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Thread: Voters say they’re worse off after four years of Obama, so why is Romney struggling?

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    Re: Voters say they’re worse off after four years of Obama, so why is Romney struggli

    Quote Originally Posted by obvious Child View Post
    Users like Born Free do not research topics much. German Auto industry also makes superior models that sell often for premiums. While there are more affordable subsidiaries, the bulk of German auto industry is not going after the low priced market. The US auto industry is far different with everything from cheap cars to who would pay that kind of money cars.

    I do agree that letting the financial industry police itself was a terrible idea. Blame Clinton and the GOP for getting rid of Glass-Stegall.
    Look to the real demons of the financial crisis and you may find that getting rid of Glass-Stegall had a lot less to do with the crisis than the shadow banking industry, such as Countrywide writing no doc mortgages, the rating agencies giving AAA ratings to junk mortgage bonds, the fed and SEC not doing a good job of regulating with the laws already on the books and not reining in leverage at the big banks including the allowing them to create off balance sheet SIVs.

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    Re: Voters say they’re worse off after four years of Obama, so why is Romney struggli

    Quote Originally Posted by washunut View Post
    I don't think you can cite one post from me that calls for a balanced budget.
    I'm just preemptive a stupid Republican from making a stupid statement. You didn't cite anything of the sort.

    In times like these I would like to see a more sustainable deficit level being run. Something around the long term growth prospects for the nation of 2-3%. Running unsustainable deficit levels leads people to be concerned about the viability of our economy in my view. Fed chairman Bernanke has repeatedly called for a plan to get deficits down to sustainable levels in the "medium term". That is usually 3-5 years. He has said that for about 3-4 years so we should be at a point of starting to reduce our dependency on Federal deficits.
    But we both know the US does not have the political will for that. Americans want our cakes and to eat them too. We want services, spending and jobs and low taxes. Honestly, you cannot do that forever.

    People keep talking about demand, but we reality is we need demand in specific, hard hit areas. For example, the chairman talks about the need to keep deflation away, which I agree is a demand killer. My sense is that keeping interest rates, especially mortgage rates low with the expectation of them going lower is actually hurting demand for housing. Why buy a house now, even with rates low when the Fed is doing everything possible to lower rates even more. I could be wrong but even the hint of mortgage rates rising a bit would take people off the sidelines and buying now rather than delaying with the knowledge that rates will only go in one direction for the next few years, down.
    That's true, but I still never get an answer as to how reducing demand increases jobs. Born Free has fled the thread. Not surprisingly as I've never met a partisan hack who had the chops to actually stay in an adult discussion. But you're right in that raising mortgage rates abet, slowly would cause those with the wait and see mode to jump in.

    Unsustainable high deficit brings the threat of higher taxes, or inflation or both down the road which can be a deflator when thinking about how to get people to invest, which is a form of demand.
    Not to mention service cuts.

    As you know in a large, varied economy such as the U.S. there are many levers that move the lever, demand being one. I would tend to disagree that the key for more demand comes solely from federal government spending. Perhaps to much spending creates the inverse as people are fearful of long term consequences thus the increase in savings.
    The key for more demand when total private sector demand drops off is government spending as there isn't anything else. When the private sector curtails its spending, there is no other source to pick up the slack except the government. Born Free operates under this insane notion that as private sector demand decreases, private sector jobs will increase if we do not spend money via the government. Some of the loony fringe right wing economics to me is literally voodoo. Makes no sense whatsoever. The problem with fiscal as you said is that it can go over board and create new problems. But in terms of choices between private sector and public sector, if one drops and the other doesn't increase, net aggregate will fall. How that creates new jobs, I don't get and I don't even think people like Born Free really understand. They are just parroting Fox.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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    Re: Voters say they’re worse off after four years of Obama, so why is Romney struggli

    Quote Originally Posted by obvious Child View Post
    I'm just preemptive a stupid Republican from making a stupid statement. You didn't cite anything of the sort.



    But we both know the US does not have the political will for that. Americans want our cakes and to eat them too. We want services, spending and jobs and low taxes. Honestly, you cannot do that forever.



    That's true, but I still never get an answer as to how reducing demand increases jobs. Born Free has fled the thread. Not surprisingly as I've never met a partisan hack who had the chops to actually stay in an adult discussion. But you're right in that raising mortgage rates abet, slowly would cause those with the wait and see mode to jump in.



    Not to mention service cuts.



    The key for more demand when total private sector demand drops off is government spending as there isn't anything else. When the private sector curtails its spending, there is no other source to pick up the slack except the government. Born Free operates under this insane notion that as private sector demand decreases, private sector jobs will increase if we do not spend money via the government. Some of the loony fringe right wing economics to me is literally voodoo. Makes no sense whatsoever. The problem with fiscal as you said is that it can go over board and create new problems. But in terms of choices between private sector and public sector, if one drops and the other doesn't increase, net aggregate will fall. How that creates new jobs, I don't get and I don't even think people like Born Free really understand. They are just parroting Fox.
    So I am a stupid Republican. I have been a democrat for more than 40 years you idiot.

    You are in the black and white partisan box that says that if we change one part of demand ( the government in your case) then the other will be static. Not sure what makes you so certain in a world when PHDs in economics even those of the Federal reserve come to different answers.

    If only the world was as certain as political hacks want to believe. Life would be so much easier.

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    Re: Voters say they’re worse off after four years of Obama, so why is Romney struggli

    Quote Originally Posted by washunut View Post
    So I am a stupid Republican. I have been a democrat for more than 40 years you idiot.
    I didn't say you. I said a stupid Republican. Some of the partisan posters like to pop in with idiotic comments. That was a preemptive strike against a dumb statement someone else might make.

    You are in the black and white partisan box that says that if we change one part of demand ( the government in your case) then the other will be static.
    Come again? Where did I say any of that?

    You're right though as government spending declines private sector activity based on it should decline as well. My point is that as one part of the economy reduces activity, without a corresponding increase from the other, net aggregate demand will fall.

    You posting drunk?
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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    Re: Voters say they’re worse off after four years of Obama, so why is Romney struggli

    Quote Originally Posted by obvious Child View Post
    ...as government spending declines private sector activity based on it should decline as well. My point is that as one part of the economy reduces activity, without a corresponding increase from the other, net aggregate demand will fall.
    Just a question, this spending you speak of, is there any reason to believe that if the government cuts off the faucet, that the private sector won't correspondingly pick it up in some areas?
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    Re: Voters say they’re worse off after four years of Obama, so why is Romney struggli

    Quote Originally Posted by j-mac View Post
    Just a question, this spending you speak of, is there any reason to believe that if the government cuts off the faucet, that the private sector won't correspondingly pick it up in some areas?
    Why would the private sector spend money when there is no additional demand?

    If the government cuts spending but there is no one buying your product, why would you go out and hire 10 more people and buy more manufacturing machines to make goods no one is buying pass your current production?

    The private sector does not spend money to meet demand that does not exist. As demand decreases, private sector cuts activity to meet that demand. Unless it sees coming demand, it will not make additional investments. As demand drops, spending matches to supply that level of demand.

    This is basic. Really, really, really basic.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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    Re: Voters say they’re worse off after four years of Obama, so why is Romney struggli

    Quote Originally Posted by obvious Child View Post
    Why would the private sector spend money when there is no additional demand?

    If the government cuts spending but there is no one buying your product, why would you go out and hire 10 more people and buy more manufacturing machines to make goods no one is buying pass your current production?

    The private sector does not spend money to meet demand that does not exist. As demand decreases, private sector cuts activity to meet that demand. Unless it sees coming demand, it will not make additional investments. As demand drops, spending matches to supply that level of demand.

    This is basic. Really, really, really basic.

    I know OC, but bare with me, you are way more knowledgeable in economics than I am, so I apologize if my questions seem elementary to you, but I am just a regular guy trying to understand it all...But you said something above that sparks my interest. That is...

    If the government cuts spending but there is no one buying your product, why would you go out and hire 10 more people and buy more manufacturing machines to make goods no one is buying pass your current production?
    Why would not the proper answer to this be, If a company is not able to sell its product on the market without governmental assistance, then they should be out of business.
    Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.

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    Re: Voters say they’re worse off after four years of Obama, so why is Romney struggli

    Quote Originally Posted by j-mac View Post
    I know OC, but bare with me, you are way more knowledgeable in economics than I am, so I apologize if my questions seem elementary to you, but I am just a regular guy trying to understand it all...But you said something above that sparks my interest. That is...
    You work for a trucking company right?

    If orders for deliveries drop considerably, your firm will cut back the number of trucks on the road and cut trucker hours correct? Thus leading to less money in worker's pockets, fewer new trucks and less fuel purchases. Which results in less activity at gas stations, truck manufacturers and worker spending. As demand drops, companies cut back hours, cut back purchases of raw materials and cut back on investments. Rather than buying 10 new trucks, they only by 2 or 3. This ripples through the economy as business after business cuts back on their spending reducing demand at every level.

    Why would not the proper answer to this be, If a company is not able to sell its product on the market without governmental assistance, then they should be out of business.
    Come again? The company is selling less product then it did before because demand has declined. I'm not saying the company is reliant upon government assistance, but some are, largely DoD firms, but merely that private sector activity curtails activities. My point is that if government cuts spending at the same time private sector cuts spending, total aggregate demand will fall. If government doesn't pick up the reduction by ordering more goods or requisition more bridges, then net activity will drop and businesses will see this ripple through. For instance, if developers hire a contractor to put a road in for a development, but because of low demand for new housing they stop their developments, that contractor is now out of work. The government often steps in an requests a repavement of an existing road or accelerates the repavement (as government should be repaving anyways). That keeps the contractor busy, so he keeps buying raw materials and he keeps his employee hours the same. If government does not request this and developers stop hiring him, he's now faced with less activity. So he cuts back his purchases of materials and cuts his employee hours. His suppliers now have less demand so they start cutting. So on and so forth. When private sector activity wanes, unless there is a corresponding increase in government demand, net aggregate demand will drop. Leading to less investment, fewer jobs and less activity.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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    Re: Voters say they’re worse off after four years of Obama, so why is Romney struggli

    Quote Originally Posted by obvious Child View Post
    You work for a trucking company right?

    If orders for deliveries drop considerably, your firm will cut back the number of trucks on the road and cut trucker hours correct? Thus leading to less money in worker's pockets, fewer new trucks and less fuel purchases. Which results in less activity at gas stations, truck manufacturers and worker spending. As demand drops, companies cut back hours, cut back purchases of raw materials and cut back on investments. Rather than buying 10 new trucks, they only by 2 or 3. This ripples through the economy as business after business cuts back on their spending reducing demand at every level.



    Come again? The company is selling less product then it did before because demand has declined. I'm not saying the company is reliant upon government assistance, but some are, largely DoD firms, but merely that private sector activity curtails activities. My point is that if government cuts spending at the same time private sector cuts spending, total aggregate demand will fall. If government doesn't pick up the reduction by ordering more goods or requisition more bridges, then net activity will drop and businesses will see this ripple through. For instance, if developers hire a contractor to put a road in for a development, but because of low demand for new housing they stop their developments, that contractor is now out of work. The government often steps in an requests a repavement of an existing road or accelerates the repavement (as government should be repaving anyways). That keeps the contractor busy, so he keeps buying raw materials and he keeps his employee hours the same. If government does not request this and developers stop hiring him, he's now faced with less activity. So he cuts back his purchases of materials and cuts his employee hours. His suppliers now have less demand so they start cutting. So on and so forth. When private sector activity wanes, unless there is a corresponding increase in government demand, net aggregate demand will drop. Leading to less investment, fewer jobs and less activity.

    Well, thanks for taking the time to explain that to me. I understand what you are saying, however right or wrong, I think there is another side to this, and will do some more research on my own, and get back to ya...
    Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.

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    Re: Voters say they’re worse off after four years of Obama, so why is Romney struggli

    Quote Originally Posted by j-mac View Post
    Well, thanks for taking the time to explain that to me. I understand what you are saying, however right or wrong, I think there is another side to this, and will do some more research on my own, and get back to ya...
    I don't see the other side here. There is public spending and there is private spending. There's no one else out there to hire that contractor to put another road in if both the government and private sector industries stop hiring contractors to put roads in. If both sides stop contracting work for new roads, the contractor who builds roads has no work. Unless there is a third magical side of the economy that is not part of the private sector or the public sector, there isn't another side.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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