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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q

    Quote Originally Posted by Anthony60 View Post
    Liberals also like to whine about how tax cuts "cost" money. Or that the tax cuts need to be "paid for". Huh? Pay for a tax cut? More screwy liberal logic. Stop spending OUR money then!
    Yes, don't you know we're supposed to pay for keeping our own money?

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q

    Quote Originally Posted by Visbek View Post
    Actually, I'd say it is "whoever has the best idea."

    Unfortunately, turning TANF into block grants for the states indicates that state control isn't necessarily the best idea (How States Have Spent Federal and State Funds Under the TANF Block Grant Center on Budget and Policy Priorities).

    Also, few municipalities (aside from big urban centers) have the resources to really deal with providing safety nets, let alone designing them to avoid welfare traps.



    I've said several times in this thread that I don't blame Bush much for the bubbles. He had a little bit of responsibility, as did Clinton; both of them failed to uphold or implement regulations that would have reduced the contagion, though neither really could have eliminated the bubble. Greenspan had more responsibility, since low interest rates were one factor, and Greenspan held a hard line against any financial or mortgage regulations.

    The banks bear more responsibility than the politicians. To make a long story short: There was a ton of capital (US and international) looking for a home, and the Dot Com implosion shifted capital away from equities and into real estate. Real estate rarely has a multi-regional decline; in most cases, one region will decline while others do fine. So, money starts pouring into real estate.

    New financial innovations wound up pouring tons of fuel on the fire. Mortgage brokers misused risk modeling software, which masked the risks. Mortgage originators started selling mortgages to Wall Street, and had no incentives or requirements to hold onto any of the mortgages, so they had no skin in the game. Wall Street banks used CDOs and MBSs to slice and dice the mortgages, which increased the obscurity and disguised the risks, and also resulted in the banks not caring if the borrowers defaulted. Not only did the banks shovel the derivatives at an uneducated market, they also in some cases bet against their own products with CDS's.

    It is important to note that while CDOs can be a good product, they were certainly abused by the investment banks. The entire structure was flawed; the top-rated tranches were not typically specified based on the risks of the mortgages, but who gets paid first. Some banks would also take the lowest (riskiest) tranches, repackage them into another CDO to further obscure the risks. Other products like synthetic CDOs were so complex that I don't know why anyone would buy them.

    Another factor is that banks abused their own VAR systems, and failed to assess the risks to their own existence. They also heavily pressured the ratings agencies to give their products higher ratings than they deserved, with the threat of pulling business (talk about a flawed incentive system).

    Of course, none of this works without buyers, of both the homes and the derivatives. Lots of people bought homes they knew, or should have known, they couldn't have afforded. Investors bought financial products they didn't fully understand, which is never a good idea.

    Subprime was as much a symptom than a cause. They only really became a big force well into the bubble, when the mortgage brokers and banks were running out of borrowers with decent credit histories and decent jobs. In 2003, subprimes were still only 8% of the market; it leaped to 18% in 2004, then 20% in 2005 and 2006. There were also lots of issues with option ARMs, interest-only mortgages, 80-20s and so forth:



    So yeah, the banks do hold a fair amount (if not the bulk) of responsibility for the crisis and subsequent recession, and were not sufficiently taken to task yet for their role.



    Not only are my personal affairs none of your business, my own experiences have nothing to do with how the bubble formed, perpetuated and burst.



    Because they're distorting both the political system and the economy, and some of the choices they're making have a negative effect on the entire country.



    Again, it's not about me.

    What they do that potentially harms the entire economy is that some of the super-wealthy want to cut functions that are critical for the nation as a whole (e.g. education, regulation, safety nets). Their enormous wealth also gives them significantly more influence over politicians, via contributions and lobbying -- now more than ever, since the SCOTUS unleashed nearly-unlimited campaign spending.



    *sigh* Again, since you repeatedly insist on excluding SS and Medicare, it's a $2.5 trillion projected deficit for 2015.

    I never said "I don't care about waste." In fact, we haven't really discussed waste very much. The topic of this thread is the slightly ridiculous claim that one quarter of negative growth is somehow supposed to be an indicator that the entire economy is going down the tubes, which is not the case.

    So, to that end: Government spending, revenue collections, high deficits and high debt actually are not a problem for the US economy. Deficits are roughly back in line from the past ~40 years. Despite a slow grinding recovery, things are getting better, so debt as a percentage of GDP is likely to fall, especially if we cut defense spending to a reasonable level and keep health care spending in check. In the short and medium term, the US is more than capable of paying what it owes, and the funds it's using are not a detriment at a time when lenders are still reluctant to lend.
    You obviously have no idea what your taxes fund which is why you refuse to answer the question as to why SS and Medicare are on budget. Both are self funded, supposedly dedicated to you due to your investment and returned to you when you turn 62 if you want or 65. Rather interesting that you continue to ignore that reality. SS and Medicare were never intended to be put on budget but rather as Al Gore stated "in a lockbox" but those federal politicians that you seem to believe care put it on budget to use the excess money vs what was being paid out on issues other than SS which has led to trillions in unfunded liabilities. You have no idea where the money is going to come from to fund your SS because that ponzi scheme has spent your money if you work

    The fact remains this is about you and every other individual who make up the whole. You want people to believe you care when the reality is you don't understand what you are talking about. If you can do it why can't everyone else? This isn't about those who truly need individual help and that can be provided by the state and local communities but like most liberal/progressives it is about thinking with your heart instead of your brain. We don't need a 3.8 trillion dollar Federal Govt. to take care of those truly in need as the states can do that

    You have such low expectations of Obama and not surprising. I knew he was unqualified due to his resume and yet you and others ignored that

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q

    Quote Originally Posted by Boo Radley View Post
    He answer you pretty well, but this is the trouble with causal relationships. Correlation doesn't mean causation. Too often people think because something happen during a presidency that the president was responsible, when in fact there may well be other causes.
    Really? You have no problem posting charts showing that tax cuts caused the deficits while ignoring the fact that economic activity improves with tax cuts and cannot prove that the tax cuts didn't cause that activity. So how can tax cuts cause a reduction of revenue when revenue grew after the tax cuts? How do you know the activity would have been the same without those tax cuts?

    Carter was a good man but typical of all liberals refusing to admit that govt. micro management of the economy caused the mess that Reagan inherited and continue to cause the problems we have today. Liberals never learn from history, they just repeat it.

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q

    Quote Originally Posted by Conservative View Post
    You obviously have no idea what your taxes fund....
    Yes, I do.

    I've read the budgets, I've pored over spreadsheets with decades of budgeting data. I know that SS and Medicare are in a trust, funded by specific payroll taxes. I know that listing SS in the federal budget does NOT change the actual accounting, did NOT eliminate the trust funds, did and does NOT put SS into the general funds, or change how it's funded. As I've already said: They are on the budget because they are actual government outlays, and if you want to know how much the government is spending, and you want to make reasonable comparisons, you include it in the budget.


    Both are self funded, supposedly dedicated to you due to your investment and returned to you when you turn 62 if you want or 65.
    No, actually, it isn't.

    Social Security is NOT like an IRA. It is not an investment where you receive a return. Current contributors pay for current SS recipients, and surpluses collected go into the trust fund. While your benefit is based on your earnings, you do not own your benefits in the same way as an IRA. If you start collecting at 65 and die at 66, family members are eligible for survivor benefits, but they will not inherit a package of assets as they do with an IRA. Many recipients will receive more in benefits than they paid into the system, especially those on disability.

    We should also recognize that SS was implemented at a time when life expectancy was around 65, whereas today it is 78. In addition, in the past there were 16+ active workers per SS recipient; today, it is 3 workers per SS recipient.

    In order to be truly self-sustaining in the future, we'd have to significantly raise the age at which you can collect it and/or or cut benefits. Good luck with that.


    The fact remains this is about you and every other individual who make up the whole. You want people to believe you care when the reality is you don't understand what you are talking about.
    Or, you just ignore what I'm typing, and slag me without any idea of what I actually know or believe.


    This isn't about those who truly need individual help and that can be provided by the state and local communities but like most liberal/progressives it is about thinking with your heart instead of your brain.
    *sigh*

    1) Many states and municipalities do offer and/or have input on safety nets.
    2) Many states and municipalities lack the ability to provide the same level of services as offered by federal safety nets.
    3) Turning over those safety nets to state and local governments does not seem to produce better outcomes, certainly not categorically.
    4) It doesn't matter if those safety nets are operated locally or federally. In both cases, the government has to generate revenues to pay for the outlays.


    We don't need a 3.8 trillion dollar Federal Govt. to take care of those truly in need as the states can do that
    Yet again!!! Don't tell me in one breath that SS and Medicare shouldn't be included in the budget, and then CITE BUDGET FIGURES THAT INCLUDE SS AND MEDICARE OUTLAYS.

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q

    Quote Originally Posted by donsutherland1 View Post
    Most of the economic forecasts I've seen are in the 3%-4% range. The 4% figure is at the high end of those forecasts. There are a few outliers below and above that range.
    So what?

    How many of those 'experts' predicted a 2.9% drop in Q1?

    When will people learn that most economists (including the Fed) are macroeconomic ignoramuses.

    Most of them missed the dot.com crash and the housing crash (including those glorified bean counters at the Fed) when both should have been staggeringly obvious.

    http://www.reuters.com/article/2013/...90H13Q20130118

    I pay attention to facts/data from unbiased sources...not opinions from economists who clearly do not understand macroeconomics.

    And the data clearly shows that the economy is NOT rebounding sufficiently (so far) in this quarter to justify a 3-4% GDP rise prediction...not even close (IMO).

    Since March, 25-54 age employment is down, consumer spending has reduced (not increased), the trade deficit is worse and durable goods orders contracted in May.

    http://www.debatepolitics.com/breaki...post1063453761

    Anyone that says the signs are there for a 3-4+% GDP growth in Q2 (so far) is simply - IMO - not reading the numbers or is ignoring them (and I am referring to a GDP growth of 3-4%, not an 'improvement' of 3-4%).

    I am not saying it cannot happen, but I believe it will take one heck of a great June to do so.
    Last edited by DA60; 06-27-14 at 11:06 AM.

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q

    Deep into the thread, we have an analysis of what actually caused the GDP drop. Some is a decline in consumption, but big chunks are drops in inventory ("stocks" on the chart), and in a combination of an increase in imports and a drop in exports.

    We should note that normally, an increase in imports is actually a positive indicator, as it indicates that Americans were buying foreign goods in significant amounts. A decline in exports will have local effects, but are largely due to conditions outside the US (obviously).

    Just one of many reasons why GDP is not the end-all and be-all of economic indicators.


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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q

    Visbek;1063456449]Yes, I do.

    I've read the budgets, I've pored over spreadsheets with decades of budgeting data. I know that SS and Medicare are in a trust, funded by specific payroll taxes. I know that listing SS in the federal budget does NOT change the actual accounting, did NOT eliminate the trust funds, did and does NOT put SS into the general funds, or change how it's funded. As I've already said: They are on the budget because they are actual government outlays, and if you want to know how much the government is spending, and you want to make reasonable comparisons, you include it in the budget.
    What you ignore is the reality that the revenue and expenses of SS and Medicare are on budget and if the revenue is more than the expenses which it was when LBJ created the unified budget that the money was used for something other than SS/Medicare being replaced with IOU's. Where exactly is the money going to come from to pay those IOU's?

    Current Report: Combined Statement of Receipts, Outlays, and Balances of the United States Government (Combined Statement): Publications & Guidance: Bureau of the Fiscal Service

    Social Security History

    SS on Budget

    "On-Budget"-

    In early 1968 President Lyndon Johnson made a change in the budget presentation by including Social Security and all other trust funds in a"unified budget." This is likewise sometimes described by saying that Social Security was placed "on-budget."
    This 1968 change grew out of the recommendations of a presidential commission appointed by President Johnson in 1967, and known as the President's Commission on Budget Concepts. The concern of this Commission was not specifically with the Social Security Trust Funds, but rather it was an effort to rationalize what the Commission viewed as a confusing budget presentation. At that time, the federal budget consisted of three separate and inconsistent sets of measures, and often budget debates became bogged-down in arguments over which of the three to use. As an illustration of the problem, the projected fiscal 1968 budget was either in deficit by $2.1 billion, $4.3 billion, or $8.1 billion, depending upon which measure one chose to use. Consequently, the Commission's central recommendation was for a single, unified, measure of the federal budget--a measure in which every function and activity of government was added together to assess the government's fiscal position.
    And what you ignore and everyone else ignores with regard to the Federal Govt. is that you believe that the Federal Govt has an endless supply of money and printing it or borrowing it doesn't affect value

    How are these IOU's going to be funded

    Social Security IOUs stashed away - Washington Times


    Social Security is NOT like an IRA. It is not an investment where you receive a return. Current contributors pay for current SS recipients, and surpluses collected go into the trust fund. While your benefit is based on your earnings, you do not own your benefits in the same way as an IRA. If you start collecting at 65 and die at 66, family members are eligible for survivor benefits, but they will not inherit a package of assets as they do with an IRA. Many recipients will receive more in benefits than they paid into the system, especially those on disability.

    We should also recognize that SS was implemented at a time when life expectancy was around 65, whereas today it is 78. In addition, in the past there were 16+ active workers per SS recipient; today, it is 3 workers per SS recipient.

    In order to be truly self-sustaining in the future, we'd have to significantly raise the age at which you can collect it and/or or cut benefits. Good luck with that.
    That doesn't give the govt. the excuse to spend that money on whatever they want nor does it justify the waste, fraud, and abuse now. What you fail to recognize is that it wasn't sold to the public that way and millions of Americans are living simply on SS. Now again, where is the money going to come from to fund those IOU's?



    Or, you just ignore what I'm typing, and slag me without any idea of what I actually know or believe.
    I ignore nothing, just pointing out your ignorance and youthful inexperience



    *sigh*

    1) Many states and municipalities do offer and/or have input on safety nets.
    2) Many states and municipalities lack the ability to provide the same level of services as offered by federal safety nets.
    3) Turning over those safety nets to state and local governments does not seem to produce better outcomes, certainly not categorically.
    4) It doesn't matter if those safety nets are operated locally or federally. In both cases, the government has to generate revenues to pay for the outlays.
    So why is this duplicated at the Federal Level? Yes, govt provides funds for federally mandated programs which they should however the reality is Promoting the General Welfare now means providing for the general welfare.

    Tell me what a bureaucrat in D.C. knows about a problem in your local community and why they are better able to handle it? Why would you expect a bureaucrat that helped created a 17.5 trillion dollar budget will do a better job than your local community?



    Yet again!!! Don't tell me in one breath that SS and Medicare shouldn't be included in the budget, and then CITE BUDGET FIGURES THAT INCLUDE SS AND MEDICARE OUTLAYS.
    As usual you miss the point, SS/Medicare are still on budget, SS and Medicare revenue is still being spent on items other than SS and Medicare and the solution starts with taking SS and Medicare OFF BUDGET and put back where it belongs. Starting to fund those IOU's has to happen

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q

    Quote Originally Posted by Visbek View Post
    Deep into the thread, we have an analysis of what actually caused the GDP drop. Some is a decline in consumption, but big chunks are drops in inventory ("stocks" on the chart), and in a combination of an increase in imports and a drop in exports.

    We should note that normally, an increase in imports is actually a positive indicator, as it indicates that Americans were buying foreign goods in significant amounts. A decline in exports will have local effects, but are largely due to conditions outside the US (obviously).

    Just one of many reasons why GDP is not the end-all and be-all of economic indicators.

    There are four components of GDP, figure out what they are and what they contribute to GDP

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q

    Quote Originally Posted by DA60 View Post
    So what?

    How many of those 'experts' predicted a 2.9% drop in Q1?

    When will people learn that most economists (including the Fed) are macroeconomic ignoramuses.

    Most of them missed the dot.com crash and the housing crash (including those glorified bean counters at the Fed) when both should have been staggeringly obvious.

    Fed missed warning signs in 2007 as crisis gained steam | Reuters

    I pay attention to facts/data from unbiased sources...not opinions from economists who clearly do not understand macroeconomics.

    And the data clearly shows that the economy is NOT rebounding sufficiently (so far) in this quarter to justify a 3-4% GDP rise prediction...not even close (IMO).

    Since March, 25-54 age employment is down, consumer spending has reduced (not increased), the trade deficit is worse and durable goods orders contracted in May.

    http://www.debatepolitics.com/breaki...post1063453761

    Anyone that says the signs are there for a 3-4+% GDP growth in Q2 (so far) is simply - IMO - not reading the numbers or is ignoring them (and I am referring to a GDP growth of 3-4%, not an 'improvement' of 3-4%).

    I am not saying it cannot happen, but I believe it will take one heck of a great June to do so.
    Macroeconomics is complex and there is little doubt that forecasts are typically not great. Contrary to some of the commentary in this thread, economic forecasts for growth or expectations of a resumption of growth do not necessarily mean that one one supports President Obama's policies.

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q

    Quote Originally Posted by jonny5 View Post
    Do you really think the intent is to "put it to the people suffering the most"? Maybe thats why you dont understand it.
    What's the alternative? I mean, the right has blocked just about every domestic legislation that would help Americans with the often repeated line of, "We're broke," but we always have enough money for the same guys to want to intervene anywhere evil pops up in the world.

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