patrick.net

Strategist says

1. The 9% is a nominal rate. Inflation was high in the 70's and 80's.

But Inflation and real growth were low under Bush and Obama and yet national debt doubled under each one of them.
i.e. the debt is exploding much faster than nominal economy.

Strategist says

2. After 911 and pointless wars,our deficit shot up.

3. 2008 crash resulted in more deficits due to bailouts, and keeping the economy afloat.

These were just what we did with the debt.
It doesn't change the fact that without going 9% deeper in debt every single year we would be in deep recession.

Logan Mohtashami says

Deficits are a positive for the economy and mostly due to demographics

If the deficits are due to retirement savings (money not spent), how come the saving rate is so low in the US?
Not only the debt grows 9% a year but this is not like this is due to a temporary factor: this is extra debt just to pay for our current living expenses as things are setup now.
All this while a number of people in their prime years are out on the side watching.

Heraclitusstudent says

If the deficits are due to retirement savings (money not spent), how come the saving rate is so low in the US?

Mandatory pay outs

S.S. and Medicare

any reduction of this payout would be bad

As long as their is no inflation created we are good and there hasn't be currency induced inflation due to federal debt

This is what I want to nail David Stockman on

We are going to have an inflationary push-cost economic crash similar to 1980-1983.

Anyone claiming inflation is low is buying the purposefully misleading, adjusted and hedonically adjusted again, wrong "basket of goods" - over-weighing flexible, unnecessary goods (HDTVs & plastic trinkets) and under-weighing inflexible goods (medical bills, rent, education, utilities, taxes) that the BLS is intentionally disingenuously selling.

What will cause this crash to be much worse and much longer in duration than 1980-1983 is a) massive debt on government, corporate and household balance sheets + b) radical monetary policy of central banks the globe over for the last 8 years keeping interest rates at the zero bound while conducting monetization of government debt through QE and monetization of bad corporate debt through LSAP (large scale asset purchases) + c) massive underemployment and stagnant or declining real wages for 90% of populations (wealth inequality at levels higher than any periods other than the 1920s, revolutionary periods, etc.) + d) declining aggregate demand (look at exporting nations and indicators such as Baltic Dry Index) + e) currency devaluation wars that have already begun and will accelerate + (I'll write the remaining factors later after doing things on Friday night that must be tended to)...

to be continued

freespeechforever says

We are going to have an inflationary push-cost economic crash similar to 1980-1983.

People have been saying this for years

The best case for inflation is when our young demographics kick in, years 2020-2024

Another thing I am bringing up at the conference

U.S. dollar and imports

Dollar gets stronger it's deflationary for us

Service inflation grows stronger

Rent and medical inflation but our imports get cheap

Hence the Gap between PCE inflation and core inflation over decades

Malthus failed Folks!!!

We killed inflation on imports here

Heraclitusstudent says

These were just what we did with the debt.

It doesn't change the fact that without going 9% deeper in debt every single year we would be in deep recession.

The real number that counts is the debt/GDP ratio. We are OK there. We can afford it.

On another note

Born 7 October 1885 - Niels Bohr, Denmark, physicist, expanded quantum physics (Nobel 1922)

We killed inflation in much of the flexible goods type segments (e.g. Electronics - see post above) that people buy infrequently (maybe once a year or every 3 years), while we killed much of the labor demand for native workers and suppressed their wages with liberalized trade with nations not being as regulated (child labor, pollution, other laws), while inflation is roaring in inflexible goods/services (rent/housing, medical care, tuition, utilities taxes, etc.

We will see an inflationary cost-push crash followed by stagflation, and then because structural damage to economy (globally) is so severe, aggregate demand will crash leading to massive deflation ultimately.

freespeechforever says

labor demand for native workers

I don't know how else to say this

We have 5,900,000 job openings in America in all sectors of the economy ( Highest level ever recorded in human history)

Read the report here

https://loganmohtashami.com/2016/09/07/5900000-job-openings/

freespeechforever says

We killed inflation in much of the flexible goods type segments (e.g. Electronics) that people buy infrequently (maybe once a year or every 3 years), while we killed much of the labor demand for native workers and suppressed their wages with liberalized trade with nations not being as regulated (child labor, pollution, other laws).

True, but the rest of our society benefited from cheaper and better quality products like cars.
As for child labor, many families in 3rd world countries would starve to death if they did not put their kids to work. You would have done the same.

Strategist says

As for child labor, many families in 3rd world countries would starve to death if they did not put their kids to work. You would have done the same.

Logan Mohtashami says

As long as their is no inflation created we are good and there hasn't be currency induced inflation due to federal debt

This is what I want to nail David Stockman on

So you want the debt to continue to grow 9% a year for decades while economic growth and inflation converge to 0?
Do you realize Stockman is going to make you look like a total idiot?

Strategist says

The real number that counts is the debt/GDP ratio. We are OK there. We can afford it.

Sure we can have debt 200% of GDP, then 400% of GDP. Until debt growth for 1 year exceeds entire GDP growth that year.
What more do you need to realize how artificial and futile this entire affair has become?

Logan Mohtashami says

At what price to America?
Wonder why a moron like Trump is even close to Clinton?

Heraclitusstudent says

Strategist says

The real number that counts is the debt/GDP ratio. We are OK there. We can afford it.

Sure we can have debt 200% of GDP, then 400% of GDP. Until debt growth for 1 year exceeds entire GDP growth that year.

What more do you need to realize how artificial and futile this entire affair has become?

200% or 400% would be a disaster for us.
100% is more manageable.
Check this out.

http://www.tradingeconomics.com/united-states/government-debt-to-gdp

Heraclitusstudent says

At what price to America?

Again

155 Million working
82% full time workers
43 year low in unemployment claims
Highest Job openings ever recorded in Human history

Heraclitusstudent says

Trump

Plays the race card ... plays to the uneducated white make crowd which have suffered, especially those who never graduated high school

I have done some data work on this

If you're 40-70 year white male, substance abuse, no education and no skill set

Life sucks !!!

Heraclitusstudent says

Do you realize Stockman is going to make you look like a total idiot?

You should see what I have stored if I get my shot...

Debt has grown and inflation has collapsed

Strategist says

freespeechforever says

We killed inflation in much of the flexible goods type segments (e.g. Electronics) that people buy infrequently (maybe once a year or every 3 years), while we killed much of the labor demand for native workers and suppressed their wages with liberalized trade with nations not being as regulated (child labor, pollution, other laws).

True, but the rest of our society benefited from cheaper and better quality products like cars.

As for child labor, many families in 3rd world countries would starve to death if they did not put their kids to work. You would have done the same.

Take away child labor in those cases and watch them sell their female children off as brides

Logan _ I'm on my way out now, but you really need to brush up on fundamentals if you're going to take Stockman or Kotklikoff head on.

We're in a radical monetary experiment now, with Japan under the monetary policies of Kuroda & the BOJ as a harbinger of things to come for developed nations (the demographic argument is a red herring, and even allowing for it, developed economies are trending towards Japan's birth/death rates, anyways), that has seen an amazing (and wholly artificial, engineered) period where equities (risk) and bonds (safety) have had bull runs ; hear me loud and clear - this is the tell that the underlying pillars of economic health are crumbling, and that it is only by monetary policy re-flation of financial assets (bizarrely both risk and safety instruments simultaneously) that the entire global economy is being propped up by bubble-economics.

It won't end well. It never does. The central banks are reflating bubbles as palliative efforts to revive each recession/great recession, creating more severe crashes that do more structural damage to the economic foundation as a consequence.

This is the 5th major bubble since 1989 (coincidentally, Japan sparked that one with a run on U.S. Real Estate and Media concerns).

Instead of seeing corporations borrow to expand production or invest in R&D, because they can sell debt at a near-zero price point, because of central banks breaking the function of the yield curve, and because aggregate demand is weak, they are using such debt to fund share buybacks.

Everything is perverse from a macro AND micro way to such a degree that the red flags couldn't be brighter.

Financialization is playing an outsized and destructive role, and is being enabled by absolutely radical central bank actions.

There isn't even any possible price discovery in markets anymore. We last saw clear echoes of this in the 1932-1936 period, in the wake of the Great Depression, when all fundamentals broke down (but for different reasons).

This bubble is broader and deeper than that of 2007, which was far broader and deeper than that of 1998, and so on.

bob2356 says

Obviously a trump voter, it's true because hey I just made it up.

Still stuck on the wingnut narrative. Sure, I'm not a fan of limousine liberals, much like yourself, but that hardly makes me a right winger;

Not big on letting Muslim extremists and their supporters into country. Bill Maher agrees win me and he's passes for liberal in this day and age

Also, not voting as I haven't since gore in 2000. Waste of time. I'm not delusional enough to think that I matter in a global sense. Too bad you're in your 60s and haven't figured it out

What we really have is a lack of low-intelligence jobs. Not low education jobs, per se, but jobs for Americans with low intelligence are declining rapidly. It's a tragedy because instead of productive work that provides dignity and character to low intelligence Americans, we are supporting them on the dole while they kill themselves with drugs and commit ever increasing levels of crime.
Americans with a reasonable rate of intelligence can still get jobs, or be trained for jobs, but Americans in the lower 50%tile are mostly shit outta luck.
And that creates consequences for the rest of us.
So we'd better create them some jobs or get started with the eugenics, because these huddled masses will overrun us as time goes on, and nobody will have a good life.
Automation has mostly replaced these people with robots.
But robots don't cause crime if they are unemployed.
So what can we reasonably do with them?

bob2356 says

You can't look at the chart either?

I stopped looking at charts you comment upon because you have a tendency to misread them and use it as a pretext to be argumentative in a jerky manner. If I were a pussy like some here I would put you on ignore, but you do sometimes make thought provoking statements, so I do appreciate that (no sarcasm)

Really though, I am proud of you bob for reading the graph correctly; for once, although, you are surprisingly grumpy even when you are right, which is 100% of the time(sarcasm)

You guys need to verse yourself with the current data....

Don't worry about me... I can hold my own with anyone... but unless you focus on the facts ... you will always be at a disadvantage ..

This is isn't like trading stocks or buying real estate..

This is economics

Remember big Marco thinking

44% of the population are workers, 100% are consumers

Working and consumption are at all time highs

This entire manufacturing thesis is simply terrible, It shows how desperate the left and right are in trying to bash America

MMT/Gold Bugs