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Thread: Obama ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases

  1. #181
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    Re: Obama ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases

    Quote Originally Posted by The Prof View Post
    you're the one forecasting inflation sufficient to finance ONE TRIL OF SERVICE PAYMENTS per year

    LOL!

    i'm afraid this time keynes has simply bit off more than any economist (or waiter at applebees) can chew

    america simply cannot afford ONE TRIL per year of INTEREST

    despite cyclical smoothing

    regardless of what many of the foremost financial minds on the planet (LOL!) say

    we simply cannot afford it

    sorry
    Why have you not answered my question?
    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 ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases

    Quote Originally Posted by Goldenboy219 View Post
    Nope!

    The last time short term treasury yields were 0% was???? That's right, 1930's. The entire world braced for impact and luckily Ben began printing like a mad man. While i fault the stimulus for being puny, it was better than no stimulus.

    And to be entirely technical, short term treasuries were in a state of negative yields first quarter 2009. That has never happened before.
    More Obama talking points. Obama has done nothing except increase the debt.

    This was a Reagan like recession not even close to a depression.

    It is and will continue to get worse because of Obama policies. The one thing you fail to see is the inflation during Reagan Obama does not have that so this recession is close to Reagan because of that.

    Politifacts in order to show that this is worse than Reagan did not look at inflation.

    Laffer: Obama's 'Train Wreck' Ahead - HUMAN EVENTS


    Arthur Laffer, creator of the Laffer Curve that showed how low tax rates boost economic growth, is warning anyone who will listen that the economy is headed for a “train wreck” in 2011 that will make the current recession look tame by comparison.

    The famed economist, whose supply-side, tax-cutting policies enacted by President Reagan in 1981 put the economy on a record-breaking, 25-year economic trajectory of growth and prosperity, is telling Americans not to be lulled by sporadic signs of growth this year, because the economy is headed for a sharper decline next year when tax rates are expected to jump sharply, sending the economy into a new tailspin.

    “It will make the decline in U.S. output from 2010 to 2011 worse than the decline in output in 2008 and 2009 which will catastrophic,” Laffer said in an interview with HUMAN EVENTS.


    In a wide-ranging discussion about where the economy is headed, and the fiscal, tax and monetary reasons why, Laffer gives a bleak forecast of where President Obama and his administration are taking the country in the next three years -- which he predicts will end with Obama’s defeat in 2012.

    “Obama is a fine, very impressive person. He really is. Unfortunately, everything that he is doing in economics is exactly wrong. He is a crappy president,” Laffer said.

    “Whenever a country is in the throes of spending too much and raising taxes, it’s a fiscal catastrophe in the making and this is what is happening now,” he said.

    The economy in the short-term this year “will continue to improve, growing by more than 4 percent. By the end of 2010 the unemployment rate could fall to as low as 7 percent and the Obama administration will be busting with pride and conceit,” Laffer told his clients in his latest economic outlook for the year ahead.

    But don’t be fooled into thinking the economy is actually coming out of one of the worst recessions of the post-war era, because this year will be a false recovery, he adds. The downturn will begin again when “2011 will enter center stage, followed quickly by an economic catastrophe. All the factors that will make 2010 (and have already made the last half of 2009) look so good will reverse direction, and 2011 will be a train wreck,” he said in his forecast.

    The big reason, among several, is Obama’s plan to allow the Bush tax cuts to expire at the end of this year, and other tax increases the Obama administration intends to enact this year and next, and how businesses will respond to these tax changes.

    “In anticipation of known tax increases the economy will shift income and output from 2011 -- the higher tax year -- into 2010 -- the lower tax year. As a result of this income shift, 2010 will look a lot better than it should, and 2011 will be a train wreck,” he predicts.

    “GDP growth in 2010 will be some 3 to 4 percent higher than it otherwise should be, thus green shoots,” he said. “The transfer of income from 2011 into 2010 will not only make 2010 [economic growth] higher than it otherwise would be, it will also make 2011 [economic growth] 3 and 4 percent lower than it otherwise should be because people have shifted income out of 2011 into 2010.”

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    Re: Obama ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases

    Quote Originally Posted by Lord Tammerlain View Post
    Sure the US can withstand 1 trillion of interest, if the economy was double the size it is today. A high enough inflation rate can make that occur within 4 years say about 18%
    IF the economy is DOUBLE the size it is today

    in FOUR years

    LOL!

    voila!

    these keynesians, man...

    they're just like MAGICIANS!

    LOL!

    unfortunately, the rabbit is DEAD
    Last edited by The Prof; 02-16-10 at 06:29 PM.

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    Re: Obama ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases

    Quote Originally Posted by Lord Tammerlain View Post
    Why do you think this recession is closer to the Reagan Carter one rather then the depression?

    It could very well be due to the massive governmental stimulus that has been enacted from a rather early point in the economic crisis.

    Or more to the point, what do you think would have happened to the economy without the government spending that has led to the massive deficit
    I think the capitalism would take over and the market would repair itself.

    Obama did all he could to destroy capitalism through this economic downturn.

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    Re: Obama ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases

    Quote Originally Posted by Lord Tammerlain View Post
    The early 80's recession was a steep and harsh one, because Volker finally called for an end to the high inflation rates of the US. He raised the fed funds rates to very high levels, which caused a decrease in overall economic activity. That is why that recession occured

    This recession is due to deb fueled bubbles being burst. When a debt fueled bubble bursts you tend to see deflation. In a heavily indebted nation deflation is the last thing you want to see as it makes debt repayment harder and harder. Overall you end up with a downward spiral that causes economic activity to decrease, leading to further deflation and so on
    Yet Obama does not have the inflation problem. If Obama had used the Reagan plan would we still be in a deep recession?

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    Re: Obama ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases

    Quote Originally Posted by Goldenboy219 View Post
    18% will be a bit high, and i highly doubt the fed will allow it to get that far. But 6%-8% will be more likely IMHO; combined with economic growth and higher taxes, the treasury will not have any problems.
    There will be little growth without Jobs.. We are still seeing hundreds of thousands lose jobs each month.

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    Re: Obama ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases

    Quote Originally Posted by The Prof View Post
    IF the economy is DOUBLE the size it is today

    in FOUR years

    LOL!

    voila!

    these keynesians, man...

    they're just like MAGICIANS!

    LOL!

    unfortunately, the rabbit is DEAD
    Not Magic

    But a way to deal with excess/bad debts at the expense of the lenders.

    It is what Italy, Mexico, Greece, Turkey have done in the past.

    The other option is deflation.

    Typically deflation is more of a problem for economies then inflation

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    Re: Obama ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases

    Quote Originally Posted by ptif219 View Post
    Yet Obama does not have the inflation problem. If Obama had used the Reagan plan would we still be in a deep recession?
    Yes, and even worse then what it is now

    Reagans admin did not have a debt bubble collapse as the cause of the recession

    Volker intentionally caused the Reagan recession to battle inflation and get it under control

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    Re: Obama ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases

    EIGHTEEN PERCENT INFLATION!!!

    LOL!

    THE CURE!

    these keynesians really have that POPULIST touch

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    Re: Obama ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases

    Quote Originally Posted by ptif219 View Post
    I think the capitalism would take over and the market would repair itself.

    Obama did all he could to destroy capitalism through this economic downturn.
    Eventually it would

    But in the meantime more business would have gone under, from the banks to the auto industry (not just the big three but most of their suppliers as well.

    This would have resulted in more unemployement then we have now, leading to more foresclosures on homes, and even more banks going under.

    Overall there were two choices to be made. An extremely hard economic collapse, having massive unemployement, resulting in the loss of trillions of capital for everyone. This would last for about 3 years, but would have unemployment at levels higher then the great depression (and no unemployement/welfare programs to help people with). Followed by economic growth and it would be fairly rapid. The economic and social hardships would be difficult to describe in actual harshness, but lets just say strong potential for revolution. The second choice is what was choosen. To spread out the harm from the massive debt bubble over an extended period of time, and to spread it out to nearly everyone. This will last for at least 10 years, and economic growth will be muted for an extended period of time. 70's style stagflation is what should come to mind.
    Last edited by Lord Tammerlain; 02-16-10 at 07:07 PM.

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