Krugman: There is no deficit problem
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  Krugman: There is no deficit problem
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Author Topic: Krugman: There is no deficit problem  (Read 1891 times)
The world will shine with light in our nightmare
Just Passion Through
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« on: March 09, 2013, 04:26:22 PM »

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opebo
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« Reply #1 on: March 09, 2013, 04:33:21 PM »

Not to mention the 11.5 trillion of 'debt' in the hands of the public can simply be bought into non-existence by the Fed.  They're doing so right now at the rate of 85 billion per month.
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True Federalist (진정한 연방 주의자)
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« Reply #2 on: March 09, 2013, 06:03:09 PM »

Not to mention the 11.5 trillion of 'debt' in the hands of the public can simply be bought into non-existence by the Fed.  They're doing so right now at the rate of 85 billion per month.

With the side effect of making interest rates abysmally low, which is not something we need to encourage as a long term solution.
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Antonio the Sixth
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« Reply #3 on: March 09, 2013, 07:19:34 PM »

Krugman keeps being awesome.
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Benj
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« Reply #4 on: March 09, 2013, 09:49:32 PM »

Not to mention the 11.5 trillion of 'debt' in the hands of the public can simply be bought into non-existence by the Fed.  They're doing so right now at the rate of 85 billion per month.

With the side effect of making interest rates abysmally low, which is not something we need to encourage as a long term solution.

Maybe not, but it does tell us that now is the time for government to be incurring debt rather than avoiding it.
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Torie
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« Reply #5 on: March 09, 2013, 10:22:01 PM »

I tend to doubt Krugman has given much serious thought to the coming entitlement fiscal meltdown bomb, absent course corrections of some kind. What, me worry?
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True Federalist (진정한 연방 주의자)
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« Reply #6 on: March 09, 2013, 10:30:17 PM »

Not to mention the 11.5 trillion of 'debt' in the hands of the public can simply be bought into non-existence by the Fed.  They're doing so right now at the rate of 85 billion per month.

With the side effect of making interest rates abysmally low, which is not something we need to encourage as a long term solution.

Maybe not, but it does tell us that now is the time for government to be incurring debt rather than avoiding it.

So that when those interest rates go back up the budget deficit goes wacko high?  I do agree that the government should be trying to lock in the current low rates as much as possible so as to keep the borrowing costs down as long as possible.  But racking up additional debt because of a mistaken belief that rates will remain low when the debt comes due?  That's insane.
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Indy Texas
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« Reply #7 on: March 09, 2013, 11:55:33 PM »

Not to mention the 11.5 trillion of 'debt' in the hands of the public can simply be bought into non-existence by the Fed.  They're doing so right now at the rate of 85 billion per month.

With the side effect of making interest rates abysmally low, which is not something we need to encourage as a long term solution.

Maybe not, but it does tell us that now is the time for government to be incurring debt rather than avoiding it.

So that when those interest rates go back up the budget deficit goes wacko high?  I do agree that the government should be trying to lock in the current low rates as much as possible so as to keep the borrowing costs down as long as possible.  But racking up additional debt because of a mistaken belief that rates will remain low when the debt comes due?  That's insane.

Most of that debt is of a fairly long duration and is not going to have a rate adjustment. When you issue a 30-year Treasury bond today, the coupon rate is whatever the interest rate is today. It's not a floating-rate bond.
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traininthedistance
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« Reply #8 on: March 10, 2013, 01:14:43 AM »

I tend to doubt Krugman has given much serious thought to the coming entitlement fiscal meltdown bomb, absent course corrections of some kind. What, me worry?

Krugman has gone on the record multiple times to say that we do need to do something about Medicare at some point in the next couple decades (which is, at least on the federal level, the virtual entirety of the "entitlement bomb").

He has thought about it and concluded, rightly, that focusing on it now to the exclusion of fixing our more pressing short-term problems will do more harm than good.
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opebo
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« Reply #9 on: March 10, 2013, 04:50:20 AM »

I tend to doubt Krugman has given much serious thought to the coming entitlement fiscal meltdown bomb, absent course corrections of some kind. What, me worry?

Yes he tends not to lend credence to right-wing propaganda, Torie.
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Snowstalker Mk. II
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« Reply #10 on: March 10, 2013, 08:19:25 AM »
« Edited: March 10, 2013, 08:42:36 AM by Senator Snowstalker »

I tend to doubt Krugman has given much serious thought to the coming entitlement fiscal meltdown bomb, absent course corrections of some kind. What, me worry?

There is no coming entitlement fiscal meltdown bomb, which explains why he has not given much serious thought to it.
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Torie
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« Reply #11 on: March 10, 2013, 09:02:25 AM »

I tend to doubt Krugman has given much serious thought to the coming entitlement fiscal meltdown bomb, absent course corrections of some kind. What, me worry?

Krugman has gone on the record multiple times to say that we do need to do something about Medicare at some point in the next couple decades (which is, at least on the federal level, the virtual entirety of the "entitlement bomb").

He has thought about it and concluded, rightly, that focusing on it now to the exclusion of fixing our more pressing short-term problems will do more harm than good.

It is curious that the stock market has zoomed up since it appeared that sequester was a done deal. Stock prices are one of the more important leading economic indicators. Is it just barely possible that Krugman might be wrong here?
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True Federalist (진정한 연방 주의자)
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« Reply #12 on: March 10, 2013, 06:09:56 PM »

Not to mention the 11.5 trillion of 'debt' in the hands of the public can simply be bought into non-existence by the Fed.  They're doing so right now at the rate of 85 billion per month.

With the side effect of making interest rates abysmally low, which is not something we need to encourage as a long term solution.

Maybe not, but it does tell us that now is the time for government to be incurring debt rather than avoiding it.

So that when those interest rates go back up the budget deficit goes wacko high?  I do agree that the government should be trying to lock in the current low rates as much as possible so as to keep the borrowing costs down as long as possible.  But racking up additional debt because of a mistaken belief that rates will remain low when the debt comes due?  That's insane.

Most of that debt is of a fairly long duration and is not going to have a rate adjustment. When you issue a 30-year Treasury bond today, the coupon rate is whatever the interest rate is today. It's not a floating-rate bond.

You totally missed my point.  Once that 30-year bond comes due, it will need to be refinanced at whatever the rate is then. (The idea we'd start running surpluses by then is already laughable, and that we'd be doing so if we started to vastly increase our public debt is even more laughable.) Do we really want to hand people 30 years from now a ticking time bomb?  Even if 30 year rates have merely gone back up to their usual levels by then, for each trillion that comes due, the annual interest expense will be going up around 40 billion.  Now if that only happened once, it wouldn't be too bad, but we've added trillions in debt in the past few years, and you're advocating we add even more trillions.  And what if the interest rates had by then not merely returned to normal but gone to higher than normal?

There is no free lunch to be gained.  At most we'd push the bill off to be due at a time when we'd be less able to afford it than now.
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opebo
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« Reply #13 on: March 11, 2013, 06:22:53 AM »

Once that 30-year bond comes due, it will need to be refinanced at whatever the rate is then.  what if the interest rates had by then not merely returned to normal but gone to higher than normal?

There is no free lunch to be gained.  At most we'd push the bill off to be due at a time when we'd be less able to afford it than now.

But that gives 30 years for the Fed to buy that debt!  There's really no need for debt to 'mature' in private hands - it should all be absorbed by the Fed before it reaches maturity.
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True Federalist (진정한 연방 주의자)
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« Reply #14 on: March 11, 2013, 09:11:05 AM »

Once that 30-year bond comes due, it will need to be refinanced at whatever the rate is then.  what if the interest rates had by then not merely returned to normal but gone to higher than normal?

There is no free lunch to be gained.  At most we'd push the bill off to be due at a time when we'd be less able to afford it than now.

But that gives 30 years for the Fed to buy that debt!  There's really no need for debt to 'mature' in private hands - it should all be absorbed by the Fed before it reaches maturity.

The Fed isn't buying that debt to give the government low borrowing costs, tho that is a side effect.  Hopefully the economy will have recovered by then so that it no longer makes sense for the Fed to be doing what it is doing.
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krazen1211
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« Reply #15 on: March 11, 2013, 02:27:51 PM »

http://www.nytimes.com/2005/01/11/opinion/11krugman.html

Add borrowing for privatization to the mix, and the budget deficit might well exceed 8 percent of G.D.P. at some time during the next decade. That's a deficit that would make Carlos Menem's Argentina look like a model of responsibility. It would be sure to cause a collapse of investor confidence, sending the dollar through the floor, interest rates through the roof and the economy into a tailspin.

http://krugman.blogs.nytimes.com/2005/10/18/the-bush-tax-cuts-and-the-deficit/

The answer, of course, is that wiggle at the end of the line in Chart 1. Revenue is still low by historical standards, but it’s not as low as it was last year. And as a result, the budget deficit actually came down in fiscal 2005, albeit to a level that would have seemed shockingly high a few years ago.

Is this a good basis for claiming success? Well, put it this way: if a student gets a D after a string of F’s, his performance has improved – but that doesn’t put him at the top of the class.



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krazen1211
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« Reply #16 on: March 11, 2013, 02:28:23 PM »

Watch Scarborough demolish this idiot.

http://tv.msnbc.com/2013/03/05/watch-joe-scarborough-and-paul-krugman-face-off-over-debt/

Krugman: You know, that–you know, that’s such a tired argument, to go and search for quotes in stuff I said once upon time instead of dealing with the issue.






How dare someone quote the man in his own words!
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Obamanation
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« Reply #17 on: March 11, 2013, 03:10:14 PM »

Watch Scarborough demolish this idiot.

http://tv.msnbc.com/2013/03/05/watch-joe-scarborough-and-paul-krugman-face-off-over-debt/

Krugman: You know, that–you know, that’s such a tired argument, to go and search for quotes in stuff I said once upon time instead of dealing with the issue.






How dare someone quote the man in his own words!

Scarborough is the same joke who said the 2012 election was "neck-in-neck."

Obvious fool is obvious.
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Marokai Backbeat
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« Reply #18 on: March 11, 2013, 04:12:22 PM »

I watched that "debate" a couple days ago, and Scarborough did nothing but act like a jockish politician, true to his own style. He debated Krugman like they were running against each other for elected office, not like someone who was actually interested in the issue, and would just say things that suited him in that moment that he would completely contradict later, like claiming he would support an additional 200 billion in yearly domestic stimulus spending, despite never having claimed to support such a thing ever before.
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Politico
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« Reply #19 on: March 11, 2013, 07:47:18 PM »
« Edited: March 11, 2013, 07:51:30 PM by Politico »

At this point, Krugman is practically a shameless political operative who is beyond emotionally invested. He is the last person to turn to for advice.
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krazen1211
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« Reply #20 on: March 11, 2013, 09:20:13 PM »

Watch Scarborough demolish this idiot.

http://tv.msnbc.com/2013/03/05/watch-joe-scarborough-and-paul-krugman-face-off-over-debt/

Krugman: You know, that–you know, that’s such a tired argument, to go and search for quotes in stuff I said once upon time instead of dealing with the issue.






How dare someone quote the man in his own words!

Scarborough is the same joke who said the 2012 election was "neck-in-neck."

Obvious fool is obvious.


He's smart enough to throw Krugman's own drivel back in his own face. Therefore Krugman has to lie about Krugman.
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krazen1211
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« Reply #21 on: March 11, 2013, 09:21:13 PM »

He debated Krugman like they were running against each other for elected office, not like someone who was actually interested in the issue, and would just say things that suited him in that moment that he would completely contradict later

Hahahahaha!



Add borrowing for privatization to the mix, and the budget deficit might well exceed 8 percent of G.D.P. at some time during the next decade. That's a deficit that would make Carlos Menem's Argentina look like a model of responsibility. It would be sure to cause a collapse of investor confidence, sending the dollar through the floor, interest rates through the roof and the economy into a tailspin.
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