REAL WORLD EVENT DISCUSSIONS

Collapse of the Middle Class Welfare State

POSTED BY: KIRKULES
UPDATED: Monday, September 26, 2011 07:26
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VIEWED: 2034
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Sunday, September 25, 2011 3:43 AM

KIRKULES


This is the future we have to look forward to in the USA if we continue on our current path. It's probably already to late to turn things around, not sure if it's even worth trying. You'd think that those who support the welfare state would want to make it sustainable, but the opportunity to vote themselves a pay increase is more than they can resist. I don't blame Obama in the slightest because he was at least honest about what he was going to do. Past administrations left us this mess, Obama just pushed us past the point of no return.

http://www.nytimes.com/2011/09/25/world/europe/as-welfare-state-collap
ses-greeks-suffer-and-fear-future.html


"Since 2010, the government has raised taxes and slashed pensions and state salaries across the board, in an effort to rein in the bloated public sector that today employs one in five Greeks. Last week, the government announced it would put 30,000 workers on reduced pay as a precursor to possible termination and would cut pensions again for nearly half a million public-sector retirees.

Many Greeks fear a vicious circle: a death spiral of more austerity measures, further economic contraction and correspondingly lower tax revenues, making it that much harder to make a dent in the debt, pushing the country toward default in spite of the austerity."


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Sunday, September 25, 2011 4:15 AM

M52NICKERSON

DALEK!


Quote:

Originally posted by Kirkules:
Many Greeks fear a vicious circle: a death spiral of more austerity measures, further economic contraction and correspondingly lower tax revenues, making it that much harder to make a dent in the debt, pushing the country toward default in spite of the austerity."




....and somewhere Keynes is laughing, "I rutting told you."

I do not fear God, I fear the ignorance of man.

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Sunday, September 25, 2011 4:57 AM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)


You'd think that those who claim to support "free market capitalism" would want to make it sustainable, too, but that hasn't happened here either.

Taxes - especially on the middle class - are at historic lows, yet people aren't buying. In an economy that's based more than 70% on consumerism, people refuse to spend, because they have nothing left to spend. Real-world wages are down for every group except the very rich, who have seen their incomes and wealth rise at astronomical rates.

Welcome to laissez-faire feudalism. Enjoy, but remember, once in a while the peasants get their hands on a guillotine.

"Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservatives." - John Stuart Mill

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Sunday, September 25, 2011 5:08 AM

NIKI2

Gettin' old, but still a hippie at heart...


Amusing, isn't it? Proof the current insistence on "cut, cut, cut" isn't working, but gawd forbid we should learn from it and try something else!

And of course, we're JUST like Greece, you betcha!

Or, maybe not:
Quote:

Analysts’ views of a Greek default — based on the ratings agency definition — ranges from at least 50% to about 90%. On the other side of the spectrum, most are saying the odds of a U.S. default are still close to 0%. It’s very significant that analysts are considering a U.S. default at all, but those odds are still spectacularly low.

The tell-tale sign that borrowers don’t want to hold Greek debt? Look no further than the yield on its two-year notes. Investors are clearly much more comfortable holding short-term U.S. debt. http://blogs.wsj.com/economics/2011/06/14/u-s-vs-greece-is-debt-situat
ion-even-comparable
/





Hippie Operative Nikovich Nikita Nicovna Talibani,
Contracted Agent of Veritas Oilspillus, code name “Nike”,
signing off



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Sunday, September 25, 2011 5:16 AM

AURAPTOR

America loves a winner!


Quote:

Originally posted by Niki2:

Amusing, isn't it? Proof the current insistence on "cut, cut, cut" isn't working, but gawd forbid we should learn from it and try something else!



Isn't working ? What the fuck are you even talking about ? It's not even been TRIED yet! And as for all the big govt spending, the 'shovel ready' jobs Obama and the Left promised... THAT'S what isn't working.



" I do not love the bright sword for its sharpness, nor the arrow for its swiftness, nor the warrior for his glory. I love only that which they defend. "

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Sunday, September 25, 2011 5:16 AM

DREAMTROVE


And I'll laugh at Keynes. I'd recommend religion but the healthcare plan sucks ;)

That's what a ship is, you know - it's not just a keel and a hull and a deck and sails, that's what a ship needs.

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Sunday, September 25, 2011 5:38 AM

SIGNYM

I believe in solving problems, not sharing them.


There are real problems in this world shit-storm.

But first, let us be cleat that it was NOT "Fannie and Freddie" that started the shit-storm, it was banks around the developed world that created trillions of dollars for real estate loans and injected that fake money into each other and the economy as a whole. When that bubble of fake money popped, entire national economies got swallowed.

SO now the governments are in a position: What to do?

The normal course of events is for governments to step in, and re-expand the money supply by spending more into the economy. This creates demand, which creates jobs, which creates growth. The idea is that governments economic, fiscal and monetary policies work in counter-cyclical fashion: When capitalism goes bust.... as it does routinely... the government is there to pick up the pieces.

Most nations have handled this quite well: Iceland, Germany etc. But other nations (Greece) were near the edge of bankruptcy anyway, had over-borrowed money in fat years instead of saving for the lean years; and now their coffers are empty; their ability to repay is nil, and they have little money with which to revive their economy. What to do with THESE nations?

This is where the IMF comes in.

The IMF always always requires that borrower-nations impose austerity on their people, even if those austerity measures literally kill a national economy, driving down its GDP into depressionary territory.

How does a government get revenues and repay its loans when its economy is lying beaten and bloody on the floor?

There is another school of thought, and that is to grow the economy out of trouble, by allowing them to continue using their funny money. It's a little counter-intuitive, but it's worked before in Argentina and the USA.

The real issue should be, though, is How do we keep this from happening again? It is the same question that faced many nations as they emerged from the Great Depression. Unfortunately, some of those nations molded that pent-up economic angst into war machines which created a semblance of a normalized economy, and other nations responded with war machines of their own, so the full lessons of managing world finance and economy was lost in WWII. .

Personally, I would rather see the collapse of the upper class welfare state.

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Sunday, September 25, 2011 5:42 AM

AURAPTOR

America loves a winner!


Quote:


There are real problems in this world shit-storm.

But first, let us be cleat that it was NOT "Fannie and Freddie" that started the shit-storm,.



Yeah, it was. The sooner you come to accept that fact, the sooner you'll be up to speed with how to fix the problem.

Until then, all further discussion is a complete waste of time.

Quote:

The normal course of events is for governments to step in, and re-expand the money supply by spending more into the economy. This creates demand, which creates jobs, which creates growth. The idea is that governments economic, fiscal and monetary policies work in counter-cyclical fashion: When capitalism goes bust.... as it does routinely... the government is there to pick up the pieces.


This is a colossal misunderstanding of how the economy is suppose to work.


" I do not love the bright sword for its sharpness, nor the arrow for its swiftness, nor the warrior for his glory. I love only that which they defend. "

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Sunday, September 25, 2011 6:46 AM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.


Just want to point out the ridiculousness of Rappy claiming to know anything.


Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes?

Yeah, me neither....

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Sunday, September 25, 2011 6:53 AM

KIRKULES


Quote:

Originally posted by 1kiki:
Just want to point out the ridiculousness of Rappy claiming to know anything.



Thanks 1kiki for your brilliant contribution to the thread, your demonstration of your keen intellect has us all in awe.

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Sunday, September 25, 2011 6:59 AM

KIRKULES


How anyone can see the Greek example as a result of to little Keynesian stimulus is beyond me. Your answer to excessive spending is more spending? You don't need to be an economic genius to know the first thing you do when you've dug yourself into a hole is quit digging.

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Sunday, September 25, 2011 7:04 AM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.


I don't know SignyM. There are some things I 'get' about capitalism.

One is that it requires lots of selling of things for a profit, b/c every time a sale goes through some rich person bleeds some money off the economy. And it doesn't matter what it's a sale of - and whether it only spends a short time in people's hands before it ends up in a landfill, in the water, or in the air. Environmentally capitalism is unsustainable b/c it depends on sucking up resources and spewing out waste so that profit can be made in the middle.

I get that through concentration of wealth and subsequent economies of scale and sheer power of size it concentrates wealth and kills competition as inexorably as the sun and the urth dance in space.

And I get that it doesn't depend on gaultism. It depends on large numbers of people who have no other choice but living and working and buying in the company town, which in this case is the international capitalist economy.

And it will crash. Perhaps it will be social revolt, environmental destruction, or global economic collapse, but you can't drive at 100mph towards a cliff indefinitely.

However, I'll consider this, but I suspect there are too many imponderables for my brain.


Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes?

Yeah, me neither....

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Sunday, September 25, 2011 7:05 AM

NIKI2

Gettin' old, but still a hippie at heart...


Spending cuts agreed to in the LAST government shut-down debacle:
Quote:

•13 billion from funding for programs at the Departments of Labor, Education, and Health and Human Services

•over $1 billion in a cut across non-defense agencies

•reductions to housing assistance programs and some health care programs

•$8 billion in cuts to our budget for State and Foreign Operations

•$630 million in earmarked transportation projects

•at least $2.5 billion in transportation funding that is ready to be earmarked

•$35 million by ending the Crop Insurance Good Performance Rebate

•$30 million for a job training program that was narrowly targeted at certain student loan processors•$18 billion in cuts deemed unnecessary by the Pentagon http://thehill.com/blogs/blog-briefing-room/news/155069-white-house-de
tails-cuts-made-in-budget-deal
]


Hippie Operative Nikovich Nikita Nicovna Talibani,
Contracted Agent of Veritas Oilspillus, code name “Nike”,
signing off



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Sunday, September 25, 2011 7:06 AM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.


You're welcome 'little kirk pieces'.


Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes?

Yeah, me neither....

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Sunday, September 25, 2011 7:13 AM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.


I think it's also obvious that middle class welfare states can be completely successful, so there is nothing intrinsically wrong with the idea. It's all in the execution.

OTOH I can't think of a capitalist economy yet that could run indefinitely without crashing and burning and hurting - even killing - a lot of people in the process. But then, that makes sense. If people are a commodity in the capitalist system, and commodities need to be destroyed to 'market-forces' rebalance the economy after a crash, then people need to be destroyed.


Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes?

Yeah, me neither....

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Sunday, September 25, 2011 7:14 AM

M52NICKERSON

DALEK!


Quote:

Originally posted by Kirkules:
How anyone can see the Greek example as a result of to little Keynesian stimulus is beyond me. Your answer to excessive spending is more spending? You don't need to be an economic genius to know the first thing you do when you've dug yourself into a hole is quit digging.



Because economies are like streams. When money is flowing things are good, when it is not, things get stagnate.

I do not fear God, I fear the ignorance of man.

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Sunday, September 25, 2011 7:18 AM

AURAPTOR

America loves a winner!


Quote:

Originally posted by 1kiki:
Just want to point out the ridiculousness of Rappy claiming to know anything.



By not making your case, what so ever ?

Wow, you showed us, huh?


Moron.


" I do not love the bright sword for its sharpness, nor the arrow for its swiftness, nor the warrior for his glory. I love only that which they defend. "

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Sunday, September 25, 2011 7:24 AM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)


Quote:

Originally posted by AURaptor:
Quote:

Originally posted by Niki2:

Amusing, isn't it? Proof the current insistence on "cut, cut, cut" isn't working, but gawd forbid we should learn from it and try something else!



Isn't working ? What the fuck are you even talking about ? It's not even been TRIED yet! And as for all the big govt spending, the 'shovel ready' jobs Obama and the Left promised... THAT'S what isn't working.




Funny, we were told that tax cuts for the rich would bring certainty to the markets, and that would bring confidence to the "job creators" who would then start hiring, despite there being no demand ("supply side" economics, y'see) because the working poor have no disposable income to speak of.

All the jobs the right promised to create... THAT'S what isn't working!

"Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservatives." - John Stuart Mill

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Sunday, September 25, 2011 7:26 AM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.


Apparently my very next post used words that were too big for our little Rappy.


Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes?

Yeah, me neither....

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Sunday, September 25, 2011 7:27 AM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)


Quote:

Originally posted by 1kiki:
I think it's also obvious that middle class welfare states can be completely successful, so there is nothing intrinsically wrong with the idea. It's all in the execution.

OTOH I can't think of a capitalist economy yet that could run indefinitely without crashing and burning and hurting - even killing - a lot of people in the process. But then, that makes sense. If people are a commodity in the capitalist system, and commodities need to be destroyed to 'market-forces' rebalance the economy after a crash, then people need to be destroyed.


Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes?

Yeah, me neither....




There's never been a successful large economy based on capitalism that didn't have a good deal of socialism in it. Such a system has never existed because it simply does not work.



"Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservatives." - John Stuart Mill

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Sunday, September 25, 2011 7:31 AM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)


Quote:

Originally posted by Kirkules:
How anyone can see the Greek example as a result of to little Keynesian stimulus is beyond me. Your answer to excessive spending is more spending? You don't need to be an economic genius to know the first thing you do when you've dug yourself into a hole is quit digging.




Okay, show us all YOUR keen intellect. List all the successful large economies that have zero government spending and no deficits or debts.

I'll wait.

"Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservatives." - John Stuart Mill

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Sunday, September 25, 2011 7:32 AM

AURAPTOR

America loves a winner!


kwickie, you're wrong ( as usual )

Bush's tax cuts worked just fine. But excessive spending by both parties (and mainly Democrats, after 2006 ) put our economy into a nose dive.

5% unemployment vs 9.2 % unemployment. Even after nearly a trillion $ stimulus package was passed, which were were told we HAD to have, or else unemployment would hit 8.0% !!!!

Well, we got it, and unemployment shot right past 8.0% anyways, past 9.0 %....

Time to put away foolish, childish ideas such as middle class welfare state, and let the American people get back to work.


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Sunday, September 25, 2011 7:46 AM

M52NICKERSON

DALEK!


Quote:

Originally posted by AURaptor:
kwickie, you're wrong ( as usual )

Bush's tax cuts worked just fine. But excessive spending by both parties (and mainly Democrats, after 2006 ) put our economy into a nose dive.



You mean the tax cuts that added a huge amount to the deficit, yup you do!

Quote:

Originally posted by AURaptor:5% unemployment vs 9.2 % unemployment. Even after nearly a trillion $ stimulus package was passed, which were were told we HAD to have, or else unemployment would hit 8.0% !!!!

Well, we got it, and unemployment shot right past 8.0% anyways, past 9.0 %....



Yes because of a massive economic collapse that happened with Bush in office and who's seed were planted by Reagan.

Quote:

Originally posted by AURaptor:Time to put away foolish, childish ideas such as middle class welfare state, and let the American people get back to work.


How, no one is hiring, because no one is spending money? Just getting out of the way is not going to put money in peoples pockets and send them to the stores to increase demand.

I do not fear God, I fear the ignorance of man.

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Sunday, September 25, 2011 7:54 AM

KIRKULES


Quote:

Originally posted by m52nickerson:
Quote:

Originally posted by Kirkules:
How anyone can see the Greek example as a result of to little Keynesian stimulus is beyond me. Your answer to excessive spending is more spending? You don't need to be an economic genius to know the first thing you do when you've dug yourself into a hole is quit digging.



Because economies are like streams. When money is flowing things are good, when it is not, things get stagnate.

I do not fear God, I fear the ignorance of man.


Thinking like yours is exactly what got us into this mess in the first place. People thinking that just moving money around is some how creating wealth. Any real sustainable economy is based on making real things that people want and need. Creating money by government hocus pocus just reduces the incentive to make real things. Government has never created a single net job because the money they remove from the economy causes businesses not hire three or more people for every one job the government forces us to pay for. The reason Greece will never recover from this collapse is because every time things start to look a little beter they will return to their old ways because it is ingrained in their society now. There is still hope for our future because we are just now reaching the point were 50% rely on gov spend so we sill have a small majority that know living without government subsidy means a better life for all. There's a bigger pie to share without the government taking a big slice before the money has had a chance to create real wealth in the economy. We will always need basic safety nets for those unable to do for themselves, but the days of liberal benefits for all is coming to an end worldwide as it inevitably always will.

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Sunday, September 25, 2011 7:58 AM

KIRKULES


Quote:

Originally posted by Kwicko:
Quote:

Originally posted by Kirkules:
How anyone can see the Greek example as a result of to little Keynesian stimulus is beyond me. Your answer to excessive spending is more spending? You don't need to be an economic genius to know the first thing you do when you've dug yourself into a hole is quit digging.




Okay, show us all YOUR keen intellect. List all the successful large economies that have zero government spending and no deficits or debts.

I'll wait.



You'll be waiting a long time if you are unable to make a relevant point. First you should point out what I said that leads you to believe that I want zero government spending.

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Sunday, September 25, 2011 8:02 AM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)


Quote:

Originally posted by Kirkules:
Quote:

Originally posted by Kwicko:
Quote:

Originally posted by Kirkules:
How anyone can see the Greek example as a result of to little Keynesian stimulus is beyond me. Your answer to excessive spending is more spending? You don't need to be an economic genius to know the first thing you do when you've dug yourself into a hole is quit digging.




Okay, show us all YOUR keen intellect. List all the successful large economies that have zero government spending and no deficits or debts.

I'll wait.



You'll be waiting a long time if you are unable to make a relevant point. First you should point out what I said that leads you to believe that I want zero government spending.



Okay, what constitutes "excessive" spending, then? You'll notice I *did* bring up deficits and debts, too. Or did you not see that part?

Which countries should we emulate? Which countries are doing everything right when it comes to spending, and what are they spending their money *ON*? (I bet none of them spend a trillion a year on their military)

"Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservatives." - John Stuart Mill

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Sunday, September 25, 2011 8:03 AM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)


Quote:

Originally posted by Kirkules:
Quote:

Originally posted by m52nickerson:
Quote:

Originally posted by Kirkules:
How anyone can see the Greek example as a result of to little Keynesian stimulus is beyond me. Your answer to excessive spending is more spending? You don't need to be an economic genius to know the first thing you do when you've dug yourself into a hole is quit digging.



Because economies are like streams. When money is flowing things are good, when it is not, things get stagnate.

I do not fear God, I fear the ignorance of man.


Thinking like yours is exactly what got us into this mess in the first place. People thinking that just moving money around is some how creating wealth. Any real sustainable economy is based on making real things that people want and need. Creating money by government hocus pocus just reduces the incentive to make real things. Government has never created a single net job because the money they remove from the economy causes businesses not hire three or more people for every one job the government forces us to pay for. The reason Greece will never recover from this collapse is because every time things start to look a little beter they will return to their old ways because it is ingrained in their society now. There is still hope for our future because we are just now reaching the point were 50% rely on gov spend so we sill have a small majority that know living without government subsidy means a better life for all. There's a bigger pie to share without the government taking a big slice before the money has had a chance to create real wealth in the economy. We will always need basic safety nets for those unable to do for themselves, but the days of liberal benefits for all is coming to an end worldwide as it inevitably always will.




By this thinking, government has also never DESTROYED a single net job.

"Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservatives." - John Stuart Mill

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Sunday, September 25, 2011 8:07 AM

M52NICKERSON

DALEK!


Quote:

Originally posted by Kirkules:

Thinking like yours is exactly what got us into this mess in the first place. People thinking that just moving money around is some how creating wealth. Any real sustainable economy is based on making real things that people want and need. Creating money by government hocus pocus just reduces the incentive to make real things. Government has never created a single net job because the money they remove from the economy causes businesses not hire three or more people for every one job the government forces us to pay for. The reason Greece will never recover from this collaps is because every time things start to look a little beter they will return to their old ways because it is ingrained in their society now. There is still hope for our future because we are just now reaching the point were 50% rely on gov spend so we sill have a small majority that know living without government subsidy means a better life for all. There's a bigger pie to share without the government taking a big slice before the money has had a chance to create real wealth in the economy. We will always need basic safety nets for those unable to do for themselves, but the days of liberal benefits for all is coming to an end worldwide as it inevitably always will.



No thinking like mine didn't get us into this mess. Deregulation and government overspending during good times did. See if you understood the other side of the debate you would understand that government spending should be counter cyclic. You would also understand that government spending is not the same as government jobs. Although the Nordic-Model of economics with very large government workforces proves you wrong, more so when you realize that those countries were some of the least affected by the collapse.

Government spending can mean the industries, that build really things, get more business. If the government is building something it still needs to purchase the materials.

As for coming to an end, I don't think so. It will become apparent that continuing to cut spending while economies are weak does nothing to help them, it only hinders them more.

I do not fear God, I fear the ignorance of man.

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Sunday, September 25, 2011 8:33 AM

KIRKULES


Keynesian stimulus might actually help slightly in a very minor economic downturn, but that would only be the case if you go into the downturn with a low dept load or reserves. Going into a major downturn while already having accumulated an economy crushing dept load more that nullifies any benefit of additional spending. One of the reasons the current economy may be a final nail in the coffin of Keynesian economics is that in the past the increase in government spending levels were never high enough during recessions to conclusively prove or disprove Keynes. The economy has grown so large now that we are incapable of borrowing or making enough money to be significant in percentage terms to the whole economy and that may make it no longer even be posible to test Keynes theory.

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Sunday, September 25, 2011 8:40 AM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.


"Keynesian stimulus might actually help slightly in a very minor economic downturn, but that would only be the case if you go into the downturn with a low dept load or reserves."

After WWII the government had an extremely high debt load, which it payed down with extremely high top tier tax rates. And the US economy boomed. There is nothing wrong with taxes apparently as a cure for government debt.


Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes?

Yeah, me neither....

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Sunday, September 25, 2011 8:44 AM

M52NICKERSON

DALEK!


Quote:

Originally posted by Kirkules:
Keynesian stimulus might actually help slightly in a very minor economic downturn, but that would only be the case if you go into the downturn with a low dept load or reserves. Going into a major downturn while already having accumulated an economy crushing dept load more that nullifies any benefit of additional spending. One of the reasons the current economy may be a final nail in the coffin of Keynesian economics is that in the past the government spending levels were never high enough during recessions to conclusively prove or disprove Keynes. The economy has grown so large now that we are incapable of borrowing or making enough money to be significant in percentage terms to the whole economy and that may make it no longer even be posible to test Keynes theory.



Your right on until you got to "economy crushing dept." Explain to me how government debt adversely affects an economy before the point of default.

You also hit on a very important point, "but that would only be the case if you go into the downturn with a low dept load or reserves". This is important. This is way during good economic times government spending must be scaled back.

I disagree that the economy is now to large to testing the theory and to properly stimulate the economy. The debt crisis right now is more or less self made. The US is not having trouble borrowing money, nor would we have to barrow every bit of stimulus. Some spending that is not stimulating can be shifted as well as increasing revenues.

I do not fear God, I fear the ignorance of man.

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Sunday, September 25, 2011 9:02 AM

KIRKULES


Quote:

Originally posted by m52nickerson:
I disagree that the economy is now to large to testing the theory and to properly stimulate the economy. The debt crisis right now is more or less self made. The US is not having trouble borrowing money, nor would we have to barrow every bit of stimulus. Some spending that is not stimulating can be shifted as well as increasing revenues.



The more you borrow the harder it becomes and the cost of money go up. Economies that have reached 100% of GDP dept loads a paying 7% or more in interest. There's little doubt it would be the same for us. It all has to do with your ability to repay, that's why US debt was downgraded. If we continue to borrow we will get more downgrades and interest rates will become prohibitively high.

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Sunday, September 25, 2011 9:05 AM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

Yeah, it was. The sooner you come to accept that fact, the sooner you'll be up to speed with how to fix the problem.
Ohm, yeah. Fannie and Freddie caused the real estate meltdown in Ireland, Britain, Spain and Iceland. An you have PROOF... indeed, you do! ... which has conveniently (for you) not made if to FFF,net. Because FFF.net only shows repeated - apparently baseless- assertions made by a certain individual who never brings facts to the table, only opinions. It's a wonder it can even balance its checkbook.
Quote:

This is a colossal misunderstanding of how the economy is suppose to work.
This is a colossal misunderstanding of how economy REALLY works. This wouldn't be the first time that reality and theory parted ways.

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Sunday, September 25, 2011 9:12 AM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.


Kirkules

You have yet to show that the 'Collapse of the Middle Class Welfare State' actually happened as it is clearly thriving in many countries and only potentially collapsing in a selected few others. In order to claim collapse, doesn't it have to have actually collapsed?


Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes?

Yeah, me neither....

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Sunday, September 25, 2011 9:18 AM

FREMDFIRMA


Quote:

Originally posted by Kwicko:
Welcome to laissez-faire feudalism. Enjoy, but remember, once in a while the peasants get their hands on a guillotine.


Frankly we coulda ended the thread right there and not made a whit of difference, Mikey.

Remember, to them this ideology, is actually a theology, and as such they will maintain it just like any religious wackjob when their ridiculous faith in something obviously not true is challenged.

And the only real solution to that problem is to mercilessly beat them with their own holy texts till they flee in terror of you...

Would you like to borrow Atlas shrugged for a little while ?


-Frem

I do not serve the Blind God.

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Sunday, September 25, 2011 9:24 AM

M52NICKERSON

DALEK!


Quote:

Originally posted by Kirkules:

The more you borrow the harder it becomes and the cost of money go up. Economies that have reached 100% of GDP dept loads a paying 7% or more in interest. There's little doubt it would be the same for us. It all has to do with your ability to repay, that's why US debt was downgraded. If we continue to borrow we will get more downgrades and interest rates will become prohibitively high.



The US debt was downgraded by one credit agency, in what was more a political move then a true credit rating. The key would be that we need to cut back once things turn around.

I do not fear God, I fear the ignorance of man.

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Sunday, September 25, 2011 9:58 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by 1kiki:
After WWII the government had an extremely high debt load, which it payed down with extremely high top tier tax rates. And the US economy boomed. There is nothing wrong with taxes apparently as a cure for government debt.



Note that government spending also greatly dropped during that period: from $1.024 billion (in constant 2005 dollars) in 1945 to $609 million in '46, $345 million in '47, and $281 million in '48. In fact, spending didn't reach the 1945 level again until 1974.

So it would seem that taxes alone weren't the cure. Ending the war (or wars, in the present instance) might be a bigger factor.

http://www.whitehouse.gov/omb/budget/Historicals

"Keep the Shiny side up"

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Sunday, September 25, 2011 10:09 AM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

So it would seem that taxes alone weren't the cure. Ending the war (or wars, in the present instance) might be a bigger factor.
So, do you support ending US intervention abroad, when the USA is not directly threatened?

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Sunday, September 25, 2011 11:33 AM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.


"And the only real solution to that problem is to mercilessly beat them with their own holy texts till they flee in terror of you...

Would you like to borrow Atlas shrugged for a little while ?"

Too lightweight.

Curious. All the people spoiling to get into a debate bailed once they got one - again.



Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes?

Yeah, me neither....

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Sunday, September 25, 2011 4:26 PM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)


Quote:

Posted by SignyM:


This is a colossal misunderstanding of how economy REALLY works. This wouldn't be the first time that reality and theory parted ways.



Can you say "Trickle Down"?



I knew you could!

"Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservatives." - John Stuart Mill

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Sunday, September 25, 2011 4:32 PM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)


Quote:

Originally posted by 1kiki:
Kirkules

You have yet to show that the 'Collapse of the Middle Class Welfare State' actually happened as it is clearly thriving in many countries and only potentially collapsing in a selected few others. In order to claim collapse, doesn't it have to have actually collapsed?


Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes?

Yeah, me neither....




And in those "selected few others" where their economies DO seem to be collapsing, what traits do they share other than government spending? Investments in things like credit-default swaps and risky "bubble" investing, for instance? Seems like the REAL reason such economies are in trouble is from too much unregulated or under-regulated capitalism - the vast majority of which comes right back to roost on the doorsteps of Wall Street banks.

"Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservatives." - John Stuart Mill

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Sunday, September 25, 2011 4:53 PM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)


Quote:

Originally posted by SignyM:
Quote:

So it would seem that taxes alone weren't the cure. Ending the war (or wars, in the present instance) might be a bigger factor.
So, do you support ending US intervention abroad, when the USA is not directly threatened?




Speaking only for myself, YES!

After all, the GOP says we have a "spending problem". The biggest chunk of discretionary spending we can do away with right now is the military budget. We could cut it by AT LEAST ten percent per year for ten years. If you start with a defense budget of a trillion dollars, after ten years you've trimmed that to less than $350 billion. You've cut $650,000,000,000 from the budget every year thereafter, and $350 billion should be more than enough to protect us from box cutters.

Stop spending on overseas adventures. Cut down the size and scope of our military. Don't walk away from our foreign bases - SELL THEM, preferably to their host countries. Bonus points if we sell them "as is" and save money on moving all the crap back here (except for some of the more serious weaponry, of course).

Geezer's got a point - Taxes alone weren't the WHOLE solution to the post-WWII paydown of our debt. But what he misses is that they were indeed a big part of the solution. Cut spending AND raise taxes on the top tier.

"Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservatives." - John Stuart Mill

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Sunday, September 25, 2011 5:55 PM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.


That the war ended was a happy result of history. Eisenhower's high taxes were deliberate policy to pay down the war debt: "We cannot afford to reduce taxes, and reduce (government) income until we have in sight a program of expenditure that shows that the factors of income and outgo will be balanced.” When faced with a debt that had been already rung up, Eisenhower raised top-bracket taxes, which had begun to drop, to pay it down.






Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes?

Yeah, me neither....

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Monday, September 26, 2011 2:43 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by SignyM:
So, do you support ending US intervention abroad, when the USA is not directly threatened?



I'd like to see it reduced. I don't have a problem with training cadres or forward-based equipment and support facilities in areas where U.S. interests might be involved, but propping up failing governments for most of a decade seems pretty wasteful.

Seems the 'governments' in Iraq, Afghanistan, etc. have proved more interested in sectarian squabbling and lining of pockets than establishing countries that actually work and can control their own security. It might be time to let them sink or swim.

I think that we'd see even more reduction of the military budget if we could get politics out of the procurement process and stop buying multi-billion systems the military says it doesn't need. Unfortunately, this is one process that has bi-partisan support.



"Keep the Shiny side up"

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Monday, September 26, 2011 3:00 AM

GEEZER

Keep the Shiny side up


Quote:

Originally posted by 1kiki:
That the war ended was a happy result of history. Eisenhower's high taxes were deliberate policy to pay down the war debt: "We cannot afford to reduce taxes, and reduce (government) income until we have in sight a program of expenditure that shows that the factors of income and outgo will be balanced.” When faced with a debt that had been already rung up, Eisenhower raised top-bracket taxes, which had begun to drop, to pay it down.



Looking at the tax rates for 1951 vs. 1952, it appears he raised everyone's tax rates, and raised the taxes on lower income folks more (2%) than he did on the top earners (1%). Middle class and upper middle class folks took the biggest hit, with increases up to 6%.

http://www.taxfoundation.org/publications/show/151.html

"Keep the Shiny side up"

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Monday, September 26, 2011 3:20 AM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.


http://www.beezernotes.com/wordpress/?p=5041

If we were to have the same tax structure today, the poor would see a 5% absolute rise in their tax rates, single earners up to 75,000 (joint 150,000) would see a 12% absolute drop, between 75,000 and 225,000 anywhere between a 3% drop to a 2% rise, and over 225,000 would see up to approximately a tripling of their current tax rate. Sorry Geezer, it's not what you make it out to be. Tax rates were flatter up to 225,000 but were steeply higher for the top earners, where a lot of the tax revenues came from.


Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes?

Yeah, me neither....

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Monday, September 26, 2011 4:43 AM

BYTEMITE


I figure that our economy is looking pretty doomed no matter what we do, so the question I'm going to ask here is entirely hypothetical and without any personal investment one way or another.

I'm not sure how INCREASING the supply of anything creates demand?

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Monday, September 26, 2011 5:16 AM

NIKI2

Gettin' old, but still a hippie at heart...


Quote:

Seems the 'governments' in Iraq, Afghanistan, etc. have proved more interested in sectarian squabbling and lining of pockets than establishing countries that actually work and can control their own security. It might be time to let them sink or swim.

I think that we'd see even more reduction of the military budget if we could get politics out of the procurement process and stop buying multi-billion systems the military says it doesn't need. Unfortunately, this is one process that has bi-partisan support.

Well said, Geezer,these would be an excellent place to start. It is also, seemingly the one place we can all but guarantee bipartisan OPPOSITION, as you said!

If the Middle East is ready for Democracy, then they've taken MAJOR steps forward in the past fifty years, of which I've seen no sign. The people want "democracy" as they envision it, just as we did/do. But it's not that easily achieved, as we've found out, and in a culture accustomed to tribal mentality, might-over-right "government" (even on the smaller level), it's my opinion it don't happen all that fast. We CAME from a semi-democratic background and started essentially "anew" except for that background. They're coming from a whole different perspective; the people of the country WANT democracy, but those who come to power have an entire history to fight, in their background. I'm not sure OUR "founding fathers" could have created what they did if they hadn't had the chance to start fresh(ish) and didn't have to fight a mentality of thousands of years every time they tried to create part of the government.

I don't see it happening there yet, much as I wish it could. Even our form of (corrupted) democracy is better than what they had, but it's just too hard a leap for those who want to be in power to make, even if they start out intending to do so. It saddens me greatly.


Hippie Operative Nikovich Nikita Nicovna Talibani,
Contracted Agent of Veritas Oilspillus, code name “Nike”,
signing off



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Monday, September 26, 2011 5:18 AM

NIKI2

Gettin' old, but still a hippie at heart...


Well, Byte, I would say increasing the supply of money certainly creates demand...for goods, which people who have a few extra dollars to spare would want if they had the money, which would increase demand for "things", which would increase the need for materials and jobs, and on we go. Way too simplistic, of course, but that's the basic idea I believe.

I'm not arguing whether it's good or bad, just answering your question, as some see it.


Hippie Operative Nikovich Nikita Nicovna Talibani,
Contracted Agent of Veritas Oilspillus, code name “Nike”,
signing off



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Monday, September 26, 2011 7:26 AM

BYTEMITE


That sounds like deflation, which I've never understood why that was bad, since the average person can buy more stuff with less.

The best explanation I heard for why it was bad is that employers might use it as an excuse to lower wages. But then, in an inflationary period, to maintain a living wage, you kind of have to change wages as well.

But I'm still not understanding, I think. Because when you increase the money supply, the value of the money relative to goods goes down, which I think is inflation.

EDIT: Ooh, I know. Deflation when the money supply is limited is bad if only a few people hold that money supply. Which might be inevitable? Seems like it might become inevitable.

I kinda think maybe a stable currency rate is best. I'm not sure why we need inflation setting the interest rate and all this stuff. I'm not sure that money generated by interest exists, as in, has value by being money that is tied to or produced by real world assets. It seems like moving numbers around to me, not generating real value. Economic magic and fantasy.

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