I admit the foreign investment loophole has to be closed too. I was referring to investment in jobs here in the US. I think if you search on Supply & Demand you’ll find some background on that concept.
It seems you’re conflating debt with debt interest. Your quote indicates that the debt interest of $225 billion is the larger concern at this point, as it will continue to balloon. We are required by law to pay that interest, by the way. While accruing more debt accrues more interest, nobody is going to come looking for our heads if we accrue debt (at least not yet). Cutting spending has nothing to do with the actual requirement to pay the interest on what we owe (note that I said ‘on what we owe’, not ‘all of what we owe’). If we don’t pay the interest, our rates are going to soar. It’s really no different than using a credit card.
That’s not to say that we don’t need to somehow get spending under control, although it’s interesting to note that your quote points to the fact that no matter what they agree on in these negotiations, it’s a spit in the ocean and will have no significant impact on the debt itself. Without increases in revenue to go along with cuts in spending, we will march steadily backwards. In short, at this late date, not raising the debt limit would be more detrimental than raising it.
Not sure I understand you. Are you saying that somewhere on those sites I will find this analysis/recommendation: “We had this same situation following WWII, and Eisenhower fixed the problem by raising taxes of profits sky high, and the only way around was through investment.”
Sorry, no, not exactly. However, a main premise of Krugman’s book “The Conscience of a Liberal” was that the golden era of post-war America was also the Great Compression, where disparities in wealth in America were relatively quite small.
From a wiki summary of the book here (http://www.wikisummaries.org/The_Conscience_of_a_Liberal_Summary):
So, not exactly, but not far off either, and his regular blog updates are not inconsistent with his argument from his book.
Seventy percent of US GDP is consumer spending. Over the past few decades, the US family has gone from largely one-earner to largely two-earner families and gone further and further into debt just to maintain their standards of living, due to the fact that the median wage has effectively stood still since about 1980. So people have maxed out their credit cards and tapped out all the equity in their main store of value, their home, which is now declining in value and leaving millions of Americans underwater in terms of home equity. They’re not spending because they don’t have any money to spend or access to credit and they’re worried about losing their job.
Also, too, monetary policy that normally gooses the economy in a recession is a non-starter. Normally what happens is that the Fed slashes interest rates which encourages consumer spending, investment etc. But rates were already rock bottom when the meltdown happened so the Fed can’t cut them any further. Deficit spending is a non-startee due to the political climate.
And people aren’t seeing what economic recovery there is because all the actual growth from the recovery is being hoovered up by corporations, who are taking 90% of what recovery there is. Wage earners are seieing about 1 percen of if.
For any real recovery we’re going to have to see a more even distribution of income than we’re seeing now. If the average American isn’t making any more money than they were then they’re just not going to spend any more. And corporations aren’t going to release their vice=like grip on the politicians and the economy so things aren’t going to change for a long time.
Yes. Just before the meltdown happened, and no co-incidentally, we had eight years of the most business-friendly pro-growth policies we’ve ever had. The result of these pro-growth policies was the biggest economic meltdown since 1929. You’re just parroting an ideology that has been comprehensively trashed by the actual events of the past few years.
He really is worth reading. Over the years we’ve had people telling us that the Bush boom, tax cuts etc. were going to be a resounding success, that there was no housing bubble, that there wasn’t a serious problem with the financial system, that freeing the market from regulation would result in new and unparralelled prosperity for all and so on. Krugman disagreed with all this and was proved right.
Since the meltdown when we’ve been warned about hyperinflation, huge increaes in interest rates, crowding out of private investment by government borrowing and so on by the same clowns and idiots who were so spectacularly wrong pre-meltdown. Krugman has disagreed with them again and has again been proved right. I read him because history has proved that he knows what he’s talking about.
The links below cover your point a little but there are endless more on his blog, including a bunch of posts on his front page entitled “Some links to stuff I’ve written bearing on macroeconomic policy. Read all of them, and you’ll have a good sense of where I’m coming from.”
http://krugman.blogs.nytimes.com/2009/08/28/the-burden-of-debt/
http://krugman.blogs.nytimes.com/2009/08/23/how-big-is-9-trillion/
I read his stuff all the time. However, I don’t recall him advocating that we tax the bejesus out of companies in order to “force” them to invest in new ventures (or whatever), per the post I responded to, above. But if you have a cite of him advancing that idea, I would welcome reading it. I don’t need links to his blogs, as I know where they are and I’m not inclined to do other people’s research for them in this forum.
I don’t need to any research. You need to find a reason to contradict my statements instead of just asking for cites. I don’t appeal to authority, I appeal to reason. Do you think that people invest money to create jobs? Do you think people invest at all just for their jollies? There is no investment in jobs because there is no profitable reason to do so.
On the decline in demand point, here’s an interesting article on how the collapse of the housing bubble destroyed the wealth of the middle class in America. (With lots of numbers and graphs!)
Our main strategy for dealing with economic problems in America is to concentrate more and more wealth in the hands of a tiny minority.
Whether that means bail-outs, deregulation which allows them to suck the economy dry via credit default swaps (for some reason those who made out like bandits don’t publicize their success), or simply lowering taxes for the super-wealthy, the main strategy is always the same.
But what happens when wealth has become so concentrated that the vast majority of the country has no money? Now there is no need to invest and create jobs in an attempt to earn money from the populace, because they have none. With no need to go after your (nonexistent) money or to use you for (nonexistent) jobs, you are irrelevant to the economy.
The economy adapts around you, but does not include you. It doesn’t need you anymore. For anything.
It will be hard to fix, but all we can do is try to concentrate wealth even more in the hands of the most wealthy by further deregulating and lowering their taxes.
Do you have a cite that “the vast majority of the country has no money”?
I’d be very surprised if that was true, but if you’ve got a cite…?
There is not going to be any jobs. You can just forget about jobs unless the US changes its policies.
There will not be any jobs coming back, until, and unless, we balance the federal budget AND start running a positive Balance of Trade. In the last decade the balance of trade for the USA was a* deficit of $6 trillion dollars…this is in ADDITION to the federal budget deficits*. The United States is going bankrupt, and the US dollar is going to be worthless.
The USA has not had a Balance of Trade surplus since the 1960’s back when the USA had lots and lots of good paying jobs.
Relatively speaking, the US does not “make anything” anymore. There will not be any jobs until the US brings back its manufacturing jobs and starts to make things that other people want to buy. Everything else you guys have been talking about is just fluff, fiction, deception, a red herring, meaningless, and has nothing to do with bringing back good paying jobs for all .
Gah, these supposed ‘causes’ read like banal talking points from the left:
“Evil Republicans did <insert random event> which caused rich people to <insert random event>, while deregulation caused <insert random event>, and stripped the middle class of all its money.”
You might as well cut and paste the same explanation into a debate of anything bad that happens.
Of course, this is just a re-statement of typical left-wing beliefs:
- Rich people have too much money
- The middle class is dying
- deregulation is bad
Of course, the right does it too, in reverse:
“The problem is that rich people were taxed too heavily, while the middle class got all the perks, and in the meantime the economy was choked off by regulations.”
That may be a fine statement of core beliefs, but in a discussion of specific causes of specific events, it really doesn’t take you very far. It’s fine to make those statements, but then you have to back them up with explicit references and show the chain of causation. Anything less is not debate - it’s just partisan venting.
Oh, and TriPolar: It’s you who made a factual claim, therefore the responsibility is on you to back it up. It’s not John Mace’s job to go out and track down your sources and try to reconstruct your chain of logic. You either put up facts and describe your reasoning, or you go hang out somewhere like IMHO where you can just state whatever you want with no expectation that you provide cites for factual claims.
I stated my opinion. Which is worth just as much as any economist’s. Nobody has facts to present on future economics. The facts that you and anyone else should know are A) Eisenhower brought the tax rates up to 90% at the top. Hardly anybody paid that because there were abundant ways to make investments to lower that rate. Nobody can prove that led to the economic boom that did occur, but it is the consensus of all rational people I’ve ever heard of. B) People with money to invest do it based on the belief they will profit, not for altruistic reasons. C) Investment in job creating enterprises in this country have not provided the same kind of returns as foreign investments are believed to, and non-productive, non-job creating gambling with financial instruments have. D) Debt, deficit, and spending amounts are not the problem, the percentages are. Unless people start dying faster or having more children, the economy will only improve through growth, which requires demand, which means more money in the hands of the vast majority of people, which has to come from tax expenditures (non-sustainable), charity (yeah, that’ll happen :rolleyes:), or investment in job creation.
If you don’t like my opinion, explain some logical inconsistency, or facts that counter my argument, or a better argument of your own.
Except with cites, data, and consistency with what has actually happened in the real world.
Obama said “You can sit on your ass and earn $330 a week”?
Cite that Obama said this, or implemented any kind of policy resembling what you’re talking about?
He’s a 20 year old guy in a tough situation. I don’t think he’s presenting that as an argument, just an expression of frustration.
I can’t seem to find anything, but that doesn’t automatically make everything I’ve ever said a lie. I’m just syaing that that is the impression received from all the changes he’s made to welfare and Social Security
Wow! Obama made changes to welfare and Social Security??? When did he pull this off, and how?