Rug Burn Junky on 29/7/2011 at 13:19

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Haven't I given enough? I give and give, and you take and take, and where does that leave me?

This time, I really don't have much time, since I'm getting ready for (probably another 12 hour day at) work. But when I say the "full effects" in that instance it was just about federal money flows - state and local governments have already been in a pinch, since they can't issue treasury sponsored securities (that eats up part of our debt limit), layoffs will accelerate as other federal subsidies are cut off. Social security checks won't be paid. Highway construction contracts will stop. Any number of things that are palpable and noticeable.

That's for being "unable to issue." Throw in the increased interest charges that most Americans would pay (floating rate mortgages and student loans are usually keyed to T-bills, if not LIBOR, and both would rise) and people will freak. We're talkiung about suddenly owing a couple of hundred dollars a month more.

For Obama to disregard the debt ceiling and issue securities, the disastrous results would be different. T-bills are a staple on the financial markets - they're cash equivalents, and a fallback investment option for all sorts of accounts. If the market is suddenly hit with T-bills of questionable value, there will be institutional investors who will have no choice but to purchase them, but others who will stay away, since the "full faith & credit" would be contested. Having the market pool tainted by these securities could potentially throw much of the market into gridlock (as a corporate trustee's counsel, I don't even want to think about what would happen if my bank starts buying these and one of our big investment bank clients freaks out over it). IT would poison the well, and that's not even counting the political effects of the Roberts court hitting him with a ruling that would make Bush v. Gore look sensible, or the house republicans blowing their top and pulling out a full throated impeachment proceeding that would make it look like Clinton got a blow job in comparison... errr, you know what I mean.

I'd say they're one and the same, one is just deeper inside the money stream. Everybody wants a raise at their job, and nobody thinks about the macro implications. That goes the same for a 5% cost of living increase or 2 and 20% hedge fund commission.

What happens on the market and "sensible level of return" is a side a effect, and really shouldn't be the focus. This is where I'm running out of time, but yes, we can go for many, many years without turning into Greece. The boom was bad, but it was a bubble, not a fundamental flaw in our economy (a fundamental flaw in our financial markets maybe, but that's another story.) As I said, we carried far more debt during the post-war period, and we were able to grow our way out of it. Alleviating the household balance sheet problem would be a start (inflation would be a GOOD thing right now, for exactly that reason), and keeping a basic social safety net which actually allows entrepreneurs to take risks instead of forcing them into wage slavery. One of the results of high levels of income inequality is a further downward push on wages in the general economy. The equilibrium we are reaching keeps wages just below the levels required for modern necessities, and requiring some debt spending, and keeping the populace resource-constrained in such a way that it minimizes market forces on behalf of labor - and disincentivizing saving. Unless of course you have an equity builder like a home - which allows for modest saving, at the cost of flexibility, trading one constraint for another. In the 50's this was counteracted by a strong union presence and sensible tax policies. Decreasing income inequality would go a long way to improving this - the market equilibrium will reach a point allowing for more productive, sustainable growth, without debt fueled bubbles being a necessity for any sort of uptick. Make sense?

Decoupling the profit motive from the increase in overhead. Right now, private insurance corporations make a totally rational choice that it is more profitable to spend money on the denial of coverage, thus maximizing profit from premiums, than it is to provide coverage. This is a market failure. Because the incentives of the insurance companies are profit driven, the equilibrium that the market reaches causes ever accelerating increases in the cost of care for the same service.

As much as libertarians want to believe in the invisible hand, it simply doesn't work with health care (Kenneth Arrow wrote the definitive economic paper on this over 50 years ago.) There are any number of ways to solve this. The affordable care act took some steps which would reduce costs, but left the private market structure intact.. A public option would put a major player into the market without a profit motive - thus adding downward pressure to prices, and upward pressure on the care provided. A single payer system would remove the profit motive entirely and spread costs to the entire population as a true risk-sharing venture. A national health system would do the same and reduce even more bureaucratic costs. The ACA was as far to the right as you can get while still accomplishing anything - modest regulation of a still-private industry - so much so that it blows my minds that retards argue against it as "socialist."

You kind of have a funny conception of what is "ideal." Eliminating SS/Medicare would be harmful to everyone - beyond the cruelty of basically requiring a heavy percentage of the populace into poverty as they age - it would directly impact the labor market to the negative for everyone.
No. and utter fail.

Given that nothing in those quotes was keynesian in the slightest, we can assume one of two things. Either, you do actually know something about Keynesian economics, in which case you are deliberately misstating the position in order to troll. Or you've ingested so much misinformation that you are truly ignorant of what the doctrine says, and you actually believe what you wrote.

So which is it: Are you an asshole or an idiot?

CCCToad on 30/7/2011 at 09:36

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Well, Moyer, the argument could be made (and frequently has been made) that keeping the defense budget high creates jobs. Hell, the conventional wisdom is that its defense spending that got us out of the depression and that we need the wars in the middle east to create jobs.

Anyways, though, I think another major issue is that the extreme amounts of waste ocurring at all levels of government severely impedes our ability to create jobs. Hell, the stimulus bill supposedly spent almost three hundred grand per job it "created" and there's quite a few projects it was spent on that boggle the mind(ie, 40 grand in costumes for an awareness campaign). My personal favorite is spending 11 million dollars on a bridge to be built at Microsoft's headquarters. Why the fuck couldn't they build their own damn bridge?

Keep in mind, though, that I don't lay the blame higher up. Many of the top-tier in government seem to make the mistaken assumption that the people who will actually be managing these projects are as smart as they are when that is anything but the truth.

The blame belongs solely to whoever the idiots that approved that money be spent on those project.

CCCToad on 31/7/2011 at 04:43

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Do you?

The point is, that the stimulus didn't work. And here's a link to stop you from screaming that I'm just an idiot and don't know what I"m talking about. People far more qualified to comment on it than either you or me agree with me, as both Greenspan and other treasury officials(past and current) are on record as stating that both the Stimulus bills and QE had no measurable benefits.

doctorfrog on 31/7/2011 at 06:03

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Check, and mate, sirrah!

CCCToad on 31/7/2011 at 12:08

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Which kind of proves my point: that the effectiveness of stimulus spending is severely undermined by high levels of government corruption, as the US government ranks much higher than Australia on multiple corruption indexes.

The result is that the spending doesn't really create jobs but instead is used to enrich cronies. While I've seen a few television interviews (back around the time of TARP) claiming that doing so is a good idea because the rich will spend the money and create jobs. The problem is that this is logically the same disproven argument behind the Bush Cuts: enriching the rich will enrich us. In reality its important that such money gets distributed to as low a level as possible because the working class re-circulates a much higher percentage of the money they take in than the rich do.

Also corruption in the grant process exacerbates our economic situation by increasing the wealth disparity that is driving this entire crisis.