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Thread: conservatives can no longer deny they've been lied to about deficits.

  1. #11
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    Re: conservatives can no longer deny they've been lied to about deficits.

    Quote Originally Posted by faithful_servant View Post
    ..and once again, a liberal ignores the FACT that it was a response to a DEM. Congress that triggered the last recession.
    Egads. Not even close. The 2008 recession had a lot of contributors, including:

    Refusal by Clinton and Bush 43 administrations to regulate derivatives, CDOs, CDSs, and other new financial instruments
    Greenspan keeping interest rates very low, which made lending for mortgages cheap, which helped inflate the bubble
    Failure of the ratings agencies to properly identify risk
    Failure of bank VAR systems and other internal mechanisms to identify risk
    Mortgage originators, who had no skin in the game, and quickly sold off new mortgages with poor documentation
    Mortgage originators and banks who thought it'd be a good idea to increase the number of subprime and exotic loans
    Outright fraudulent mortgage originators and banks, who just wanted warm bodies to sign loans
    Mortgage risk evaluation software, which was using out-of-date and inaccurate risk models
    Investment banks, who also often had no skin in the game, and quickly sold off new mortgages with poor documentation
    Investment banks that did everything they could to make their offerings as obscure as possible, and sell them not just to financial actors who should have known better, but also to people who had no business buying financial instruments they didn't understand
    Aforementioned financial entities that bought total crap without looking into it enough
    Aforementioned clueless buyers who had no business buying MBSs and CDOs and derivatives
    Real estate speculators, who took advantage of and fed the bubble
    Much of the American public, who were buying properties they couldn't afford, with mortgages they should never have taken out in the first place
    Pretty much everyone, who did not realize that there was a huge bubble in real estate

    Despite conservative screeching, Fannie & Freddie did very little. They were very late to the subprime market, and basically -- like Lehman -- were caught holding the bag.

    The government is actually more responsible for inaction -- failure to oversee new markets, rein in banks, and pop the bubble early -- than for actions. But that's very typical in a bubble. No one is ever rewarded for causing a recession earlier, even if doing so would reduce its intensity.

    And that's the truth. In a nutshell. A bit more complex than your narrative, but don't let that bother you.

  2. #12
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    Re: conservatives can no longer deny they've been lied to about deficits.

    Quote Originally Posted by Visbek View Post
    Nope.

    Clinton produced a surplus. Bush 43 burned right through it, and his policies -- namely, cutting taxes while waging two major wars (who does that?!?), adding Medicare Part D -- combined with revenue shortfalls caused by a major recession, produced record deficits.

    As the economy recovered, and revenues got back to normal, and we could pull back on the stimulus and war spending, and with a tiny tax hike towards the end, yes deficits dropped to a more normal level.

    Now, Trump's policies are set to send deficits rocketing back up again. He isn't going to cut Social Security or Medicare, two of the most expensive federal programs. He wants to increase defense spending, another huge program. He isn't going to cut VA spending, in fact he'll have to increase it if he wants to reduce wait times. Right off the bat, Trump refuses to cut or plans to increase spending for 70% of the federal budget.

    Further, his plan is to slash income and corporate taxes, which will cause another drop in revenues. Based on his current plans, he could add $5 trillion or more to the current debt.

    So. Can we put you down, on record, as someone who objects to high levels of both deficit spending and debt?
    There was no surplus under Clinton. The debt continued to rise every year under him as it has for every other president since Eisenhower.

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    Re: conservatives can no longer deny they've been lied to about deficits.

    Quote Originally Posted by joG View Post
    He was an excellent economist. Now he is a predictable populist liberal.
    Or, he's both an excellent economist and a populist liberal.

    Not much different than Milton Friedman, who was a brilliant in his economic insights, and kind of an idiot when it came to his libertarian fetish.

    Meanwhile, Krugman's comments are consistent. When unemployment is too high (and we're in a liquidity trap), deficits are not a problem. We're stimulating and lending our way out of a recession, and thus getting the economy back on track faster. But when you're at full employment, as we probably are now, then running huge deficits for stimulus programs (such as a big infrastructure program) doesn't offer economic benefits. Further, much of the increase in deficits will not be spent fixing problems, but will go to tax cuts for the wealthy -- and that does very little for the economy.

    Krugman's major objection is that Trump et al are basically taking advice from people who have been consistently wrong for decades -- Laffer, supply siders and the like. Even if we can handle bigger deficits and debts (which we can), that doesn't mean that increasing our liabilities without any benefits to the economy is a good idea.

    Figuring that out actually requires reading what he has to say, with an open mind. Who has time for that, amirite?

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    Re: conservatives can no longer deny they've been lied to about deficits.

    Quote Originally Posted by Visbek View Post
    Egads. Not even close. The 2008 recession had a lot of contributors, including:

    • Refusal by Clinton and Bush 43 administrations to regulate derivatives, CDOs, CDSs, and other new financial instruments
    • Greenspan keeping interest rates very low, which made lending for mortgages cheap, which helped inflate the bubble
    • Failure of the ratings agencies to properly identify risk
    • Failure of bank VAR systems and other internal mechanisms to identify risk
    • Mortgage originators, who had no skin in the game, and quickly sold off new mortgages with poor documentation
    • Mortgage originators and banks who thought it'd be a good idea to increase the number of subprime and exotic loans
    • Outright fraudulent mortgage originators and banks, who just wanted warm bodies to sign loans
    • Mortgage risk evaluation software, which was using out-of-date and inaccurate risk models
    • Investment banks, who also often had no skin in the game, and quickly sold off new mortgages with poor documentation
    • Investment banks that did everything they could to make their offerings as obscure as possible, and sell them not just to financial actors who should have known better, but also to people who had no business buying financial instruments they didn't understand
    • Aforementioned financial entities that bought total crap without looking into it enough
    • Aforementioned clueless buyers who had no business buying MBSs and CDOs and derivatives
    • Real estate speculators, who took advantage of and fed the bubble
    • Much of the American public, who were buying properties they couldn't afford, with mortgages they should never have taken out in the first place
    • Pretty much everyone, who did not realize that there was a huge bubble in real estate

    Despite conservative screeching, Fannie & Freddie did very little. They were very late to the subprime market, and basically -- like Lehman -- were caught holding the bag.

    The government is actually more responsible for inaction -- failure to oversee new markets, rein in banks, and pop the bubble early -- than for actions. But that's very typical in a bubble. No one is ever rewarded for causing a recession earlier, even if doing so would reduce its intensity.

    And that's the truth. In a nutshell. A bit more complex than your narrative, but don't let that bother you.
    Yes, there were a lot of causes, but the post I was replying to tried to lay the responsibility at the Fed. leadership level at the feet of the President, when the TRUTH is that level of responsibility gets laid at the feet of Congress. The market constricting part of the equation was triggered in part by the impending election of a Dem controlled Congress. That's the part that the post I was responding to tried to lay at Pres. Bush's feet when it should be laid at the feet of the anti-business Dem. congresscritters coming into office. Sorry if I didn't offer up a full analysis of every little detail to satisfy you, but I was addressing just the one piece of this large pie.
    Our nation has not always lived up to its ideals, yet those ideals have never ceased to guide us. They expose our flaws, and lead us to mend them. We are the beneficiaries of the work of the generations before us and it is each generation's responsibility to continue that work. - Laura Bush

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    Re: conservatives can no longer deny they've been lied to about deficits.

    Quote Originally Posted by Harshaw View Post
    More than that, liberal luminaries such as Paul Krugman were urging that "debt scolds" be ignored, and that there should be deficit spending for years to come in the Hillary administration:

    http://krugman.blogs.nytimes.com/201...-macro-policy/

    That was this past August; he re-affirmed by tweet in Ocotober:

    Attachment 67212280

    But within the last few days, now that there's going to be a Republican administration, in his own words, "deficits matter again."

    https://www.nytimes.com/2017/01/09/o...2Fpaul-krugman

    There's hardly a shred of difference between the economic conditions of late October and today, so the only explanation for the about-face is abject, slobbering hackery.
    You seem incredibly confused, the left is not claiming that deficits matter, the left is condemning the abject hypocrisy of the right as they immediately flip flop on deficits based on the party of the president.

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    Re: conservatives can no longer deny they've been lied to about deficits.

    Quote Originally Posted by Taylor View Post
    There was no surplus under Clinton. The debt continued to rise every year under him as it has for every other president since Eisenhower.


    Wrong. There were multiple years of genuine surpluses under Clinton. Revenues were greater than outlays. By any definition, that is a surplus.

    The public debt -- the amount borrowed from the public, and the measure that pretty much everyone uses -- dropped slightly during those deficit years.

    The gross debt -- which includes intergovernmental loans -- did continue to go up. However, that's because when payroll taxes run a surplus, the government is required by law to lend those funds to the rest of the government. I.e. when payroll taxes run a surplus, gross debt increases. Further, when we draw down from the Social Security trust fund, gross debt can shrink, even though Social Security is in a more precarious position.

    Gross debt is a valid measure. However, a) only if you use it as a consistent measure, and b) only when you actually understand how it works. It's not valid when the only reason to cite it is to blast Democrats, and/or obscure how Republican political leaders don't actually give a crap about shrinking government or reducing debts.

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    conservatives can no longer deny they've been lied to about deficits.

    Quote Originally Posted by faithful_servant View Post
    Yes, there were a lot of causes, but the post I was replying to tried to lay the responsibility at the Fed. leadership level at the feet of the President, when the TRUTH is that level of responsibility gets laid at the feet of Congress. The market constricting part of the equation was triggered in part by the impending election of a Dem controlled Congress. That's the part that the post I was responding to tried to lay at Pres. Bush's feet when it should be laid at the feet of the anti-business Dem. congresscritters coming into office. Sorry if I didn't offer up a full analysis of every little detail to satisfy you, but I was addressing just the one piece of this large pie.
    Well then your "TRUTH" is horse****. President Bush 2 forcibly removed the states mortgage underwriting standards. His own ****ing working group unequivocally blamed his own policies. No amount of willful ignorance can change those facts.

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    Re: conservatives can no longer deny they've been lied to about deficits.

    Quote Originally Posted by Visbek View Post
    Or, he's both an excellent economist and a populist liberal.

    Not much different than Milton Friedman, who was a brilliant in his economic insights, and kind of an idiot when it came to his libertarian fetish.

    Meanwhile, Krugman's comments are consistent. When unemployment is too high (and we're in a liquidity trap), deficits are not a problem. We're stimulating and lending our way out of a recession, and thus getting the economy back on track faster. But when you're at full employment, as we probably are now, then running huge deficits for stimulus programs (such as a big infrastructure program) doesn't offer economic benefits. Further, much of the increase in deficits will not be spent fixing problems, but will go to tax cuts for the wealthy -- and that does very little for the economy.

    Krugman's major objection is that Trump et al are basically taking advice from people who have been consistently wrong for decades -- Laffer, supply siders and the like. Even if we can handle bigger deficits and debts (which we can), that doesn't mean that increasing our liabilities without any benefits to the economy is a good idea.

    Figuring that out actually requires reading what he has to say, with an open mind. Who has time for that, amirite?
    The economic indicators in late October were not appreciably different from today, and pointed to the conditions we have today, yet he prescribed years -- YEARS -- of deficit spending to come. He'd still be saying it right now if Hillary were the president-elect.

    The only thing he's "consistent" in is that he does about-faces when the White House changes hands. THAT, he does shamelessly.
    If you feel a need to "reinterpret" the Constitution, you must know that what you want to do is unconstitutional.
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    Re: conservatives can no longer deny they've been lied to about deficits.

    Quote Originally Posted by faithful_servant View Post
    Yes, there were a lot of causes, but the post I was replying to tried to lay the responsibility at the Fed. leadership level at the feet of the President, when the TRUTH is that level of responsibility gets laid at the feet of Congress.
    ...and I just briefly explained how that isn't correct either. You're being equally inaccurate in your attempts to correct someone else.

    Yes, Congress had a role -- I forgot to mention that the repeal of Glass-Steagall was a big factor. But Congress didn't act alone; someone had to sign those laws, let alone guide them through Congress.

    Clinton, Bush 43, Greenspan also a variety of influences and responsibility. But overall, the government piece was relatively small. It was mostly market mechanisms, of capital looking for somewhere to go, then forming a bubble, then the private sector pumping it up to get their piece. Most of the government's responsibility is in a failure to regulate.

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    Re: conservatives can no longer deny they've been lied to about deficits.

    Quote Originally Posted by Casca XV View Post
    The GOP lied about the Deficit? Are you F**king kidding?

    The Deficit is the annual budget shortfall that creates the National Debt, and Obama has increased the National Debt more than all the prior 43 Presidents combined.

    Yet Dems use phony numbers to claim he cut the deficit in half, leaving out that he quadrupled it just before that.
    I thank you for your prior military service... admire all Marines, and recognize your current work among psychopaths might warp your views. Please consider protecting your head better during your MMA workouts.

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