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Austerity for the sake of austerity is not the answer. But the question needs to be whether our spending is as efficient as Europe's in the first place before taking all cuts off the table. Just like Japan in the 90s, the key is "what we do" rather than "what we cut". I'm mostly referring to defense cuts but also referring to our bloated health care giveaway bonanza. These are both examples of bipartisanship in the wrong direction (historically). Another thing we tend to do is make blanket statements like "corporate tax rates should be reduced" (or not reduced). Maybe they should (or should not)....or maybe corp rates need to be reduced for small business, thus encouraging more entrepreneurship, thus moving more of the GDP % to small business, thus diluting the influence/impact of any 1 corporation. We have got to get back to being a country of diverse voices & influence. Right now, we're essentially controlled by a very small amount of entities with enormous influence. Encouraging a dilution of that influence should be our secondary goals with any economic policy. |
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I absolutely agree with all of this. In my defense - I think a lot of the "cut spending" people are totally transfixed by this "indescriminate austerity" idea though, of just like say...slashing everything 25%. It's simple, it's easy to comprehend, which means it's an easy sell to an uneducated populace. So when I hear "cut spending" without anymore detail the assumption is that that is what the other person is talking about. |
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{shrug} Depends upon what those voices are saying; i.e. diversity for the sake of diversity is an enormous mistake if you're including batshit crazy. Problem is, we don't even have much in the way of a coherent definition of "batshit crazy". The lack of cohesion due to overdiversification is very like as much a cause of our eventual death as anything out there. |
I see austerity more as the thing we should be trying to avoid here rather than a fiscal strategy. If our path is truly "unsustainable" then we're eventually on our way to austerity-like problems if we don't change paths.
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I'm not sure we need to cre about defining batshit crazy though. We can let batshit crazy be batshit crazy, imho. I agree that diversification makes it more difficult to implement a cohesive agenda but when we're talking federal government (not local)...I'd say thats a good thing. It means it better make sense for a majority of people rather than a majority of power. And to be clear, I'm all for individuals being as rich & powerful as they can be. What I am finding less & less use for are corporate constructs that create artificial (my word) power & influence. Such as what we see in many industries these days where we have consolidated our way to 2-4 corporations running everything in a single industry...and if thats not viewed problematic...those same 2-4 corporations are running 4-8 other industries. To the extent that they have now been able to homogenize multiple industries into a single voice & lobbying platform. Diversification of power & influence counteracts that level of (mega) influence. |
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And the "batshit crazy"(i.e. Ron Paul, Dennis Kucinch, Ralph Nader) are the ones that have been talking about your last paragraph for decades. The only thing you are leaving out is how the federal government has been glad to help these mega-corporate entities get to where are they are today. |
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Fair enough, I suspect (in hindsight) I may not have parsed your original statement ("We have got to get back to being a country of diverse voices") as finely as I should have. My comment worked from general notion that you were proposing all of those diverse voices should have weight, leading me to try to remove some of them from the equation. In hindsight I suspect you were going for more discernment than I was giving you credit for. |
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Would not fishing be affected by severe storms? (honest question - I presume there must be an effect to both when they could fish but also in the aftermath to the fish population?). |
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They might be, but not in Alaska. |
Yeah, I think the ghost of Ted Stevens is the most plausible explanation ;)
SI |
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Maybe distributed voices would have been the more appropriate term for what I was trying to convey & likely less ambiguous. My take is that no lobbying is better than a handful of entities lobbying on behalf of industries & people that dont necessarily share the same belief system. Not too unlike my take on labor unions for that matter. I'm very cautious of anybody (person or corporation) that lays claim to speaking for a lot of other people without having to be accountable to those same people in any meaningful way. |
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Sure...thats absolutely the case. I think its sheer stupidity & general incompetence (sprinkled with some bribery here & there) though. The amount of consolidation in different business industries is getting downright scary to me. Even if you ignore the obvious wealth disparity that occurs from it (which I don't have a major issue with personal income disparity in & of itself), the amount of power & influence to continue lobbying for squatting policy that only these handful (at best) groups want is completely counter to the entrepreneurial spirit that made this country innovative, productive, and what made people give a crap about other people. Instead, we have this society thats been beaten down by entities that are, themselves, runaway trains. And I say runaway trains because I know (as I'm sure others do as well) know how corporate decisions are made. I know why companies sellout to others. And I also understand the concept of arms races between competing companies vying for leverage with each other. You can't blame these entities for advocating their own personal welfare as its in their (and their shareholders') best interests to do what they do. This is what a federal government made up of adults is supposed to intuitively just get...and we simply don't have enough that do. |
In a bill that is, hypothetically, meant to restore some fiscal balance, how can anyone possibly defend all of the pork that has been added to it??
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I could be wrong - but from what I understand weren't most of these items 'extensions' to existing setups rather than being brand new deals? ... they're being presented in much of the media as being additional pork and horrible because of it. eg. the Rum Subsidy is an 'extension' rather than anything new, the electric scooter stuff is again an 'extension' of an existing policy ... etc. ... (please note I'm not excusing everything nor pretending that some new things were undoubtably pushed through as part of the deal - however the media 'outrage' about things appears to be trying to milk things somewhat more than might be appropriate) |
WSJ.com
By Ian Talley The International Monetary Fund is revising its metrics on how fast governments should cut their budgets, with the IMF’s top economist making the case that Europe’s fiscal diets were too severe. In a new paper published Thursday, IMF Economic Counsellor Olivier Blanchard and research-department economist Daniel Leigh show the IMF recommended slashing budgets too fast early in the euro crisis, starving many economies of much-needed growth. In “Growth Forecast Errors and Fiscal Multipliers,” Messrs. Blanchard and Leigh calculate IMF and European economists underestimated the euro-for-euro effect of cutting government budgets. While economists expected that cutting a euro from the budget would cost around 50 cents in lost growth, the actual impact was more like 1.50 per euro. |
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It doesn't matter, as long as they continue authorize expenditures (new or extensions), then the fiscal situation can only get worse. This is why one of the reason to oppose increased taxation (regardless if they will generator new revenues or not) is to force the issue away from the "drunken sailor" mindset that is so pervasive. Reductions in spending has to start someplace but it won't start at all if they believe throw money at anything and everything. |
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WTF? You mean contractionary policies are contractionary? |
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Hey - maybe if I post enough studies and actual experiences it'll get through to reality-deniers. Maybe... |
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The problem here isnt whether the scooter or fishery projects (whether they are extensions or new initiatives) are valid & worthwhile....the problem I have is that our government cannot pass ANY legislation without having all of these tangential & unrelated add-ons thrown on top of it. Its just like in 2008 when the entire economy was tanking. We can't pass a bill called "Need money for x or the world economy will collapse" without adding in scientific testing of frog semen. And the initial bill failed getting through the House in part because of the pork. "Pork" projects isn't (in my mind anyway) synonymous with "not worthwhile" projects...its the fact that we can't pass important legislation without adding these types of projects & trying to ram them through because the big ticket item is considered too important to vote against. While it may not be practical to submit each of those pork projects individually, we really need a mechanism or process that allows for submission of important bills on their own, and less critical bills to be lumped together with Presidential line item veto authority. This would get accountability back into the legislative process (and to some extent the President)...but naturally nobody wants to be held accountable so it probably never changes. |
This is from a friend who blogs lots of commentaries
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GE had the 4th highest amount of reported lobbying dollars, contributing heavily to both presidential campaigns, as well as to 80 memers of Congress. |
Ugh
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The Republicans take much needed heat for often ignoring science but how can both parties be completely oblivious to exponential growth? |
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We need "sustainable debt reduction" policies-which means that our capping our spending growth below GDP growth, tackle real spending reforms (The big problem with SS and Medicare is that people take out more than they've paid in), built an economy for the 21st century (I believe we are just starting to experience an energy resource boom here, provided we don't continue to try to put up more and more walls) and examine our social structures as well (e.g. I don't believe that spending even more on education isn't going to change our results here), Quote:
I don't think there is anything "wrong" with it, just the fact that it's stuffed in a Sandy Aid relief bill. |
I love the "Trillion Dollar Coin" idea and hope it happens. Basicallt Geithner can just mint a platinum coin of any denomination (google it)
Maybe I'm more excited about it as the plot of some heist movie though. |
So it's kindof like the $100K bill?
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In essence, yes. Actually the idea is for Obama to just point out that he can do it (which is frankly silly) and then bargin that away to the Republicans permanantly in exchange for the Republican House permanantly giving up the House's authority on the debt ceiling (which is also silly - why should they have the ability to think about not paying the bill for spending that they have authorized). |
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Would have loved to see the liberals reaction if they voted against the war under Bush and he printed a trillion dollar coin. Good thing we have no gold standard anymore or that would have to be like a 25,000 lb gold coin. And it's a really dumb idea but no country has ever thought of anything like this have they? .jpg) |
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The thing with those sort of plots which a lot of people miss is that the growth there by percentage is actually probably lesser with the 'larger' jumps. That is look at the 10 years under Reagan - its starts around '1' and grows to '4' - that is it quadruples the debt in 10 years. In the first 4 years under Obama the debt grew from 10 to 14, that is a 40% rise .... far lesser than the percentage increase under Reagan during the same relative time period (ie. its not that the growth is 'growing' in percentage terms, its just 10% of $1m is bigger than 10% of $100k). (not excusing anything at all - but I think its very easy to get emotive about such issues and miss the fact that just because a graph shows a larger 'raw figure' increase it doesn't mean that its growing at a faster percentage rate) |
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Obama will never do it because he is too cautious, but something big needs to happen to stop this debt ceiling madness. We can't run a country when the GOP threatens to stop paying the bills every couple of years. |
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So how about looking at it from a point of view that hates what Reagan, Bush, and Obama did? The debt has gone 14x larger in 30 years. I would love for somebody to explain how this won't impact a guy who tries to put a little money away every month to save for his family's future. You can't possibly tell me that if I have $100,000 put away now and I retire in 30 years that I can buy a small house, or 3-4 cars, or 3 pounds of gold, or 100K hamburgers... And it is most certainly hitting an exponential slide. (Not at a 2^x still but still about to take off to out of control numbers) |
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You've now gone off plot a little haven't you - you're now decrying inflation as a whole? Inflation while 'bad' to individuals is actually 'good' to society as a whole if kept within sensible limits. To try and explain this - if there was no inflation there would be less encouragement for people to invest money into other ventures, hence less jobs and growth in general would be created. For an example of this look into the Japanese economy which has struggled to stimulate inflation - often consumers often hold off purchasing in the hope of a better deal later when the price of something may have dropped. |
So about that whole Boehner is going to resign thing... how did that work out? ;)
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Agree. And normal people pay for energy and food which the United States conveinently removed from their inflation calculation. I don't know about you but my family has been quite strapped lately to pay for those two items. (and its always some other bs excuse and nothing to do with priting large amounts of money) |
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Sadly, not very well. I'm pretty sure the GOP -- in its current form -- is pretty much done. |
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I'm not even going to begin to waste my time pointing out how Zimbabwe /= America. You're more intelligent then that. |
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And the sequel - what the hell do you do once you've successfully heisted the coin? Edit: The "dumb muscle guy" of the heist team would probably try to use it in a vending machine. |
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And you are intelligent enough to know if one of the solutions to avoid cutting spending at all is to print a trillion dollar coin than our country is fucked. (Democrat, republican, or independent). The great empires all collapse (economic and military reasons, check to both) seems like some future society will read and laugh about the trillion dollar coin. (Edit: if gov Romney or gov perry would have talked about a trillion dollar coin at the debates many on here would be on the floor laughing. I am confident that you realize how stupid this idea is) |
When I first started teaching fifteen years ago there was an end of year algebra III question that asked about designing a sprinkler system to maximize coverage of an irregular shaped lawn. A kid turned in a paper that said they would tie a hose to the back of a trained dog and let it run around. I thought it was clever but I said this is for a decent sized grade why don't you rethink. They ended up turning that answer in. It is like this type of avoid the real problem with a clever solution has now reached the higher levels of government. Don't understand why we can't spend five times more than we take in well look at this clever math I have done that you can't possibly understand. Nobel Prize please, nothing wrong here.
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Might be worth realising that past situation is no guarentee of future situation, if you ignore a small problem long enough it can easily turn into a larger one. How many people here realise that England got itself into a large enough mess in the 1967 that it literally DEVALUED its currency to try and devalue its debts and make it more competitive. Devaluation of the pound I could easily foresee a similar thing happening with the US Dollar at some point in the future if things aren't controlled ... |
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But Scott Caan is busy exercising his thespian muscle on (Golden Globe Nominated!) Hawaii Five-O! SI |
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Ding ding ding. I believe you've stumbled upon the real elephant in the room. Back away slowly, draw no attention to it or yourself. Then double up on your meds for a few days & you should feel better in no time. |
As riveting a concept that the trillion dollar coin is, the more likely scenario is that Obama could just issue an executive order around it, using the public debt section of the 14th amendment. It'd be a pretty aggressive use of executive power from a guy who campaigned against such things, but a lot of people have endorsed the idea (including Bill Clinton).
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I was talking to my wife yesterday and was trying to figure out what kind of massive botch that Congress would have to do to feel it was so hopeless they might as well just say "screw it all, let's accomplish something and damn the electoral consequences". And the only thing I could come up with was miss with the missile fired to blow up an asteroid coming towards earth
But let's pretend there are actually citizen-centric rather than voting-centric incentives somehow magically in place so that good things are rewarded even if they are "3rd rails". What would/should happen? *Publicly finance elections and ban outside money *Ban lobbying for 5 years after public service with stiff penalties for violators *Phase in Social security changes up to 70 years of age *Switch to the metric system *Vigorously apply Sherman Anti-Trust across our economy *Either switch our health care to single payer or strip out the parts where it privatizes the profits and socializes the losses (like Medicare Part D) and just make it a mandate SI |
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The smart political thing would be to float the idea and then use it to cut some stuff that is third rail-y in his own party that he knows needs to be cut. However, there are many in the GOP who wouldn't take the inch and would instead want a yard and that's why it can't necessarily be done. SI |
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fixed that for ya |
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(Adding to your list) * Put some money behind fraud prevention / detection in these large programs. Maybe rather than individual offices for each program that are individually funded and thus easy to underfund so Congress looks like they are doing something without annoying their handlers, we hand the whole thing over to the Secret Service and expand its budget? I'd be a bit leery of handing it over to the FBI, but expanding detection and penalties for securities, medicare, social security, banking, and similar white-collar government bilking would help. Let's work on making sure we are helping people who actually NEED the help, that would make it much easier to eliminate arguments against programs like this from people like me :D * Include Congressional Ethics. They are already looking to kill Pelosi's board that looks into Congressional scandals, move it to the Secret Service or FBI and let 'em loose. * Reasonable defense cuts. Of course if you do #1 then it might take care of itself. * In addition to limits on lobbyists, we need limits on regulators going into private business for the folks they are regulating. #1 may be a huge step forward here. * I like restricting the ability to add unrelated riders to bills. Let's also go back to "fillibuster requires you to actually get up and talk" and other reforms in how bills get handled / dealt with. * Loosen the 2-party stranglehold. This is probably more at the local level, but we need more than Dems/Repubs in debates at all levels. No debates without at least 3 separate parties represented. And if this means more runoff elections, so be it. I'd love to see someone stand up to the parties and organize debates along more reasonable lines, and tell the candidates to show up or not, their choice. If we ended up with a Libertarian, Green Party, and maybe one or two others with no Repub or Dem because they didn't like the rules debate, I think that would be awesome. Stop letting the Dem/Repub campaigns set the rules for the debates. |
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... then you'd have a debate involving the worst of our nation's nut jobs, with rarely a decent idea between, so marginal that it's a very legitimate question whether they're sane enough to even be allowed to walk the streets. On the bright side, at least it would gather the least useful members of the political class all in one place. |
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Ideally, if any other parties could get over that hump of relevance, maybe they'd attract more talent. There has to be talented Republicans and Democrats, maybe blocked from career advancement because of internal politics, because they're too sincere in their views, because they abhor playing the game, etc., who would consider jumping ship if another outfit offered them some kind of access. |
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It's not like we're getting any decent ideas from the folks currently in office. But the main point is to get some different ideas up there and force the folks who get into power to address some of the questions brought up by the other parties. Instead of the watered down talking points we get now. |
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The vast majority of which are so absurd on their very face that it's a waste of time & energy ... and it ain't exactly like the productivity of the two relevant parties is so high that they need to be wasting time like that. |
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I don't think its that politicians don't have decent ideas - I think its that most politicians are professionals and their job involves ensuring they retain a job first and foremost. Any 'real' solution to the problems existing in society/economy (in all countries not just the US) involve things which are unplalatable to a large section of society - either corporations (ie. funding your election) or populace (ie. voting) ... as such they'll ignore issues and leave things heading towards calamity rather than risk their own personal situation for the betterment of the majority. Think of it like a doctor who is paid directly by tips from his patient - he has a patient who appears outwardly fine, the patient will pay happily to stay 'fine' .... the doctor however knows he has a (currently) invisible tumour which will kill him, the treatment will be unpleasant and painful .... this will likely reduce the doctors tips, so he ignores the tumour in order to maximise his income .... |
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And that's part of what I'm trying to change by bringing in more outsiders. Let the radicals vote for the radicals in the debates, maybe the middle moderates can actually find someone to vote for when the "real" candidates don't have to pander to the fringes. |
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The problem is that everyone is a radical at the start of their career - I'm sure Obama when he started as a politician had more radical ideas and wanted to make a difference, ditto Republicans etc. .... The problem is self-interest, when its your job and income on the line how will you react - when a self-interest group offer you a cush $1m/year job as a retirement option after your term in office what will you do etc. ... Unfortunately most people will look after themselves and theirs first and foremost, ie. take the cash whether corruptly (ie. as a kickback) or legitimately (ie. as funds to advertise during the next campaign) ... it doesn't matter which tbh as the effect is the same. |
I guess maybe a top 4 or so?
Officials: US drone strike kills Taliban commander in Pakistan - World News Quote:
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Insight into the 4 days on the fiscal cliff negotiations.
Fiscal Cliff Averted: How The White House Got A Deal Before The Deadline Quote:
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Devil is in the details but below seems reasonable.
White House weighs broad gun-control agenda in wake of Newtown shootings - The Washington Post Quote:
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Interesting how a lot of people seem upset that their paychecks are smaller, thanks to more payroll taxes being taken out.
CURL: Obama supporters shocked, angry at new tax increases - Washington Times Hope and less change: Americans cringe at first paychecks of 2013; Stunned lib asks, ‘What happened?’ | Twitchy |
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1 and 2) Unconstitutional. Freedom of speech, remember? 3) I agree on SS at 70, but also tie to an life expectancy index that re-adjusts every decade or so. Also reform parts of the disability portion as well. To expand on SS/Medicare, the big problem is people take out more money than they pay in, by a rather big margin. Fix that equation, and you'll fix a lot of our problems. 3) Being a big company doesn't mean your violating anti-trust laws. 4) Why the change to the metric system? I guess the idea, but didn't we try that before? |
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I really can't believe how much opposition there still is to something as silly as the metric system conversion. It's better for math and science and plays an non-insignificant role on why we are getting worse at both of those fields. I have yet to hear a good reason as to why we are soft metric rather than hard metric. As for the unconstitutionality of getting money out of elections, we shall see. If not for an extremely pro-business Supreme Court, Citizens United goes a different direction or, more specifically, the floodgates aren't opened up and it's a much more narrow ruling. It's pretty easy to see someone making a "one person one vote not one dollar one vote" case that reverses it or severely limits it if the Supreme Court composition changes. So you could make the law now, hedging that in 10 years the court has changed as it took 8 years for this challenge of McCain-Feingold to reach them. That said, one could easily argue that making corporate dollars makes Congress that much more beholden to them so the two parties will coalesce around corporate dollars, thus further making both more protective of business and less protective of consumers and individual citizens. Oops. SI |
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What an insanely biased take on that. The payroll tax is not at the same level it was when Obama took office, and it was the GOP that absolutely refused to extend that tax cut, in part because they could twist it as an Obama tax increase. |
Ya, c'mon, it's only cool to highlight confused Republicans as examples of how every conservative thinks, don't do it with liberals.
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I don't care about the nutpicking, but the facts of the tax increase are wildly skewed.
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1) I'm not moving to the metric system, but it would be an uphill battle-both mentally and financially. 2) I have no problem with publicly financed elections-and it's not just businesses, but unions as well, who are just as bad as business. I always hated how it's okay for unions to fund their candidates, but not businesses. Both need to be removed completely from the process. How do you fight against "issue" campaigns? It seems like it would be tough to regulate along that line. Quote:
So how do you propose paying for SS? Shouldn't it be based on how much you pay in that you get back? What do you think about this article on Obamacare and jobs? http://www.usatoday.com/story/money/...-jobs/1785641/ |
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Incredibly simplified and biased towards a particular angle intended to show "Obamacare" in a poor light. You could contrast it with the fact that if 'x' million more people will have cover there will likely be expansion within the healthcare industry to handle these people. (but frankly at this stage no one knows the ultimate effect of this policy - from the sounds of things it punishes companies who employ mainly part-time staff, so it could well lead to less jobs overall but more full-time positions .... whether thats a good thing, tbh I don't know ...) |
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It wouldn't cause inflation. It's just a technical fix to the problem, the money isn't being dumped into the economy. |
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Doesn't it punish employers for having too many employees who work more than 30 hours a week? That's what I thought the article was about, the service industry preparing to take a hodge-podge approach to minimize the number of "full-time" workers. |
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I'm struggling to think how printing a trillion dollar coin wouldn't cause inflation, regardless of how its used. The supply of money would obviously increase by quite a bit and would have some effect on the value of the American currency. Now you may argue that the inflation would be exactly the same as offering a trillion dollars in Treasury Bonds, but that causes inflation as well. |
Here's a good Q/A on the platinum coin option.
http://www.bloomberg.com/news/2013-0...all-wrong.html It's a terribly stupid idea, but probably less stupid than refusing to lift the debt ceiling. |
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The trillion dollars isn't entering the money supply. It's just a technical trick to allow them to keep borrowing. They would be spending what they had planned to spend in the first place. |
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Maybe not but it is a trick to raise the debt ceiling which is a failure of leadership. It's a sign that we depend on ongoing financial assistance from foreign countries to finance our governments reckless fiscal policies. And it weakens us domestically and internationally. |
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Probably unconstitutional. If the courts get involved, that'd almost certainly be the outcome. OTOH, one can make the argument as well that Congress playing political games and trying to hold the nation's sovereign debt hostage to extract political concessions is ALSO unconstitutional. That would be a fascinating train wreck to watch. |
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The fun part is that foreign countries don't even hold 1/3 of United States debt. It's a fun little canard, but if you could magically wipe out every penny in foreign-held debt, we're still $10 trillion in the hole. The rest is entirely internal - debt held in the form of T-bills and savings bonds by United States citizens. Mitt Romney tried to make hay over the idea that we're borrowing money from China to subsidize Big Bird. China holds 8% of US debt. More than any other single nation, to be sure, but you're still talking single digit percentages. |
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You're right actually I misread it - I thought it was forcing coverage for low hour workers whereas its forcing it only for high hour workers ... thats particularly moronic imho, although I suppose from a politicians perspective its 'creating jobs' (ie. 1 full-time job is now 2 part-time) .... although I doubt that many will support people alone if thats the case. |
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Don't let facts skew this trillion dollar fake monster everyone is suddenly worried about. |
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And my post was tongue in cheek using Obama's exact words about the debt ceiling in 2006 Edit: And yes some of us are concerned about the debt created by both parties out of control spending. |
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I've seen columnists say that if one is unconstitutional then the other is constitutional. So one way or another... |
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What's your plan other than "stop spending"? |
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I don't think it's an either/or thing, frankly. I think the 14th Amendment cuts the legs out from under the House Republicans as it pertains to using the debt ceiling as a legislative hostage, and I think the Treasury would be usurping Congress' power if it minted a trillion dollar coin as an end run around the debt ceiling. |
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Well I am a middle school math teacher for a living so I am not going to act like some people on here do and say "Take 32.6 billion from the department of energy" with no idea whose job I am cutting or what that really means but yes stopping spending would be a big part of it. The overseas imperialism would probably be big cut #1 in a Panerd presidency. I differ substantially from Libertarians and Ron Paul on the tax thing. (Though at least Rand Paul made an attempt to cut from both the military and domestically unlike most in DC) I think a good response would be huge cuts in spending and then tax increases (though the IRS code could lose a few pages) to pay for what we can't cover. My big beef with "eat the rich" or whatever is why should they have to be the only ones shouldering a tax burden for a Congress that is scared to cut anything? I think of a family that has everything they need plus 25 cars and 6 houses they can't afford. So they call in the current GOP and Dem leadership and ask for advice. The real advice would be to both cut back seriously on the spending and to get another job to pay for what you don't cut. These guys would come in and find a $3.99 movie rental and argue over the morality of nudity in it and at the end of the day convince the voting public that this family can't cut back at all and can't get another job until we solve the problems with the $4 movie. |
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You are printing money to pay your debts. That cannot in any way, shape, or form be non-inflationary. Like I said, you can argue that inflation would increase by the same amount it will by spending the trillion dollars in T-bills, but increased inflationary pressure will result. I mean if its not inflationary, why don't we just print a coin that covers the entire debt and use that to pay our debt off? |
Its just like trying to argue that food and energy should be included in an inflation calculation. Of course adding $1,000,000,000,000 increases the money supply and decreases the value of the currency but you can't possibly understand the level of math they can do they says "Your groceries cost more?" well it isn't because we pumped trillions of dollars into the economy. (And when you do get them to admit it might be inflation then you get some nonsense about how inflation is good, why save when you can borrow money you shouldn't be borrowing at super low interest rates?)
But the weirdest part of all? Somehow these laws and math rules change based on which party controls the purse strings and the presidency. What was out of control in 2006 is now needed and vice versa. |
I don't think it would be terribly inflationary if the funds spent replaced money that would have otherwise been borrowed. The key would be committing to keeping the monetary level flat over the next three years and replacing what was spent through bond sales.
It's admittedly a terrible idea, but I think it's better than refusing to pay our bills and the resulting chaos from that decision. |
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Refusing to pay our bills is unconstitutional anyways. 14th Amendment FTW |
There's no practical monetary impact of the trillion dollar coin but it's hard to predict perception. Even the guy in the article above who likes the idea says that it requires Obama to "clearly explain" what it's all about and then "vow" to melt the coin when the crisis is past. That's his plan to control perception. Is it really that easy? I would assume whatever he tried to "explain" or "vow" would get twisted 6 ways from Sunday all over the globe and the world financial markets, but that the "trillion dollar coin part" would come across loud and clear. I don't know what the effect of that would be, just that Obama can't guarantee any particular perception just with a really nice speech.
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This is probably more for the economy thread, wherever that is, but I wonder if when the government bails out giant insurance companies, it budgets for the cost of defending lawsuits filed against it by that giant insurance company. Maybe all that legal work is part of the "stimulus," generated to spread more of of that taxpayer money around to well connected attorneys.
Rescued by a Bailout, A.I.G. May Sue Its Savior - NYTimes.com |
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Of course, all of that presumes no negative effects IF the debt limit is subsequently raised ;).
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No you aren't. The Trillion dollars isn't being used to pay debts and is not entering the money supply. It's just a technical trick. Absolutely nothing would change between this and Congress raising the debt ceiling. |
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Are you indicating to me that spending an extra $1 trillion after raising the debt ceiling would not increase inflation? If not (and you should not indicate that, because it's not true) then spending $1 trillion in lieu of that would increase inflation as well. |
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They aren't spending the extra trillion. |
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It wouldn't actually be spent. It just temporarily changes the balance sheet so the debt situation doesn't look as bad, which would allow the government to borrow more money under the debt ceiling laws. That doesn't necessarily make it that simple, or even a good idea - but ON PAPER there's no practical effect other than that end-around the debt ceiling laws. I don't think it's entirely without risk in terms of how other countries and banks might react to it, and there might be some separation of powers/abuse of executive authority issues (even though there is legal authority to do this, there's legal authority to do all kinds of things that are constitutionally suspect, that's why we have appellate courts to sort those things out). Somebody brought up how the Dems would react if Bush floated this idea during the Iraq War/Debt limit stuff - I'm positive there would have been calls for impeachment and such. |
For the record, I don't think it should be done. It's a shitty gimmick move and sets a bad precedent. At the same time, I think all of this is just grandstanding and there is no way they'd let us default on our debt and stop SS checks and military pay to go out.
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Welcome to US politics! Pretty much everything is at least setting a bad precedent, and most are shitty gimmick moves that don't really address the underlying issue(s) but make it appear that they are doing something. |
The Trillion Dollar Coin seems like a horrible idea politically.
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I think those are good plans for the most part. I just think people underestimate how much spending you'd have to cut. Closing a few bases overseas is not going to do it. You'd have to dramatically cut military spending. And with that comes the loss of jobs and less tax revenue to pay for the other bills. There are so many jobs tied into our defense spending. And on top of it, a large chunk of our defense spending is legacy costs. Paying the benefits of veterans who fought in wars. How can you cut that? You keep saying cut back on spending, but there aren't a lot of other areas that would have an impact. It's either got to be defense, social security, or medicare. Now you can cut a research project or something else, but it's insanely small. Sort of like the griping over PBS which would have literally no impact on our overall deficit. So how do you go about cutting SS and Medicare? You've had people who paid in their entire lives. Cutting their payments would be akin to a company stealing a pension from their employees. Or your financial advisor raiding your IRA. That's why cutting spending is so hard. Personally I think there are some easy fixes that can be done right away. Medicare could go through a bunch of reforms to reduce costs. One would be opening borders for the trade of prescription drugs (which helps all Americans). The other would be allowing us to negotiate rates with manufacturers (which is insane that we can't do it now). No reason why payroll tax shouldn't be restarted after say $250k and no reason there shouldn't be a Medicare/SS tax on capital gains. |
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*sigh* There is a reason that the link that DT posted talking about Diel keeps mention "When the debt limit is raised, then can exchange the limit for the coin and melt it" - its because the coin is substituting for the limit - ie, the government spending that needs to be done will be accomplished by the coin rather than through debt instruments. Basically, it IS being spent as it would be spent using debt instruments. To claim that no inflation results is silly. Of course inflation results. Inflation results from taking on increased debt as well believe it or not. |
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I can't think this is anything more than political posturing that will never see the light of day SI |
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They aren't spending anything new. The coin just allows them to borrow more money, just as a little note from Congress does. All that happens now is they have a coin in a vault instead of a letter from Congress. No new money is entering the financial world which is what causes actual inflation. They will be doing exactly the same thing they would do if Congress gave them approval to raise the debt ceiling. Increased debt doesn't lead to inflation either. Perhaps in the case where there is a fear of sovereign default. The opposite is happening these days as whenever things go bad in the economy, everyone jumps to their safety net, the US dollar. |
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Yes, exactly, which leads me to: Quote:
Even Paul Krugman, the Keynesianest of the Keynesians believes that while debt doesn't lead to inflation in these economic conditions (economy depressed and interest rate close to 0), he is quick to mention that when these conditions change, the Federal Reserve will have to quickly sell off its federal debt in order to prevent massive rise in inflation. Others, who aren't as ok with mounting debt do believe that debt leads to inflation. |
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