patrick.net

Yes, there's very vague criticism of Obama.

What specifically could he have done differently? I can think of a few things:

* not signing the NDAA
* insisting on the public option
* refusing contributions from Wall Street

Overall though, Obama is a giant freaking success compared to Bush, who started an unneccessary war and hugely increased spending while giving huge unjustified tax cuts to the 1%.

But no, Obama could not have been white. That's something he could not have done differently.

Overall though, Obama is a giant freaking success compared to Bush, who started an unneccessary war and hugely increased spending while giving huge unjustified tax cuts to the 1%.

Agree. Obama may not be the best president in U.S. history. But at least he's semi-competent. Unlike Bush.

But no, Obama could not have been white. That's something he could not have done differently.

Hey now, Michael Jackson managed to do it somehow.

TMAC54 says

I remember the entire country bowing & chanting in a meditative state. "ALLA CHANGE ALLLLLA CHANGE IS COMING ALLLA".

Yes, true. And who knows what might have happened if republicans were willing to help him be successful. The idea of his success was what they fought vigorously against.

I think it's widely understood that Obama anticipated being post partisan(that was the big hope), and republicans were not about to let him have that kind of success.

marcus says

Yes, true. And who knows what might have happened if republicans were willing to help him be successful. The idea of his success was what they fought vigorously against.

I think it's widely understood that Obama anticipated being post partisan(that was the big hope), and republicans were not about to let him have that kind of success.

I think that is exactly correct.

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curious2 says

Blaming the Republican minority in Congress for everything that happened in 2009-2011 ignores the math.

The math is the democrats held a filibuster proof majority in the senate for 12 weeks in the spring '09, until ted kennedy got too sick to come to work anymore, and another 15 weeks at then end of '09, though Congress was out for the holidays for much of that time, until Scott Brown took over in January '10.

So of the two years they really had more like 6 months. Getting health care reform and the stimulus was all the time they had.

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curious2 says

BTW, please look up the difference between "do" and "due."

I'd say when you resort to pointing out grammatical mistakes, you've lost the debate.

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TMAC54 says

Or the gullable people that saw him as something other than just another tap dancing politician ?

I was called racist when I pegged him as that when he was on the 2008 campaign trail. Like mention song and dance and a black man in the same breath and the apologist automatically think Al Jolson.

Devaluation of the currency is not exactly the same as the value against other currencies decreasing. (that is, that isn't the definition)

That is, If it's devalued, it goes down against other currencies, but if it goes down against other currencies, it doesn't have to be because it's devalued.

In fact, looking at just the variable of interest rates (alone), decreasing interest rates, with other countries not decreasing their interest rates (as much), should cause our currency to go down against theirs. (holding all other variables constant).

These things are complicated, and sometimes paradoxical.

It's like with real estate. Inflation should cause RE prices to go up. But sometimes in the short run, inflation causes interest rates to go up (the cost of money), resulting in lower RE prices (at least for a while - since people look at their monthly financing cost).

The only thing that's always true, is that it sure is good to have A LOT of capital and to be able to take advantage of all the opportunities that the changes bring.

david1 says

GDP is Consumer Spending ($10.7T) + Government Spending($3T) + Investment by Business($2.4T) + Net Exports($-.6T). Cutting government spending by $1T on social programs would reduce GDP by $1T. Much (if not all) of the money spent on Government social programs is recirculated through the economy by the recipients of that spending in the form of consumer spending. Lets conservatively say half, so another $.5T. Total $1.5T reduction. Now reducing taxes will give consumers more disposable income to spend, so lets say that total tax receipts decrease 20% ($.46T) and none of that is saved and all goes back into the economy. Unlikely but best case. Again using the 1.5 times multiplier for the velocity of money makes the total increase in consumer spending $.7T. Net, GDP will fall $.8T unless there is something else making up the difference. ($1T + $.5T - $.7T = $.8T)

That's why GDP is not a very good measure of wealth or prosperity. In your example above where did 50% of the money distributed in social programs but not spent go to and why did cutting government spending by 1T only reduce taxes by .5T another 50% loss? Are you saying it costs 50% of taxes to collect them and another 50% to distribute them?

TMAC54 says

STOP

Hammer Time.

bob2356 says

In your example above where did 50% of the money distributed in social programs but not spent go to

Perhaps I wasn't clear. All of the $1T in social program spending goes into the economy. Additionally, that same $1T is then spent AGAIN, all or in some part, due to the velocity of money. That is, after the government pays Medical bill for the Medicare recipient, that money goes to doctors, nurses, medical shareholders, etc. and is then spent again. So you get more than $1 in GDP for every dollar of government spending.

bob2356 says

why did cutting government spending by 1T only reduce taxes by .5T another 50% loss?

They are totally unrelated. a decrease in tax recepits is part of the Ryan plan to cut taxes. I estimated this at 20% of 2011 total receipts. $.46T.

You might be figuring out that deficit spending, in fact, does increase GDP.

bob2356 says

Are you saying it costs 50% of taxes to collect them and another 50% to distribute them?

Not what I am saying at all. I hope I was more clear this time around.

In short, I am saying that for the economy as a whole, it would be better if there was less saving and more spending. As shown, business investment is by far the smallest component of GDP (and the economy), therefore lowering taxes to allow more business investment is not as effective at growing the economy as increased demand is.

david1 says

So you get more than $1 in GDP for every dollar of government spending.

So we should just have 100% taxes and endless prosperity will be the result.

wthrfrk80 says

david1 says

So you get more than $1 in GDP for every dollar of government spending.

So we should just have 100% taxes and endless prosperity will be the result.

Funny. Of course not, due to deadweight loss. But we should tax and spend at the tax revenue maximizing rate. The Laffer curve exists and is correct. At 100% flat tax rates, revenue is not as high as it is at some lower point. Current tax structure is such that we are below the rate of maximum revenue. Further raising beyond that point reduces revenue.

david1 says

The Laffer curve exists and is correct.

Bueller...Bueller...Bueller...

And the biggest drag on the economy is...GOVERNMENT.

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Honest Abe says

And the biggest drag on the economy is...GOVERNMENT.

Actually pretty sure that's not true. The biggest drag on the economy is the lack of purchasing power in the middle class.

Almost all the increase in income for the last 20 years as gone to the top 1%, and they can invest as much as they want with that income -- it won't do any good without middle class customers to buy the stuff they're trying to sell.

We had far higher rates of growth when taxes on the 1% were much higher. In fact, growth rates seem pretty much proportional to the tax rates on the 1%. Just go back and compare US growth rates to tax rates on the 1%.

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wthrfrk80 says

Bueller...Bueller...Bueller...

I'm not sure I get this one.

Let me throw something out at you, see what you think. The reason Republicans use deficit spending to score political points but nothing else (why the dont decrease spending) is because deficit spending actually serves as asset protection for the capitalists. It keeps demand for their capital high...

Per capita income has increased 35% in real terms since 1980; however all of this gain was realized in the top 20%, income per capita in the bottom half of this country actually fell.

With the increase in income centralized only at the top, the top is essentially running out of places to invest. There is too much saving, and the demand for investment return has increased. This is why interest rates are low; there is so much capital seeking return with little demand for it. The Government creates the demand for the capital by deficit spending. If government didn't deficit spend, there would be less demand for capital and less debt. Returns on debt would be even less and capital would seek higher returns elsewhere, cause price inflation due to competition in all areas in which capital chased return.

This concentration seeking return is also the reason for the run up in gold prices, oil prices, etc. The top has accumulated so much capital it has more appetite for risk. 30 years ago, there were fewer speculators with large appetites for risk. What increases appetite for risk? Security in other areas. Think about it - if you have a nice nest egg socked away for retirement, you are more prone to take a small risk that really wouldn't affect your lifestyle than you would be otherwise.

You want oil prices to go down? Raise taxes on capital or increase demand for capital in other areas with less inherent risk. Increasing the demand for capital will increase the return, making it more attractive to capital.

If Government raised taxes to the revenue maximizing point, the supply of capital would be lower due to the government confiscating more of it. This would decrease speculation in commodities, lowering oil, gold, etc. On its own, it would also decrease the supply of debt capital, which would increase interest rates. However, the offset to this would be the decreased demand for debt capital since government revenues would be higher, causing less need to borrow. My suspicion is falling prices in higher risk classes of investment vehicles would occur first, with falling prices in debt capital being last due to the decreased perception of default risk.

Its counter intuitive to what one may think, but really to get the economy going we need to reverse the concentration of capital at the top, which would decrease capital hoarding and yield chasing, decreasing commodity price inflation driven by speculation. Less hoarding means more capital flowing through the economy, increasing demand for labor and increasing wages. China's economy is seeing this very thing - there is so much demand for Chinese labor that it becomes less "cheap" by the day. It is no secret that this is the driving force behind China's growing economy - the increase of capital flowing through the economy. If that capital was hoarded instead, their economy would realize much less growth.

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marcus says

interest rates are a more precise measure of the value of the dollar than things like the CPI and the dollar index

Also, to the extent this is true it's that interest rates are looking forward (expectations based), where as cpi looks back, and the dollar index closer to right now, but it also reflects value relative to other currencies, more than interest rates do and much more than CPI does.

curious2 says

The reference to Ferris Bueller is because the Laffer curve is voo doo economics, repeatedly disproved.

I knew the movie, knew the quote, just didn't, and still don't, see how the reference makes any sense.

Who told you the Laffer curve is voodoo, repeatedly disproven? I think you need to check your sources.

http://jparnell.com/blog/?p=229

"Few economists question the basic premise of the curve. What some debate is the shape of the curve and our current position on it. Those who say they are “for the curve” believe we are at a point where increasing the tax rate will not significantly increase tax revenue."

http://www.qando.net/details.aspx?Entry=7083

"The curve itself is pretty simple, and there's hardly an economist in the world that doesn't believe that the Laffer Curve, or something quite like it, doesn't exist."

Mick Russom says

and maybe there would be a bit of a wealth effect from those who have scrimped and saved could spend a bit because money was no longer toilet paper and things were affordable, you know, like gas, food, rent, tuition

That is idiotic. When home prices crashed from in 2008, did you notice a wealth effect?? If so, you were looking at something different than me. I noticed the largest downturn since the Great Depression.

david1 says

With the increase in income centralized only at the top, the top is essentially running out of places to invest. There is too much saving, and the demand for investment return has increased. This is why interest rates are low; there is so much capital seeking return with little demand for it.

Amen. I'm not exactly at the top, but like everyone else I'm running out of places to invest. See: /?p=1211957

david1 says

Who told you the Laffer curve is voodoo, repeatedly disproven?

Wasn't it the first George Bush (dubya's dad)?

I think Ben Stein even said so in Ferris Bueller's economics class: "he called it 'something-do economics'...does anyone know?....no?...He called it 'voodoo economics'...voodoo economics..."

wthrfrk80 says

think Ben Stein even said so in Ferris Bueller's economics class: "he called it 'something-do economics'...does anyone know?....no?...He called it 'voodoo economics'...voodoo economics..."

Thats right. Now i get the reference.