patrick.net

I don't really understand what the issue with the GOP is these days in regards to the nomination. Its so clearly been Romney for months now. They know it. The Democrats know it. Yet they can't accept it for some reason. If they have a chance Romney is clearly the only choice they've got.

Kevin says

and whoever they put up in 2016 can reap the benefits of a post recession boom.

Lot of optimism there. We're in the midst of a decade long, very drawn out process of credit de-leveraging. You can say it will be a long-drawn out depression, but it won't be clear until 7-10 yrs have passed by. This is a secular cycle and it is a test of US as a society if we can get through it with minimal damage. But the politics is so broken in the country that I doubt this will be done without large scale damage to middle class.

I wouldn't exactly say you are right but I would argue that if they lost it wouldn't be a "huge" loss.

Consider the time bombs going on. By the time it is 2016 baby boomers would retire en masse. The left created social security and medicare so if they cannot fix their own programs it make them look weak. Just on the same note with the right if you cannot get us out of war (which has been the case in the past) then they look weak.

There were some on the right that felt that when George HW bush lost that it was a good thing because he wasn't conservative enough.

mdovell says

The left created social security and medicare so if they cannot fix their own programs it make them look weak

Social security has zero problems until 2030 or so (sooner if employment doesn't grow like the overly-optimistic projections say it will).

Medicare is another story, but Medicare was broken not by liberals but by conservatives (Parts B, C, D).

Social Security is not a big problem. You can raise contribution caps (or remove them), you can raise the retirement age, you can means test, and you can lie about COLA.

Medicare is a very real problem. You can't fix Medicare in a vacuum though; you have to fix the entire health care system.

Given that Medicare is close to half of all medical spending now, you can easily make the argument that it already *is* the medical system.

The only viable option for medicare in the short term is probably to raise contribution rates. Long term, we need to replace the entire system with something new.

I do feel pretty confident about the economy in 2016, at least relative to things today. I'm not saying we're going back to 1999 or even 2003, but I do think it'll be much better than now.

Kevin says

The only viable option for medicare in the short term is probably to raise contribution rates. Long term, we need to replace the entire system with something new.

Per-capita healthcare costs are $8000, more than twice the global average. The long pole in the tent is the cost of hospitalization. Our political process is completely fubar'd up now. There is going to be no "replacement".

Kevin says

I do feel pretty confident about the economy in 2016, at least relative to things today.

Why?

Bellingham Bill says

Per-capita healthcare costs are $8000, more than twice the global average. The long pole in the tent is the cost of hospitalization. Our political process is completely fubar'd up now. There is going to be no "replacement".

Oh please. There's always change. Not tomorrow and maybe not this decade, but there will eventually be a complete overhaul of the medical system.

Bellingham Bill says

Why?

Because of the amount of money sitting idle. Eventually the Apples and Microsoft's of the world are going to realize that sitting on $50B isn't really helping them, and they'll start spending. That's the catalyst that starts things really moving again.

Kevin says

and they'll start spending

I've cashed my share of dotcom paychecks, but $50B isn't going to replace the $1T+/yr flow that the housing bubble was throwing off.

I just think 2002-2008 was fake, fiction, and fraud. Where does that leave us now???

http://research.stlouisfed.org/fred2/graph/?g=3lL

Quite frankly, in my superbear mood I can't figure out how things are holding together as well as they are.

Perhaps my "paycheck economy" thesis isn't as solid as I think it is -- perhaps there is more leakage from the rentier-economy to the paycheck one.

Or perhaps there's in fact some more shoes to drop still.

Dunno.

Bellingham Bill says

mdovell says

The left created social security and medicare so if they cannot fix their own programs it make them look weak

Social security has zero problems until 2030 or so (sooner if employment doesn't grow like the overly-optimistic projections say it will).

Medicare is another story, but Medicare was broken not by liberals but by conservatives (Parts B, C, D).

“Nessuna soluzione . . . nessun problema!„

It is largely argued that there is little fraud within medicare but sadly that is not the case. Just that fact that company have ads about products that "..bill medicare with NO cost to you" means it is up for grabs.

Raising the age for it is political suicide. I think they might phaze it out after a given age...treat it like TANF reform. say it lasts for 20 years with a phaze out at age 85 starting.

Kevin says

Because of the amount of money sitting idle. Eventually the Apples and Microsoft's of the world are going to realize that sitting on $50B isn't really helping them, and they'll start spending. That's the catalyst that starts things really moving again.

Outside of a very few apple/microsoft type players corporations sitting on cash is a myth. Look at the other side of the balance sheet for most corporations and you will find borrowing that far exceeds cash. Corporations have been stocking up on very cheap cash just in case the banking system goes south again. I wonder what they see on the horizon that we don't?

bob2356 says

Outside of a very few apple/microsoft type players corporations sitting on cash is a myth. Look at the other side of the balance sheet for most corporations and you will find borrowing that far exceeds cas

I used to believe that but was proven wrong. A fair amount of companies do have cash on the sidelines...so why aren't they spending?

well

1) Why would anyone spend money on anything now if they can get it cheaper tomorrow, next month or next year?

2) I'm not saying obamacare is scaring businesses but the constant back and forth is. Some might save money to pay for it but if they have more bills to pay they might gut it.

3) Some might simply be watching competitors to wait for them to fail and then buy them up.

4) They have to hold cash because everything else is going down...

Ever hear of gentrification? Imagine that but on a higher level..that's what might be going on.

http://online.wsj.com/article/SB10001424053111903927204576574720017009568.html

Corporations have a higher share of cash on their balance sheets than at any time in nearly half a century, as businesses build up buffers rather than invest in new plants or hiring.

"Nonfinancial companies held more than $2 trillion in cash and other liquid assets at the end of June, the Federal Reserve reported Friday, up more than $88 billion from the end of March. Cash accounted for 7.1% of all company assets, everything from buildings to bonds, the highest level since 1963."