
Now, maybe additional stimulus is the best plan out there. But there's no 100% certainty to that. There's a risk that the added stimulus won't be very effective and will just make the future more painful. In light of that risk the prudent thing to do is redirect the garbage spending.
People are cutting back their investments because there is little to invest in. Consumers stopped trying to borrow money while they attempt to lower their debt levels. Businesses don't want to invest in increasing output because people are using their income to pay off debt, meaning there isn't rising demand. Then, there's no strong economy out there to carry the torch. EU has touched into another recession, China's growth has slowed tremendously (since its exports have slowed), and South America is being South America.
The result? Shove your money into countries that can't or won't realistically default. AKA, countries that print their own money and have a diversified economy. Or shove your money into gold and "safe" businesses.
If we use government borrowing to put idle private sector workers back to work, we're investing in a better chance to pay off any extra debt. By sitting on high unemployment and an unvoluntary mass exodus from the workforce, we're eroding worker skills and experience and lowering the potential for growth in the long run, which takes a dump over any plan to repay debt we have.
There are many reasons why people aren't investing. Fear of government debt and deficits is just one them. But just because it is one of many factors doesn't mean you get to ignore it.
Using government money to put idle workers to work is only worthwhile if it is spent on useful things. China is struggling with bad loans from its stimulus program and Japan is trapped in perpetual stimulus mode (government debt 230% of GDP and counting!) in part due to wasteful spending.
So no, just because we have idle workers doesn't mean that the government gets a blank check and a free pass to blow money on whatever the heck it wants.
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