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On August 21 2012 18:06 ShadeR wrote:Did that isidewith test. Got 88% Jill Stein. + Show Spoiler +Brack Obama 86%
Gary Johnson 77%
Ron Paul 65%
Mitt Romney 33% Anyway wanna give me a heads up on her?
Did, I got
92% Stein
84% Obama
75% Alexander
34% Paul
24% Romney
I'm a bit surprised I got so low on Paul, but he's pretty kooky so not too shocked.
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Good posts paralleluniverse.
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On August 21 2012 21:28 DoubleReed wrote:
So, how about Mr. Akin? This whole shpiel is putting even more of a highlight on how bad the GOP is right now on women's issues.
Rightly thrown under the bus.
McCaskill was heading toward Senate a win anyway (I think she was, I don't think it was a done deal w/ Akin winnig).
But you don't take any chances with a state that McCain won by .01%, what 20,000 or so votes? IIRC. Obama didn't re-count it because it didn't matter.
* won by ~4,000 votes.
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On August 21 2012 12:26 Savio wrote:Show nested quote +On August 21 2012 12:17 {CC}StealthBlue wrote:
Anyone who has been working for a few years knows that some of their paycheck has gone to SS etc.
So if it ends the Government better start sending out refunds. SS was a retarded system anyway. If they Govt had taken that money and invested it in any of the large diversified funds out there, the majority of retirees in American would be Millionaires (I don't have a source for that other than my brother who has PhD in Finance) As it is, it guarantees us all a pittance at the biggest loss you can imagine, because we lost the opportunity to invest that money. imo, SS is basically the stupidest government program ever created. EDIT: I just realized I wrote that SS "was" a retarded system. That shows how much confidence I have that it will continue working "as we know it" for the rest of my life.
Yeah because the stock market always go up and people didn't have their 401k's/savings wiped out after '08.
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On August 21 2012 23:47 RCMDVA wrote:Show nested quote +On August 21 2012 21:28 DoubleReed wrote:
So, how about Mr. Akin? This whole shpiel is putting even more of a highlight on how bad the GOP is right now on women's issues. Rightly thrown under the bus. McCaskill was heading toward Senate a win anyway (I think she was, I don't think it was a done deal w/ Akin winnig). But you don't take any chances with a state that McCain won by .01%, what 20,000 or so votes? IIRC. Obama didn't re-count it because it didn't matter. * won by ~4,000 votes.
Actually, Akin was favored to win and the democrats had largely given up on McCaskill given how unpopular she is.
Anyway, Akin is a retard and needs to be replaced.
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On August 21 2012 23:55 ZeaL. wrote:Show nested quote +On August 21 2012 12:26 Savio wrote:On August 21 2012 12:17 {CC}StealthBlue wrote:
Anyone who has been working for a few years knows that some of their paycheck has gone to SS etc.
So if it ends the Government better start sending out refunds. SS was a retarded system anyway. If they Govt had taken that money and invested it in any of the large diversified funds out there, the majority of retirees in American would be Millionaires (I don't have a source for that other than my brother who has PhD in Finance) As it is, it guarantees us all a pittance at the biggest loss you can imagine, because we lost the opportunity to invest that money. imo, SS is basically the stupidest government program ever created. EDIT: I just realized I wrote that SS "was" a retarded system. That shows how much confidence I have that it will continue working "as we know it" for the rest of my life. Yeah because the stock market always go up and people didn't have their 401k's/savings wiped out after '08.
In the long term stocks do well over time, so a well-managed system could put public funds into the market and be expected to make gains over time. Yes, well managed is key here. Besides that, I've always thought that if the stock market truly crashes for a long period of time, the economy will be so bad we won't be able to afford SS no matter how it is structured.
That said I am skeptical of the claim that most retirees would be millionaires under that system. USA GDP per capita is something like $50k/person. How much would have to be generated to turn that many people into millionaires? It's unlikely that changing SS would make us significantly wealthier. I guess it could produce a lot more paper wealth through the stock market, but unless that is matched by gains in real production, then it would just be an inflationary mirage.
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On August 21 2012 12:26 Savio wrote:Show nested quote +On August 21 2012 12:17 {CC}StealthBlue wrote:
Anyone who has been working for a few years knows that some of their paycheck has gone to SS etc.
So if it ends the Government better start sending out refunds. SS was a retarded system anyway. If they Govt had taken that money and invested it in any of the large diversified funds out there, the majority of retirees in American would be Millionaires (I don't have a source for that other than my brother who has PhD in Finance) As it is, it guarantees us all a pittance at the biggest loss you can imagine, because we lost the opportunity to invest that money. imo, SS is basically the stupidest government program ever created. EDIT: I just realized I wrote that SS "was" a retarded system. That shows how much confidence I have that it will continue working "as we know it" for the rest of my life.
Can you ask your brother what happened to the majority of retirees at 1929 when they had private accounts? If SS was such a terrible program, then why was it created in the first place?
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Took that isidewith quiz also:
Jill Stein 95%
Barack Obama 91%
Stewart Alexander 77%
Mitt Romney 25%
Ron Paul 21%
Not in the least bit surprised by the results. The best was the "who you side with by party" stat. 97% Democrat, 7% Republican haha.
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From the isidewith quiz:
95% Jill Stein
86% Stewart Alexander
84% Barack Obama
79% Gary Johnson
63% Jimmy Mcmillan
36% Ron Paul
5% Mitt Romney
By Party:
93% Green
91% Democrat
1% Republican(LOL)
It's too bad candidates outside of Democrat/Republican have no chance of winning.
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On August 21 2012 18:58 paralleluniverse wrote:Show nested quote +On August 21 2012 01:40 JonnyBNoHo wrote: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. Now there has been some criticism of the Reinhart, Rogoff work, such as the 90% number being arbitrary and hand-picked, and also this from Krugman: http://krugman.blogs.nytimes.com/2010/07/21/notes-on-rogoff-wonkish/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." Source: http://www.mcclatchydc.com/2010/08/17/99285/what-should-we-do-about-national.htmlAnd then there's this from Reinhart (again): 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. They are arguing that when there's high debt (for the record: Bush's fault), then stimulus, which increases debt would "perpetuate the period of slow economic growth". And this is a misinterpretation of the cited work of Reinhart, Reinhart and Rogoff, which finds that high debt is correlated with slow growth. This does not imply that even higher debt will cause even slower growth. In fact, where in the Reinhart, Reinhart and Rogoff paper does it say that stimulus is bad when debt is high? It doesn't. It's a invalid inference made my this no-name paper. It fails to understand the most simplistic mantra of statistical inference: correlation does not imply causation. In the very last paragraph of the Reinhart, Reinhart and Rogoff paper it says: Show nested quote +Finally, this paper should not be interpreted as a manifesto for rapid public debt deleveraging in an environment of extremely weak growth and high unemployment. However, our read of the evidence certainly casts doubt on the view that soaring government debt is a non-issue simply because markets are presently happy to absorb it. Source: http://www.nber.org/papers/w18015.pdf?new_window=1 Why was this statement ignored? The finding that high debt is correlated with low growth doesn't imply that even higher debt will cause even lower growth. If the government doesn't spend, then who will? Why would the private sector spend when there is a lack of aggregate demand? I generally don't dispute that in the long run, high debt is bad for growth. High government debt isn't cost-free. But this is a correlation, it can run both ways, maybe low growth causes high debt. In the short run, trying to cut government spending now would be doing exactly what Reinhart, Reinhart and Rogoff cautions us to not do. The idea that when government spending is cut, people would be inspired by the confidence fairy to spend more is exactly the flawed logic behind Europe's disastrous austerity. Cutting spending in a recession further depresses the economy, making it even harder to pay down government debt in the long run. Having high debt is not a sustainable long run policy, but in the short run, it is self-defeating to make the recession worse by cutting spending which makes the debt problem worse. Also, that quote from Reinhart in the Washington Times, essentially saying that stimulus saved the economy, wasn't from many years ago. It's from November 2011, which is quite recent. Where does she say that stimulus is a waste of money? The fact that people are somehow spooked out of investing my high government debt is laughable. Government debt should only factor into investment decisions to the extend that rational agents anticipate higher future taxes because the government would need to pay down the debt later. The argument that this stops stimulus from working is known as Ricardian Equivalence. Krugman got into a long debate with Chicago economists on why this is completely wrong: http://krugman.blogs.nytimes.com/2011/12/26/a-note-on-the-ricardian-equivalence-argument-against-stimulus-slightly-wonkish/They've since backed down from the claim.
Rogoff argued for a stimulus going into and during the recession. But Rogoff also argued that after the recession (where we are now) more prudence was in order.
As it becomes increasingly evident that the recovery will remain subdued in Europe and the US, there is a growing chorus for indefinitely sustaining aggressive post-crisis fiscal stimulus. Governments that instead propose gradually reducing deficits and ultimately stabilising debt to income levels - such as both Germany and the UK - are accused of pig-headed fiscal conservatism. Had they only a better grasp of Keynesian truisms, we are told, these countries' leaders would realise that their penury risks throwing already weak economies into double-dip recessions, or even a sustained depression. There is no question that huge uncertainty hangs over the global economy, but is the case against commonsense fiscal conservatism so compelling? I don't see it.
source (requires subscription)
As to the Krugman article - yes, buying a home on credit will result in a large net increase in spending. But in following years spending will be lessened due to repaying the mortgage.
In policy terms, yes, deficit spending can boost overall spending but the after affect is sluggish growth. Just as the mortgage results in a crimp in household spending, the government debt acts as a drag on growth. If the response to the sluggish growth is more debt then the consequence will repeat itself - more debt, less growth, leading to more debt and continued sluggish growth. That's the story of Japan over the past 30 years as government debt climbed from 60% of GDP to 230%.
Moreover, what if we consider bad debt? If a bank lends out money to finance a home purchase and sees that the homeowner is having difficulty paying it back then the bank will increase its loan loss reserves and curtail new lending.
Similarly if people see government spending as inefficient or unsustainable it will result in them curtailing their own lending, spending and investment. It may not be $1 for $1, but it will be more than nothing.
Did the Bush tax cuts and resulting deficits result in a prosperous decade? Certainly not. The tax cuts may have helped stabilize the economy following the recession but it didn't make the economy very robust afterwards. Why? Were the tax cuts just not big enough? Yeah, that's the ticket...
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On August 21 2012 19:09 paralleluniverse wrote:Show nested quote +On August 21 2012 06:25 JonnyBNoHo wrote:On August 21 2012 05:25 aksfjh wrote:On August 21 2012 05:03 JonnyBNoHo wrote:On August 21 2012 04:17 aksfjh wrote:On August 21 2012 03:44 JonnyBNoHo wrote:On August 21 2012 02:49 aksfjh wrote:On August 21 2012 01:40 JonnyBNoHo wrote: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. Now there has been some criticism of the Reinhart, Rogoff work, such as the 90% number being arbitrary and hand-picked, and also this from Krugman: http://krugman.blogs.nytimes.com/2010/07/21/notes-on-rogoff-wonkish/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." Source: http://www.mcclatchydc.com/2010/08/17/99285/what-should-we-do-about-national.htmlAnd then there's this from Reinhart (again): 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. Nobody is asking for a blank check. You're trying to paint stabilizer spending as stimulus investment. It's funny, because the article you linked even stated that the proposals being made in the U.S. DO learn from Japan's mistakes by making investments that are more needed. We have good data stating what the government could invest in. Stabilizer spending is stimulative. There's plenty of government spending that is wasteful. I don't know why you want to argue with these two points. So, you want to stop stabilization spending? What government spending do you find wasteful right now? No, I don't want to stop stabilization spending. Never said I did. Ethanol subsidies are wasteful. A lot of agriculture subsidies are wasteful. The military has complained about getting equipment it doesn't want. The government owns a bunch of buildings and land it doesn't use or under-utilizes. There's a lot of government waste out there. Redirecting it to useful endeavors is the low hanging fruit we should be after. I don't know enough about these programs to decide whether they're a waste or not. The first one seems OK. But, yes, government waste is bad. The US should eliminate government waste. But it would be delusional to think that you can make any difference to government debt by eliminating "government waste". The major drivers of government debt is Social Security, medical costs, and Defense. But this... this is peanuts. Immaterial in the grand scheme of things.
I didn't intend the list to be an exhaustive guide to every dollar the government spends ineffectively.
I also wasn't proposing that we eliminate government debt by removing wasteful spending. I was proposing that we help the economy grow by replacing wasteful and ineffective spending with higher priority items like needed roads and bridges.
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i watched 2016 this morning and boy am i scared if obama gets re elected
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On August 21 2012 19:52 mcc wrote:Show nested quote +On August 21 2012 12:26 Savio wrote:On August 21 2012 12:17 {CC}StealthBlue wrote:
Anyone who has been working for a few years knows that some of their paycheck has gone to SS etc.
So if it ends the Government better start sending out refunds. SS was a retarded system anyway. If they Govt had taken that money and invested it in any of the large diversified funds out there, the majority of retirees in American would be Millionaires (I don't have a source for that other than my brother who has PhD in Finance) As it is, it guarantees us all a pittance at the biggest loss you can imagine, because we lost the opportunity to invest that money. imo, SS is basically the stupidest government program ever created. EDIT: I just realized I wrote that SS "was" a retarded system. That shows how much confidence I have that it will continue working "as we know it" for the rest of my life. You understand that the point of SS was not to provide luxury life, but to guarantee that people would not live in abject poverty when old ? Investments are risky (no matter what some "experts" say) and thus would run against the point of SS, which is to provide guaranteed security, not possible riches. Of course with time role of SS changed from this secure minimum to providing comfortable life to retired, but the point is still the guaranteed part and no investment with high return is risk-free. That is not to say that SS could not have been managed better.
Even assuming worst case scenarios, in any major diversified fund 100% of retirees would be better off. Even bad investments are better than Social Security long term.
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On August 22 2012 03:20 Savio wrote:Show nested quote +On August 21 2012 19:52 mcc wrote:On August 21 2012 12:26 Savio wrote:On August 21 2012 12:17 {CC}StealthBlue wrote:
Anyone who has been working for a few years knows that some of their paycheck has gone to SS etc.
So if it ends the Government better start sending out refunds. SS was a retarded system anyway. If they Govt had taken that money and invested it in any of the large diversified funds out there, the majority of retirees in American would be Millionaires (I don't have a source for that other than my brother who has PhD in Finance) As it is, it guarantees us all a pittance at the biggest loss you can imagine, because we lost the opportunity to invest that money. imo, SS is basically the stupidest government program ever created. EDIT: I just realized I wrote that SS "was" a retarded system. That shows how much confidence I have that it will continue working "as we know it" for the rest of my life. You understand that the point of SS was not to provide luxury life, but to guarantee that people would not live in abject poverty when old ? Investments are risky (no matter what some "experts" say) and thus would run against the point of SS, which is to provide guaranteed security, not possible riches. Of course with time role of SS changed from this secure minimum to providing comfortable life to retired, but the point is still the guaranteed part and no investment with high return is risk-free. That is not to say that SS could not have been managed better. Even assuming worst case scenarios, in any major diversified fund 100% of retirees would be better off. Even bad investments are better than Social Security long term.
That is not guaranteed, that is just extrapolation of current trend. Plus in case of short term losses the investment based SS might not have enough money to pay at the specific moment, but it has to be able to.
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On August 22 2012 03:26 mcc wrote:Show nested quote +On August 22 2012 03:20 Savio wrote:On August 21 2012 19:52 mcc wrote:On August 21 2012 12:26 Savio wrote:On August 21 2012 12:17 {CC}StealthBlue wrote:
Anyone who has been working for a few years knows that some of their paycheck has gone to SS etc.
So if it ends the Government better start sending out refunds. SS was a retarded system anyway. If they Govt had taken that money and invested it in any of the large diversified funds out there, the majority of retirees in American would be Millionaires (I don't have a source for that other than my brother who has PhD in Finance) As it is, it guarantees us all a pittance at the biggest loss you can imagine, because we lost the opportunity to invest that money. imo, SS is basically the stupidest government program ever created. EDIT: I just realized I wrote that SS "was" a retarded system. That shows how much confidence I have that it will continue working "as we know it" for the rest of my life. You understand that the point of SS was not to provide luxury life, but to guarantee that people would not live in abject poverty when old ? Investments are risky (no matter what some "experts" say) and thus would run against the point of SS, which is to provide guaranteed security, not possible riches. Of course with time role of SS changed from this secure minimum to providing comfortable life to retired, but the point is still the guaranteed part and no investment with high return is risk-free. That is not to say that SS could not have been managed better. Even assuming worst case scenarios, in any major diversified fund 100% of retirees would be better off. Even bad investments are better than Social Security long term. That is not guaranteed, that is just extrapolation of current trend. Plus in case of short term losses the investment based SS might not have enough money to pay at the specific moment, but it has to be able to.
Several SS funds in the Netherlands got burned by the stock market when it crashed. They can still pay atm but there coverage levels are under the legal limit. I agree that investments should be made to generate money but they have to be done smart and most of all safe.
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On August 22 2012 02:18 JonnyBNoHo wrote:Show nested quote +On August 21 2012 18:58 paralleluniverse wrote:On August 21 2012 01:40 JonnyBNoHo wrote: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. Now there has been some criticism of the Reinhart, Rogoff work, such as the 90% number being arbitrary and hand-picked, and also this from Krugman: http://krugman.blogs.nytimes.com/2010/07/21/notes-on-rogoff-wonkish/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." Source: http://www.mcclatchydc.com/2010/08/17/99285/what-should-we-do-about-national.htmlAnd then there's this from Reinhart (again): 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. They are arguing that when there's high debt (for the record: Bush's fault), then stimulus, which increases debt would "perpetuate the period of slow economic growth". And this is a misinterpretation of the cited work of Reinhart, Reinhart and Rogoff, which finds that high debt is correlated with slow growth. This does not imply that even higher debt will cause even slower growth. In fact, where in the Reinhart, Reinhart and Rogoff paper does it say that stimulus is bad when debt is high? It doesn't. It's a invalid inference made my this no-name paper. It fails to understand the most simplistic mantra of statistical inference: correlation does not imply causation. In the very last paragraph of the Reinhart, Reinhart and Rogoff paper it says: Finally, this paper should not be interpreted as a manifesto for rapid public debt deleveraging in an environment of extremely weak growth and high unemployment. However, our read of the evidence certainly casts doubt on the view that soaring government debt is a non-issue simply because markets are presently happy to absorb it. Source: http://www.nber.org/papers/w18015.pdf?new_window=1Why was this statement ignored? The finding that high debt is correlated with low growth doesn't imply that even higher debt will cause even lower growth. If the government doesn't spend, then who will? Why would the private sector spend when there is a lack of aggregate demand? I generally don't dispute that in the long run, high debt is bad for growth. High government debt isn't cost-free. But this is a correlation, it can run both ways, maybe low growth causes high debt. In the short run, trying to cut government spending now would be doing exactly what Reinhart, Reinhart and Rogoff cautions us to not do. The idea that when government spending is cut, people would be inspired by the confidence fairy to spend more is exactly the flawed logic behind Europe's disastrous austerity. Cutting spending in a recession further depresses the economy, making it even harder to pay down government debt in the long run. Having high debt is not a sustainable long run policy, but in the short run, it is self-defeating to make the recession worse by cutting spending which makes the debt problem worse. Also, that quote from Reinhart in the Washington Times, essentially saying that stimulus saved the economy, wasn't from many years ago. It's from November 2011, which is quite recent. Where does she say that stimulus is a waste of money? The fact that people are somehow spooked out of investing my high government debt is laughable. Government debt should only factor into investment decisions to the extend that rational agents anticipate higher future taxes because the government would need to pay down the debt later. The argument that this stops stimulus from working is known as Ricardian Equivalence. Krugman got into a long debate with Chicago economists on why this is completely wrong: http://krugman.blogs.nytimes.com/2011/12/26/a-note-on-the-ricardian-equivalence-argument-against-stimulus-slightly-wonkish/They've since backed down from the claim. Rogoff argued for a stimulus going into and during the recession. But Rogoff also argued that after the recession (where we are now) more prudence was in order. Show nested quote +As it becomes increasingly evident that the recovery will remain subdued in Europe and the US, there is a growing chorus for indefinitely sustaining aggressive post-crisis fiscal stimulus. Governments that instead propose gradually reducing deficits and ultimately stabilising debt to income levels - such as both Germany and the UK - are accused of pig-headed fiscal conservatism. Had they only a better grasp of Keynesian truisms, we are told, these countries' leaders would realise that their penury risks throwing already weak economies into double-dip recessions, or even a sustained depression. There is no question that huge uncertainty hangs over the global economy, but is the case against commonsense fiscal conservatism so compelling? I don't see it. source (requires subscription) As to the Krugman article - yes, buying a home on credit will result in a large net increase in spending. But in following years spending will be lessened due to repaying the mortgage. In policy terms, yes, deficit spending can boost overall spending but the after affect is sluggish growth. Just as the mortgage results in a crimp in household spending, the government debt acts as a drag on growth. If the response to the sluggish growth is more debt then the consequence will repeat itself - more debt, less growth, leading to more debt and continued sluggish growth. That's the story of Japan over the past 30 years as government debt climbed from 60% of GDP to 230%. Moreover, what if we consider bad debt? If a bank lends out money to finance a home purchase and sees that the homeowner is having difficulty paying it back then the bank will increase its loan loss reserves and curtail new lending. Similarly if people see government spending as inefficient or unsustainable it will result in them curtailing their own lending, spending and investment. It may not be $1 for $1, but it will be more than nothing. Did the Bush tax cuts and resulting deficits result in a prosperous decade? Certainly not. The tax cuts may have helped stabilize the economy following the recession but it didn't make the economy very robust afterwards. Why? Were the tax cuts just not big enough? Yeah, that's the ticket...
Because the tax cuts were inefficient. We had taxes the lowest they had been in half a century, and then they're cut even more. The same thing with the Japan scenario. They had a well kept infrastructure, and then kept throwing money at those projects.
The ideal progression of events would unfold as follows: Private sector gathers too much debt, then goes into a deleveraging shock. During that shock, consumer spending drops tremendously in order to pay down debt as fast as possible, which causes demand to drop, and subsequently employment to drop as well. At some point, so many people are unemployed that debt repayment schedules go back to normal, but with depressed demand with more people not earning wages. The government, having taken a minimal role in private sector supply/demand manipulation would fill in the demand gap of the people that were laid off. Essentially, this works out to a tradeoff of private sector debt with public sector debt. Because the government is assumed to react poorly to investment decisions, the intervention should be quick, powerful, and dedicated to the most ailing portion of the economy that provides the best longterm gains. Once employment returns to natural levels, the government slowly enacts measures to deal with the long term debt. The investments made by the government should increase output, in the long run, that can handle the higher debt burden.
That's really the key right there. A good equivalent argument would be taking out a loan for a college education. You want to make sure your education will grant you the income to pay back that loan. At the same time, you have to make the most out of every dollar you borrow. Since most student loans can help with living expenses as well, it's best to spend as much as possible (%) on the education and the least on living expenses. It's not good to be scared of borrowing money so much that you only borrow enough to live off of while taking minimal hours, because, in the long run, you end up with even higher debt with so much of the money (%) going into living expenses.
On August 22 2012 02:28 JonnyBNoHo wrote:Show nested quote +On August 21 2012 19:09 paralleluniverse wrote:On August 21 2012 06:25 JonnyBNoHo wrote:On August 21 2012 05:25 aksfjh wrote:On August 21 2012 05:03 JonnyBNoHo wrote:On August 21 2012 04:17 aksfjh wrote:On August 21 2012 03:44 JonnyBNoHo wrote:On August 21 2012 02:49 aksfjh wrote:On August 21 2012 01:40 JonnyBNoHo wrote: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. Now there has been some criticism of the Reinhart, Rogoff work, such as the 90% number being arbitrary and hand-picked, and also this from Krugman: http://krugman.blogs.nytimes.com/2010/07/21/notes-on-rogoff-wonkish/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:
[quote]
And then there's this from Reinhart (again):
[quote]
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. Nobody is asking for a blank check. You're trying to paint stabilizer spending as stimulus investment. It's funny, because the article you linked even stated that the proposals being made in the U.S. DO learn from Japan's mistakes by making investments that are more needed. We have good data stating what the government could invest in. Stabilizer spending is stimulative. There's plenty of government spending that is wasteful. I don't know why you want to argue with these two points. So, you want to stop stabilization spending? What government spending do you find wasteful right now? No, I don't want to stop stabilization spending. Never said I did. Ethanol subsidies are wasteful. A lot of agriculture subsidies are wasteful. The military has complained about getting equipment it doesn't want. The government owns a bunch of buildings and land it doesn't use or under-utilizes. There's a lot of government waste out there. Redirecting it to useful endeavors is the low hanging fruit we should be after. I don't know enough about these programs to decide whether they're a waste or not. The first one seems OK. But, yes, government waste is bad. The US should eliminate government waste. But it would be delusional to think that you can make any difference to government debt by eliminating "government waste". The major drivers of government debt is Social Security, medical costs, and Defense. But this... this is peanuts. Immaterial in the grand scheme of things. I didn't intend the list to be an exhaustive guide to every dollar the government spends ineffectively. I also wasn't proposing that we eliminate government debt by removing wasteful spending. I was proposing that we help the economy grow by replacing wasteful and ineffective spending with higher priority items like needed roads and bridges.
The thing is, all that wasteful spending might add up to a couple of billion, maybe even 10s of billions. We should start there, but that is definitely not enough to enact the programs we need right now.
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On August 22 2012 03:28 Gorsameth wrote:Show nested quote +On August 22 2012 03:26 mcc wrote:On August 22 2012 03:20 Savio wrote:On August 21 2012 19:52 mcc wrote:On August 21 2012 12:26 Savio wrote:On August 21 2012 12:17 {CC}StealthBlue wrote:
Anyone who has been working for a few years knows that some of their paycheck has gone to SS etc.
So if it ends the Government better start sending out refunds. SS was a retarded system anyway. If they Govt had taken that money and invested it in any of the large diversified funds out there, the majority of retirees in American would be Millionaires (I don't have a source for that other than my brother who has PhD in Finance) As it is, it guarantees us all a pittance at the biggest loss you can imagine, because we lost the opportunity to invest that money. imo, SS is basically the stupidest government program ever created. EDIT: I just realized I wrote that SS "was" a retarded system. That shows how much confidence I have that it will continue working "as we know it" for the rest of my life. You understand that the point of SS was not to provide luxury life, but to guarantee that people would not live in abject poverty when old ? Investments are risky (no matter what some "experts" say) and thus would run against the point of SS, which is to provide guaranteed security, not possible riches. Of course with time role of SS changed from this secure minimum to providing comfortable life to retired, but the point is still the guaranteed part and no investment with high return is risk-free. That is not to say that SS could not have been managed better. Even assuming worst case scenarios, in any major diversified fund 100% of retirees would be better off. Even bad investments are better than Social Security long term. That is not guaranteed, that is just extrapolation of current trend. Plus in case of short term losses the investment based SS might not have enough money to pay at the specific moment, but it has to be able to. Several SS funds in the Netherlands got burned by the stock market when it crashed. They can still pay atm but there coverage levels are under the legal limit. I agree that investments should be made to generate money but they have to be done smart and most of all safe.
IIRC, the treasury uses SS funds to buy treasury bonds at market rates.
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On August 21 2012 23:55 ZeaL. wrote:Show nested quote +On August 21 2012 12:26 Savio wrote:On August 21 2012 12:17 {CC}StealthBlue wrote:
Anyone who has been working for a few years knows that some of their paycheck has gone to SS etc.
So if it ends the Government better start sending out refunds. SS was a retarded system anyway. If they Govt had taken that money and invested it in any of the large diversified funds out there, the majority of retirees in American would be Millionaires (I don't have a source for that other than my brother who has PhD in Finance) As it is, it guarantees us all a pittance at the biggest loss you can imagine, because we lost the opportunity to invest that money. imo, SS is basically the stupidest government program ever created. EDIT: I just realized I wrote that SS "was" a retarded system. That shows how much confidence I have that it will continue working "as we know it" for the rest of my life. Yeah because the stock market always go up and people didn't have their 401k's/savings wiped out after '08.
Can you find a major diversified fund that has underperformed SS over the course of the last 50 years?
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From the isidewith quiz:
85% Barack Obama (Democrats)
82% Jill Stein (Green)
80% Gary Johnson (Libertarian)
63% Stewart Alexander (Socialist)
34% Ron Paul (Republican 2)
30% Jimmy Mcmillan (Rent is 2 damn high)
12% Mitt Romney (Republican)
3% Virgil Goode (Paleoconservative)
By Party:
87% Democrat
72% Green
27% Libertarian (tt)
12% Republican
Given, that I went for a relatively conservative line in my picks, I am a bit surprised at how low Republicans are on my scoring. At least I can be happy that I disagree with the paleoconservatives on everything. I am surprised that the libertarian candidate almost agree with me as much as the Green party. The socialists are not my cup of tea in USA. As a european that should be a clue for them.,,.
I do think you have to run it multiple times to get an idea of who you agree with since the number of questions are too low for a good separation.
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On August 22 2012 00:47 DetriusXii wrote:Show nested quote +On August 21 2012 12:26 Savio wrote:On August 21 2012 12:17 {CC}StealthBlue wrote:
Anyone who has been working for a few years knows that some of their paycheck has gone to SS etc.
So if it ends the Government better start sending out refunds. SS was a retarded system anyway. If they Govt had taken that money and invested it in any of the large diversified funds out there, the majority of retirees in American would be Millionaires (I don't have a source for that other than my brother who has PhD in Finance) As it is, it guarantees us all a pittance at the biggest loss you can imagine, because we lost the opportunity to invest that money. imo, SS is basically the stupidest government program ever created. EDIT: I just realized I wrote that SS "was" a retarded system. That shows how much confidence I have that it will continue working "as we know it" for the rest of my life. Can you ask your brother what happened to the majority of retirees at 1929 when they had private accounts? If SS was such a terrible program, then why was it created in the first place?
My guess is it was created to be a short term political boost as the first generation of retirees got a lot of benefit for not putting a lot into it.
Now we are facing:
![[image loading]](http://upload.wikimedia.org/wikipedia/en/thumb/0/0b/Medicare_%26_Social_Security_Deficits_Chart.png/640px-Medicare_%26_Social_Security_Deficits_Chart.png)
and
![[image loading]](http://upload.wikimedia.org/wikipedia/en/thumb/e/e1/Social_Security_Worker_to_Beneficiary_Ratio.png/640px-Social_Security_Worker_to_Beneficiary_Ratio.png)
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EPT
