patrick.net

I for one welcome the Bipartisan divide, we could use an Agitator for good measure too. This Washington session is the most fiscally dangerously irresponsible lot, in the history of economics and Government.

I think we need massive indecision on every issue on the books, at least until these deficit junkies can grow up, and realize my kids aren't going to even be capable of paying for their greed and corruption, not at the rate they are going.

The budget deal late last year had the Republicans on the high ground.

They could argue they were voting for tax cuts for everyone but the Democrats blocked them by insisting on raising taxes (on the rich, but they just left that out to bullshit people).

Plus they held the nuts of several million unemployed people moving into Federal EUC tiers in their grasp, too.

The deal was actually something of a continued stimulus measure, even if it cost the Dems having to break a campaign promise to really sock it to the rich with that confiscatory 39.6% top marginal bracket.

This time around, I just think the Republicans are pointing the gun at their own heads.

Obama and the Dems should just say "go ahead, make our day".

Tenouncetrout says

my kids aren’t going to even be capable of paying for their greed and corruption

"our kids" can easily afford paying down the debt. All we have to do is cut spending on the military 50%, move to national single payer universal health insurance that costs other countries HALF what our BS system does, and raise taxes back to Clinton levels.

The problem is YOUR PARTY and your bullshit changing-with-the-wind IDEOLOGY is opposed to all 3 measures now, even though in living memory you had guys like Eisenhower telling us not to fall into the military-industrial trap, and as recently as 2008 the arch-conservative Heritage Foundation proposed "ObamaCare" as a necessary reform to the system.

http://www.heritage.org/Research/Commentary/2008/11/Exchange-We-Can-Believe-In

What a pack of outright liars you guys are.

He said today, "The only way we get out of this problem is increase the revenues to the federal government," said Coburn.

BTW, that quote was from Senator Tom Coburn, the Oklahoma Republican from the Gang of Six who dropped out of the group.

Sure, but you need to follow that political logic back into the economic realm.

We cut $1.5T of spending. Guess where the economy goes?

health and education have been pulling the wage train since 2000:

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

Red line is % growth in health & education, which has an immense government footprint, blue line is overall job growth/decline.

Cut government spending and that will remove millions of middle class jobs in the health and education sectors.

Same thing with the military. Even the wasteful stuff like the second F-35 engine program is a $450M jobs program supporting maybe 3000 people, plus around ANOTHER 10,000 people that get to see that government money once the government paychecks hit local economies.

If we cut $200B from the military I don't know what would happen, but it would be very bad.

The alternative to all this cutting is just taxing people more. We should start by taxing people who are buying all these treasury bonds in the first place. They clearly have more money than they know what to do with.

Troy says

Cut government spending and that will remove millions of middle class jobs in the health and education sectors.

Well not necessarily. Money won't just stay around dormant, potentially it will get reinvested into something that free market needs, without government intervention of choosing where it should flow.

We can't just have government spend all the money into specific sector because today it creates jobs, money should flow through economy on it's own somewhere along the lines of Austrian economics.

Government redistribution isn't an answer. Might as well hire people to dig ditches with tea-spoons to create jobs.

If we are malinvesting it will eventually hurt the economy when our economy is based around ballooned industries that produce no positive net effect on the society and isn't needed anywhere else. Idea is to create a product and services other nations will buy, not just have money play musical chairs in America.

"Well not necessarily. Money won’t just stay around dormant, potentially it will get reinvested into something that free market needs, without government intervention of choosing where it should flow."

The money will indeed be reinvested... in China and India.

Unemployment durig the New Deal:

1933: 25.2%
1937: 13.8%
1938: 16.5%
1940: 13.9%

Kind of hard to argue that government spending does not create jobs, no? In less than one decade, you saw nearly a 50% drop in the unemployment rate.

Wonder why unemployment went from in 1937-1938? Because that was when FDR scaled back the New Deal and cut spending.

Not to mention that if we cut education and health care spending, much more is at stake than jobs. Now your talking about the quality of peopels' lives. Who wants to tell Grandma that she can't have a hip replacement?

"The Death Panels of ObamCare, for one."

Are you REALLY going to re-start the death panel lie? I thought you were so much smarter than that. Why don't you jsut go off and watch some Fox News while we have an intelligent conversation here?

"If the government got out of the way,"

You mean just like how the govt. got out of the way from 1929-1933 under Herbert Hoover?

“If the government got out of the way,”

http://bestofwikipedia.tumblr.com/post/169193535/thought-terminating-cliche

ChrisLA says

Idea is to create a product and services other nations will buy, not just have money play musical chairs in America.

I agree with this. So much of the support we give to the lower class is just skimmed by the upper class. Doctors and medical goods manufacturers via the medicaid system, landlords via Section 8 and whatnot.

This is why I think we need to basically "nationalize" health, housing, and transportation. We need to increase the supply such that the scarcity rents in housing disappear, cost controls in health mean we are getting what we pay for, and local mass transporation is so good we don't need to waste so much money on our 19th century car technology.

ChrisLA says

Money won’t just stay around dormant, potentially it will get reinvested into something that free market needs, without government intervention of choosing where it should flow.

Not while American labor costs are 6X Chindia's.

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

See that? That's what's happening now, not some Austrian reality-challenged bullshit.

You want to nationalize housing? You mean as in govt. owned housing, or govt. mortgages?

The Rich Are Moving More Money Overseas

http://blogs.wsj.com/wealth/2011/05/18/the-rich-are-moving-more-money-overseas/

HousingWatcher says

You mean as in govt. owned housing, or govt. mortgages?

I think the one way would be to fund private concerns to construct very high quality MFH -- like what you can find around Irvine -- with government money, but with a very strong rent-capture regime, such that private industry would only see management returns -- the land rent would go back to the government.

This would increase the supply and serve to drop rents over time as more and more of these "projects" were completed.

Complicating matters is the historical habit of tenants to actively destroy housing wealth and the fact that we as a nation really don't want housing to get any more affordable here.

This is probably a dumb idea but I just want to see the land market reduced as a form of parasitical specuvesting, and this is one way to do it.

So you want more housing projects? We've had them since the 40s here in NYC. They are murder central.

HousingWatcher says

We’ve had them since the 40s here in NYC.

http://en.wikipedia.org/wiki/Stuyvesant_Town

Japan has something similar with Urban Renaissance developments.

"The Projects" have historically been thrown up to ghettoize people in shitty accomodations.

The key thing to reduce housing costs is to create an oversupply of reasonably livable housing.

My current place was built in the late 80s and is still toprate as far as quality of living goes.

Density is good for many reasons, but investment in density is generally not attractive to private capital.

I'm just riffing on a different idea that combines private management with public investment.

Peter Cooper is not a housing project. It is actually quite expensive. 2 bedroom apts. go for about $4,500 a month. In my post, I was referring to govt owned housing projects.

And no developer is going to create an over supply. If they see there is more supply than demand, they will shut construction down.

HousingWatcher says

And no developer is going to create an over supply. If they see there is more supply than demand, they will shut construction down.

yeah, that's my point. Government could fund the construction (putting construction people and the construction supply chain to work) and guarantee the management company management returns, the more units they built, the more money they would make, regardless of the rent level.

Peter Cooper is not a housing project. It is actually quite expensive. 2 bedroom apts. go for about $4,500 a month.

not the rent-control units . . .

This idea is just basically a fix for rent-control, which I don't like. More supply is the best fix for rents being too high.

Prop 13 in its perversion actually penalizes redevelopment. Not saying this idea is any good, but it's better than Prop 13 + rent control : )

Troy says

I think the one way would be to fund private concerns to construct very high quality MFH — like what you can find around Irvine — with government money

You've sung this tune before -

http://en.wikipedia.org/wiki/Pruitt%E2%80%93Igoe

No thanks! Been there, done that, doesn't work. Not everyplace is Irvine and not everyone wants to live in muti-unit housing. This isn't Japan as we have a lot of land that currently sits idle. Mass transportation only works when you have a mass to transport which outside of specific dense population centers it doesn't work. Instead of all of this idle claptrap people need a J-O-B. Without those nothing else matters. The heart of the matter is really WHY we don't make our own stuff anymore. Lack of tarrifs? China playing us the fool with currency manipulation? Perhaps energy costs are eating our lunch? It seems that job creation is the last thing on these fools minds - democrats as well as republicans.

I largely agree with that -- that we are not Japan, and thus their solutions may not work here.

We have tens of millions of defective people here, more defective people than the total population of the Kanto region of Japan, for sure.

Housing is in fact something of a sideshow compared to the bigger problems, but I do think the shitty nature of our housing stock is in fact a causative agent of these bigger social problems.

Pruitt-Igoe was a lesson in What Not To Do. Shitty architecture, shitty construction, and no actual long-term plan.

You speak of jobs, yet we have 500,00 jobs lost in residential construction:

http://research.stlouisfed.org/fred2/series/CES2023610001

if we could take $300B/yr from the defense budget we could hire these 500,000 workers and give each of them a $600,000 building budget.

What could a team of 100 do with a $60M annual construction budget? Multiply that by 5,000!

I'm not saying let's build new ghettoes, but intelligently put people back to work building actual useful wealth. The more USABLE housing goods we have, the lower our housing cost and loss to the parasitical specuvestor class and the more money we can devote to actual life costs.

The heart of the matter is really WHY we don’t make our own stuff anymore.

The problem isn't really that Chinese wages are 1/6th our own. That's a good thing for us overall, we get wealth much cheaper.

The problem is the money our consumers send to China isn't coming back into our consumer economy, and thus we're losing jobs drip by drip.

http://www.census.gov/foreign-trade/balance/c5700.html

This has been $60B the first three months, or $250B/yr. That's FIVE MILLION $50,000 jobs.

Same thing (but much larger) with the oil trade deficit. We send them 5% of our paychecks, they don't return the money into our consumer economy.

No Troy, we can't hire all those contruction workers. Did you not get the latest Tea Party talking points? If we cut taxes and spending, we will create millions of jobs. And everyone will live happily ever after on their unicorn ranch.

your point is of course entirely correct and was my assumption. Most of my argument was that there existed latent opportunity for wealth creation for an increasing number of Americans 1945-1980, perhaps out to 2000.

Increasing productivity worked hand-in-hand in the 1950s and 60s create supply-side conditions, that, along with healthy taxation rates and labor able to claim more of the production pie (thanks to organization and a general labor shortage), resulted in a wealthier middle class.

I agree we have a distribution problem now. Plus we have a macroeconomic problem vis-a-vis OPEC and China, our consumer money goes to them but doesn't come back in a form that workers can receive as pay.

Same thing wrt the rents extracted from the middle class by finance, healthcare, and landlords.

First Wham-O, and now Chesapeake Bay Candle is returning manufacturing operations to the US. Who says productivity doesn't matter?