Explaining Why Federal Deficits Are Needed[W:5330]

[Conservative]

So you guys never cherry pick, only the right does. Got it.

Only in the liberal world is using BLS, BEA, and Treasury data cherrypicking because the date doesn't meet the leftwing narrative. All this spending in the NAME of compassion is nothing more than doing what liberals do best, keep people dependent. Of course they don't want the govt. to print money to give to the poor because that means the poor no longer need liberalism to take care of them.

 

[Critter7r]

So you guys never cherry pick, only the right does. Got it.

In a chart showing a trend of increasing net savings from 1970 to 2015, he says, "but look at 1986 to 1993, it went down!!"

That you aren't on my side in calling out his cherry-picking shows just how insincere your arguments are.

 

[Conservative]

In a chart showing a trend of increasing net savings from 1970 to 2015, he says, "but look at 1986 to 1993, it went down!!"

That you aren't on my side in calling out his cherry-picking shows just how insincere your arguments are.

What exactly is your point? You think allowing the American people to keep more of what they earn as in the Reagan tax cuts caused people to save less? You think that giving people a check from the taxpayers, deficit spending, is the answer to what ails this country? does that change human behavior? Does that reinstitute personal responsibility into the lives of individuals who have lost that quality? Does that change how people approach job interviews, how they dress, how they act?

I am trying to figure out why after 7 + years of Obama, almost 9 trillion in deficit spending that we need more deficit spending? Please explain

 

[JohnfrmClevelan]

What exactly is your point? You think allowing the American people to keep more of what they earn as in the Reagan tax cuts caused people to save less? You think that giving people a check from the taxpayers, deficit spending, is the answer to what ails this country? does that change human behavior? Does that reinstitute personal responsibility into the lives of individuals who have lost that quality? Does that change how people approach job interviews, how they dress, how they act?

I am trying to figure out why after 7 + years of Obama, almost 9 trillion in deficit spending that we need more deficit spending? Please explain

That was already explained earlier in this thread, the part that you refuse to read. Instead, you want us to explain it all over again, because you can't be bothered to do your homework.

Maybe that reluctance to learn is part of the answer you are looking for....

 

[Critter7r]

What exactly is your point?

That savings subtracts from GDP. Nothing more. If I earn $50k this year, then since my earnings are somebody else's spending, GDP for me was $50k this year. But if I save $10k of that, then I only contribute $40k to the economy over the course of next year, causing a lower GDP. Either there has to be a mechanism to make up for my savings, or GDP decreases. I'm not assigning a good/bad value to anything I just said, that's just how it works.

You think allowing the American people to keep more of what they earn as in the Reagan tax cuts caused people to save less? You think that giving people a check from the taxpayers, deficit spending, is the answer to what ails this country? does that change human behavior? Does that reinstitute personal responsibility into the lives of individuals who have lost that quality? Does that change how people approach job interviews, how they dress, how they act?

I am trying to figure out why after 7 + years of Obama, almost 9 trillion in deficit spending that we need more deficit spending? Please explain

By definition, deficit spending is not "giving the people a check from the taxpayers". No taxpayers are involved in deficit spending. The gov't is spending MORE than they take in from taxpayers when they deficit spend.

 

[Conservative]

That savings subtracts from GDP. Nothing more. If I earn $50k this year, then since my earnings are somebody else's spending, GDP for me was $50k this year. But if I save $10k of that, then I only contribute $40k to the economy over the course of next year, causing a lower GDP. Either there has to be a mechanism to make up for my savings, or GDP decreases. I'm not assigning a good/bad value to anything I just said, that's just how it works.



By definition, deficit spending is not "giving the people a check from the taxpayers". No taxpayers are involved in deficit spending. The gov't is spending MORE than they take in from taxpayers when they deficit spend.

Again, what you fail to recognize is those deficits have to be paid for and that is the debt service paid for by printing money or borrowing it. You pointed out a chart that shows savings decreasing, why is that? Inflation was down and taxes were cut putting more money into the hands of the people. Could it be that investment capital went up and isn't counted as part of savings? Could it be that people used savings to pay down debt? Using the chart on savings doesn't tell a lot because it isn't in context. By the way poor people save very little regardless of the year and as most liberals don't seem to understand people are guaranteed equal opportunity NOT equal outcome. Equal Outcome is what the left promotes in rhetoric but does little in substance

 

[Critter7r]

Again, what you fail to recognize is those deficits have to be paid for and that is the debt service paid for by printing money or borrowing it. You pointed out a chart that shows savings decreasing, why is that?

I can only assume it's because you misread the chart.

EDIT : What it shows is a decreasing savings RATE, that went into the negative only for a short time during the recession. But so long as the savings RATE is positive, Net Savings is increasing.

 

[Kushinator]

Again, what you fail to recognize is those deficits have to be paid for and that is the debt service paid for by printing money or borrowing it.

What's your point?

 

[Conservative]

What's your point?

Both affect the ability of the consumer to spend and the value of their dollar or amount of money they have to spend. Debt service is funded by tax revenue which takes money out of the hands of the consumer and the local economy, printing money reduces the value and leads to inflation. As smart as you think you are you should know that

 

[Conservative]

I can only assume it's because you misread the chart.

EDIT : What it shows is a decreasing savings RATE, that went into the negative only for a short time during the recession. But so long as the savings RATE is positive, Net Savings is increasing.

Maybe which is why I need you to explain it. if savings went down, how do you explain it since inflation was down and personal income up

Wonder if it has anything to do with consumer confidence in knowing their take home pay would be higher because of the tax cuts thus more of a willingness to increase their assets by purchasing?

 

[Kushinator]

Both affect the ability of the consumer to spend and the value of their dollar or amount of money they have to spend.

Another instance of just making things up. Do you have any data to support your contention that debt service has an impact on consumption, the value of the dollar, or disposable income in general? Simply saying so isn't enough.

Debt service is funded by tax revenue which takes money out of the hands of the consumer and the local economy, printing money reduces the value and leads to inflation.

Debt service as a percentage of the budget is at an all time low. Inflation??? What inflation!

As smart as you think you are you should know that

Why can't you prove any of these assertions?

 

[Critter7r]

Maybe which is why I need you to explain it. if savings went down, how do you explain it since inflation was down and personal income up

Savings didn't go down.

The savings RATE decreased.

i.e. I earned $50k last year and saved $5k. This year, I earned $51k and saved $4k. I still spent more into the economy, but saved less. Net savings increased (EDIT : DECREASED, sorry), GDP increased, but the savings rate decreased.

 

[Moderate Right]

In a chart showing a trend of increasing net savings from 1970 to 2015, he says, "but look at 1986 to 1993, it went down!!"

That you aren't on my side in calling out his cherry-picking shows just how insincere your arguments are.

You mistakenly believe that the only definition of cherry picking is merely adjusting dates. While I do agree with you on that (and the left does this as well), you refuse to acknowledge that there are other ways to cherry pick and the left are experts at all of those. For example, polls can ask questions or poll a particular audience in a certain manner to influence the results to promote a particular agenda. Another example would be to only use certain parameters (other than dates) such as declaring Obamacare is a success because there are less uninsured than there used to be, while ignoring the many different ways that Obamacare has made things worse.

 

[Critter7r]

You mistakenly believe that the only definition of cherry picking is merely adjusting dates. While I do agree with you on that (and the left does this as well), you refuse to acknowledge that there are other ways to cherry pick and the left are experts at all of those. For example, polls can ask questions or poll a particular audience in a certain manner to influence the results to promote a particular agenda. Another example would be to only use certain parameters (other than dates). Yet another example would be to declare that Obamacare is a success because there are less uninsured than there used to be, while ignoring the many different ways that Obamacare has made things worse.

Not interested in your justification of not calling out your own for cherry-picking and instead obfuscating the subject.

The point was merely that net savings generally increases.

 

[Conservative]

Another instance of just making things up. Do you have any data to support your contention that debt service has an impact on consumption, the value of the dollar, or disposable income in general? Simply saying so isn't enough.



Debt service as a percentage of the budget is at an all time low. Inflation??? What inflation!



Why can't you prove any of these assertions?

Oh, Good Lord, does everything have to be substantiated by a chart? Does logic and common sense ever come into your world. Think about it and get back to me. What do higher taxes do to personal spending? What does more money going to the Federal Govt. do to the local economy.

Sorry logic and common sense proves it quite well.

Debt service as a percentage of Record budgets is going to be low but then again the amount really doesn't both you because the percentage is low, just like the Reagan debt of 1.7 trillion is much worse than the 8.6 trillion Obama debt because the percentage change is higher. That is liberal logic

 

[Conservative]

Savings didn't go down.

The savings RATE decreased.

i.e. I earned $50k last year and saved $5k. This year, I earned $51k and saved $4k. I still spent more into the economy, but saved less. Net savings increased, GDP increased, but the savings rate decreased.

yes, and as I stated consumer confidence was higher due to the certainty that the paychecks would be higher due to lower taxes. Also percentage change really is irrelevant it is all about net worth.

 

[jaeger19]

Those are choice words from someone that expects the economy to grow from a revenue source that in reality, doesn't present itself except in the face of bitter hardship.

Nope.

and that's the point.

Remember when we had a discussion about whether the government can crowd out private money? Remember the arguments on whether the measure of that is simply interest rates.

Well, some of the result of crowding out is NET SAVINGS". One of the mechanisms that leads us to be a net saver is crowding out. When the government particularly with deficit spending, crowds out private money.. it means that more money gets saved.
When the government provides a loan, a service or a product that could be produced by private industry it lessens the investment by private industry and thus less spending and more savings.

(and of course there is also monies in the form of credits, bridges to nowhere etc.. which goes into pockets of the wealthy that are more prone to save)

That's one of many things that John and apparently you is missing. John and now you argue that we need deficit spending because we are net savers.. but you and he fail to realize one of the reasons that we are net savers is because of government spending.

with less crowding out etc.. the more money would be invested by the private market and less money would be saved.

 

[Kushinator]

What do higher taxes do to personal spending?

That depends on who is the one paying more in taxes. If those who have high savings rates pay more in taxes, it won't have much, if any, impact. If those who have low savein....... you get the point.

What does more money going to the Federal Govt. do to the local economy.

Again, that depends on the level of re-disbursement to that same local economy. In Texas, they receive more money from the federal government than they pay in taxes. Not so in NY, California, or Illinois.

Sorry logic and common sense proves it quite well.

So the data is wrong? Is it not true that inflation has averaged 1.4% since 2009? Has the monetary base (printing money) not increased by $3.5 trillion in that same time frame?

If what you claim is true, the actual data must be wrong. Is this your contention now?

Debt service as a percentage of Record budgets is going to be low but then again the amount really doesn't both you because the percentage is low, just like the Reagan debt of 1.7 trillion is much worse than the 8.6 trillion Obama debt because the percentage change is higher. That is liberal logic

Debt service has not impacted the governments ability to borrow or spend; meaning, it isn't a drag on economic growth.

 

[Critter7r]

Nope.

and that's the point.

Remember when we had a discussion about whether the government can crowd out private money? Remember the arguments on whether the measure of that is simply interest rates.

Well, some of the result of crowding out is NET SAVINGS". One of the mechanisms that leads us to be a net saver is crowding out. When the government particularly with deficit spending, crowds out private money.. it means that more money gets saved.

Well, then we must be crowding out less than ever, since the savings rate has been decreasing for decades.

When the government provides a loan, a service or a product that could be produced by private industry it lessens the investment by private industry and thus less spending and more savings.

(and of course there is also monies in the form of credits, bridges to nowhere etc.. which goes into pockets of the wealthy that are more prone to save)

That's one of many things that John and apparently you is missing. John and now you argue that we need deficit spending because we are net savers.. but you and he fail to realize one of the reasons that we are net savers is because of government spending.

with less crowding out etc.. the more money would be invested by the private market and less money would be saved.

Less money IS being saved.

 

[Kushinator]

Well, some of the result of crowding out is NET SAVINGS". One of the mechanisms that leads us to be a net saver is crowding out. When the government particularly with deficit spending, crowds out private money.. it means that more money gets saved.

:lamo

No! It was explained rather concisely:

By itself an increase in the deficit, either in the form of an increase in government spending or a reduction in taxes, causes an increase in demand. But how this affects output, employment and growth depends on what happens to interest rates.

When the economy is operating near capacity, government borrowing to finance an increase in the deficit causes interest rates to rise. Higher interest rates reduce or “crowd out” private investment, and this reduces growth.

The “crowding out” argument explains why large and sustained government deficits take a toll on growth; they reduce capital formation. But this argument rests on how government deficits affect interest rates, and the relationship between government deficits and interest rates varies.

How do higher interest rates reduce growth??? Simply by reducing the level that goes to fund investments relative to the level going to pay interest.

:lamo

But by all means, carry on with this shocking display of make believe.

 

[jaeger19]

I said that an outsized share of income is going to the rich, which is true. But that is a separate problem.



That's like going on a diet by starving your chickens and cows.



Because too much demand would outstrip our economy's ability to meet demand, which would drive up prices.

If you really have a problem understanding this, then there is little hope for you. I truly hope, for your sake, that you are just raising this argument (yet again) to be a P.I.T.A.

1. that isn't a separate problem.. I have been trying to get you to see that.. but you absolutely refuse to do so. I suspect because it bites into your ideology

2. No.. because your premise is to feed the farmer steak because maybe a chicken or cow might benefit. (see above)

3. No John.. tell him the real reason that it would drive up prices.. it would cause inflation.

Not "outstrip the economies ability to meet demand. The country and world has huge capacity to meet demand John.

 

[Conservative]

That depends on who is the one paying more in taxes. If those who have high savings rates pay more in taxes, it won't have much, if any, impact. If those who have low savein....... you get the point.



Again, that depends on the level of re-disbursement to that same local economy. In Texas, they receive more money from the federal government than they pay in taxes. Not so in NY, California, or Illinois.



So the data is wrong? Is it not true that inflation has averaged 1.4% since 2009? Has the monetary base (printing money) not increased by $3.5 trillion in that same time frame?

If what you claim is true, the actual data must be wrong. Is this your contention now?



Debt service has not impacted the governments ability to borrow or spend; meaning, it isn't a drag on economic growth.

A lot of depends there but none when it comes to those who claim deficits don't matter and we need govt. deficit spending. Aren't there a lot of depends there like where the money is spent?

As for savings and higher taxes regardless of who pays them higher taxes still affect human behavior to different degrees but human behavior is something many here don't seem to understand or even try to understand

 

[jaeger19]

:lamo

No! It was explained rather concisely:



How do higher interest rates reduce growth??? Simply by reducing the level that goes to fund investments relative to the level going to pay interest.

:lamo

But by all means, carry on with this shocking display of make believe.

Kushinator.. it was already explained to you how that is incomplete. Government competes with private industry which crowds out.

Just because you lack the understanding to figure out that when the government say.. decides to build or support building healthcare clinics. that this competes with private interest. Or when it gives a special subsidy to a few large corn growers.. or a myriad of other things.. that this is also crowding out and is not captured by "interest rates".

You got schooled on this before. Heck.. I doubt you even understood that this can happen if I had not brought it up. And provided links of examples of such.

The only one in make believe land is you.. who think that interests rates are the only indicator of crowding out.

 

[Kushinator]

Aren't there a lot of depends there like where the money is spent?

Yes!!!!!!!!!!!!!

Giving the money to people with low or negative savings will ensure it is spent. Giving the money to fund foreign invasions is actually a negative; as it costs both lives and real resources that are not deployed within the country itself.

As for savings and higher taxes regardless of who pays them higher taxes still affect human behavior to different degrees but human behavior is something many here don't seem to understand or even try to understand

I understand that if Bill Gates has to pay an extra $50 million in taxes next year, it will have absolutely no impact on what he spends on himself next year.

Why haven't you responded to my point regarding inflation and printing? Do you lack the courage to admit you were wrong?

 

[Critter7r]

3. No John.. tell him the real reason that it would drive up prices.. it would cause inflation.

Not "outstrip the economies ability to meet demand. The country and world has huge capacity to meet demand John.

It would cause inflation because it would outstrip the economy's ability to meet demand.

Inflation doesn't just happen to happen.