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Don’t forget, Robert Reich is an idiot.
The last 3 years years have been a death trap.
Go back and read the stuff Reich was writing in 2008 and 2009. Most of what he was advocating for, he got, and most of it has failed. He’s a lot like Krugman, except with a smaller soap box.
the stimulus hasn’t failed, woody, it helped. just because things aren’t perfect now doesn’nt mean they wouldn’t be worse.
that noted, it was far from ideally designed, far.
I am a lifelong… not conservative, but seething hater of liberals, but the republicans, today, the tea party, about economics, are so far out into left field, so far oblivious to reality, and such a danger to us all, that …
while not a whole lot in this world do I bother to worry about, aside from what car to take on an afternoon drive, they scare me.
its a perfectly solvable situation -vs- runaway ignorance about economic reality. Government surpluses are a big part of why we are in the calamity we are in (clintons surpluses plus the years that bush’s deficits weren’t enough to outweigh the trade deficit)… every. single. time. in. us. history. that. the. govt. ran. a. meaningful. surplus. depression. followed. except. this. time. but. this. isn’t. so. great. either.
The government needs to create currency over time for the wealth, in dollars, of its citizens to grow and for the economy to continue its long term growth trajectory. It creates currency via deficits.
Think of the government “debt”, not as debt, but as the offering to the worlds private sector the option of a savings account that earns interest. That is far more accurate.
this is a terrific starting point, the reading of the blogs there and the replies is about as good as it gets for understanding economics. http://pragcap.com/resources/understanding-modern-monetary-system
should the government have big welfare programs? no
should the government spend massive amounts of money year in and year out? no
is the private sector far more efficient at spending and investing? yes, far
is the governments “debt” a problem? no. the solitary possible consequence of gov’t deficit spending, i.e., currency creation, is hyperinflation, but that is overwhelmingly unlikely in the US today. In fact more deficits would probably reduce the odds of it, because if used properly those deficits could employ some people and reduce societal tension… its government collapse and rejection of a currency in totality AND NEVER IN HISTORY MONEY PRINTING that has caused hyperinflation. But anyway
should the government run deficits? yes, almost always, to maintain steady inflation and growth. only if the economy was really overheating would a gov’t surplus make sense. but in the history of the US, a substantial government surplus has always lead to disaster.
Ryans plan would be the biggest backfire in history.
It all conflicts with my personal politics too, I realize that economics isn’t really a science, in practice, its just an extension of any given persons personal politics. But there are answers.
And the fact of the matter is the reality of economics hath spat in the face of my personal politics, and caused me to… not change my sentiment towards freeloading morons who start fights in my pubs and follow me around when i’m driving in my cars and grab my girlfriends arse when we’re at a club in pointlessly creepy ways…
but i do accept that some amount of that welfare/handout/deficit money IS WITHOUT A DOUBT IN MY POCKET. see my post from your thread a night or two ago.
It all winds up back in the hands of hte productive citizens, eventually. Could it be spent more efficiently by the private sector? Without ANY doubt.
Do regulations favor mega corporations and spit in the face of small biz? NO QUESTION.
Do mega corps drive the economy? Nope, idiots like me inventing crap and stuff do. Sometimes, if far more talented than I am, idiots like me, inventing crap in garages, become steve jobs. With a mega corp. But apple really does add to society, doesn’t it?
I digress. But we NEED government deficits to carry on as we have. Which, BTW, has resulted in almost certainly the greatest and fastest rise in standard of living in human history.
We need to shrink government, favor small biz, cut regulations, etc. BUT WE CAN’T RUN GOVERNMENT SURPLUSES OR EXTREME NON-HILARITY WILL ENSUE, as it always has.
Idiots can invent all the cool shit they want, but it won’t matter if banks aren’t extending credit to the middle of the bell curve. We spent Trillions propping up TBTF banks because of the threat of derivatives collapsing the system (Per H. Paulson’s 2008 gun to the head closed door chats w/congress that kicked off the printing). Wouldn’t it be fucked up if we could have just let large global banks fail and ignored their derivatives obligations, only to construct new banks from the ashes that would resume passing credit on to US consumers and businesses?
Even if that’s how it worked out and we could deficit spend our asses into more coke fueled bubbles, we’re still eventually fucked because American businesses continue to shift labor outside the USA to maximize profits. Greedy assholes.
dude, credit is not the main source of wealth creation
idiots aren’t that great at inventing things, just as a reasonably obvious side note
read the last few “IBC news” posts of woodshedder, some good insights into why US Corps would outsource have been offered and…
fwiw
mega rant there, but the fact is the repub austerity stuff / “austrian school” stuff, will come closer to killing us all than I care to endure.
Its not about anger, its not about politics or bigotry or biases, its potential a science. Economics that is. There are potentially answers.
Does the US gov’t have a debt problem? of course not. They don’t owe anybody anything but a few whacks at a keyboard.
But, but, but, but, but, faith in the currency?
ya, 10 years bonds are at a whopping 2%, and every time the world gets pissed off, the dollar goes up. ya, people hate dollars.
China, BTW, has collected like a trillion dollars worth of them. Thats how much they want them. Think about that. They REALLY want them.
Check I don’t disagree. I’m just saying that we will never run deficits that are sustainable and foster growth by following Reich’s policies.
the point woods is that any deficit for the US is sustainable, the ONLY constraint for deficit spending is inflation.
and while the inflation of the last decade has seemed high, it is also important to remember that this is COMPLETELY normal historically. We every so often (few decades) have periods of commodity price inflation and this generally leads to panic (see the 70s).
Once in awhile I write a blog on another site, who don’t allow cursing and such, its been a long time since I logged in there, because I basically spit my comments here out on the fly and, well, I spit those out on the fly too, but I at least think about it for awhile.
If you want to see it i’ll post or email a link to a blog that shows studies of historical commodity inflation cycles and how advanced and extreme this one is.
In them they show the telltale sign of the beginning of a new secular bull in stocks, which is decuopling of commodities and stocks with stocks going to the upside (same is a telltale sign of the beginning of a new secular bear in stocks, but reversed).
Whats the max deficit of the US government? Infinite, literally, UP TO THE CONSTRAINT OF HYPERINFLATION, which, btw, we aren’t close to.
Cost of a Ferrari? not really up in 5-6, maybe even 10, years. Don’t forget, 360 Modenas were selling well into the $200ks when I was dead broke and dreaming of one day owning a Ferrari and looking on ebay. Today, 2 generations and eons of performance later, Italias are $275 in the same situation.
Cost of a house? Down in the last 5 years.
Cost of food? Up, but this, cyclically, happens.
Cost of gas? Down in the last 3 years.
Hyperinflation? Where again? Oh yeah, in the impassioned and emminently charismatic speeches of people selling you gold and gold related advice who, by the way… while telling you the dollar has no value and is worthless…
charge you dollars. oh, the irony.
But screw all that. We MAKE OUR OWN MONEY, and the basic “money multiplier/m1/m2/m3” understanding is flat silly.
Read the link above… gov’t deficits are literally the creation of new currency (EXACTLY like striking gold in the 1800s) and stimulative. Government surpluses are historically disastrous, and always will be, always.
The Ryan plan is utterly insane.