Welcome, Guest. Please login or register.
Did you miss your activation email?
October 23, 2014, 12:12:35 am
HomePredMockPollEVCalcAFEWIKIHelpLogin Register
News: Don't forget to get your 2013 Gubernatorial Endorsements and Predictions in!

+  Atlas Forum
|-+  General Politics
| |-+  Economics (Moderator: ag)
| | |-+  Tax Code That Encourages Manufacturing and Savings
« previous next »
Pages: 1 [2] 3 4 5 Print
Author Topic: Tax Code That Encourages Manufacturing and Savings  (Read 5201 times)
opebo
YaBB God
*****
Posts: 47609


View Profile
« Reply #25 on: January 17, 2012, 01:06:08 pm »
Ignore

Interesting statistic prior to the crash. The average young graduate prior to 2008 took about 15 years to reach his parents income level, but it only took him about 5 years to reach his parents standard of living. Guess what made up the difference?

Dubious right-wing definitions of 'standard of living'?

Income level is a less dubious statistic than 'standard of living', Wonk, because the latter is terribly prone to funny business like overrating the importance of useless things like the internet, computer machines, or consumer electronics and underrating that a car is far more expensive as a percentage of income than it was in the better days (1970s).

The fact is that income for most people has been in a terrible relative downward spiral since Reagan took office - as is inevitable in any neoliberal economic regime.
Logged

The essence of democracy at its purest is a lynch mob

Wonkish1
YaBB God
*****
Posts: 2214


View Profile
« Reply #26 on: January 17, 2012, 01:47:48 pm »
Ignore

Interesting statistic prior to the crash. The average young graduate prior to 2008 took about 15 years to reach his parents income level, but it only took him about 5 years to reach his parents standard of living. Guess what made up the difference?

Dubious right-wing definitions of 'standard of living'?

Income level is a less dubious statistic than 'standard of living', Wonk, because the latter is terribly prone to funny business like overrating the importance of useless things like the internet, computer machines, or consumer electronics and underrating that a car is far more expensive as a percentage of income than it was in the better days (1970s).

The fact is that income for most people has been in a terrible relative downward spiral since Reagan took office - as is inevitable in any neoliberal economic regime.

Actually its quite simple really. How much do they spend! But to expect Opebo to get this is apparently asking way to much. I guess in Opebo's world a car should be "weighted" and carry a value 5 times its purchase price for calculating standard of living?
Logged
opebo
YaBB God
*****
Posts: 47609


View Profile
« Reply #27 on: January 17, 2012, 01:55:42 pm »
Ignore

Wonk are you referring to cheap junk from WalMart?
Logged

The essence of democracy at its purest is a lynch mob

Wonkish1
YaBB God
*****
Posts: 2214


View Profile
« Reply #28 on: January 17, 2012, 02:47:43 pm »
Ignore

Wonk are you referring to cheap junk from WalMart?

Wow you just keep on sinking lower and lower don't you? Its all spending combined. So food, clothes, cars, housing, interest/debt service, vacations, insurance, electronics, restaurants, etc. Add up all of the spending for the year and there you go. Damn you're bad!
Logged
WillK
YaBB God
*****
Posts: 1291


View Profile
« Reply #29 on: January 18, 2012, 09:27:49 am »
Ignore

... So you have to eat. You have to have a place over your head. You can delay the fixing of a problem on your car or some maintenance, but eventually your stupid not to spend on it if you have the money. ...

Well thats the crux of it:  lack of money = lack of expenditure to meet demand; therefore stimulate system by getting money out there.

Quote
The problem is that encouraging of debt to purchase things that don't have an adequate return on capital either by lowering interest rates to an artificially low level or by directing public entities to spend more money just adds more risk into the system

Stagnant economies also have risks. 

Quote
and (in the case of public spending) removes other capital from the system that would have been used on better risk vs. return spending that grew the economy more.

Maybe yes, maybe no.  I see why that is an attractive conclusion from models created in an econ class, but it seems to me that in the real world it is less clear cut.  Depends on where the capital is drawn from and how it is deployed. 

Logged
Wonkish1
YaBB God
*****
Posts: 2214


View Profile
« Reply #30 on: January 18, 2012, 11:15:07 am »
Ignore

... So you have to eat. You have to have a place over your head. You can delay the fixing of a problem on your car or some maintenance, but eventually your stupid not to spend on it if you have the money. ...

Well thats the crux of it:  lack of money = lack of expenditure to meet demand; therefore stimulate system by getting money out there.

Quote
The problem is that encouraging of debt to purchase things that don't have an adequate return on capital either by lowering interest rates to an artificially low level or by directing public entities to spend more money just adds more risk into the system

Stagnant economies also have risks.  

Quote
and (in the case of public spending) removes other capital from the system that would have been used on better risk vs. return spending that grew the economy more.

Maybe yes, maybe no.  I see why that is an attractive conclusion from models created in an econ class, but it seems to me that in the real world it is less clear cut.  Depends on where the capital is drawn from and how it is deployed.  

But the money you are referring to is debt, and if its a prudent investment like replacing a roof you'll take out the debt really regardless of the cost of capital. The only thing lowering the cost of capital does is encourage people to take out debt to spend on stupid investments or luxury spending. So the lack of money = lack of debt in our system. The creation of it for stupid spending isn't a good thing for the system.

Actually stagnation is associated with high debt burdens and inflationary environments. So the idea that putting more debt into the system to stimulate demand is a way to stave off stagflation is actually quite retarded.


Actually, its quite simple really. If an investment locks in a high return you will take out the debt regardless if the cost of capital is 3%, 5%, 8%, 20%, etc. For example, the ability to earn an income is the single highest return on capital you can get so taking out a loan to purchase a car even if its a 10% interest rate is a no brainer. By lowering the cost of capital you make less prudent investments more attractive. So if you are actually talking about "stimulating" the economy you are referring to those less prudent investments being made on credit and this goes for public spending as well. So then its a fact that there would be less capital and reserves left to make those more prudent investments. Keep in mind that any single moment in time there is a finite amount of capital to be lent out just the same as their is a finite amount of lumber, gasoline, or cases of beer. I sincerely hope that makes sense to you because its not "maybe yes, maybe no".



Look I get the reasons why you take the positions you do, but once you go into the detail I am  I find it hard to believe someone could stay objective and keep on taking those positions.
« Last Edit: January 18, 2012, 11:21:49 am by Wonkish1 »Logged
opebo
YaBB God
*****
Posts: 47609


View Profile
« Reply #31 on: January 18, 2012, 11:33:57 am »
Ignore

...Its all spending combined. So food, clothes, cars, housing, interest/debt service, vacations, insurance, electronics, restaurants, etc. Add up all of the spending for the year and there you go. Damn you're bad!

But what's your point?  You claimed that 'standard of living' was going up even though income is going down.. how can this be other than 'technological advance' or cheaper junk from slave countries?
Logged

The essence of democracy at its purest is a lynch mob

Wonkish1
YaBB God
*****
Posts: 2214


View Profile
« Reply #32 on: January 18, 2012, 11:48:31 am »
Ignore

...Its all spending combined. So food, clothes, cars, housing, interest/debt service, vacations, insurance, electronics, restaurants, etc. Add up all of the spending for the year and there you go. Damn you're bad!

But what's your point?  You claimed that 'standard of living' was going up even though income is going down.. how can this be other than 'technological advance' or cheaper junk from slave countries?

I asked the question and its clear you weren't able to figure out the answer. The answer is debt. The reason why graduates achieve a standard of living equal to their parents a whole 10 years prior to their income catching up to their parents is because prior to the crash these folks accomplished that by financing that lifestyle on credit.

So yeah instead of thinking about some obvious answers you instead looked for weird complicated answers that didn't have anything to do with the issue.

I hope the real answer makes a lot more sense for ya.
Logged
opebo
YaBB God
*****
Posts: 47609


View Profile
« Reply #33 on: January 18, 2012, 12:12:22 pm »
Ignore

But what's your point?  You claimed that 'standard of living' was going up even though income is going down.. how can this be other than 'technological advance' or cheaper junk from slave countries?

I asked the question and its clear you weren't able to figure out the answer. The answer is debt.

The reason why graduates achieve a standard of living equal to their parents a whole 10 years prior to their income catching up to their parents is because prior to the crash these folks accomplished that by financing that lifestyle on credit.

No it isn't!  It is because their income is too low.

Before my father started his own business, he was a unionized worker in the late 50s through the late 60s, and the rate of pay was equivalent to about $50-75/hour - this is what enabled the growth in the economy and the improvement in living standards back then.   The reason for the debt is simply the declining and unlivable incomes of the vast majority of americans nowadays (and after all debt is no problem if you have a livable and rising income, as you can simply pay it back).
Logged

The essence of democracy at its purest is a lynch mob

Wonkish1
YaBB God
*****
Posts: 2214


View Profile
« Reply #34 on: January 18, 2012, 01:19:20 pm »
Ignore

But what's your point?  You claimed that 'standard of living' was going up even though income is going down.. how can this be other than 'technological advance' or cheaper junk from slave countries?

I asked the question and its clear you weren't able to figure out the answer. The answer is debt.

The reason why graduates achieve a standard of living equal to their parents a whole 10 years prior to their income catching up to their parents is because prior to the crash these folks accomplished that by financing that lifestyle on credit.

No it isn't!  It is because their income is too low.

Before my father started his own business, he was a unionized worker in the late 50s through the late 60s, and the rate of pay was equivalent to about $50-75/hour - this is what enabled the growth in the economy and the improvement in living standards back then.   The reason for the debt is simply the declining and unlivable incomes of the vast majority of americans nowadays (and after all debt is no problem if you have a livable and rising income, as you can simply pay it back).

Your veering off the topic. I don't know what the amount of time was in the 50s for a new adult to achieve his parents income. Prior to the crash it averaged 15 years. It may have been shorter in the 50s. The point being made was that new adults have been achieving the standard of living of their parents in only an average of 5 years. The difference is a higher proclivity towards debt and less saving than their parents.

So you are talking about something completely different. The point was this large spread being financed on credit nothing more, nothing less. Lets say you succeed in boosting the income of folks today that doesn't change the fact that a large spread between spending and income financed on credit is not a good thing for our society. It adds risk to those indebted and the system and it straddles long term burdens on average people and entities. So way to completely bumble the point of the little factoid.

So by posters above saying that they are supportive of Keynesian policy to stimulate demand what they are really saying is to further encourage people to forgo saving for spending even when its luxury spending or imprudent investment that will later cost them more in interest expense or even blow up in their face when people realize the only thing that "investment" is being driven by is borrowing with artificially low interest rates. They are saying they would further encourage this horrible spread in the name of "stimulating the economy" even though this cheap credit to buy a new TV from Wal Mart is doing nothing to help the average American and on the contrary making things worse for them.

Opebo if you truly are worried about the little guy its the perforation of debt to fund luxury spending that should give you cause for concern instead of being on the side of Keynesian bankers that love it when the demand for credit is high and can make obscene profits with a large spread between an extremely low FFR/deposit rates and the interest rate they are lending at.
« Last Edit: January 18, 2012, 01:21:15 pm by Wonkish1 »Logged
Link
YaBB God
*****
Posts: 3464
View Profile
« Reply #35 on: January 18, 2012, 03:26:20 pm »
Ignore

Well you do realize that demand in the absence of cost is near infinite right? People want to buy things and you don't have to stimulate the desire to do so they will eventually do it anyway. Plus the vast majority of consumption is ongoing regardless of how the economy is doing. So you have to eat. You have to have a place over your head. You can delay the fixing of a problem on your car or some maintenance, but eventually your stupid not to spend on it if you have the money. Same for replacing your roof. Same for eventually replacing broken appliances, cars, etc. The list goes on and on. So when a demand site Keynesian says he wants to stimulate demand what he is really saying is that he wants to accelerate the purchasing of luxury items when a normal individual/entity given their current balance sheet finds it not ideal yet. And how they do it is through the stimulation of debt...personal, corporate, and public. The problem is that encouraging of debt to purchase things that don't have an adequate return on capital either by lowering interest rates to an artificially low level or by directing public entities to spend more money just adds more risk into the system and (in the case of public spending) removes other capital from the system that would have been used on better risk vs. return spending that grew the economy more. I'm in a hurry so I made this short and sweet and come back later if you have comments or ?s.

Okay I am finally beginning to see what the problem is.  Right wingers base their economic religion on erroneous assumptions instead of reality.  I find it interesting that you said this...

So you have to eat. You have to have a place over your head.  You can delay the fixing of a problem on your car or some maintenance, but eventually your stupid not to spend on it if you have the money.

This quote illustrates two huge errors in right wing thinking.  First of all the statement that you are stupid if you delay auto maintenance is true.  But the erroneous assumption that I find most "free market" right wing types make is that on balance people aren't stupid.  And in fact with all this "American exceptionalism" BS, whatever that means, I find right wingers put forth the thesis that Americans are the least likely people on the planet to be stupid.  Unfortunately reality, an obesity epidemic, and two unpaid for wars would seem to indicate otherwise.  People are stupid and do not always act in their own best interest.  And their stupidity (ie bad brakes) not only affects them it also affects the 1%er cruising around in his Bentley if the guy slams into him.

The other thing that bothers me about your statement is this...

...if you have the money.

I think a Keynesian intervention that ensures that we don't have masses of unemployed stressed out people driving around looking for jobs and healthcare with bad brakes is worth while.  Now obviously in the real world it would be difficult to fine tune a level of Federal spending that would accomplish that at a reasonable cost.  But we can do things like extend unemployment benefits and expand government healthcare programs to free up money for other necessities.

So when a demand site Keynesian says he wants to stimulate demand what he is really saying is that he wants to accelerate the purchasing of luxury items when a normal individual/entity given their current balance sheet finds it not ideal yet. And how they do it is through the stimulation of debt...personal, corporate, and public.

I do not consider health insurance and fire fighters "luxury items."  It's so bizarre how right wing thinking assumes all government spending is wasteful.  Rick Perry learned in a big way laying off a bunch of fire fighters is a bad idea when a chunk of his state burned up.  If he was a bit more Keynesian or just had a bit more of a common sense fiscal policy plenty of six figure homes may have not burned down.  The problem with a lot of this spending is the benefits are not always readily apparent to the masses.  You have to look two or three steps down the road to see the benefits.

The same can be said of bridges.  Bridges benefit everyone but no one is really pushed to be taxed or borrow money to fix them.  The only time they get attention is when they collapse.  I do not consider repair bridges a "luxury."  Free market capitalism will not build bridges in a timely and safe manner.  It makes sense to do a Keynesian intervention to build bridges and put people back to work so they can pay mortgages, save for their children's education, repair their brakes, buy health insurance, etc.  Hardly what I would call blowing your money on "luxuries."

The problem is that encouraging of debt to purchase things that don't have an adequate return on capital either by lowering interest rates to an artificially low level or by directing public entities to spend more money just adds more risk into the system and (in the case of public spending) removes other capital from the system that would have been used on better risk vs. return spending that grew the economy more.

You do realize that if we were to implement austerity measures and pay down the US debt interest rates would go down?  You realized that right?
« Last Edit: January 18, 2012, 03:30:24 pm by Link »Logged

Insane quote of the year-

"Every aspect of life in America is worse than when he [Obama] took over" -Marco Rubio
Politico
YaBB God
*****
Posts: 4888
View Profile
« Reply #36 on: January 18, 2012, 04:44:19 pm »
Ignore

Nobody is railing against public funding of basic infrastructure such as bridges/highways at the state level, firefighters/police officers at the local level, and the military at the national level. Even Adam Smith spoke out in favor of public funding of basic infrastructure.

Put aside the improper allocation of resources (e.g., getting government into realms it has no business being in) and perverse incentives, as noted by Wonk, and here's the biggest problem with Keynesiansim: The deficit spending never seems to go away even after the business cycle is on the upswing again. You can look at the data of many nations, and from a strictly Keynesian, theoretical point-of-view you would think these nations have been in the midst of 30+ consecutive years of recessionary conditions! Eventually the enormous, non-stop deficit spending adds up to a situation like Japan where debt-to-GDP is over 200%, which is obviously a figure that can only end in default.
Logged

"Government is the great fiction through which everybody endeavors to live at the expense of everybody else."

- Bastiat
Wonkish1
YaBB God
*****
Posts: 2214


View Profile
« Reply #37 on: January 18, 2012, 04:49:01 pm »
Ignore

LOL, Link. First starting off a discussion by saying people are majority retarded shouldn't win you many friends. Its interesting to see that type of Bill Maher like contempt for the average American so willingly.

Second, your argument has absolutely nothing to do with the comments I just made. The line about someone being stupid if they put off car maintenance for example wasn't an assumption to the overall argument. So maybe this should be the moment where I should say, "I'm beginning to see the problem liberals can always find a piece of a statement that they will take to completely misunderstand a point and that is why they never learn anything." The point to the first 9 sentences is that most spending is reoccurring even in a bad economy. This is a key point that Buffett has made over the course of the recession and its a correct one. Nothing in those first 9 sentences has anything to do with people being ramming into the back of a person because they didn't change their breaks. Instead in aggregate this notion that demand falls off a cliff in a recession is incorrect. Most of things people spend money they still do during a recession(they may delay some, but they still do). The list provided is just examples its not a crux of the argument. People can be stupid during a recession or a boom, it doesn't change the fact that the vast majority of consumption is ongoing even during a recession.

In regards to "if they have the money" piece. First, I'm referring to liquidity here which means both the having of cash and the access to cash and its again not a condition of the argument, but instead a qualifier of the example. Now when I refer to Keynesian stimulating of Demand you are looking at basically two things(and I thought that the reader would get the difference when I was talking about one or the other, I guess I was wrong so allow me to break it down--hopefully you can now not confuse the effects of expansionary monetary policy with that of fiscal policy):
1) Is the lowering of base interest rates to encourage the demand of debt. That doesn't improve the average persons access to credit because their credit worthiness is a separate issue than interest rates. It instead just encourages people who otherwise wouldn't have taken out debt to finance investment or luxury spending. Since the making of a good investment(returns above the cost of capital) will be taken out or not(see your stupidity line is covered) regardless of the interest rate is 3% or 10% then again interest rates don't matter for this category(the high return category). Instead what you get out of artificially low interest rates is either a) bad investments that maybe only return slightly more than the current artificially low cost of capital that will blow up when interest rates rise later or b) more luxury spending that may have been avoided if interest rates were higher(any of this that can be avoided is a good thing not a bad thing regardless of what dip$hits like Krugman believe who actually root for as many people as possible to take out $2k TVs on a credit card. Remember kids if your a Keynesian saving is bad and luxury spending financed on credit is good). Whats actually quite funny is that this argument is what takes into account stupid people because if everybody was smart nobody would finance luxury spending on credit. It is our acknowledgement of stupid people that shows why the Keynesian notion of encouraging people to do this by artificially low interest rates is a bad thing and actually if everybody was really smart the effect of Keynesian monetary stimulus would be zero.
2) The debt spending of public entities to try to stimulate demand in the economy. First lets establish the fact that presence of number 1) makes them particularly reckless because as soon as the FFR has to rise or interest rates naturally move up these idiots(actually probably the biggest idiots of them all) are immediately in trouble(example Europe). But using up limited capital within the private sector to make public capital investments doesn't do anything more for the average person than that limited capital being used up by private enterprise/entities/individuals to make capital investments unless of course you are one that actually believes that the public sector is more efficient and makes more prudent and higher returning investments than the private sector does. So again you have accomplished nothing by doing this and likely made things worse by using up finite capital that would have otherwise been put to better use in the private sector. And so you don't "free up anything" quite the contrary.

In reference to this "So when a demand site Keynesian says he wants to stimulate demand what he is really saying is that he wants to accelerate the purchasing of luxury items" you completely shot and missed. Notice how I say "individual/entity" and you assumed I was talking about public right then. I'm instead talking about the desired outcome of Keynesian stimulus(monetary or fiscal) and that is to increase the amount of spending done by average people either by increasing their desire for credit or by giving them money to spend financed by government debt. Furthermore keep in mind that throughout this entire process I have been saying luxury items and bad investment(I wonder if you purposely left the second point out because you don't like difficulty in making your argument). Have you ever calculated the return of another bridge lets say 5 miles away from another bridge and determined whether that is a higher return than making an investment in a new gas station, a factory, and a shoe store for example? Because central planners don't think that way and yet that when we are talking about the economy that is what matters and if they even started calculating that it would at least be an improvement over their current stupid crap. What if the cost is more than the benefit? Instead liberals just assume that if its public spending its got to be worthwhile. Sorry, but if that was true the Soviet Union would have been an amazing success. Again the public sector is not as efficient as the private. Millions of private businesses and individuals are better at picking the highest returning investments than a couple people like you or some dip$hit "Tsar" is.



You do realize that a FFR of 0% is completely unnatural right? And that if the Fed was a private entity looking for a profit that level of stupidity and handouts to bankers would never happen, right? Only public entities offer giveaways like that because they don't actually personally pay for that level of stupid charity in the attempt to "stimulate the economy". So yeah if the US government paid down debt interest rates would fall and if you put the FFR back to anything close to what a private entity would charge and the Fed starting selling of their huge treasury and MBS portfolios then you would see interest rates move considerably higher that would completely dominate any yield pressure from the US government paying down debt(also even if the government starting paying down debt the lowering of *overall* interest rates wouldn't last long as other forms of new debt issuance, such as corporate, took its place).
« Last Edit: January 18, 2012, 06:04:15 pm by Wonkish1 »Logged
Wonkish1
YaBB God
*****
Posts: 2214


View Profile
« Reply #38 on: January 18, 2012, 05:31:02 pm »
Ignore

Nobody is railing against public funding of basic infrastructure such as bridges/highways at the state level, firefighters/police officers at the local level, and the military at the national level. Even Adam Smith spoke out in favor of public funding of basic infrastructure.

Put aside the improper allocation of resources (e.g., getting government into realms it has no business being in) and perverse incentives, as noted by Wonk, and here's the biggest problem with Keynesiansim: The deficit spending never seems to go away even after the business cycle is on the upswing again. You can look at the data of many nations, and from a strictly Keynesian, theoretical point-of-view you would think these nations have been in the midst of 30+ consecutive years of recessionary conditions! Eventually the enormous, non-stop deficit spending adds up to a situation like Japan where debt-to-GDP is over 200%, which is obviously a figure that can only end in default.

LOL that is the real funny part about liberals, social democrats, labour, etc. they aren't even good Keynesians. At least Keynesianism believes in cutting spending and running large surpluses in boom years, but in each and every case they demand more spending even then.

At least they could be honest as to what they really are. They aren't Keynesian technocrats instead they are statists without any economic school of thought behind them because no real economist would ever be caught dead advocating the sheer stupidity of their ideas.
« Last Edit: January 18, 2012, 05:32:59 pm by Wonkish1 »Logged
Link
YaBB God
*****
Posts: 3464
View Profile
« Reply #39 on: January 18, 2012, 05:55:15 pm »
Ignore

It makes sense to do a Keynesian intervention to build bridges and put people back to work so they can pay mortgages, save for their children's education, repair their brakes, buy health insurance, etc.  Hardly what I would call blowing your money on "luxuries."

In reference to this "So when a demand site Keynesian says he wants to stimulate demand what he is really saying is that he wants to accelerate the purchasing of luxury items" you completely shot and missed. Notice how I say "individual/entity" and you assumed I was talking about public right then.

I believe I addressed spending by individuals.

Instead liberals just assume that if its public spending its got to be worthwhile. Sorry, but if that was true the Soviet Union would have been an amazing success. Again the public sector is not as efficient as the private. Millions of private businesses and individuals are better at picking the highest returning investments than a couple people like you or some dip$hit "Tsar" is.

Mmmm... you've got me confused with someone else.  My central thesis has always been sometimes the public sector should handle certain tasks and sometimes the private sector should handle certain tasks.  As I illustrated in my rather lengthy post there is minimal free market incentive to build most bridges.  That is the reason we have government.  This splitting that you and OWS and the Teabaggers do doesn't make any sense to someone like me.  And the Soviet Union?  Really?  Retaining fire fighters in drought stricken Texas is equivalent to the Soviet Union?  Really?

LOL, Link. First starting off a discussion by saying people are majority retarded shouldn't win you many friends. Its interesting to see that type of Bill Maher like contempt for the average American so willingly.

Thank God I'm in the facts and reality business and not the schmoozing clients business.  The majority of Americans are over weight and obese=Americans operating in the free market don't have a clue when it comes to diet and exercise.  FACT.  Use words like "retarded" and "Bill Maher" all you want.  It doesn't change the FACTS.  That's why I like my field.

if everybody was smart nobody would finance luxury spending on credit.

I know plenty of people who took out low interest loans and bought very nice homes that they are enjoying.  They are paying back the loans with future earnings.  Their wives and kids think they are pretty smart.
« Last Edit: January 18, 2012, 06:02:00 pm by Link »Logged

Insane quote of the year-

"Every aspect of life in America is worse than when he [Obama] took over" -Marco Rubio
Link
YaBB God
*****
Posts: 3464
View Profile
« Reply #40 on: January 18, 2012, 06:00:46 pm »
Ignore

Nobody is railing against public funding of basic infrastructure such as bridges/highways at the state level, firefighters/police officers at the local level, and the military at the national level. Even Adam Smith spoke out in favor of public funding of basic infrastructure.

I swear it's like listening to the Rush Limbaugh show around here.  READ the paper dude.

Logged

Insane quote of the year-

"Every aspect of life in America is worse than when he [Obama] took over" -Marco Rubio
Link
YaBB God
*****
Posts: 3464
View Profile
« Reply #41 on: January 18, 2012, 06:06:12 pm »
Ignore

The deficit spending never seems to go away even after the business cycle is on the upswing again. You can look at the data of many nations, and from a strictly Keynesian, theoretical point-of-view you would think these nations have been in the midst of 30+ consecutive years of recessionary conditions!

I hear you dude...

Logged

Insane quote of the year-

"Every aspect of life in America is worse than when he [Obama] took over" -Marco Rubio
Politico
YaBB God
*****
Posts: 4888
View Profile
« Reply #42 on: January 18, 2012, 06:10:05 pm »
Ignore

The deficit spending never seems to go away even after the business cycle is on the upswing again. You can look at the data of many nations, and from a strictly Keynesian, theoretical point-of-view you would think these nations have been in the midst of 30+ consecutive years of recessionary conditions!

I hear you dude...



Where's 2009-2012? Oh yeah...we would need Al Gore's forklift for those years.

FYI: I am registered Democrat. What the hell are you doing trying to turn this into a partisan issue, anyway? Both sides are guilty of deficit spending to no end. At least the Republicans do it to "starve the beast" in hopes it will lead to a smaller government down the road. Democrats in power do it because they don't care about the future. Well, at least Obama doesn't. Give him four more years, and we'll be lucky not to default by 2025.
« Last Edit: January 18, 2012, 06:12:44 pm by Politico »Logged

"Government is the great fiction through which everybody endeavors to live at the expense of everybody else."

- Bastiat
Politico
YaBB God
*****
Posts: 4888
View Profile
« Reply #43 on: January 18, 2012, 06:15:44 pm »
Ignore

Nobody is railing against public funding of basic infrastructure such as bridges/highways at the state level, firefighters/police officers at the local level, and the military at the national level. Even Adam Smith spoke out in favor of public funding of basic infrastructure.

I swear it's like listening to the Rush Limbaugh show around here.  READ the paper dude.



When did Governor Rick "Let's Re-invade Iraq and Then It's on to Turkey" Perry matter again? Why is it August 2011 in Link's world right now?
Logged

"Government is the great fiction through which everybody endeavors to live at the expense of everybody else."

- Bastiat
Wonkish1
YaBB God
*****
Posts: 2214


View Profile
« Reply #44 on: January 18, 2012, 06:44:58 pm »
Ignore

Quote
I believe I addressed spending by individuals.

Yeah, but you responded to my comment which wasn't talking about the public expenditure and was instead talking about the "stimulation" of private demand that is why I corrected you.

Quote
Mmmm... you've got me confused with someone else.  My central thesis has always been sometimes the public sector should handle certain tasks and sometimes the private sector should handle certain tasks.  As I illustrated in my rather lengthy post there is minimal free market incentive to build most bridges.  That is the reason we have government.  This splitting that you and OWS and the Teabaggers do doesn't make any sense to someone like me.  And the Soviet Union?  Really?  Retaining fire fighters in drought stricken Texas is equivalent to the Soviet Union?  Really?

Okay, but we aren't talking about the "handling of tasks". We are talking about the economy and what causes growth. Keep in mind the whole start of this discussion began with another poster about the subject of the "lack of demand" and whether "stimulating" it was good for the economy. So for example obviously police needs to be a public function, but that has nothing to do with the topic. The topic is whether or not additional public spending on things like fire fighting, highways, bridges, etc. does more to benefit the economy than private sector investment. The real answer is it depends. Now even with a finance background I could probably never calculate these things close to perfectly, but I could probably give a better stab at it than you could given my background. For example another bridge probably has an economic return on capital equal to the amount of time it saves people daily and the economic worth of that time. So the first bridge for 200 miles probably has a huge return on capital and another bridge 2 miles from a different one could easily have a huge negative return on capital(and it will definitely have a lower return on capital than the average for the private sector at the time). An approximate idea to take a stab at doing this would be to bust out a financial calculator and estimate the amount of people that would be using the new bridge. Then estimate the amount of average time they would save. Then estimate an approximate value for that time. Then input the total cost of that investment into the calculator with the annual "savings" into it as the cash flows and discount it back by lets say 6% and boom out comes your IRR. If that IRR is lower than the average the private sector is getting on new capital investment than congratulations you just actually did damage to your economy by approving that appropriation. Since the private sector is much better at doing these things than the public sector I'm inclined to not rely on public sector capital investment to produce a better recovery than private hence why I don't agree with anything, but small ongoing infrastructure spending on as needed basis not some stupid here's a few hundred billion now go find a ton of projects regardless if it generates good public returns on capital or not because the goal is to employ people not actually fill to maximize growth.

Quote
Thank God I'm in the facts and reality business and not the schmoozing clients business.  The majority of Americans are over weight and obese=Americans operating in the free market don't have a clue when it comes to diet and exercise.  FACT.  Use words like "retarded" and "Bill Maher" all you want.  It doesn't change the FACTS.  That's why I like my field.

Obesity is just an example. You could go down a long list of glass half full and glass half empty stuff on the intelligence of the American people. Practically all of America can read and write. The amount of degrees among the population is very high. The amount of successful businesses started by Americans is very high. The wealth as a nation we have achieved makes us an envy of the world. I mean the list goes on and on. People are a mixed bag. The fact that you only choose to see only the negative in people is up to you, but that doesn't necessarily make it an accurate portrayal of them either. Keep in mind those same people occupy government positions as well and so don't expect any more magic from them either except when they make a mistake it screws everybody over(also I tend to be surprised by the relative idiocy of people that occupy public positions relative to their counter parts in private positions).

Quote
I know plenty of people who took out low interest loans and bought very nice homes that they are enjoying.  They are paying back the loans with future earnings.  Their wives and kids think they are pretty smart.

Thank God anecdotal evidence isn't a substitute for anything. By the way speaking from a purely financial perspective that still was likely a bad investment. From a piece of mind "I got a luxury that gives me true joy" perspective that could have been the best investment in the world I can't comment on that part though. Today(and what should have been the case always) the investment in a home should have been entirely based on a rent vs. buy calculation. That means you find the minimum sized home for you to live comfortably in and you look at the rental price of such a place. Then you compare it to the cost to buy and input the length of time you estimate to live their. When doing this the principal value is the length of time because that points to the amount of principal pay down you get. **Any home bigger or nicer than what you can live comfortably in is technically an "investment" in luxury(calculated based on the spread in cost between the two). The housing boom skewed this traditional calculator because people started buying not because it booked some of what would have been rental payments into principal reduction, but instead because they assumed astronomically high appreciation rates...that was a new phenomenon caused by lots of other buying on a cheap credit.
« Last Edit: January 18, 2012, 07:05:42 pm by Wonkish1 »Logged
Link
YaBB God
*****
Posts: 3464
View Profile
« Reply #45 on: January 18, 2012, 06:45:20 pm »
Ignore

The deficit spending never seems to go away even after the business cycle is on the upswing again. You can look at the data of many nations, and from a strictly Keynesian, theoretical point-of-view you would think these nations have been in the midst of 30+ consecutive years of recessionary conditions!

I hear you dude...



Where's 2009-2012? Oh yeah...we would need Al Gore's forklift for those years.

FYI: I am registered Democrat. What the hell are you doing trying to turn this into a partisan issue, anyway? Both sides are guilty of deficit spending to no end. At least the Republicans do it to "starve the beast" in hopes it will lead to a smaller government down the road. Democrats in power do it because they don't care about the future. Well, at least Obama doesn't. Give him four more years, and we'll be lucky not to default by 2025.

This isn't about Democrats and Republicans.  This is about people that believe in absolutes and people like me who use logic and facts.  Like I have said multiple times before there are certain things government should be involved in and there are certain things the private sector should take the lead in.  There is a time for deficit spending and there is a time for making cuts and having a surplus.  The same is true on an individual and corporate level.  It's called balanced.  I am all for spending cuts when the economy improves or at least isn't in danger of sliding back into recession.  I am also for letting the Bush tax cuts expire for everyone eventually.  They can go up on $250K/yr net taxable income people now and the rest of the people when the economy improves.

As far as Obama vs Romeny is concerned.  Read Romney's plan.  Tax cuts for the rich are not going to improve the deficit situation.
Logged

Insane quote of the year-

"Every aspect of life in America is worse than when he [Obama] took over" -Marco Rubio
Wonkish1
YaBB God
*****
Posts: 2214


View Profile
« Reply #46 on: January 18, 2012, 06:56:18 pm »
Ignore

The deficit spending never seems to go away even after the business cycle is on the upswing again. You can look at the data of many nations, and from a strictly Keynesian, theoretical point-of-view you would think these nations have been in the midst of 30+ consecutive years of recessionary conditions!

I hear you dude...



Where's 2009-2012? Oh yeah...we would need Al Gore's forklift for those years.

FYI: I am registered Democrat. What the hell are you doing trying to turn this into a partisan issue, anyway? Both sides are guilty of deficit spending to no end. At least the Republicans do it to "starve the beast" in hopes it will lead to a smaller government down the road. Democrats in power do it because they don't care about the future. Well, at least Obama doesn't. Give him four more years, and we'll be lucky not to default by 2025.

This isn't about Democrats and Republicans.  This is about people that believe in absolutes and people like me who use logic and facts.  Like I have said multiple times before there are certain things government should be involved in and there are certain things the private sector should take the lead in.  There is a time for deficit spending and there is a time for making cuts and having a surplus.  The same is true on an individual and corporate level.  It's called balanced.  I am all for spending cuts when the economy improves or at least isn't in danger of sliding back into recession.  I am also for letting the Bush tax cuts expire for everyone eventually.  They can go up on $250K/yr net taxable income people now and the rest of the people when the economy improves.

As far as Obama vs Romeny is concerned.  Read Romney's plan.  Tax cuts for the rich are not going to improve the deficit situation.

But Link lets be honest though what is actually happening during those boom years? You see the Dems proposing a huge expansion of spending in their budget proposal and the Republicans proposing either a freeze or a small decrease in their budget proposal. If Clinton didn't have to negotiate with the GOP in the 90s there is no way you would have had a surplus in the 90s just going off the budget proposals he actually submitted. Furthermore, look at the state budgets in the US today. The blue states(even before you take into account off balance sheet liabilities like pension liabilities) are in far worse situation than red states.

Being honest and "using logic and facts" you have to at least admit that every time the budget proposals come out its the Dems that offer up more spending even when technically in boom years if they were true Keynesians they should be offering up decreases in government spending.

Can you at least give this one?
« Last Edit: January 18, 2012, 06:58:02 pm by Wonkish1 »Logged
opebo
YaBB God
*****
Posts: 47609


View Profile
« Reply #47 on: January 18, 2012, 07:48:01 pm »
Ignore

Your veering off the topic. I don't know what the amount of time was in the 50s for a new adult to achieve his parents income. Prior to the crash it averaged 15 years. It may have been shorter in the 50s.

Yes, I believe it was comon in the 50s and 60s for young men to make more than their fathers immediately upon beginning work.  This was caused by unionization.

Opebo if you truly are worried about the little guy its the perforation of debt to fund luxury spending that should give you cause for concern instead of being on the side of Keynesian bankers that love it when the demand for credit is high and can make obscene profits with a large spread between an extremely low FFR/deposit rates and the interest rate they are lending at.

Not at all wonk, there is no problem with heavy borrowing as long as incomes are legislated to go up rapidly every year, as was the case from the 30s through the 70s.
Logged

The essence of democracy at its purest is a lynch mob

Wonkish1
YaBB God
*****
Posts: 2214


View Profile
« Reply #48 on: January 18, 2012, 07:53:38 pm »
Ignore

Opebo if you truly are worried about the little guy its the perforation of debt to fund luxury spending that should give you cause for concern instead of being on the side of Keynesian bankers that love it when the demand for credit is high and can make obscene profits with a large spread between an extremely low FFR/deposit rates and the interest rate they are lending at.

Not at all wonk, there is no problem with heavy borrowing as long as incomes are legislated to go up rapidly every year, as was the case from the 30s through the 70s.

See that is where you just hopped on the crazy train. Add a new one to the list. Opebo's 50th idea for wanting to screw over the little guy: Get them very heavily indebted on crappy luxury consumption.
Logged
opebo
YaBB God
*****
Posts: 47609


View Profile
« Reply #49 on: January 18, 2012, 08:01:51 pm »
Ignore

No luxuries involved, wonk, just house and a car or two.
Logged

The essence of democracy at its purest is a lynch mob

Pages: 1 [2] 3 4 5 Print 
« previous next »
Jump to:  


Login with username, password and session length

Logout

Powered by SMF 1.1.20 | SMF © 2013, Simple Machines