Printing money to buy debt only devalues the dollar. Wouldn’t be easier to just right off the debt? After all if my right pocket owes my left pocket ten dollars why can’t I leave it in my right pocket.
When there’s work that needs to be done, and unemployed people looking for work, the solution surely involves putting unemployed people to work doing the work that needs to be done. My suggestion would be to lower the barriers to entry in the health care field while reducing the costs of getting the necessary training. In other words, to invest in the human capital neccessary to address the problem.
The flip side is the more people there are who have the skills and training, the less it’s likely to cost to employ them. It’s a win-win-win.
Not in a recession.
Do you think any of this could be avoided by the government making a budget and sticking to it. And I’m not talking about, “if my budget is enacted in 20 years we’ll have a balanced budget”. We all know that’s bullshit. A budget should be balanced every year.
I’m on the council of the little villlage I live in. We have a small tax base. Every year we make a budget and except for the hit we took in '08 we end up with a small fund balance every year. And the one year we did take the hit we saw the writing on the wall and budgeted accordingly. I’m not trying to pretend that a village of 1,000 people compares to running a country of 310 million but the theory is the same, you spend only what you bring in. And while we have some complain that it takes around five years for us to have enough set aside to do some road repair when we ask those who complain if they want to pay off a bond they accept that we do what we can pay for.
Now if we were able to print money when we needed it it might be different.
America would never have become the richest, most powerful nation in the world by following that advice. Prudent deficit spending is entirely appropriate in recession. Kitchen table economics do not scale well when talking about the budget of a first world nation.
“Prudent deficit spending”
But Fear we are way past “prudent defict spending”. I mean way way way past “prudent defict spending”
If you wrote off the debt, you’d be eliminating trillions of dollars of private savings as well as plunging the world into financial chaos. So that would be a bad idea.
As far as printing money is concerned, if it caused the value of the dollar to fall, you’d expect the value of the dollar to have fallen, given all the money that’s been printed. But that hasn’t happened. Why not?
But that does not imply slavish adherence to a balanced budget is any better.
"As far as printing money is concerned, if it caused the value of the dollar to fall, you’d expect the value of the dollar to have fallen, given all the money that’s been printed. But that hasn’t happened. Why not? "
What do you mean?? The dollar dropped again on Wednesday. A few years ago if I when I went to Canada and I gave them a U.S. dollar they would give me $1.40 Canadian. Last week it was one for one. Do you go to the gas station? Do you go to the grocery store? The value of the dollar has dropped.
"But that does not imply slavish adherence to a balanced budget is any better. "
So Fear, it’s either a trillion dollars a year in “prudent defict spending” or a slavish adherence to a balanced budget?? No middle of the road with you, eh?
And they wonder why there is such a divide in this country.
So, do you think that we can take steps to reasonably reduce the deficit, or do you think we should immediately make
. That doesn’t seem middle of the road to me.
You either:
[QUOTE=JQPublic]
A budget should be balanced every year.
[/QUOTE]
Okay, now your turn. We’ve already achieved most of the cuts of Simpson Bowles.
I accept the fact that you have probably read up a lot on this subject and know much more than I. I only have practical experience. Let me explain what little I know. We need road work done so issue a bond for the money = deficit spending. We collect our tax revenue and budget our bond payment thus we have a balanced budget while incorporating prudent deficit spending.
What about the bush tax cuts? Was there some sort of deal that the Democrats would cut spending in exhcange for the Busht ax cuts? I’m not getting your point.
Aux contraire. We might need more deficit spending in the short term and more balanced budgets over the medium term. You should take a look at where the deficits are coming from. A significant portion of that deficit is the result of lower tax revenues from the recession and increased safety net spending from the recession. A significant portion fo that deficit can be traced to the Bush tax cuts. A significant portion fo that deficit can be traced to our military expansion. Very little can be traced to extra spedning and programs by this administration.
No, he is saying that people who insist on balanced budgets don’t know what they are talking about. I think Fear would be OK with lower deficits or even surpluses, just not now.
Obviously for some reason this is crazy talk.
That is correct. The debt is a long term problem that must be addressed. But it is not the most important problem we face. Creating jobs is more important in the short run that reducing the debt. If we must add to the debt in the short run, while planning how to cut spending over the long run to reduce the debt, that is the responsible thing to do. And yes, reducing the debt to a reasonable level will take decades.
Gas prices are going down.
Gasoline prices post biggest fall in nearly 4 years: survey
It’s true the dollar’s been falling vs. the CAD. On the other hand, it’s rising against the euro:
Inflation in the US is low.
OK gas prices aren’t double what they were 4 years ago anymore I’m getting 40% less gas for every dollar I spend. To me that sounds like devalued currency.
Great news our currency is up against another nearly bancrupt financial system.
I call bullshit on low inflation. Do you buy your own groceries? They base inflation numbers on big ticket items not the items we purchase on a daily basis. My grocery bill is up at least 25%. Couple that with gas being 40% higher my dollar doesn’t go as far as it did. So it’s either our currency is devalued or there’s inflation.