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Thread: Obama says he cannot guarantee Social Security checks will go out on August 3

  1. #441
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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by ReverendHellh0und View Post
    So we should choke hold folks, and small businesses with spending and tax increases with non producing government jobs to get us out of a recession? I may not have the financial background you do, but this doesn't make much sense to me.
    It would not make sense to me either. But lets consider real fiscal stimulus e.g. public works. Assume that the federal government decided to build a giant wall that sits on the border of Mexico and the U.S. Do they build it? Of course not! They will simply contract it out to the lowest bidding private companies who will then hire more workers, lease/purchase more machinery, set contracts for materials, purchase more insurance, etc.... Such an endeavor would circulate income throughout the macro economy creating real paychecks for people who have a lofty desire to spend (this is America). As long as these specific earners spend 50% of their income on domestic goods, every $1 spent via government will lead to $2 in total income/output/expenditure (you take your pick).

    Tax increases with 9.2% unemployment is out of the question. Down the road, it will be critical to raise revenue to the point where it falls in line with the historical average of 18.5% (it is at 15%). But until the labor market shows some real positive momentum, tax cuts are as likely to lead to recession as spending cuts.

    So on august 2nd, folks will get about 70% if no deal is passed?
    They should get about 2/3 at best. On a per dollar basis, it is more along the lines of 57%, but the elderly population is the largest single voting demographic (with any meaning). Appeasing these voters is critical for job security if you are a politician
    Last edited by Kushinator; 07-15-11 at 02:56 PM.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

  2. #442
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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by 1Perry View Post
    But we have the examples of TARP, the Stimulus, QE1 and 2 which are all examples of this thinking and unemployment has went up.
    I realize that -- but those are individual programs, with mixed results. We're talking about an across the board, 44% cut in government spending, period....which, in times of poor economic growth, takes on some importance.

    I'd also like to reiterate that I would prefer the debt ceiling not raised, for the reasons I mentioned above. I acknowledge that the cut in spending will shock the economy. But that seems almost preferable to the long-term alternative, providing the government doesn't get its stuff together.

    The difference between mine and Goldenboy's opinion is that he believes the government is savvy enough to raise the debt ceiling now, and begin legitimate long-term uninterrupted austerity in 2012 or some such thing. I don't share his faith, and would rather burn the whole house down immediately
    '
    Still, if the government actually does what he says it will do, I would be satisfied.
    Last edited by Jeezy; 07-15-11 at 03:04 PM.
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  3. #443
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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by Goldenboy219 View Post
    You mean that study cpwill has been trying to pass off? It in no way reflects our current situation. Keynesian theory is what has been used by every administration since 1945. Even the Volker move in the early 1980's is textbook Keynes
    Which study was that? I've read numerous studies, all of which specifically address the current situation.The one that comes to mind came out of Harvard. Is that the same as cpwill's?

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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by Jeezy View Post
    It's very easy to understand. In the absence of real growth and normalized lending, government spending is buoying the market. Cut it by 44%, and out comes the rug from under the market's feet. What Goldenboy is saying, in simple terms, is that once people are actually all working again, the deficit will recede naturally, as GSEs and such will slowly become redundant.

    ...of course, I'd still rather the debt ceiling not be raised and pay the penalty. But only because I have far less faith in the federal government's ability to meaningfully reduce deficits in the long term.




    ...eh. It's also textbook monetarist.

    Sorta depends on "which" Keynesianism you mean.
    But if you don't raise the debt ceiling and the US defaults, interest rates will rise on the existing debt - thus RAISING the debt by leaps and bounds.

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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by FilmFestGuy View Post
    But if you don't raise the debt ceiling and the US defaults, interest rates will rise on the existing debt - thus RAISING the debt by leaps and bounds.
    Raising the interest rate? Yes.

    Make it a little harder to pay back the debt? I guess.

    By leaps and bounds? No.

    As it stands, interest payments represent a pretty small part of receipts. There'd have to be a truly massive global US bond dump for it to be a big problem....and there won't be.
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  6. #446
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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    I feel that we are at one of the most important crossroads we have had to face as a country.

    Assuming what was said earlier is correct, we have been abiding by Keynsian Theory since 1945. This I feel sheds light to the true purpose of taxing the wealthy. Tax codes usually implement percentages, which means if you are dealing with a larger principle you are going to collect more money. Conservatives look at taxing the rich as wealth distribution, but I do not think that is what the administration is doing. It is using the surplus of cash to spend, keeping consumption and driving money through the economy, following the principles of Keynsian Theory.

    The problem in my eyes, is we are dealing with a debt that has never been accumulated this much before. The assumption is that Keynsian Theory is sustainable at all points in time. It is very possible this is a financial outlook that is sustainable for a certain period of time, until the system collapses on itself.

    In either case, this crossroad is going to be an economic experiment on Keynsian Theory. Knowing this administration, they are going to follow this perception for as long as they can. They are going to keep spending, and probably, keep borrowing. People in history will examine the decisions that are going to be made now. And they will have in their economic books hard evidence on whether or not Keynsian Theory is sustainable or not.

    I can not assume that this outlook on our economy is sustainable in all points of time. That is an assumption that has literally no evidence to back it up. It is childish to think, "It has worked for the past 60 some years, it has got to work now!" It is sort of like driving an off road four wheeler, and assuming that there is no terrain possible that can conquer your four wheeler. You base this assumption with all the land you have conquered in the past. It's faulty logic.

    And so I conclude that even though I think Obama has done a good job at least keeping what we have, he has to be put out of office. Sticking by Keynsian Theory this blindly is going to ultimately lead to bad results.

    However, when the new president is given the black folder of The Presidency, is he going to be forced to continue what has been done? It could very well be possible we have crossed the point of no return, in which case, it wouldn't really matter who we elect.

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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by Jeezy View Post
    ...eh. It's also textbook monetarist.

    Sorta depends on "which" Keynesianism you mean.
    To get an insight of how before his time Keynes really was, i would read Chapter 21 of "The General Theory of Employment, Inflation, and Money."

    Both neo-classical and Keynesian's have similar views on monetary policy except for things like the existence of a liquidity trap.
    Last edited by Kushinator; 07-15-11 at 03:17 PM.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by Jeezy View Post
    I realize that -- but those are individual programs, with mixed results. We're talking about an across the board, 44% cut in government spending, period....which, in times of poor economic growth, takes on some importance.
    O.K. we agree there. Other than I'll say the programs were in the big picture, failures.

    I'd also like to reiterate that I would prefer the debt ceiling not raised, for the reasons I mentioned above. I acknowledge that the cut in spending will shock the economy. But that seems almost preferable to the long-term alternative, providing the government doesn't get its stuff together.
    Agree.

    The difference between mine and Goldenboy's opinion is that he believes the government is savvy enough to raise the debt ceiling now, and begin legitimate long-term uninterrupted austerity in 2012 or some such thing. I don't share his faith, and would rather burn the whole house down immediately
    '
    Still, if the government actually does what he says it will do, I would be satisfied.
    They are savvy enough but there is no way they would do it.

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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by FilmFestGuy View Post
    But if you don't raise the debt ceiling and the US defaults, interest rates will rise on the existing debt - thus RAISING the debt by leaps and bounds.
    We are NOT going to default.

  10. #450
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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by Jeezy View Post
    Raising the interest rate? Yes.

    Make it a little harder to pay back the debt? I guess.

    By leaps and bounds? No.

    As it stands, interest payments represent a pretty small part of receipts. There'd have to be a truly massive global US bond dump for it to be a big problem....and there won't be.
    I guess it all depends on whether the dollar weakens or strengthens from technical default?!?! Since the debt we are talking about is in dollar terms, paying back fixed amounts in weaker (inflated) dollars would make things easier for those in hock. But, then again economic activity would tank instantanously, thereby reducing reducing real national income(s).

    You would think a default would lead to a general price increase...... But...

    You would think that tens of trillions of dollars of debt would not allow a general increase in prices when people are out of work in hordes...
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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