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Thread: Economy's Biggest Drag Right Now Is Government

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    Re: Economy's Biggest Drag Right Now Is Government

    When you consider that the 1st quarter budget deficit was $320 billion--which is a staggering amount--you can only conclude that the paltry GDP number would even be worse, if not near or below zero, were we living within our means and not counting as economic growth wealth pulled from the future. Our economic condition and what accounts for "growth" nowadays is entirely reliant upon debt and quantitative easing from the FED. What we are experiencing is neither real economic growth, nor sustainable economic policy.

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    Re: Economy's Biggest Drag Right Now Is Government

    Quote Originally Posted by j-mac View Post
    I don't think those out there still unemployed, underemployed, losing their homes, destroying their credit, to the tune of a real number closer to 12% would agree here.
    I don't think unemployed people would feel great about the economy even if the unemployment rate was 2%. Nonetheless, the private sector has added jobs for 25 consecutive months and the economy is slowly but surely coming back. Too slowly to be sure.

    How much 'funny money' can a country create before our money is just plain worthless? Obama deficits dwarf that of Bush's in half the time, and yet Obama called Bush 'unpatriotic' for his, so what does that make Barry?
    Literally speaking, we can keep printing money as long as people are willing to buy our debt. And notwithstanding dire predictions on the right, demand for U.S. debt has never been higher despite the fact that we are paying close to zero interest. Thanks to those low interest rates, the cost of maintaining the debt now is actually LOWER than it was in 2007. But obviously we can't keep accumulating debt at this rate. We should be enacting medium and long-term policies to reduce the debt through spending cuts, entitlement reform, and tax increases. Unfortunately neither party has been willing to face reality.

    In State Government jobs maybe, certainly nothing was done on that level for the private sector whom BTW still is the lion share of jobs.
    The stimulus addressed both private and public sector jobs. Obviously a lot of the state projects that it paid for were carried out by private contractors. And of course it helps private busiensses when public employees aren't laid off. Like everyone else, public employees spend their money at private businesses.

    So, you are running out of other peoples money, and you want to blame the failure on the people you just fleeced?
    Huh?

    Well, the GSA certainly proved that didn't they? Hell, My company doesn't have a summer picnic, or a Christmas party anymore, Hell, we don't even get a Turkey for Thanksgiving much less a million dollar junket to Vegas....
    Clearly the GSA outing was a fiasco, but this sort of thing is hardly limited to government. For example, Merrill Lynch gave its CEO an $10 million bonus the year the company lost $11 billion.

    Some of it may be cyclical, sure, but look we have to come to the realization that what is being done right now is a failure.
    I think the government has basically done the right thing over the last four years. Not perfect, but generally the right moves. But there is only so much the government can do to correct massive recession that arose out of the financial sector. It's just going to take time.
    "The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. ... 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."

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    Re: Economy's Biggest Drag Right Now Is Government

    Quote Originally Posted by AdamT View Post
    I don't think unemployed people would feel great about the economy even if the unemployment rate was 2%. Nonetheless, the private sector has added jobs for 25 consecutive months and the economy is slowly but surely coming back. Too slowly to be sure.
    It depends on how you arrive at that 2% number now doesn't it? If your policies have resulted in a shrinking of the labor force that makes the number appear to be declining, then say that indicates 'jobs growth', well, that isn't really honest now is it?

    Literally speaking, we can keep printing money as long as people are willing to buy our debt. And notwithstanding dire predictions on the right, demand for U.S. debt has never been higher despite the fact that we are paying close to zero interest. Thanks to those low interest rates, the cost of maintaining the debt now is actually LOWER than it was in 2007. But obviously we can't keep accumulating debt at this rate. We should be enacting medium and long-term policies to reduce the debt through spending cuts, entitlement reform, and tax increases. Unfortunately neither party has been willing to face reality.
    I agree with you that we need both parties to cut the crap so to speak, and start leveling with the people. But, if we are placing our bets on the health of the country on the sheer ability to go deeper into debt, and less on real innovation, and basic fundamentals of what built this country, then we are in deep, deep trouble.

    The stimulus addressed both private and public sector jobs. Obviously a lot of the state projects that it paid for were carried out by private contractors. And of course it helps private busiensses when public employees aren't laid off. Like everyone else, public employees spend their money at private businesses.
    So, by that reasoning, then every job should be a government one?

    Huh?
    You are making the argument once again that the wealthy in this country should pay more, and if they don't then it is their fault if the country collapses.

    Clearly the GSA outing was a fiasco, but this sort of thing is hardly limited to government. For example, Merrill Lynch gave its CEO an $10 million bonus the year the company lost $11 billion.
    GSA is the tip of the iceberg. If you want an argument from me that CEO's that run their business into the ground then jump out with a golden parachute is proper, you won't get it. But that is up to the shareholders of the company. Just as this malfeasance from governmental agencies is up to the voters, and Obama is running from that record, and shifting responsibility. Yet, you and others want us to believe that Obama has done a bang up job?

    I think the government has basically done the right thing over the last four years. Not perfect, but generally the right moves. But there is only so much the government can do to correct massive recession that arose out of the financial sector. It's just going to take time.
    We don't have that luxury of time. Obama himself said that if his policies didn't produce some real measurable indicators that he laid out, then he would be a one termer....Now, liberals want us to just forget that he said that....Time to pay the piper.


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    Re: Economy's Biggest Drag Right Now Is Government

    Quote Originally Posted by j-mac View Post
    How much 'funny money' can a country create before our money is just plain worthless?
    Depends on the country. In the case of the United States, the answer is: a lot more than we are currently making. Since Obama took office, the inflation rate has varied from a low of -2.1% to a high of 3.9%...and as of last month, it stood at a respectable 2.7%. Additionally, the current interest rate on 1-year treasury bills is 0.19% and the current interest rate on 30-year treasury bonds is 3.12%...nearly the lowest they have ever been. In real terms, investors are literally willing to PAY THE GOVERNMENT to hold their money. If hyperinflation is in our future, the markets sure don't seem to be freaking out about it. Why do you suppose that is?
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    Re: Economy's Biggest Drag Right Now Is Government

    Quote Originally Posted by j-mac View Post
    It depends on how you arrive at that 2% number now doesn't it? If your policies have resulted in a shrinking of the labor force that makes the number appear to be declining, then say that indicates 'jobs growth', well, that isn't really honest now is it?
    No, it doesn't depend on how you arrive at the number. People who are suffering under any economy will be unhappy. Saying that some people are unhappy doesn't negate the fact that the economy is improving.

    I agree with you that we need both parties to cut the crap so to speak, and start leveling with the people. But, if we are placing our bets on the health of the country on the sheer ability to go deeper into debt, and less on real innovation, and basic fundamentals of what built this country, then we are in deep, deep trouble.
    I agree.

    So, by that reasoning, then every job should be a government one?
    No, I don't think that follows at all from what I wrote. In fact it contradict it, because if every job was a public job then public employment couldn't bolster private businesses.

    You are making the argument once again that the wealthy in this country should pay more, and if they don't then it is their fault if the country collapses.
    No, I didn't make that argument at all. In my view *everyone* needs to pay higher taxes to address our serious debt problem. But I would phase in higher taxes sooner for the wealthy because it would have less impact on growth than higher taxes on the poor and middle class.

    GSA is the tip of the iceberg. If you want an argument from me that CEO's that run their business into the ground then jump out with a golden parachute is proper, you won't get it. But that is up to the shareholders of the company. Just as this malfeasance from governmental agencies is up to the voters, and Obama is running from that record, and shifting responsibility. Yet, you and others want us to believe that Obama has done a bang up job?[/quote]

    Seems to me that the responsible parties have been fired from GSA. But yeah, any time you have an organization as large as the US government there are going to be abuses. Happens in the private sector too.

    We don't have that luxury of time. Obama himself said that if his policies didn't produce some real measurable indicators that he laid out, then he would be a one termer....Now, liberals want us to just forget that he said that....Time to pay the piper.
    We don't have a lot of options here, unfortunately. If you cut spending and/or taxes too quickly you will only succeed in sending the economy back into recession, which only makes deficits worse. This is a problem that will have to be fixed over the next 40 or 50 years -- not the next four or five years.
    "The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. ... 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."

    -- Adam Smith

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    Re: Economy's Biggest Drag Right Now Is Government

    Quote Originally Posted by j-mac View Post
    I love it, even NBC is straying from the re elect Obama narrative. With a whole summer to go, seems like it'll be a hot one for the administration.
    Government dragged down by corporate interest and lobbyists....

    Who do you think really runs the House and Senate?

    Come on, stop blaming the executive branch.

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    Re: Economy's Biggest Drag Right Now Is Government

    Quote Originally Posted by Kandahar View Post
    Depends on the country. In the case of the United States, the answer is: a lot more than we are currently making. Since Obama took office, the inflation rate has varied from a low of -2.1% to a high of 3.9%...and as of last month, it stood at a respectable 2.7%. Additionally, the current interest rate on 1-year treasury bills is 0.19% and the current interest rate on 30-year treasury bonds is 3.12%...nearly the lowest they have ever been. In real terms, investors are literally willing to PAY THE GOVERNMENT to hold their money. If hyperinflation is in our future, the markets sure don't seem to be freaking out about it. Why do you suppose that is?
    I don't think I am smart enough to know why, or else I'd be doing something other than driving a truck...heh, heh...But I do know that these numbers, and statics being constantly cited seem fishy.


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    Re: Economy's Biggest Drag Right Now Is Government

    Quote Originally Posted by AdamT View Post
    We don't have a lot of options here, unfortunately. If you cut spending and/or taxes too quickly you will only succeed in sending the economy back into recession, which only makes deficits worse. This is a problem that will have to be fixed over the next 40 or 50 years -- not the next four or five years.

    40 or 50 years? We'll be lucky at the pace Obama is setting if we are still a free country in another 4 years....IMHO.


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    Re: Economy's Biggest Drag Right Now Is Government

    Quote Originally Posted by j-mac View Post
    We'll be lucky at the pace Obama is setting if we are still a free country in another 4 years....IMHO.
    Good God, the Fox News machine has really gotten to you folks. You'll believe just about anything...

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    Re: Economy's Biggest Drag Right Now Is Government

    Quote Originally Posted by j-mac View Post
    I don't think I am smart enough to know why, or else I'd be doing something other than driving a truck...heh, heh...But I do know that these numbers, and statics being constantly cited seem fishy.
    The inflation rate is calculated by the Bureau of Labor Statistics. And although it's certainly possible to quibble with the way they calculate inflation, the calculation itself hasn't changed in any major way since Obama took office, so any concerns that he somehow made them "fishy" are unfounded. The last major revision to how the CPI is calculated was in 1983.

    The T-bill and T-bond rate are public information; they are traded freely on the open market, so at any given point in time you can buy a US government bond for the interest rate. If investors were really expecting our currency to lose a lot of its value, then the interest rates would be much higher because people would be less willing to risk loaning the government their dollars now, only to be paid back in cheaper dollars later.

    All the economic data strongly points to one conclusion: The US is at absolutely no risk for high inflation. We could (and probably should) borrow/print a lot MORE money than we currently are, without experiencing any major devaluation.
    Last edited by Kandahar; 04-29-12 at 12:50 PM.
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