The Fiscal Cliff

[SandYFan]

Krugman back on his horse today. The reason the economy is so bad is because we didn't do ENOUGH stimulus. If only the government would have listened to Paul, that voice crying the wilderness for more spending, we would have a better economy.

http://www.nytimes.com/2013/09/06/op...rssnyt&emc=rss

Set aside the politics for a moment, and ask what the past five years would have looked like if the U.S. government had actually been able and willing to do what textbook macroeconomics says it should have done — namely, make a big enough push for job creation to offset the effects of the financial crunch and the housing bust, postponing fiscal austerity and tax increases until the private sector was ready to take up the slack. I’ve done a back-of-the-envelope calculation of what such a program would have entailed: It would have been about three times as big as the stimulus we actually got, and would have been much more focused on spending rather than tax cuts.

Would such a policy have worked? All the evidence of the past five years says yes. The Obama stimulus, inadequate as it was, stopped the economy’s plunge in 2009. Europe’s experiment in anti-stimulus — the harsh spending cuts imposed on debtor nations — didn’t produce the promised surge in private-sector confidence. Instead, it produced severe economic contraction, just as textbook economics predicted. Government spending on job creation would, indeed, have created jobs.

Translation: Look at Europe! They took austerity measures and they're in a really bad way right now. We're not as bad, but only because we did some stimulus. If only we'd done three times as much, we'd be fine.

So simplistic. So binary. Apparently the U.S. economy's health is based entirely on government stimulus and nothing else. Thanks, Paul. Keep fighting the good fight.

[Uncle Ted]

Krugman back on his horse today. The reason the economy is so bad is because we didn't do ENOUGH stimulus. If only the government would have listened to Paul, that voice crying the wilderness for more spending, we would have a better economy.

http://www.nytimes.com/2013/09/06/op...rssnyt&emc=rss



Translation: Look at Europe! They took austerity measures and they're in a really bad way right now. We're not as bad, but only because we did some stimulus. If only we'd done three times as much, we'd be fine.

So simplistic. So binary. Apparently the U.S. economy's health is based entirely on government stimulus and nothing else. Thanks, Paul. Keep fighting the good fight.

Why is Krugman under the impression that we stopped doing stimulus spending? The last time I checked the "pie" hasn't really changed in terms of deficit (stimulus) spending...



Of course, I can't remember the last time we had even a budget besides a balanced one.

[calicoug]

Why is Krugman under the impression that we stopped doing stimulus spending? The last time I checked the "pie" hasn't really changed in terms of deficit (stimulus) spending...



Of course, I can't remember the last time we had even a budget besides a balanced one.

Because we did stop stimulus spending.

[dabrockster]

:confused2:

"Now, this debt ceiling -- I just want to remind people in case you haven't been keeping up -- raising the debt ceiling, which has been done over a hundred times, does not increase our debt; it does not somehow promote profligacy. All it does is it says you got to pay the bills that you've already racked up, Congress. It's a basic function of making sure that the full faith and credit of the United States is preserved." - See more at: http://cnsnews.com/mrctv-blog/craig-....Zl1gOYWM.dpuf

http://cnsnews.com/mrctv-blog/craig-...gh-it-has-over


What I don't hear in all of this is what he or congress is going to do to eliminate debt or decrease spending..

[byu71]

:confused2:



http://cnsnews.com/mrctv-blog/craig-...gh-it-has-over


What I don't hear in all of this is what he or congress is going to do to eliminate debt or decrease spending..

It never ceases to amaze me that such an intelligent man as Barak Obama is such a nit wit when it comes to economics. Of course it could be that he isn't that dumb, but is willing with a compliant press to bull shit the public.

Let's say your spouse and you have an agreed credit card limit of $5,000. She/He then goes out and spends $10,000. Yep you need to agree to raise your limit to $10,000 and pay it unless you want to default.

However, are you telling me there wouldn't be some kind of rules or guidelines put in place that would prevent the spouse from spending $20,000.

Obama knows damn well he can get the limit raised if he accepts some serious spending cuts. How about Obamacare for a starter?

[Goatnapper'96]

It never ceases to amaze me that such an intelligent man as Barak Obama is such a nit wit when it comes to economics. Of course it could be that he isn't that dumb, but is willing with a compliant press to bull shit the public.

Let's say your spouse and you have an agreed credit card limit of $5,000. She/He then goes out and spends $10,000. Yep you need to agree to raise your limit to $10,000 and pay it unless you want to default.

However, are you telling me there wouldn't be some kind of rules or guidelines put in place that would prevent the spouse from spending $20,000.

Obama knows damn well he can get the limit raised if he accepts some serious spending cuts. How about Obamacare for a starter?

It is a failure of leadership.

[Eddie]

"Here, I've got this contract I want you to sign that essentially gives me permission to kick you in the crotch. Now, this isn't to say that I will actually kick you in the crotch. It just gives me permission to."

In what world does raising the debt ceiling result in lower debt? And if there really is no thought to actually increasing debt, then why is there a need for a higher debt ceiling? I don't get it. Do I simply not understand how it works?

[Uncle Ted]

It never ceases to amaze me that such an intelligent man as Barak Obama is such a nit wit when it comes to economics. Of course it could be that he isn't that dumb, but is willing with a compliant press to bull shit the public.

There is Yale law school study that may explain Obama thinking...

Kahan conducted some ingenious experiments about the impact of political passion on people’s ability to think clearly. His conclusion, in Mooney’s words: partisanship “can even undermine our very basic reasoning skills…. [People] who are otherwise very good at math may totally flunk a problem that they would otherwise probably be able to solve, simply because giving the right answer goes against their political beliefs.”

In other words, say goodnight to the dream that education, journalism, scientific evidence, media literacy or reason can provide the tools and information that people need in order to make good decisions. It turns out that in the public realm, a lack of information isn’t the real problem. The hurdle is how our minds work, no matter how smart we think we are. We want to believe we’re rational, but reason turns out to be the ex post facto way we rationalize what our emotions already want to believe.

[e.g. ...]

People who thought George W. Bush banned all stem cell research kept thinking he did that even after they were shown an article saying that only some federally funded stem cell work was stopped.

http://admin.alternet.org/media/most...out-brain-ever

It also explains some of the thinking around here. BTW, where is Cali?

[il Padrino Ute]

It never ceases to amaze me that such an intelligent man as Barak Obama is such a nit wit when it comes to economics. Of course it could be that he isn't that dumb, but is willing with a compliant press to bull shit the public.

Let's say your spouse and you have an agreed credit card limit of $5,000. She/He then goes out and spends $10,000. Yep you need to agree to raise your limit to $10,000 and pay it unless you want to default.

However, are you telling me there wouldn't be some kind of rules or guidelines put in place that would prevent the spouse from spending $20,000.

Obama knows damn well he can get the limit raised if he accepts some serious spending cuts. How about Obamacare for a starter?

Who says Obama is intelligent?

[Eddie]

There is Yale law school study that may explain Obama thinking...

http://admin.alternet.org/media/most...out-brain-ever

It also explains some of the thinking around here. BTW, where is Cali?

That's interesting.

I remember doing some training with law enforcement folks, talking about interviewing witnesses, victims, perpetrators, etc. Interestingly enough, there was a study done that indicated that people were prone to believe the first story they heard the vast majority of the time - regardless of whether or not it was true. So the point they were trying to drive home to LE folks was that once to speak to even one person you will have biases that you'll have to overcome when investigating to determine what actually happened.

I'm guessing there are some similarities between what causes that and the study you mention.

[Uncle Ted]

The $4 trillion "cupboard is bare"... there is nothing that can be cut.

House Minority Leader Nancy Pelosi says Republican-led efforts to rein in government spending are pointless because there is nothing left to cut in the almost $4 trillion-a-year federal budget.


“The cupboard is bare. There’s no more cuts to make. It’s really important that people understand that,” Mrs. Pelosi, California Democrat, said in an interview broadcast Sunday on CNN’s “State of the Union.”


“We cannot have cuts just for the sake of cuts.”


The federal budget has doubled in size in 12 years, from $1.9 trillion in 2001 to $3.8 trillion this year.

Read more: http://www.washingtontimes.com/news/...#ixzz2fiSVDQHh

Cutting her own paycheck would ruin her dignity:

House Minority Leader Nancy Pelosi is speaking out against a cut in congressional pay because she says it will undermine the dignity of their positions. "I think we should respect the work we do," Pelosi said. "I think it's necessary for us to have the dignity of the job that we have rewarded." ("Dignity" is apparently a synonym for "fat paycheck.") Pelosi, whose husband, Paul, is a legit real-estate mogul, was quick to add that slicing her own paycheck wouldn’t "mean as much" as those senators who struggle to make ends meet on $174,000 per year. "We are obviously contemplating a sequester," Maryland Rep. Steny Hoyer (D) said. "Obviously we are going to take a cut, like everybody else."

http://now.msn.com/nancy-pelosi-says...dignity-of-job

We can't let Nancy Pelosi ruin her dignity. And think of all those poor senators that struggle to make ends meet on $174K per year.

[calicoug]

"Here, I've got this contract I want you to sign that essentially gives me permission to kick you in the crotch. Now, this isn't to say that I will actually kick you in the crotch. It just gives me permission to."

In what world does raising the debt ceiling result in lower debt? And if there really is no thought to actually increasing debt, then why is there a need for a higher debt ceiling? I don't get it. Do I simply not understand how it works?

It doesn't result in either higher or lower debt. Those decisions act independently of the debt ceiling. The debt ceiling exists only because Congress didn't have enough faith in itself to control spending appropriately so they passed a law to "make" them control it. Of course, Congress eventually realized they can change the law. So the artificial constraint became even more obviously dumb.

Now Congress is attempting to use the limit to threaten destruction to the economy if one party (Republicans) don't get what they want. They did this last year with great damage and are back for Act II. The debt ceiling shouldn't be raised. It should be eliminated. It serves no purpose other than a trigger for detonating the economy. We used to have faith Congress would never be so childish and pull the trigger but that was clearly wrong.

[imanihonjin]

It doesn't result in either higher or lower debt. Those decisions act independently of the debt ceiling. The debt ceiling exists only because Congress didn't have enough faith in itself to control spending appropriately so they passed a law to "make" them control it. Of course, Congress eventually realized they can change the law. So the artificial constraint became even more obviously dumb.

Now Congress is attempting to use the limit to threaten destruction to the economy if one party (Republicans) don't get what they want. They did this last year with great damage and are back for Act II. The debt ceiling shouldn't be raised. It should be eliminated. It serves no purpose other than a trigger for detonating the economy. We used to have faith Congress would never be so childish and pull the trigger but that was clearly wrong.

According to Ted Cruz the need to raise the debt limit is a leadership failure:

"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a Sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. ...Increasing America’s debt weakens us domestically and internationally. Leadership means that 'the buck stops here'. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and Grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."

[Uncle Ted]

It doesn't result in either higher or lower debt. Those decisions act independently of the debt ceiling. The debt ceiling exists only because Congress didn't have enough faith in itself to control spending appropriately so they passed a law to "make" them control it. Of course, Congress eventually realized they can change the law. So the artificial constraint became even more obviously dumb.

Now Congress is attempting to use the limit to threaten destruction to the economy if one party (Republicans) don't get what they want. They did this last year with great damage and are back for Act II. The debt ceiling shouldn't be raised. It should be eliminated. It serves no purpose other than a trigger for detonating the economy. We used to have faith Congress would never be so childish and pull the trigger but that was clearly wrong.

Yes! Who cares about these stupid ratings on bonds? What S&P doesn't realize is we can print our own money.

So let's get rid of the debt ceiling and money with strings crap. It is what Americans want... oh, wait: http://www.bloomberg.com/news/2013-0...debt-vote.html Don't people know it is un-American to disagree with President Obama?

[snowcat]