Posted by bad_luck on 3/5/2013 3:48:00 PM (view original):

Posted by tecwrg on 3/5/2013 3:43:00 PM (view original):
WTF does government deregulation have to do with government spending, other than sharing the word "government"?

I guess you're not concerned with getting the economy back full strength. Must be nice.

Way to avoid the question.  I'll ask again:

WTF does government deregulation have to do with government spending, other than sharing the word "government"?

Posted by tecwrg on 3/5/2013 4:25:00 PM (view original):

Posted by bad_luck on 3/5/2013 3:48:00 PM (view original):

Posted by tecwrg on 3/5/2013 3:43:00 PM (view original):
WTF does government deregulation have to do with government spending, other than sharing the word "government"?

I guess you're not concerned with getting the economy back full strength. Must be nice.

Way to avoid the question.  I'll ask again:

WTF does government deregulation have to do with government spending, other than sharing the word "government"?

So sharing the word "government"?

 

Posted by bad_luck on 3/5/2013 1:36:00 PM (view original):

Posted by examinerebb on 3/5/2013 1:25:00 PM (view original):

Posted by bad_luck on 3/5/2013 1:00:00 PM (view original):

Posted by examinerebb on 3/5/2013 12:50:00 PM (view original):
In an earlier post, you cited 5% unemployment as the benchmark at which the government would stop spending.  I'm assuming that's your threshold for a healthy economy.  Since 1972, we've been there twice - during the dot-com bubble and during the mortgage bubble.  That would indicate to me that it requires a bubble to get where you're comfortable with putting the brakes on spending.

That's theoretical full employment. We probably can't get that far without a bubble, you're right. But 6.5% is possible and would be good enough to pull back spending.

Okay, good.  We'll move the bar to 6.5%.  So is the below an accurate synopsis of the plan, as you see it?
 
Continue the deficit at its current rate until we hit 6.5% unemployment, hopefully fairly soon.
Hope the economy doesn't dip between now and then, because then we'd ramp up the deficit accordingly to stimulate our way out of the dip (you haven't said this that I've seen - I'm admittedly making an assumption here).
Hope that the national debt doesn't get so large that, with the rising interest rates that come with a recovering economy, the payments on the debt get out of hand.
Once we get to 6.5% unemployment, hope that we sustain it for long enough to not only cut the deficit, but pay down a good chunk of the debt.

If all of that is correct, we seem to be pinning a lot on hope.  Not the least of which is our nation's ability to ultimately pay the bills.

We've maintained a debt of over a trillion dollars for over thirty years. Don't focus on the debt. It will literally never be paid off.

The deficit, though, is a different story. Cutting spending to reduce the deficit now will put us back into recession. This is a fact. We have to wait to do it until we get to a point where it won't put us back into a recession. When exactly that is, I don't know. But we do have to do it eventually.

Posted by examinerebb on 3/5/2013 5:00:00 PM (view original):

Posted by bad_luck on 3/5/2013 1:36:00 PM (view original):

Posted by examinerebb on 3/5/2013 1:25:00 PM (view original):

Posted by bad_luck on 3/5/2013 1:00:00 PM (view original):

Posted by examinerebb on 3/5/2013 12:50:00 PM (view original):
In an earlier post, you cited 5% unemployment as the benchmark at which the government would stop spending.  I'm assuming that's your threshold for a healthy economy.  Since 1972, we've been there twice - during the dot-com bubble and during the mortgage bubble.  That would indicate to me that it requires a bubble to get where you're comfortable with putting the brakes on spending.

That's theoretical full employment. We probably can't get that far without a bubble, you're right. But 6.5% is possible and would be good enough to pull back spending.

Okay, good.  We'll move the bar to 6.5%.  So is the below an accurate synopsis of the plan, as you see it?
 
Continue the deficit at its current rate until we hit 6.5% unemployment, hopefully fairly soon.
Hope the economy doesn't dip between now and then, because then we'd ramp up the deficit accordingly to stimulate our way out of the dip (you haven't said this that I've seen - I'm admittedly making an assumption here).
Hope that the national debt doesn't get so large that, with the rising interest rates that come with a recovering economy, the payments on the debt get out of hand.
Once we get to 6.5% unemployment, hope that we sustain it for long enough to not only cut the deficit, but pay down a good chunk of the debt.

If all of that is correct, we seem to be pinning a lot on hope.  Not the least of which is our nation's ability to ultimately pay the bills.

We've maintained a debt of over a trillion dollars for over thirty years. Don't focus on the debt. It will literally never be paid off.

The deficit, though, is a different story. Cutting spending to reduce the deficit now will put us back into recession. This is a fact. We have to wait to do it until we get to a point where it won't put us back into a recession. When exactly that is, I don't know. But we do have to do it eventually.

Sorry for the delay.  Once again, work is cutting into my time for arguing anonymously on the internet.

I'm not focused on paying off the debt.  It would be damn near impossible, at this point.  I'm focused on making sure the debt doesn't increase at a rate at which we can no longer keep up with payments.  I'm looking for a plan that doesn't end with "Yeah, someone's going to have the piper at some point."  And if that means things hurt a little now, so be it.  Cutting the deficit doesn't have to be done all at once.  It can be done incrementally, allowing for the economy to adjust and absorb along the way.  I'm not looking for the elimination of the deficit tomorrow.  I'm looking to move away from growing it.  And the numbers showing that the deficit has decreased over the last 3 years are false (before you trot out a link) - agency and treasury debt are not counted in those figures.

And there's the problem:  "then lay out a long term plan for matching spending cuts with the economic growth"

When's the last time they passed a budget?  What makes you think they are capable of a long term plan?

Posted by toddcommish on 3/5/2013 5:40:00 PM (view original):
See?  The government (Congress + the POTUS) are part of the problem, and unfortunately also control many of the means to a solution.  Ask the average American how good a job Congress is doing with the economy and you'll likely get a negative response.

THAT leads to less confidence in their ability to fix the economy.  THAT leads to more uncertainty for consumers.  THAT leads to less big ticket spending.  THAT leads to a slower economy and fewer jobs.  And with the slower economy and fewer jobs, THAT leads to even less confidence in Congress/POTUS.  And so on and so on. 

Until they show economic leadership and a cohesive, intelligent, feasible plan, nobody will believe it can get done.  It doesn't even have to work.  If people believe it will work, they will change their spending habits.  People don't buy based on Keynesian analysis, they buy based on emotion.  Right now, the prevailing emotion towards the economy is negative because our government has PROVEN THEY HAVE NFI WHAT THEY'RE DOING.

Posted by examinerebb on 3/5/2013 5:42:00 PM (view original):
All according to the internet, so there's that:

Agency debt went from $44 billion in 1970 to $6.5 trillion in 2006 to $7.5 trillion in 2010 (I can't find 2011 or 2012 numbers, but I can't imagine the FHA and the like have shored up their books).  None of that is counted in the "official" national deficit or debt calculations, according to the Federal Reserve.

Just out of curiosity, because you haven't specifically addressed it, do you believe we, as a nation, are incapable of getting to the point where we can no longer afford the payments on the national debt?

Posted by bad_luck on 3/5/2013 5:48:00 PM (view original):

Posted by examinerebb on 3/5/2013 5:42:00 PM (view original):
All according to the internet, so there's that:

Agency debt went from $44 billion in 1970 to $6.5 trillion in 2006 to $7.5 trillion in 2010 (I can't find 2011 or 2012 numbers, but I can't imagine the FHA and the like have shored up their books).  None of that is counted in the "official" national deficit or debt calculations, according to the Federal Reserve.

Just out of curiosity, because you haven't specifically addressed it, do you believe we, as a nation, are incapable of getting to the point where we can no longer afford the payments on the national debt?

I doubt it. We pay $200 billion a year in interest on $14 trillion in debt.

Hmm, I'd be interested in seeing more on the agency debt. I can't imagine we have another $7.5 trillion+ out there that isn't counted in the $14 trillion over all debt amount.

I know that the treasury was buying agency bonds through the QE process.  I honestly don't know if the agency bonds the treasury purchased are counted in the official calculation or not.  I can only find one article, at a cursory glance, that seems to infer that it isn't.  It's also fairly clear that there is an agenda behind said article, so take that for what it's worth.

Either way, I believe that the deficit/debt is worse than we all are led to believe that it is.

Posted by bad_luck on 3/5/2013 5:46:00 PM (view original):

Posted by toddcommish on 3/5/2013 5:40:00 PM (view original):
See?  The government (Congress + the POTUS) are part of the problem, and unfortunately also control many of the means to a solution.  Ask the average American how good a job Congress is doing with the economy and you'll likely get a negative response.

THAT leads to less confidence in their ability to fix the economy.  THAT leads to more uncertainty for consumers.  THAT leads to less big ticket spending.  THAT leads to a slower economy and fewer jobs.  And with the slower economy and fewer jobs, THAT leads to even less confidence in Congress/POTUS.  And so on and so on. 

Until they show economic leadership and a cohesive, intelligent, feasible plan, nobody will believe it can get done.  It doesn't even have to work.  If people believe it will work, they will change their spending habits.  People don't buy based on Keynesian analysis, they buy based on emotion.  Right now, the prevailing emotion towards the economy is negative because our government has PROVEN THEY HAVE NFI WHAT THEY'RE DOING.

You are right about one thing in those three paragraphs. People don't buy based on keynesian analysis. They buy things when they a have money to spend and are confident their job won't go away.

That has nothing to do with the actual amount of the deficit, unless congress and the president get so caught up in the bickering that they let something as stupid as the sequester go through. The sequester is a legitimate threat to jobs and will decrease both confidence and demand.