patrick.net

Overwhelming debt is crushing once vibrant economies

Goddamit Ray, there's a correlation there that you're either too stupid to see or intentionally eliding. Ireland was trying to be a tax haven. Both Ireland and Iceland had immense bubble economies driven by bankers gone wild making loans to anyone.

continue to struggle to provide even basic services to people that have been accustomed to government aid and services for generations

And that's the goddamned lie that you continually spout here. Sweden, Norway, and Canada have their fiscal houses in order.

http://www.moneynews.com/StreetTalk/Norway-Investor-Haven-World/2010/11/18/id/377414

Spain and (I think) Portugal had right-wingers in power that allowed a very similar pump & dump in real estate that the Bush team allowed to happen here 2003-2006. Greece, same thing, tax-evasion and borrowing money to pay for social services.

Also, eurozone countries can't print their way out of trouble. Unlike us.

What causes fiscal train wrecks is too little taxation and too little regulation of banking, not too much of either.

The government’s efforts to help stabilize and stimulate the economy has only put us into a deeper debt hole

The hole was dug 5-10 years ago Ray.

http://research.stlouisfed.org/fred2/series/CMDEBT

If that $14T continues to go to money heaven, it's going to have to come out of the economy somehow, like maybe $4T of draindown from banking sector, which only has around $600B of market cap right now.

Even bullets won't help you in this scenario. If we go the Austerian way, better learn a self-defense regimen that doesn't have so many consumables, like aikido or wing chun, or hire somebody who does.

Troy says

The hole was dug 5-10 years ago Ray.

One huge problem I have with people like you (amongst others of course) is that you continue to blame Bush and the GOP for the very same thing that Obama and the Dems have exacerbated. Bush and the GOP did enormous damage by spending excessively through the six years they held the House, Senate & White House. To illustrate to you how different I am than you, amongst the dinner guests on Thanksgiving was the son of the former party GOP chairman for a very large metropolitan county. His father personally knew and worked with all the GOP big wigs (including Pres. Reagan & Bush 41) up from 1970 until his death in 1990. To say his son is a dyed in the wool GOPer is putting it mildly. After dinner, the two of us engaged in a “state of the country” discussion, in which I put a lot of the blame for the mess we're in on Bush 43 and the GOP. Needless to say, he wasn’t very happy about my views. If looks could kill, I'd be a dead man. The point is, you and your ilk (and other partisan political types) are water carriers for everything concerning your particular POLITICAL party, along with its leader. You consistently point to the past while failing to see the damage that is being done in the present. Just continue to argue for your side, Troy. In the mean time, the country continues to self destruct because people like you fail to see the damage BOTH parties have done and CONTINUE to do.

Ray sees no difference between irresponsible deficit spending and tax gifts to the rich (against the future of the middle class) during relatively boom times versus Keynesian spending to prevent the mother of all economic collapses.

If we could have had the recession we needed to have back in 2002 - 2003, we would have avoided so much of this. But then Bush might not have been reelected in '04 to continue taking care of "his base."

If it ever does happen though, thank goodness for our debit and credit cards. We definitely won't be doing the wheelbarrow thing. The waste and labor and inefficiency in involved in that was rather amazing if you think about it.

RayAmerica says

He has also stated that Hitler’s enormous deficit spending programs (in building his war machine and huge public works projects like the Autobahn) was “the envy of Europe” and brought great prosperity to the German people

You should read the link he shared. A quote:

“The Nazis came to power in Germany in 1933, at a time when its economy was in total collapse, with ruinous war-reparation obligations and zero prospects for foreign investment or credit. Yet through an independent monetary policy of sovereign credit and a full-employment public-works program, the Third Reich was able to turn a bankrupt Germany, stripped of overseas colonies it could exploit, into the strongest economy in Europe within four years, even before armament spending began.”5

Actually, I guess the quote was from Economist Henry C. K. Liu.

The author goes on -

"While Hitler clearly deserves the opprobrium heaped on him for his later atrocities, he was enormously popular with his own people, at least for a time. This was evidently because he rescued Germany from the throes of a worldwide depression – and he did it through a plan of public works paid for with currency generated by the government itself. "

In case you don't get it, this was the new currency they printed after the hyperinflationary period. Read the rest. It's interesting. Not sure whether it might be oversimplified.

It is an interesting question. What if we spent trillions of printed money on public works projects instead of spending it in on a round about way paying off gambling debts of people who were trying to make an easy fast buck ?

I agree that Americans are generally clueless, and have voted to fuck themselves over.

RayAmerica says

in which I put a lot of the blame for the mess we’re in on Bush 43 and the GOP. Needless to say, he wasn’t very happy about my views. If looks could kill, I’d be a dead man. The point is, you and your ilk (and other partisan political types) are water carriers for everything concerning your particular POLITICAL party,

Obama has run a very neutral -- conservative -- course. The health care reforms were straight out of Bob Dole's playbook of 1993 -- the Lincoln Chafee proposal that was co-sponsored by conservative Senators like Orrin Hatch and Ted Stevens. Marxism it wasn't and for righties like Ray to charge that "ObamaCare" is the nose of Socialism just reveals how utterly full of shit they really are.

Obama kept Bush's financial team and military management team in place. This was not really a mistake since the great damage in both these areas had already been done by the people they -- eg. Geithner and Gates -- had already replaced.

So, like Clinton, Obama is being a center center President. Looking for liberal changes where possible, but willing to trim to the right where it either makes sense or marginalizes the radical right more.

I'm only a Democratic supporter to keep the nutball conservative right -- what used to be the Bircher wing -- out of power. I'm one of the 10% of the country who thinks Obama isn't left enough!

Troy. In the mean time, the country continues to self destruct because people like you fail to see the damage BOTH parties have done and CONTINUE to do.

This is entirely BS. The Democrats didn't damage the economy -- contrary to Republican predictions -- by raising taxes in 1991 and 1993. That actually put the country on a much more solid economic footing.

The Democrats didn't damage the country voting against the Iraq war in the House. They did damage the country failing to try to filibuster the AUMF in 2002, but thanks to DINOs like Lieberman and Zell Miller they didn't have the votes to block cloture so that would have been a symbolic stand without the possibility of actually stopping Bush. There were SIX Republican no votes on AUMF in 2002 in the House and ONE in the Senate.

The Democrats weren't in charge of the Executive or Congress when the big deregulations happened 2001-2003 and the housing bubble blew from marginal to the $10T peak:

http://research.stlouisfed.org/fred2/series/HHMSDODNS

that is about $3T more than is supportable.

Now, if you want to argue that the Dems are damaging the country by being insufficiently pro-Evangelical Christian, or insufficiently anti-Abortion, anti-Gay, pro-Israel, etc. have at it but economically and militarily the Democrats have very solid records, at least compared to the entirely reckless neocon adventurism and disaster capitalism that the most recent batch of Republicans -- 1995 through 2006 -- are responsible for.

marcus says

this was the new currency they printed after the hyperinflationary period

The German hyperinflationary period was a BRIEF event that largely happened in 1923 (though was building up in 1922).

The crisis point was reached when Germany started printing papiermarks to pay the workers who were striking in the Ruhr, which had been seized by France for non-payment of war reparations.

After that, the conservative Centre coalition governments of 1924-1930 did a good job of managing the economy (what was happening behind the scenes was the Americans loaning money to cover the German non-payment of debts or something like that -- I can't really keep this complicated history in my head all that well).

But the global dislocation of 1930-31 really screwed everyone, as exporters started competing with each other to lock out their import market and go for neomercantilism. Everything went to crap and this set the stage for the resurgence of Hitler -- who was a man with a plan in 1932-33.

Troy says

I’m one of the 10% of the country who thinks Obama isn’t left enough!

I'd put it closer to 30 to 35%.

Everyone acknowledges we have a "center right" government now. Obama is a radical leftie, all the way practically to what used to be the center.

RayAmerica says

Virtually everyone that has investments that are denominated in the U.S. dollar will be wiped out.

This didn't happen in the 1970s, when the dollar fell to 40c between 1971 and 1983. That's all the inflation we need now -- over this decade -- to save the current system.

The alternative is some serious shit coming down.

marcus says

If we could have had the recession we needed to have back in 2002 - 2003, we would have avoided so much of this. But then Bush might not have been reelected in ‘04 to continue taking care of “his base.”

This is entirely correct.

The orange line i added to the above is what SHOULD have happened 2001-2008, if the slowdown medicine of the early 90s had been repeated.

But what's $4T of bubblemoney among friends?

marcus says

It is an interesting question. What if we spent trillions of printed money on public works projects instead of spending it in on a round about way paying off gambling debts of people who were trying to make an easy fast buck ?

I really doubt there's that much good public works. Well, if I were King instead of paying two years unemployment to these people:

http://research.stlouisfed.org/fred2/series/USCONS?cid=11

I'd put them to work making reasonably quality "garden apartment"-style (for lack of a better word) "projects".

This is something similar to what Japan is doing with their "Urban Renaissance" housing agency. But there's so many mistakes of the past dogging gov't housing that this would be a very risky endeavor.

I'd move every bus in the nation to natural gas/hydrogen and institute the new infrastructure to supply this fleet. I'd also double or triple service to make buses in the top 300 cities entirely superior to cars for most people -- ie service every 10 minutes instead of 30+ that it is now. 30 minute service intervals is just bullshit. That's an hour or two of personal time that busriders are losing.

After that, dunno tho.

marcus says

I’d put it closer to 30 to 35%.

Approve: 48%
Disapprove, too liberal: 38%
Disapprove, not liberal enough: 9%
Disapprove, unsure: 3%

http://i2.cdn.turner.com/cnn/2010/images/11/15/rel16a.pdf

larrypatrickmaloney says

Finally, the American debt is about $14 Trillion now, not $12 Trillion. We are essentially at 95% debt to GDP.

The debt was deflated down quite handily in the 1970s with no serious harm. Carter left with less debt than he entered, in real terms.

We think of it as a time of unemployment, but the participation rate skyrocketed in the 70s:

http://research.stlouisfed.org/fred2/series/CIVPART

as the front half of the baby boom was aged 22 through 31 in 1977.

Troy says

Approve: 48%
Disapprove, too liberal: 38%
Disapprove, not liberal enough: 9%
Disapprove, unsure: 3%

http://i2.cdn.turner.com/cnn/2010/images/11/15/rel16a.pdf

Okay, but we all know the connotation that word (liberal) has. But okay. Hard to believe.

Maybe it's because of his legislative focus, the first couple of years.