Macroeconomics: Fiscal & Monetary Policies

  • Avatar

    Posted: 01 June 2012 06:31 PM

    Death and Taxes not specific enough?  How about a topic a little more direct?

     

     

     

    EDIT by lovemyipad: I changed the title.

    [ Edited: 03 June 2012 08:14 AM by Mav ]

    Signature

    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Posted: 01 June 2012 03:20 PM #1

    Eric Landstrom - 01 June 2012 05:51 PM
    eric in Austin - 01 June 2012 05:41 PM
    Eric Landstrom - 01 June 2012 05:25 PM

    I feel a disturbance in the force: Obama is close and his lips are moving.

    As long as he keeps talking about the Minnesota Vikings football team, we’ll all be okay.


    You’re right, I felt so much better when Bush and the republicans were in charge. Boy those were some great times huh?

    Eric in Austin

    Sigh. You win. Feel better now? I’ll go one better: I personally accept responsibility for all the bad things you attribute to government. Perhaps now we can move toward discussing and creating the pro growth atmosphere every good Keynesian knows we need in order to bring our economy around without going further into debt.

    If the government does not extend its debt, then you aren’t practicing Keynesian economic theory.

    Keynesian economic theory requires deficit spending to stimulate economic growth.  It also requires cutting government spending during times of economic growth so as to curtail the potential of inflation.  The popular belief of Keynesians was that you could not have a recession, and inflation at the same time.  Carter was damned if he did, and damned if he didn’t.  He couldn’t spend to stimulate the economy, and he couldn’t cut spending to curb inflation.  Carter, to his chagrin, learned that Keynesian theory was wrong.  We created a new word to describe the condition Carter tried to correct.  We called it “Stagflation”.

    The problem is, that since LBJ’s “Great Society”, Congress has engaged in massive deficit spending, no matter the condition of the economy.  Giving government money away for free gets votes, but ultimately it catches up to you.  We are paying the price today, for the sins of the last 50 years.

    If we’re lucky, and follow Chile’s austerity example, we could emerge as strong as it is (no national debt, annual budget surpluses, flat 17% income tax, stable economy) in about 20 years.

    Signature

    You can’t do more, make more, be more, than the next guy, if you think like the next guy. Think different.

         
  • Avatar

    Posted: 01 June 2012 03:36 PM #2

    Gregg Thurman - 01 June 2012 06:20 PM
    Eric Landstrom - 01 June 2012 05:51 PM
    eric in Austin - 01 June 2012 05:41 PM
    Eric Landstrom - 01 June 2012 05:25 PM

    I feel a disturbance in the force: Obama is close and his lips are moving.

    As long as he keeps talking about the Minnesota Vikings football team, we’ll all be okay.


    You’re right, I felt so much better when Bush and the republicans were in charge. Boy those were some great times huh?

    Eric in Austin

    Sigh. You win. Feel better now? I’ll go one better: I personally accept responsibility for all the bad things you attribute to government. Perhaps now we can move toward discussing and creating the pro growth atmosphere every good Keynesian knows we need in order to bring our economy around without going further into debt.

    If the government does not extend its debt, then you aren’t practicing Keynesian economic theory.

    Keynesian economic theory requires deficit spending to stimulate economic growth.  It also requires cutting government spending during times of economic growth so as to curtail the potential of inflation.  The popular belief of Keynesians was that you could not have a recession, and inflation at the same time.  Carter was damned if he did, and damned if he didn’t.  He couldn’t spend to stimulate the economy, and he couldn’t cut spending to curb inflation.  Carter, to his chagrin, learned that Keynesian theory was wrong.  We created a new word to describe the condition Carter tried to correct.  We called it “Stagflation”.

    The problem is, that since LBJ’s “Great Society”, Congress has engaged in massive deficit spending, no matter the condition of the economy.  Giving government money away for free gets votes, but ultimately it catches up to you.  We are paying the price today, for the sins of the last 50 years.

    If we’re lucky, and follow Chile’s austerity example, we could emerge as strong as it is (no national debt, annual budget surpluses, flat 17% income tax, stable economy) in about 20 years.

    I’m glad that among this August crowd somebody noticed my dig on Keynesian theory. The problem we face is something like stagflation. Government debt is high enough that if (or rather when)aggregate interest returned to the century old mean average of 6%, at our current levels of productivity, 25% of total tax revenue will go toward servicing interest on our debt and we’ll be forced into some type of structured austerity.

    Even so, economists of every stripe (even Keynesians) understand that any type of austerity implemented without corresponding growth in place to take up the slack will create a contraction in GNP and with it increased likelihood of recession.

    As a result of our present circumstance, to my way of thinking, we need to pursue stimulus by pushing pro growth private employment policy hard even at the cost of other do-good initiatives because we cannot employ everybody in government jobs and neither can see long afford to put everybody on the government dole when our debt is already at an unsustainable level (presuming inflation cannot devalue our debt before we realize 6% aggregate yields on our treasury debt).

    [ Edited: 01 June 2012 03:39 PM by Eric Landstrom ]

    Signature

    Black Swan Counter: 9 (Banks need money, Jobs needs a break, Geithner has no plan, Cuomo’s grandstanding, .Gov needs a hobby, GS works for money, flash crash, is that bubbling crude?).

    For those who look, a flash allows one to see farther.

         
  • Posted: 01 June 2012 04:55 PM #3

    Eric Landstrom - 01 June 2012 06:36 PM

    I’m glad that among this August crowd somebody noticed my dig on Keynesian theory. The problem we face is something like stagflation. Government debt is high enough that if (or rather when)aggregate interest returned to the century old mean average of 6%, at our current levels of productivity, 25% of total tax revenue will go toward servicing interest on our debt and we’ll be forced into some type of structured austerity.

    Even so, economists of every stripe (even Keynesians) understand that any type of austerity implemented without corresponding growth in place to take up the slack will create a contraction in GNP and with it increased likelihood of recession.

    As a result of our present circumstance, to my way of thinking, we need to pursue stimulus by pushing pro growth private employment policy hard even at the cost of other do-good initiatives because we cannot employ everybody in government jobs and neither can see long afford to put everybody on the government dole when our debt is already at an unsustainable level (presuming inflation cannot devalue our debt before we realize 6% aggregate yields on our treasury debt).

    Wasn’t it Kenneth Galbraith who coined the word “stagflation?”  I never thought I would hear that again.  We need a new word.

         
  • Avatar

    Posted: 01 June 2012 05:10 PM #4

    Mercel - 01 June 2012 07:59 PM

    So much for any kind of recovery near the close.

    I’m ready for a benevolent dictatorship.

    As we know, any well-stocked Bond Cave? includes circumstantial talk about accumulating tangible assets like gold, guns, ammo, and may include additional ambitions of establishing a personal fiefdom as a benevolent despot.

    I get a kick out of the survivalists who plan to hole up.

    After The Collapse?, capitulate when the bad men come.  :wink:

    Signature

    Black Swan Counter: 9 (Banks need money, Jobs needs a break, Geithner has no plan, Cuomo’s grandstanding, .Gov needs a hobby, GS works for money, flash crash, is that bubbling crude?).

    For those who look, a flash allows one to see farther.

         
  • Posted: 01 June 2012 06:36 PM #5

    Congress successfully hampered economic recovery policies in order to prevent Obama’s reelection.

         
  • Avatar

    Posted: 01 June 2012 06:44 PM #6

    Hamourabi - 01 June 2012 09:36 PM

    Congress successfully hampered economic recovery policies in order to prevent Obama’s reelection.

    That’s funny, the GOP House has passed several recovery, jobs, and tax cut bills, and sent them to the Senate, where they never even got a vote. So you must be talking about the Harry Reid Democrat Senate - the one that hasn’t even passed a budget for three years. The one that voted down Obama’s budget unanimously (as the House did).

    Amazing how LBJ and Nixon and Reagan and Clinton were all able to work across the aisle and get stuff done. Today, we have a president who doesn’t even like talking to congressmen from his own party, let alone the opposition. Seems like a leadership problem at the top.

    Seriously, what great initiative has Obama even proposed? Just more of the same, tax, regulate, stop drilling, stop pipelines. Great for business and markets! Simply by extending the Bush/Obama tax cuts for a year, the markets would pop.

    Signature

    We filed for over 200 patents for all the inventions in iPhone and we intend to protect them. — Steve Jobs, 2007

         
  • Avatar

    Posted: 01 June 2012 06:50 PM #7

    Speaking to no one in particular:  If someone not a Democrat didn’t completely hate Clinton, ahem, economically speaking (just keeping it topical), that could be an important detail in the ongoing discussion.

    Signature

    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Avatar

    Posted: 01 June 2012 07:50 PM #8

    JDSoCal - 01 June 2012 09:44 PM
    Hamourabi - 01 June 2012 09:36 PM

    Congress successfully hampered economic recovery policies in order to prevent Obama’s reelection.

    That’s funny, the GOP House has passed several recovery, jobs, and tax cut bills, and sent them to the Senate, where they never even got a vote. So you must be talking about the Harry Reid Democrat Senate - the one that hasn’t even passed a budget for three years. The one that voted down Obama’s budget unanimously (as the House did).

    Amazing how LBJ and Nixon and Reagan and Clinton were all able to work across the aisle and get stuff done. Today, we have a president who doesn’t even like talking to congressmen from his own party, let alone the opposition. Seems like a leadership problem at the top.

    Seriously, what great initiative has Obama even proposed? Just more of the same, tax, regulate, stop drilling, stop pipelines. Great for business and markets! Simply by extending the Bush/Obama tax cuts for a year, the markets would pop.


    http://dilbert.com/strips/comic/2012-05-31/

    Signature

    Striving to exceed the needs of the future.

         
  • Posted: 01 June 2012 08:03 PM #9

    Hamourabi - 01 June 2012 09:36 PM

    Congress successfully hampered economic recovery policies in order to prevent Obama’s reelection.

    I need to respectfully disagree.  A leader’s strength is in getting both sides to cooperate.  No one side should feel like they should be high fiving.  If both sides of the aisle are “somewhat fine” - then everyone wins and fairness, in essence won out.  The antics that went on with Obama, Pelosi, and Reid are causing turmoil in today’s markets.  His lack of focus on jobs was his biggest issue. And his TOTAL focus on healthcare was completely misplaced.  He prioritized horribly and then allowed Pelosi and Reid to act with complete hubris. 

    His reelection will hopefully be a function of accountability and performance.  As a grown up one needs to take responsibility - and even today he was incapable of doing so…pointing the finger at Congress.  I for one have had enough.  I was hopeful and the nation gave him a chance but it seems to me that he is in WAY over his head. This of course may be the case given that he never had a real job in his life.

    PS By naming a thread “the Economy”—you really are inviting political debate….are we sure we want to do this?  I don’t mind stating my views or debating someone else but not if people are going to get all pissy about it. Not worth it.  I don’t need to agree with people on their political views in order to respect them for their business acumen.

    Signature

    Keep Calm and Carry On

         
  • Posted: 01 June 2012 08:05 PM #10

    I’d like to see discussion about why Ford sold 13% more cars this May over last year but US job creation numbers for May were less than half of what economists estimated.

    I am disappointed that US politicians, egged on by the media, immedately turned today’s US job numbers into a sound bite election issue blame game.

    I am very concerned about the fact that the economic numbers that Canada released today were weaker than expected. As the US’s largest trading partner, and as a major exporter, this was not encouraging.

    I think that Europe has a lot of work to do between now and the Greek election on June 17, and that the US, as of today, needs to demonstrate some maturity of its own. It can start by ending its attempts, which are quite extraordinary given the implosion of US banks in the fall of 2008, to blame Europe for the current economic mess. And China needs to engage, and be fully accepted as part of the solution.

    The upcoming Greek election is likely to be a growing issue in the next couple of weeks, but it isn’t the real issue.

    [ Edited: 01 June 2012 08:10 PM by Stew ]      
  • Avatar

    Posted: 01 June 2012 08:28 PM #11

    What should I do? Copy what I said in the intraday thread over here?

    Meh. Doesn’t matter: Europe will fall apart before the election and talking about the stupid European economic policies will trump talking about our own stupid economic policies.

    Everybody has monkeys at the wheel.

    Made money today, kids. Dow Theory.

    Signature

    Black Swan Counter: 9 (Banks need money, Jobs needs a break, Geithner has no plan, Cuomo’s grandstanding, .Gov needs a hobby, GS works for money, flash crash, is that bubbling crude?).

    For those who look, a flash allows one to see farther.

         
  • Avatar

    Posted: 01 June 2012 08:55 PM #12

    Phoebear611 - 01 June 2012 11:03 PM

    PS By naming a thread “the Economy”—you really are inviting political debate….are we sure we want to do this?  I don’t mind stating my views or debating someone else but not if people are going to get all pissy about it. Not worth it.  I don’t need to agree with people on their political views in order to respect them for their business acumen.

    While I highly prefer no pissiness, I’d rather have one pissy thread that people can choose to ignore versus pissing all over every other thread…

    (Noun, adjective, and verb…wow, almost as versatile as my favorite swear word! :D)

         
  • Posted: 01 June 2012 08:59 PM #13

    lovemyipad - 01 June 2012 11:55 PM
    Phoebear611 - 01 June 2012 11:03 PM

    PS By naming a thread “the Economy”—you really are inviting political debate….are we sure we want to do this?  I don’t mind stating my views or debating someone else but not if people are going to get all pissy about it. Not worth it.  I don’t need to agree with people on their political views in order to respect them for their business acumen.

    While I highly prefer no pissiness, I’d rather have one pissy thread that people can choose to ignore versus pissing all over every other thread…

    (Noun, adjective, and verb…wow, almost as versatile as my favorite swear word! :D)

    And now just by the nature of the title of the thread, I will keep myself out of trouble.  Sadly, it’s all so intertwined that sometimes I slip. My apologies if anyone is insulted but I just state my opinion but do not disrespect the opinions of others. 

    PS Personally, I prefer your personal swear word!

    Signature

    Keep Calm and Carry On

         
  • Posted: 01 June 2012 09:16 PM #14

    Congress successfully hampered further disastrous economic policies and maybe helped Obama?s reelection hopes.

         
  • Posted: 01 June 2012 11:18 PM #15

    I do not think there is any basis for discussion here.

    The posts so far make that clear.

    It should all be forbidden on these threads, regardless of the topic of the thread.

    There are plenty of venues for folks to vent their spleens and make their statements.

    I will occasionally respond to the right-wingers though smile