US Stocks Down 15% in 2 Weeks

[BigSkyBob]

And thank you President Obama for providing this leadership to new depths.

Yes, Obama's leadership can be blamed.  But what about the GOP's unwillingness to raise taxes? We got into this mess due to tax cuts and we have to get out of it by slowly raising the tax rates back up. If anyone thinks we can escape the mess without raising taxes, they don't deserve to be in Washington. Those people are completely naive and unwilling to face reality. (and yes the Dems who won't cut Medicare are the same, but they aren't so powerful, are they now?)

Who is disagreeing?  I think part of this increasing income taxes.  I think it takes someone to do both.  I'd be willing to give Obama a pass on being a tax and spend liberal if he wouldn't do the spending part.

Dude Obama already agreed to huge spending cuts,

Reality check, Obama had little choice but to agree to reducing the growth of spending from its projected growth of nine trillion dollars to, maybe, five trillion dollars. Only in Washington is spending five trillion dollars more a "cut."

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[BigSkyBob]

What's funny is that this is basically TARP-redux.

Threaten end of the world if we don't pass TARP (in this case, raise debt ceiling with fake cuts and revenue increases).  Pass TARP (debt ceiling raise, etc.), market crashes.

Am I basically the only poster here who was against both pieces of legislation?  Serious question really.

No.

[BigSkyBob]

The President never has any role in legislation, J.J. - he's from the executive branch you see.  The Legislative Branch is the Congress.

Ever hear of a veto?

The veto would have led to precisely the same collapse.  The only way to avoid the depression was for the Republican congress to raise taxes upon the rich.

No, that would be merely an attempt to redouble upon a failed policy.

[BigSkyBob]

The veto would have led to precisely the same collapse.  The only way to avoid the depression was for the Republican congress to raise taxes upon the rich.

So Obama had the power, but lacked the leadership to use it.

No, he had no power at all.  He could accept the House's madness, and have a depression, or veto and have a depression.  It is the same either way.  He had no power at all to change anything.

Yes, there are two things, in tandem, to solve the fiscal problem, cut spending and raise revenue.

Actually a more responsible economic program - and one which would have lead to a more secure AAA rating - would be to increase both spending and taxation.

This is why the present situation exists. Democrats aren't talking about a "balance" between taxes and so-called "cuts."  Their intention in raising taxes is to spend the money. That is why it is utterly pointless for Republicans to agree to any new taxes. They won't reduce the deficit. The Democrats would just spend the money, and point to the ballooning deficit to justify even more taxes [that will in turn be spent, ad infinitum.]

[BigSkyBob]

Well you can all quit freaking out about 1929 redux.

Then again, maybe not.

[BigSkyBob]

John Boehner said he got 98% of what he wanted with the Debt Ceiling Deal. 

Boehner may very well have gotten want he wanted: cover to screw deficit hawks, in general, and the Tea Party in particular. Deficit hawks, in general, and the Tea Party in particular got closer to 2% of what they want as opposed to 98%

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Our downgrade has everything to do with Obama massively increasing spending while cutting taxes.

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Not true, but, why let minor details like facts get in the way of a good story?

[BigSkyBob]

Our downgrade has everything to do with Obama massively increasing spending while cutting taxes.
 

Seriously?  Obama was responsible for about $1.44 trillion vs Bush's $5.07 trillion.  Heck, the Bush tax cuts alone cost us $1.8 trillion.

1)  Obama wasted a nearly a trillion dollars on a failed "stimulus" program, alone. That, and other spending increases, and tax cuts, caused the downgrade. No matter how much you claim Bush was the one that loaded up the camel, the fact remains that it was Obama that placed the straw that broke the camel's back [the trillion dollar stimulus,tax cuts,etc.] He should have reasonably known that the debt and deficit levels was too high, and acted to hold the line. Instead, he went on a spending orgy that cost this nation its AAA credit rating.

2) Your claim that the Bush tax cuts cost "$1.8 trillion" is pure conjecture. All that we know for sure is how much revenue we did raise under the Bush tax policy. We simply don't know what those revenues would have been had tax policy not been altered. In any case, in the next two years they are the Obama tax cuts, and, in the last two years they were really Obama's tax cuts by assent.

[BigSkyBob]

Our downgrade has everything to do with Obama massively increasing spending while cutting taxes.
 

Seriously?  Obama was responsible for about $1.44 trillion vs Bush's $5.07 trillion.  Heck, the Bush tax cuts alone cost us $1.8 trillion.

And S&P pointed that out in their assessment.

It is the assessment of S&P that France is AAA. Credit default swaps on Chilean  debt are actually cheaper than those for France's debt. We could discuss some of their other calls going into 2008.

[BigSkyBob]

Our downgrade has everything to do with Obama massively increasing spending while cutting taxes.
 

Seriously?  Obama was responsible for about $1.44 trillion vs Bush's $5.07 trillion.  Heck, the Bush tax cuts alone cost us $1.8 trillion.

Multiply that  $1.44 trillion by four.  Bush had eight fiscal years, Obama's had two.  S & P also pointed that out.

You have to increase revenue and cut spending (I'd say cut more of the latter, as that obviously didn't work).

To be fair, it has been 2 1/2 years of Obama so it should be multiplied by 3.2 (bringing it to $4.6 trillion).  Waaaaay too much but still less than Bush.

I don't think this is the correct comparison. The deficit since Obama has taken office is greater than 1.44 trillion. Clearly, some of Obama's deficit is being apportioned to previous Presidents. The comparision is between Bush over ten-and-a-half years versus Obama over two-and-a-half years. To have the correct comparison, you must see what Obama's responsibility is eight years from now, and compare that to  Bush's figure, today. Or, you could compare Obama's $1.44 trillion today, to what Bush's responsibility was exactly eight years ago.

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[BigSkyBob]

Our downgrade has everything to do with Obama massively increasing spending while cutting taxes.
 

Seriously?  Obama was responsible for about $1.44 trillion vs Bush's $5.07 trillion.  Heck, the Bush tax cuts alone cost us $1.8 trillion.

1)  Obama wasted a nearly a trillion dollars on a failed "stimulus" program, alone. That, and other spending increases, and tax cuts, caused the downgrade. No matter how much you claim Bush was the one that loaded up the camel, the fact remains that it was Obama that placed the straw that broke the camel's back [the trillion dollar stimulus,tax cuts,etc.] He should have reasonably known that the debt and deficit levels was too high, and acted to hold the line. Instead, he went on a spending orgy that cost this nation its AAA credit rating.

It isn't a matter of "claiming" that Bush loaded the camel ... it is fact.

No doubt Bush place one-time loads on the camel to fight wars in the Middle-East, and he placed a ongoing burden to fund the medicare prescription benefit, "No child left behind," and, the ongoing costs for wounded soldiers.  On the other hand, LBJ left the one-time burden of Vietnam, and the financial blackholes of medicaid, and medicare. If we are going to assign blame to whom loaded the camel, LBJ is the prime offender.

Obama's tax subsidy scheme is going to be another financial blackhole like medicare and medicaid. Employers are going to look at the subsidy and say, "Why should I provide subsidized health insurance [for low-wage workers] if the government would do it for me if I dropped my plan?" And, this is not to mention the trillion for the failed "stimulus" bill, and the costs of "surging" the war in Afghanistan, bombing Libya, nation-building in Iraq, and the ongoing costs for soldiers wounded in his wars.

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Only in your imagination. In the real world, S&P placed the blame on its belief that the promised budget cuts won't materialize.

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True, but it is reasonable to make assumptions based on historical performance.
[/quote]

True, but, that score is not based on reasonable assumptions. 

[BigSkyBob]

Ever hear of the Keynesian Endpoint?

Why would I hear of some nonsense coined a year ago by an idiot?

Actually first approached in the mid to late 1930.  Make sure you send a thank you note to Hitler for not getting there.

Okay, refresh me. I know that they tried to lower the deficits in 1937, and the economy softened a second time. Keynesians claim that it showed their theory was correct, and maintaining deficits was the way to go. Their critics note that WWII, not Keynesian deficits, ended the depression.

Is the "Keynesian endpoint" the point where the economy can't afford the zombie juice any longer, the artificial prosperity ends, and the slump resumes?

[BigSkyBob]

Oh BigSkyBob,

No doubt Bush place one-time loads on the camel to fight wars in the Middle-East, and he placed a ongoing burden to fund the medicare prescription benefit, "No child left behind," and, the ongoing costs for wounded soldiers. 

The wars in Afghanistan and Iraq were "one-time loads"?  So they are over? 

Well, they ceased to be Bush's wars in late January 2009. Since then, Obama has had the option of withdrawing at any time of his choosing. Obama chose war in Iraq, Libya, and an ever larger war in Afghanistan. That was Obama's choice, and the costs of perpetuating those war are Obama's.

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What?  You've gotta go back to the 1960s?  Heck, why not blame FDR for the New Deal? [/quote]


Yep, FDR passed the blackhole of Social Security with a paltry 1% tax to fund it.  Had he started straight at 7% that would have been a different story.

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True, but it is reasonable to make assumptions based on historical performance.
[/quote]

True, but, that score is not based on reasonable assumptions. 
[/quote]

Just because you don't like the #'s doesn't make them any less valid.  But don't take my word for it.  Google "cost of bush tax cuts" and read article after article after article.
[/quote]

Well, the first hit was the Washington Post fact checker that stated 1.35 trillion is too high an estimate.


However, if you type "dynamic scoring of Bush Tax cuts" you hit articles such as


http://lockestep.blogspot.com/2011/03/static-versus-dynamic-scoring.html

The figures you cite are bogus because the assumption they make are simply wrong. For instance, Bush cut capital gains taxes. The effect was to drive up stock prices, which increased the base of capital gains taxed. Those cuts may not have been a good idea, but, they didn't reduce tax receipts the amount static models scored them.

[BigSkyBob]

Hmm... ok.  So you're saying WWII wasn't Keynesian?

I doubt if Hitler was a Keynesian.  Even in the 1930's the the government didn't have enough resources to get the US out of the Depression.  It takes the private sector to solve the problem.

Um, I hate to break it to you, J.J., but the 'resources' of the 'private sector' are available to the government - through the obvious expedients of taxation, nationalization, etc. 

The point about World War Two was that it represented a government takeover of the 'private' economy, which is what solves depressions.

Reality check, the Germans did the same thing, and they ended in ruins.

[BigSkyBob]

...World War Two was that it represented a government takeover of the 'private' economy, which is what solves depressions.

Reality check, the Germans did the same thing, and they ended in ruins.

Unrelated.  The government takeover of the economy was just as salubrious in Germany as in the US.  You're talking about the fighting, which was a separate issue.

Well, if the fighting had gone the other way, we would have been left in ruins. The only reason you can plausibly claim that the "government take over of the economy" got us out of the depression is the fact we won. Had we lost, you wouldn't be making that claim.

[BigSkyBob]

FDR realized he couldn't win World War II without the private sector (and pissed off a number of New Dealers in the process).

But you do realize that economic activity was only created by government fiat, government order, government contract, don't you J.J.?  Had their not been a WWII there would never have been an escape from the Depression,

Post hoc ergo proctor hoc. All we know for sure is that Keynesian economics failed to end the depression before WWII, while our economy boomed after WWII. The German, and Japanese economies, also, boomed after the war. You can't plausibly claim that it was government fiat in WWII that lead to their booms, because their policies left their countries in a pile of rubble. Yet, you make the exact same claim about the US!

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Market economics lead Germany from rubble to prosperity in a couple of decades.

[BigSkyBob]

...our economy boomed after WWII. The German, and Japanese economies, also, boomed after the war. You can't plausibly claim that it was government fiat in WWII that lead to their booms, because their policies left their countries in a pile of rubble. Yet, you make the exact same claim about the US!

Of course I can make that claim - the Keynesian economics caused a boom in all countries, as it always does. 

Germany simply didn't follow a Keynesian path after WWII.

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The boom is the US was in part the result of our bombing their factories. We were the last producer left standing.

[BigSkyBob]

...our economy boomed after WWII. The German, and Japanese economies, also, boomed after the war. You can't plausibly claim that it was government fiat in WWII that lead to their booms, because their policies left their countries in a pile of rubble. Yet, you make the exact same claim about the US!

Of course I can make that claim - the Keynesian economics caused a boom in all countries, as it always does. 

Germany simply didn't follow a Keynesian path after WWII.

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The boom is the US was in part the result of our bombing their factories. We were the last producer left standing.

This isn't true in regards to Germany. Production in Germany actually increased through 1944 (...in large part due to workings of Albert Speer).

1) This isn't true. Civilian production was cancelled. Military production topped out in mid-1994, and declined thereafter.

2) There was a lot more bombings after mid 1944.

[BigSkyBob]

...our economy boomed after WWII. The German, and Japanese economies, also, boomed after the war. You can't plausibly claim that it was government fiat in WWII that lead to their booms, because their policies left their countries in a pile of rubble. Yet, you make the exact same claim about the US!

Of course I can make that claim - the Keynesian economics caused a boom in all countries, as it always does. 

Germany simply didn't follow a Keynesian path after WWII.

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The boom is the US was in part the result of our bombing their factories. We were the last producer left standing.

This isn't true in regards to Germany. Production in Germany actually increased through 1944 (...in large part due to workings of Albert Speer).

1) This isn't true. Civilian production was cancelled. Military production topped out in mid-1994, and declined thereafter.

2) There was a lot more bombings after mid 1944.

1) I didn't know we were differentiating between civilian and military production.

We aren't. In 1944 German armament production peaked. Total production did not peak. Civilian production was cancelled in late '43. You confused the fact that armament production increased until mid-1944 with total production peaking.

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Incrementally, much of Germany was reduced to rubble. The notion that the war left Germany a legacy of factories ready for civilian production is bogus.