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Thread: Boehner rejects Democrats’ $3 trillion deficit reduction proposal to ‘supercommittee’

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    Quote Originally Posted by obvious Child View Post
    Well, that's somewhat of the same thing. If debt buyers didn't think the US could pay back its obligations, they wouldn't be buying our debt. They'd be going straight to durable commodities. While that's happening to a certain degree, it's not happening on a massive "the US is screwed" level. So IMO, they do believe that the US will pay back its obligations hence why the rate is somewhat of an indicator. There's no question that the US debt is a problem, but honestly it's pennies compared to the rest of the unfunded liabilities the US from the federal government to states has which are estimated to be from a low end of $50 trillion to $200 trillion.



    That's not a bad idea. I just don't get how people think that major, immediate cuts won't spark a recession when growth is anemic. That sounds to me like they have no idea how the economy actually works, as if demand isn't even relevant. They keep harping on private investment yet ignore repetitively how private investment just isn't happening. Honestly, these people sound like they live in lala land where the economic data coming out of the past 200 years simply does not exist.
    I disagree with you about why US rates are low - or at least why they are as low as they are. If you have 100s of billions you need to invest every month, the US debt market is really the only game in town. Even a country as big as China doesn't have a matress big enough to stuff their money in.

    Your other point about reductions in aggregate demand due to government spending cuts would seem to be more or less irrefutable however. You are correct that there is no answer available from the slash and burners.
    "A witty saying proves nothing." Voltaire

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    Re: Boehner rejects Democrats’ $3 trillion deficit reduction proposal to ‘supercommit

    Quote Originally Posted by obvious Child View Post
    RTFT.

    10 characters.

    EDIT: It's in what you quoted. Still having reading comprehension problems eh?
    Your opinion is that the net 1.5 trillion we are putting into the economy, at the federal level, through deficit spending is what's giving us anemic growth or 1-1.5% per quarter?

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    Re: Boehner rejects Democrats’ $3 trillion deficit reduction proposal to ‘supercommit

    Quote Originally Posted by obvious Child View Post
    Instead of sniping, how about you step to the plate that Cpwill and 1Perry are unwilling to answer?

    Explain how dramatic immediate cuts to demand create new jobs.
    because (and this is important) that money comes from somewhere. You are proposing nothing but a broken window fallacy writ large.

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    Re: Boehner rejects Democrats’ $3 trillion deficit reduction proposal to ‘supercommit

    Quote Originally Posted by apdst View Post
    What demand are you talking about?
    He thinks that if you take $15 from a worker or investor, fritter $5 of it in government inefficiencies working it's way through the bureaucratic pipeline, and then give the remaining $10 to Solyndra, that you have put $10 into the economy and increased the demand in it.

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    Re: Boehner rejects Democrats’ $3 trillion deficit reduction proposal to ‘supercommit

    Quote Originally Posted by 1Perry View Post
    You once again do it below.
    I'm starting to question your capacity to read.

    I realize you are unable to see the vicous circle you are advocating but that is what it is. Take from one to pay for another and all you get is a wash.
    That is a sign you do not understand how it is financed. That only applies if people are forced at gun point to buy US debt. Like most partisans, you seem to be unaware of how a debt offering actually goes. No one forces anyone to buy US debt. Investors buy it freely because they view it as the best choice they have. By that measure, no one is "taking" money from anyone. Investors are investing in freely. Furthermore, you basically ignore how huge amounts of savings are building up both on the corporate and individual balance sheets that are for all intensive purposes, doing nothing as they earn less than inflation and banks don't use them to loan out in any reasonable way. That is in a sense a waste as resources are not being used. Your belief is based on the notion that all spending is financed by taxation and that people are forced to by debt. That over the past 30 years is clearly false.

    It's been explained many times. You just reject it.
    Correction. You and your ideological brethren get destroyed and wash rinse repeat. For all intensive purposes, you are taking an argument straight out of the Creationist handbook. Repeat the same argument enough times so that people get tired of refuting you.

    Government contractors can only be paid by the government taking the money from someone else.
    Argument already refuted unless you want to show me how people are forced at gun point to buy debt. Which I know you can't. I made that analogy before to an idiot who was arguing what you were and he promptly got the hell out of the thread never to return.

    That someone else quits spending because he knows the government is going to come looking for even more.
    The increase in purchases of T bills and bonds suggests otherwise, especially in the face of a credit rating cut and the downward trend of yields.

    I posted in another thread where despite all the spending the government did in the 30's, the unemployment rate stayed right at 15%.
    You also failed to isolate the impact of a massive dirty trade war which annihilated 14% of the economy. The same bull**** UCLA study which cited how FDR's policies made it worse fails for the same reason. It never isolated the impact of a huge direct impact of demand upon the economy and its indirect spending multipliers. You fail for the exact same reason. We know for a fact that the dirty trade wars were horrific for the global economy. The Global economy didn't reach the level of integration prior to the 30s until the mid 1990s. That's how integrated trade was to the world economy at the time. You start massive trade wars that effectively destroy huge amounts of activity back in the 30s and you will see major repercussions. That is irrefutable. But no one who ever argues that spending is the problem who cites that example ever isolates that impact to then show the R strength of how spending didn't help. Never. Not once. For a reason. One, it's hard and two it's likely to bust open their argument.

    Government spent, unemployment was 15%. They spent some more, unemployment? 15%. The only thing that broke that cycle was the positive attitude of the country with winning the war and soldiers coming home and wanting to spend. People are never going to start spending as long as the government is doing the driving.
    Then you have no real understanding of the 50s where government had its hand in virtually every industry. The government regulated virtually every industry, poured money into many new industries coming out of the war. The 50s was the Golden Age of America with major economic expansion. The government was still doing much of the driving and people were spending. Care to address that rather large time problem in your argument?

    We tried a "luxury tax". It led to large layoffs to those in the industries taxed. It got so bad that the taxes were rescinded.

    The Lesson Of Economic Damage From “Taxing The Rich” With The Punitive Luxury Tax In The 1990s

    So yes, it does make people quit buying those items.
    That's not relevant. I never argued for a luxury tax, only that certain industries are capable to passing on any tax and some are not, contrary to your argument. What happens when Target doesn't pass on a tax to consumers and Walmart does? Target picks up market shares. Ever notice why cereals are basically all the same price? Because if one starts raising prices to pass on a cost the others are willing to eat, they lose market share. You argued that business will always pass on such a tax to consumers. That is simply not true.

    The point is you do not wait until the problem because a major problem before addressing it.
    Absolutely no question there. But the notion that an artificial recession will create jobs is asinine. Ask Vockler. He put millions out of work with his artificial recession. So much so he was damaging Reagan's chances for reelection. Reagan paid him a visit and inflation went up.

    Again, it's been argued here countless times. I'm not going back to find it but I'm sure we have before.
    And all of them are wrong. As are you. Your argument is based on a faulty notion of coerced debt purchases. The primary problem with the arguments given is that they assume money will be invested. That ignores the growing savings on both corporate and individual balance sheets. People bring this up and your side runs away cowardly as fast as it can.

    If the natural level is somewhere below where we are now, it won't create jobs as you agree the economy is going to have to find that bottom before rising again.
    Well, considering this is a deleveraging recession coupled with a demand recession, fixing the debt on individual balance sheets is the real concern. People won't spend money if their discretionary is low and job security weak because of debt. Essentially personal debt is problem here. To some degree, McCain's mortgage plan was the right idea in principle as it addressed the biggest personal debt hindrance. Granted, it was borderline Communist, but it did address in principal the problem.

    Slash and burn won't help us here when personal debt is the problem. Slash and burn will just hurt the economy and make paying off personal debt even harder, which reduces consumer spending and prolongs anemic growth.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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    Re: Boehner rejects Democrats’ $3 trillion deficit reduction proposal to ‘supercommit

    Quote Originally Posted by Eighty Deuce View Post
    Look ... "Obvious" ..... if government spending were the cure-all, with $14 T in debt, maybe we'd all be CEO's by now making the big bucks ?
    No one ever argued it was the cure all. You can stop lying or you can destroy whatever credibility you have.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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    Re: Boehner rejects Democrats’ $3 trillion deficit reduction proposal to ‘supercommit

    Quote Originally Posted by 1Perry View Post
    Tax cuts alone are not going to get us out of our hole.
    That's hardly a sentiment shared by the slash and burn crowd. I do agree that tax cuts alone will not get us out of the hole. We'd have to basically eviscerate the budget to basically nothing to pay off the debt. Cutting even just the entire discretionary won't erase the deficit. We have to raise taxes and cut services. Anyone who argues otherwise is delusional, incapable of doing math or exceptionally dishonest. What I don't get is how people think how dramatic immediate cuts to demand will increase spending when you take into account spending multipliers. What happens when millions of people lose their jobs from those cuts? They spend less. Who suffers? Everyone dependent on their spending. So the second round of cuts start. Who suffers from the first level of indirect? People who rely on their spending. So on and so forth. People who think that massive cuts to demand won't cause domino effects are stupid. We see this right now with government cuts. DOD firms are cutting back as they see the coming defense cuts. Who suffers? Their suppliers. They cut back. Who suffers? Their employees and everyone who depends on their spending. Only idiots think the economy is simple and that changes don't flow through huge networks.

    Somewhere today I stated that I would accept tax increases as long as they were combined with actual, real budget cuts.
    And did you get flak from that from the so called "right?"

    Fiscally, it is conservative in light of our debt that we have no choice but to raise taxes and cut spending. There is no other way to do it mathematically. Generally, those who have real critical thinking problems here, who have problems reading and doing math are those who are pushing the cuts only policy. I'd name names but I'd get warned.

    Jobs "preservation" is an arguement for those who finally have to admit that the stimulus failed in adding jobs. And yet, even after admitting it failed, you call for more.
    Actually I always argued it failed in its original stated purpose of adding jobs. What I take offense to is the morons who said it did nothing. Not because of their ideological views, but because of their sheer inability to critically think. Apparently they think that in the absence of the stimulus which kept demand relatively stable, demand would have stayed stable despite all indicators to the contrary. It's like they have no concept of how demand plays a central role in a modern economy.

    Not all stimulus is the same. Spending on infrastructure which pays proverbial dividends over decades is hardly the same as a one time tax rebate. Furthermore, remember that a third of the stimulus wasn't actual spending per se. It was tax cuts. They were probably too small in the same light as Bush's. On top of that, much of the real spending happened well after it was needed. The stimulus failed partially because it was not targeted and it was not timely. It is not valid to argue all stimuluses are the same. We probably don't even need another stimulus at this rate (politics aside). But we do not need real dramatic immediate cuts. I have yet to see a reputable economist who thinks that dramatic immediate cuts will increase employment quickly.

    I don't think one can say people were allowed to keep more of their money which they then spent on necessities is a failure.
    Considering that both Bush's stimulus and Obama's were entirely debt financed, your argument only works if people were forced to buy debt at gun point. You cannot back that up. So stop using that argument.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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    Re: Boehner rejects Democrats’ $3 trillion deficit reduction proposal to ‘supercommit

    Quote Originally Posted by nijato View Post
    I disagree with you about why US rates are low - or at least why they are as low as they are. If you have 100s of billions you need to invest every month, the US debt market is really the only game in town. Even a country as big as China doesn't have a matress big enough to stuff their money in.
    While that is true, if the US was really as risky as you imply, commodity prices should be soaring. Furthermore, no one has hundreds of billions they have to invest monthly. Japan's buying US debt to bring the yen down. China's doing to it to slow inflation. Okay, China is the one country who has no choice given that, but individual investors, institutions and other countries don't have the same kind of pressure. Money could be flowing into oil, gold, copper and other commodities. It's not at the rate it should be if the US was really risky in a non-political way.

    When you account for politics however, yes, I do agree that the US is far riskier then the market values it. When the GOP was willing to default intentionally, that's a real bad sign our government cannot get it **** together. I'm actually quite surprised that the other rating agencies haven't cut us purely for that. In a broad spectrum risk assessment, the US should have gotten downgraded a long time ago as moderates and deal makers are systematically eliminated from Congress. Considering the level of US unfunded liabilities from a municipal to federal level ranging from $50 trillion to $200 trillion, if we cannot get our balls together to pay down $10 trillion in public debt over 20 years, we are screwed.

    Your other point about reductions in aggregate demand due to government spending cuts would seem to be more or less irrefutable however. You are correct that there is no answer available from the slash and burners.
    You'd think that, but these are people who believe that cutting a trillion from the economy won't cause job losses. I just scratch my head and then vote to kill the department of education. It clearly failed them.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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    Re: Boehner rejects Democrats’ $3 trillion deficit reduction proposal to ‘supercommit

    Quote Originally Posted by Samhain View Post
    Your opinion is that the net 1.5 trillion we are putting into the economy, at the federal level, through deficit spending is what's giving us anemic growth or 1-1.5% per quarter?
    No. A develeraging recession couple with a demand recession is stemming from high personal debt. I have asked slash and burners to explain the difference between a financial recession and a demand at least two dozen times here.

    Not once has any of them tried.

    How the hell can you talk about the economy when you can't even explain the conditions? But they do.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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    Re: Boehner rejects Democrats’ $3 trillion deficit reduction proposal to ‘supercommit

    Quote Originally Posted by cpwill View Post
    because (and this is important) that money comes from somewhere. You are proposing nothing but a broken window fallacy writ large.
    Yeah. People freely investing money into US treasuries.

    Or are you going to show me how the government is forcing people to buy debt at gun point?

    Hint: It's time for you to flee.

    He thinks that if you take $15 from a worker or investor, fritter $5 of it in government inefficiencies working it's way through the bureaucratic pipeline, and then give the remaining $10 to Solyndra, that you have put $10 into the economy and increased the demand in it.
    Want to explain to me how someone freely investing money is taking money out of the economy when that money wouldn't be used as evident by large cash amounts piling up collectively on corporate and individual balance sheets? I've pointed this out before and you just run. And spending on things like bridges is hardly the same as a loan guarantee. Or do you not know what a loan guarantee is?

    I find it amusing all you can do now is just snipe. I guess that's the expected outcome when I stripped you of your only argument before you could even make it.

    Furthermore, that $5 in expenses (grossly overexaggerated btw) should actually create more than $5 in eventual activity as the money gets spent over and over again. Really, I seriously doubt after all your posts you have any idea what a spending multiplier actually is.

    Btw: still cowardly ignoring that I see?
    http://www.debatepolitics.com/breaki...post1059917348

    I fully realize you cannot explain anything important here.
    Last edited by obvious Child; 11-01-11 at 04:53 AM.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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