09/04/2010 08:16:16 AM EST

Structural vs Stimulus

posted by sisco66

Yes, these two terms are mutually exclusive, so why the fuck are talking heads like Cenk trying to use one to fix the other? Words mean something boys. Think for yourselves, don’t follow the pack.

This is the same logic that the right wing uses to equate speculation & tax cuts to investment. You would think that a guy graduated from law school would understand the temporary and habitual connotation of the word stimulus. Once again, there is a reason they call cocaine a stimulant. The upside is temporary and addictive, and the downside destructive and expensive.

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Cenk still has no clue about economics. Again on Friday he uttered his right wing tendencies on taxes. The point of FDR's 90% plus tax rate was not to punish the rich but to deter the runaway greed and corruption that Regan once again released in the 1980's by repealing the upper tax bracket. It's been a race to the bottom ever since.

Accounting 101 dictates that low capital gains taxes encourage withdrawing money from a company, while high capital gains taxes encourage reinvestment and growth. Understanding simple math, English and basic human behavior is essential to framing a subject and developing sustainable polices.
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 Display:
Structural vs Stimulus | 82 comments (82 topical, 0 hidden)
You are right in general... (none / 0)

but high tax rates aren't going to create jobs and that's what the problem is.  We need to create jobs.  That means stimulus spending on infrastructure that adds value, not make work.

The Fed gave $2 trillion to the banks, they can give $2 trillion in stimulus to create jobs.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/04/2010 09:06:29 AM EST

yes they do (none / 0)
The 15% capital gains and dividend tax rates are what drive the exodus of money out of companies. When those rates are higher, money has to be reinvested in the companies to avoid the higher tax rate. That means retooling, upgrading equipment and buildings, R&D and hiring more people.

The low tax rates have multiple bad side effects. The borrowing has both destroyed our ability to deal with China, Russia and other debt holders as well as diverted resources from our infrastructure, R&D and healthcare. Taxes should be used for incentives and disincentives to promote healthy sustainable industry.
Healthcare, at least in part, should be paid for by the things that make us sick. The same idea should apply to the military and imports, oil/coal and pollution and anything else you can draw a direct cause and effect or drain on the commons.

The government has borrowed trillions for tax cuts and wars to subsidize inte rnational industries. If that money had been invested here at home at targeted industries we would still have a trade surplus, be energy independent and have single payer healthcare. 

You have to look at the opprotunity lost when considering the best ROI. 
 

by sisco66 on 09/04/2010 09:49:59 AM EST

[ Parent ]
Should have, would have, could have... (none / 0)

the tax rates are what they are, increasing them significantly can only have a negative effect on the economy.  Nothing i have heard, studied or imagined which change that simple macroeconomic effect.  Raising taxes reduces economic activity.

Certainly it will help initially with the deficit, but the deficit is secondary to jobs.  Without jobs you can't reduce the deficit.  Classic chicken and egg problem.  In this case nothing will improve before the job outlook does.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/04/2010 10:26:04 AM EST

[ Parent ]
not true (none / 0)
these are basic accounting and economic facts. The low tax rates are what have driven 20% of our economy into bank and wall street speculation and side bets, while away from the rest of the economy. That money needs to be taken from wall street and put back into the sytem. The tax structure along with the CFMA have made trading paper very profitable.

That is where the rubber meets the road. We need to put back the road blocks.

by sisco66 on 09/04/2010 10:36:55 AM EST

[ Parent ]
lolwut (none / 0)

Economics is a lot more complicated than "Lower taxes = More Jobs". Our current tax rates are ridiculously low for the upper income brackets and when they're allowed to stockpile that much money then they use that money for more lucrative speculation instead of riskier investment.  They also end up saving more money (percentage wise) than any other income brackets which takes money out of the system.

 

You're right in saying that Tax increases certainly wont "solve" the problem, but it's one step necessary to begin moving us in the right direction. 

by Mestilf on 09/04/2010 05:00:52 PM EST

[ Parent ]
hedge funds & flash trading (none / 0)
tax increases would solve those problems

by sisco66 on 09/04/2010 08:52:55 PM EST

[ Parent ]
You are insane... (none / 0)

you want to take away people's money to prevent them from gambling.  Instead, you are really just jealous.  People that gamble(speculate) have an illness.  Whether you take their money or not, they will still gamble(lucrative speculation).

Our current tax rates are not ridiculously low.  You have to look at the share of taxes to GDP. Historically it has been about the same as today.  What is lower is corporate taxes.


http://jessescrossroadscafe .blogspot.com/2010/08/us-ta xes-as-percent-of-gdp.html

Higher taxes only equals higher revenues during the first year, after that the rich adjust their investments to avoid taxes.  You can watch their money fly offshore into tax havens.  Would you rather have the rich people move their money offshore and have the economic crisis deepen or keep it onshore and encourage them to invest it in job creating activities.

That is intelligent fiscal policy.  I am not saying you can't raise taxes a little, but you're acting like a child who sees a big piggy bank and wants it for himself.  It's a mirage.

The only thing that should be increased are corporate taxes for companies that offshore.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/04/2010 09:10:47 PM EST

[ Parent ]
graphs are way off point (none / 0)
I am not sure what you are trying to say. Between the 1930's and 1970's taxes were much higher and it prevented the speculative boom bust cycle that Regan unleashed in the 1980's, and Clinton compounded in the late 1990's allowing Bush to throw gasoline on it in the 2000's.

It's not about revenues, it's about deterring or promoting greed, corruption and speculative bubbles. People are inherently evil when given access to unlimited money and power. FDR had this all figured out. We strayed from the plan and ended up right back in the same shit hole.


by sisco66 on 09/04/2010 09:38:42 PM EST

[ Parent ]
Dude, check the numbers... (none / 0)
What were the total tax collections as a percentage of GDP?  That's the important number, pissing and moaning about how people spend their own money is a waste of time.  You can't seriously promote the idea that high taxes are needed to punish wealthy investors because you don't like what they do with their money.  I am sure that wealthy investors will fund progressive candidates, not.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/05/2010 02:32:18 AM EST

[ Parent ]
way off (none / 0)
dude, the point is that wall street is not spending their money they are stealing yours via prop trading, flash trading, buying regulators ect....and to make it all worse they are doing this at 15% or less.

Yes the chart shows that overall percentages have stayed the same but the % of income that the wealthy has paid has gone way down. You need to look at the indivdual brackets and the effects on boom bust cycles and national debt.

by sisco66 on 09/05/2010 04:59:52 PM EST

[ Parent ]
graphs (none / 0)
I think you need to look at indvidual rates, the composite thing loses the jist of it. Taking it back to 1900 would also show a better history.

by sisco66 on 09/04/2010 09:47:41 PM EST

[ Parent ]
gambling.... (none / 0)
...with our money. That is one of the big problems. Or just plain stealing it.

by sisco66 on 09/04/2010 09:59:13 PM EST

[ Parent ]
That is a politician problem... (none / 0)
they gamble with their own money.  The Democrats chose to bail them out.  What are you complaining about?  The Democrats bailing them out or the fact that the American public elected a bunch of spineless bastards?

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/05/2010 02:34:15 AM EST

[ Parent ]
Paulson and Bernanke (none / 0)
bailed them out under Bush. Obama has stayed the course, as in keeping the car in the ditch.

I have been doing nothing but complaining about it. You know that. My personal opinion is that everyone who took part in the bailouts, the rule and law changes leading to the bailouts and the cover ups of all the above should be beaten, hung, shot and then quartered.

.....and I am not kidding.

by sisco66 on 09/05/2010 05:20:16 PM EST

[ Parent ]
Again... lolwut (none / 0)

@mcamelyne

 "you want to take away people's money to prevent them from gambling."

 It's not about taking peoples money away, it's about social responsibility. If you want to make money in this country, you are directly tied to it's well being. Also, whether you're speculating or investing, you're still gambling with that money. I don't want to stop people from gambling, I want to discourage excessive and unnecessary risk and encourage investment.

 

"Instead, you are really just jealous." 

 Lol, this is just cheap. Speculation doesn't create value in the economy, I don't believe people should be able to create massive fortunes without adding value to an economy. That's the very foundation of Capitalism. Excessive speculation simply fuels bubbles and creates market panics when firms screw up.

 "People that gamble(speculate) have an illness.  Whether you take their money or not, they will still gamble(lucrative speculation)."

 I don't have a problem with Speculation in and of itself, it's a useful tool to hedge the market. I don't think it should be stopped all together, my goal would be to discourage excessive speculation.

"Our current tax rates are not ridiculously low." 

Yes, they are.  When you're taxed less for massive earnings made by speculation than you would be actually producing something, there's something wrong with our tax policy.

"You have to look at the share of taxes to GDP. Historically it has been about the same as today." 

 You also have to look at individual income tax brackets and how they're made up. Because of tax policy over the past few decades the top income brackets have seen huge increases in income which they're more likely to save. This takes spending power away from the middle class and fuels excessive speculation.It also encourages the middle class to take on dept as a means of increasing their spending power.

"Higher taxes only equals higher revenues during the first year"

Simply not true. 

 "after that the rich adjust their investments to avoid taxes.  You can watch their money fly offshore into tax havens."

Tax havens only work as a loophole. Attempts to close those loopholes are often met by Republicans crying "job killing tax increase." 

  "Would you rather have the rich people move their money offshore and have the economic crisis deepen or keep it onshore and encourage them to invest it in job creating activities."

Setting up offshore accounts doesn't make you immune to US taxes. And simply because you move money to offshore accounts doesn't mean it's suddenly never able to come back into the US.

  "That is intelligent fiscal policy."

You haven't made any suggestions.

  "I am not saying you can't raise taxes a little, but you're acting like a child who sees a big piggy bank and wants it for himself.  It's a mirage."

 Excuse me? I never said we needed to crank the tax rates up to 11. I said they're ridiculously low and need raising. Fact is, big business isn't going to run off to Somalia every time you raise taxes in the US. Our economy is simply to big and even in this climate has huge amounts of spending power comparative to other countries. Raising certain tax rates like carried interest, just to throw one out at random,  is necessary SOMETIMES. And this would be one of those times. There's nothing childish about that.

 "The only thing that should be increased are corporate taxes for companies that offshore."

I agree. But it's not the ONLY thing that could or should be done. 

by Mestilf on 09/05/2010 06:40:16 PM EST

[ Parent ]
The social contract you want doesn't exist... (none / 0)

in the US.  The US is founded on Lockeian principles, not Rousseau's ideas.  You make a huge leap in logic without showing how the American people will get there.

Simply saying rich people have a social responsibility is not enough.  Sure people would like rich folks to pay more, but ask them individually and they don't feel they should pay more.

You are like the crazy man standing on a wooden crate on the street railing against rich people having money. Everybody will just walk right on by.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/06/2010 03:45:00 AM EST

[ Parent ]
Thats all well and good... (none / 0)
Until the situation gets so desperate that the vast majority of the underprivileged decide that whatever social contract they are the involuntary party to really isnt doing them any good and they decide to dispence with the intricacies of fine print and decide to submit their revisions in a bold font.
I guess we leave it up to the wealthy as to how far they wish to stretch the good will of the proletariat?
It may not be much longer before the wage earners suddenly start to wonder just what benefit the current patricians are actually providing them. Employment certainly isnt one of them.

by SalemP on 09/06/2010 04:14:34 AM EST

[ Parent ]
What vast majority? (none / 0)

The rich control the military.  The vast majority of people will be set upon one another long before they go after the rich. 

Several recent controversies, the mosque in NY being one, were paid and financed by Fox News.  Looks like they are making the news now, not just reporting it with the goal of setting people against one another.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/06/2010 04:29:29 AM EST

[ Parent ]
Atlas Shrugged (none / 0)
is a self fullfilling prophecy that leads to revolution. The outcome of that revolution no one knows. But more than likely it will just be another in the continuing cycle of Animal Farm.

by sisco66 on 09/06/2010 08:52:50 PM EST

[ Parent ]
And who can say (none / 0)
what a revolution will actually look like in an information age.
I really must get around to reading some Ayn Rand. If only to get some clue about how that mindset works.

by SalemP on 09/06/2010 09:41:50 PM EST

[ Parent ]
very simple (none / 0)
if you don't play by their rules, they threaten to take their ball and go home.

by sisco66 on 09/06/2010 09:48:36 PM EST

[ Parent ]
*Sigh* (none / 0)
Yup, unfortunately, while labour is so divided and so over supplied that is a very real option for a$shole objectivists.
Education to solve the oversupply, collective bargaining to cure the division.
Sounds so deceptively simple to solve.

by SalemP on 09/06/2010 10:09:14 PM EST

[ Parent ]
The individualism you want, doesn't exist. (none / 0)

 "The US is founded on Lockeian principles, not Rousseau's ideas.  You make a huge leap in logic without showing how the American people will get there."

Lol... I don't even know where to begin with this. What did you just learn those names in history class? Society by it's very nature requires individuals to work together towards a common goal. In our case it's the progression of the species. We don't need this to be told to us, and we don't need it to be "Okay'd" by those who wrote the Constitution because it's self evident. Government is merely the way we protect, organize and further our SOCIETIES interest. If you feel that the government doesn't represent you, you have two main options available; stay and try to change things, or leave. Everyone, rich or poor has an invested interest, and therefore a responsibility in keeping our society and by extension, our economy, safe and functioning. That means the government by it's very nature has a responsibility to raise or lower tax rates (among it's other powers) to stabilize itself and our economy.

 

"Simply saying rich people have a social responsibility is not enough.  Sure people would like rich folks to pay more, but ask them individually and they don't feel they should pay more."

Well that's nice but I don't really care what they think. If you live in this country, work in this country, make money in this country, you have a responsibility to protect the society that allowed you to earn that money.  You may not agree but what you think doesn't really matter. Because when it comes down to the whole "Collective vs Individual" argument, the individual doesn't have a leg to stand on. It's the COLLECTIVE that built this society. It was the COLLECTIVE that agreed in 1776 to declare independence from the British. It's the COLLECTIVE that protects your rights and without the collective you're all alone in the woods. Do you think nature cares about your rights? Do you think nature is going to pay your salary?

Now we can argue all day and night about the ethics behind it all, or about when the collective is right or wrong but that's a whole different discussion entirely. 

 "You are like the crazy man standing on a wooden crate on the street railing against rich people having money. Everybody will just walk right on by."

 

As I said previously, I have nothing against "rich people". If you have an idea, and you make a lot of money off that idea, that's awesome! I'm really happy for you. But that doesn't mean you're entitled to anything. You never were and never will be. It's the collective that decides whether or not they want to buy your product or service, and at some point you had to use the collective capital of our society to turn your idea into a reality. It could be as simple as driving on the publicly funded roads to meet an investor or taking out a Government funded grant so you can afford to go to college. Or as complicated as using the collective knowledge of our species to build something or solve a problem.

by Mestilf on 09/06/2010 10:39:12 PM EST

[ Parent ]
Before you puff yourself up... (none / 0)

you represent less than 15% of Americans.  Spout all you want, but America is not even close to being the place of your dreams.

America was founded on the principles of John Locke and so was the constitution.  The Republicans and blue dog Democrats are 100% behind them.

I am socialist and understand where you are coming from, but I am also a realist and a pragmatist.  I recognize, we are at least a generation away from ever considering what you are saying to be the American way.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/06/2010 11:24:10 PM EST

[ Parent ]
jefferson & paine...anyone? (none / 0)
I think there was a guy named jefferson and another guy who wrote some book way back in the 1700's that had something to do with the founding of our country.

"The Rights of Man", Thomas Paine

mc, sometime I wonder what planet you are living on :).

by sisco66 on 09/07/2010 09:56:25 PM EST

[ Parent ]
The rights of man... (none / 0)

not the rights of the society.  America is founded on individualism, while I may not personally accept that, I must recognize its influence on society and culture.

There is no way that godless Liberals are going to change America to be the country they want.  Those ignorant backward religious cavemen are always going to be standing in the way.

What a Liberal sees as so blindingly obvious is met with skepticism by the average American.  Even after you hit him with a two-by-four the average American will still not be sure.  It's called pragmatism and it's what keeps Americans from killing each other.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/08/2010 02:01:29 AM EST

[ Parent ]
no, you got it wrong (none / 0)
Jefferson was terrified of returning to a wealthy ruling class. Paine was a big influence on both Jefferson and Washington. You have been fed too much propaganda. There is always two sides of a coin.

Read some experts from the rights of man or common sense. They are about the commons and a social safety net.

by sisco66 on 09/08/2010 06:10:07 AM EST

[ Parent ]
Jefferson lost those arguments if I recall... (none / 0)
and Paine was just propaganda.  The real American people are somewhere in between.  As long as Americans are pragmatic, ain't nothing gonna change.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/08/2010 06:30:15 AM EST

[ Parent ]
We are a (none / 0)
Jeffersonian Democracy. Paine's propaganda led to the revolutionary war. Obviously, all sides had influence but if you look at what came out of the first few decades, corporations were very limited, and so was speculation. I don't know the whole time line off hand but there have been some peaks and valleys with this.

That said, the banks have beeen at the center of our economic rollercoaster. Too much for this thread. Anyway, it was not until Delaware relaxed it's corporate and banking laws and Regan removed the upper tax braket that things got out of control.

I have a hard time figuring out your position. Money borrowed from social security and stolen from stockholders, pension plans and 401k is not earned. Let alone that created out of thin air through rigged speculation, flash and prop trading.

It's all criminal and the fallout is coming to a head.

by sisco66 on 09/08/2010 05:01:46 PM EST

[ Parent ]
Now you sound like Alex Jones... (none / 0)

It doesn't make sense to destroy everything and rebuild it back up.  These guys are not God and the risk that things could go beyond control is to great.

Nobody is going to raid 401k's.  Pension plans are underfunded because interest rates are too low and stock market is in the toilet.  Companies will try to bail on their pension plans.  Not a surprise.

Who's borrowed the money for the markets?  The government? Hedgers?  Are you claiming tax cuts took money from these markets and transferred it to the rich?  That's a stretch.

The rich will make more money getting America moving again.  Right now all the unemployed are just a huge drag on activity and profits.  This return to feudalism perspective is nonsense.  Companies make more money when people have more disposable income to consume things.

Instead the rich are going to start clamoring for infrastructure spending as loudly as everyone else.  We don't need more taxes, we need more jobs. End free-trade.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/09/2010 05:55:48 AM EST

[ Parent ]
way off again (none / 0)
Matt Taibi can do a better job of explaining this than I can. Read his stuff on Goldman Sachs and you will better understand. Dylan Rattigan referes to a lot of it but never explains it.

I love our discussion and defeneded your positions on a post that went after you but lately when I say apple you come back with brick.

by sisco66 on 09/09/2010 07:30:17 AM EST

[ Parent ]
Nothing personal, just different strategies on... (none / 0)
economics. 

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/09/2010 08:20:00 AM EST

[ Parent ]
none taking (none / 0)
I just think you are missing what is actual going on. It's not simple investment or even market economics. The whole game is rigged, and when that stops working in their favor they change the rules of the game just as everyone esle goes "all in".

That is what Goldman Sachs, the NY Fed, Treasury and SEC have been doing. Right now Goldman Sachs is borrowing from the Fed at 0.25 or less and then buying treasuries at 2-3% and that is just the above board stuff. We are beyond all bounds of reason.

by sisco66 on 09/09/2010 03:58:40 PM EST

[ Parent ]
There was a big discussion about the case in... (none / 0)

Japan, that -0-% interest rates have a negative effect on the economy.  Without any real returns, savers are penalized and banks are encouraged just to buy treasuries and not take risk in the marketplace.

There is an orderly process to business and when rates are zero, they can only go up so that causes businesses to have in strange ways.  Instead a floor of 2 or 3% is more natural.  If the Fed raised the rates to 2%, businesses would not be impacted, only banks profits.

There are about 1,500 banks in the US on life support.  The Fed is avoiding cleaning them up by subsidizing them with these interest profits.  Zombie banks hurt Japan and they will hurt us.

As for Goldman Sachs, you are crying at windmills.  Nothing is going to change there until you get a Non-Republican and Non-Democrat in the White House.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/09/2010 10:29:34 PM EST

[ Parent ]
yes! (none / 0)
Now were are getting somewhere. Unfortunately, the banks that went under and most of the ones in trouble now are not getting help from the Fed. At least not the type the investment houses like Goldman Sachs, BOA, Citi and JP Morgan are getting.

When Ben, Tim, Paulson, Blankfin and Dimon created the crash by raising rates, changing mark to market rules and systematic insider short selling they used Shelia Bear (sp?) to take down banks/thrifts to take down Indy Mac, WaMu and Country Wide as well as Bear Sterns and Leehman Brothers cherry picking the assets and transfering the shit debt to the treas, fed and GSE's.

It was a fucking coup, and they all should be shot.

by sisco66 on 09/10/2010 06:51:55 AM EST

[ Parent ]
Don't kill them...impoverish them. (none / 0)

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/10/2010 08:00:26 AM EST

[ Parent ]
then.... (none / 0)
can we kill them? or better yet, work them to death in a mine somewhere? China maybe?

by sisco66 on 09/13/2010 09:37:46 PM EST

[ Parent ]
You misunderstand... (none / 0)
if you physically punish them, then they can cry about how they are being punished for only wanting to be rich.  If you just leave them poor as a church mouse, they have to go through life living amongst all those they despise.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/14/2010 04:04:12 AM EST

[ Parent ]
greed and destruction (none / 0)
Take BP for an example, their greed caused people to die. And this was not the first time. You can track BP back to the Shaw of Iran, Iraq and numerous spills/explosions that either killed people directly or gave them cancer.

Goldman Sachs and it's hinchmen are not to far off from BP.

Execution is freedom of expression.

by sisco66 on 09/14/2010 06:01:50 PM EST

[ Parent ]
Slippery slope...that kind of logic was used to (none / 0)
justify Pol Pot's killings.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/14/2010 10:11:06 PM EST

[ Parent ]
you are right (none / 0)
it is a slippery slope. But if the feds won't enforce the law then we have to

by sisco66 on 09/15/2010 06:33:56 AM EST

[ Parent ]
Lol comments (none / 0)
LOL TURNS OUT COMMENTS MOVE MORE TO THE RIGHT AS YOU REPLY TO PEOPLE

by Wifflum on 09/14/2010 09:16:55 PM EST

[ Parent ]
I like graphs. (none / 0)

"Terrorism is the war for the poor and powerless. War is the terrorism for the rich and powerful."

by JamesStevensDigArt on 09/04/2010 08:13:57 PM EST

[ Parent ]
what this shows (none / 0)
is that since Ronnie we have been throwing money up in the air in the form of tax cuts and hoping that it lands in the right spot, rather than targeting specific sustainable industries for growth. The ROI on the Bush tax cuts alone was an 80% loss. Imagine if we had taken that and invested it in green tech here at home....

thanks for the help

by sisco66 on 09/04/2010 08:51:51 PM EST

[ Parent ]
Especially when the graph doesn't tell... (none / 0)

you anything.  What matters is total tax collections, not the tax rate.  The deficit went up under Bush because he fought two wars and increased entitlements whilst not raising taxes to pay for them.

That's easy to fix.  Let the Bush tax cuts expire 100%, end the wars and increase medicare taxes by 2%.

That would not be the draconian tax increase that everybody wants, nor would it change social security.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/04/2010 09:15:47 PM EST

[ Parent ]
EXACTLY (none / 0)

Except that no one is proposing "Draconian" tax increases that you claim "everybody wants". We don't need to go back to the days of 70-90% but we need to get it back to 50% or more... You know, like back in the days when we could balance the budget.

I mean god DAMN look at that GDP/Debt stat. That's ROUGH.

We were fucking gravy train until Reagan came and fucked it all up.

"Terrorism is the war for the poor and powerless. War is the terrorism for the rich and powerful."

by JamesStevensDigArt on 09/04/2010 10:04:24 PM EST

[ Parent ]
yep (none / 0)
"We were fucking gravy train until Reagan came and fucked it all up."

....and Amen.

by sisco66 on 09/05/2010 05:01:53 PM EST

[ Parent ]
infastructure is not stimulus (none / 0)
it's reinvestment. That is the point I have been trying to make for some time. Stimulus comes in the form of tax cuts and rebate checks. We have to distinguish between the two.

The fed liquidity would have been good if the money had gone to home owners and buisnesses. Instead it went to margin calls and more bank speculation. That is where Keynes has been basterdized. Of course Bernanke is one of the key guys who rewrote history on the last RGD, leading to this one. So what else should we expect?

by sisco66 on 09/04/2010 10:01:09 AM EST

[ Parent ]
Most internet listeners don't have doctoral... (none / 0)

degrees in economics with the wherewithal to understand the difference between structural spending versus stimulus spending.  Wouldn't you consider structural spending under a program to stimulate the economy as a sub-category of stimulus rather than a separate category.  If so, then using the general description of "stimulus" would capture the specific spending of "structural."

The US doesn't have an industrial policy like Europe does so structural spending is not commonly differentiated from other categories.  That and it is a fraction of the total allocated spending.

Spending money on infrastructure has a similar effect as tax cuts do.  Unfortunately, there is a spending problem so tax cuts wouldn't have a very strong stimulus impact at present.  Infrastructure would create jobs, create spending in the economy and add to the wealth of the nation.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/04/2010 10:38:02 AM EST

[ Parent ]
which is why (none / 0)
…..the ARRA has failed and they are back at the crack dealer for more. The failure to distinguish the two and understand basic economics and accounting is why this country is where it is today.

Infrastructure in itself has many sub categories. There are highways, water supplies, sewer systems and the information/energy grid. The biggest ROI will come from investing in the information/energy grid. Unfortunately, that is where the least amount of money will go.

Another drawback on the traditional infrastructure is that very little of it will create growth since we are already built out, however it needs to be done. Today there is a 2.2 trillion dollar shortfall in highway funds alone.

The one place where infrastructure will create long-term ROI and growth is high speed rail. They are woking on that but again, not enough.
Gotta get outside, it's 70 and clear. Peace out

by sisco66 on 09/04/2010 10:53:39 AM EST

[ Parent ]
the word "stimulus" (none / 0)
.....asserts that it is a temporary problem. That misnomer has been reflected in all the half-ass approaches to fix the economy as well as played a major part in the failure to fix the structural problems with Wall Street, Healthcare, Housing and Energy.




by sisco66 on 09/04/2010 11:11:41 AM EST

[ Parent ]
The distinction may be somewhat moot (none / 0)
At least regarding "economics". In any conventional sense, to all intents and purposes growth is over.

Achieving contraction with economic justice, if that proves possible, is another matter.

by Landbeyond on 09/04/2010 12:57:06 PM EST

One question: (none / 0)
In what unit do you and Richard Heinberg measure economic growth?

"The first thing Fascists usually try to do is silencing the opposition."

by opposition on 09/04/2010 02:08:16 PM EST

[ Parent ]
not here (none / 0)
We still have plenty of room to grow. However, growth can also be done in the form of technology and the ability to move goods, ideas and energy, as well as produce them.
I would suggest sociopath-economics. Men are inherently evil and self serving, when given access to money and power. The problem with economic models is that modelers like Greenspan, Bernanke, Freedman and Rand fail to recognize the boundary conditions. All models have boundary conditions of some sort. In economics, it’s human behavior.

"See?  The Market can do no wrong.  To some, this sounded a bit like the circularly-reasoned response of a medieval priest to doubts about the infallibility of scripture.  Nevertheless, despite its blind spots, classical economics proved useful in making sense of the messy details of money and markets."

The author falls into several common traps. The reason our economy exploded after WWII was that we were the only industrial country that had not been leveled. JMK has been bastardized.   Keynes never suggested giving unlimited amounts of money to the banks and Wall Street for speculation. Keynes suggested keeping people working and making money available for rebuilding industry.

We have done neither.

by sisco66 on 09/04/2010 09:14:08 PM EST

[ Parent ]
Basic disagreement (none / 1)
    "The reason our economy exploded after WWII was that we were the only industrial country that had not been leveled."

Plus it still had access to large amounts of cheap, non-renewable energy. And the potential to develop access to large quantities of renewable energy sufficient for the appropriate kind and size of economy. Both the energy and the potential were wasted.

Economies don't run on money. Technology is useless without energy. Nothing moves without energy. The economy needs more and more energy. It doesn't have it, and before long it will have less and less. If you don't believe that, we can only wait and see.

Economics is a creation of humans: it's fluid. Physics is unyielding.

Having evil and self-serving men running things has bad consequences, but it isn't, now, the basic problem.

by Landbeyond on 09/05/2010 03:29:32 AM EST

[ Parent ]
all the tech (none / 0)
is there to convert to a green energy high efficiency economy while creating jobs along the way. It's just a matter of will.

by sisco66 on 09/05/2010 05:03:35 PM EST

[ Parent ]
If wishes were horses... (none / 0)
A lot of the tech, little of the will, and progressively less of the energy, especially affordable oil for importing.

To transition to "a green energy high efficiency economy" will require enormous quantities of fossil fuels and other resources, the cost of which, especially oil, will shoot up if the world economy starts to recover.

World oil output has peaked/plateaued and will soon start to decline. That's a fact. The US depends on oil imports just to maintain its present energy setup, let alone converting to a new one. That's a fact. It's a downer, I know; but facts are stubborn things (where have I heard that?).

You can check the facts for yourself, or you can just refuse to believe them. The rulers would prefer the latter; that you have your eyes on better times ahead while they continue their increasingly blatant looting.

    "…all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously. The market power of the very few oil-producing countries, mainly in the Middle East, will increase very quickly. They already have about 40 per cent share of the oil market and this will increase much more strongly in the future,"
    – Dr Fatih Birol, chief economist at the International Energy Agency, c. July 2009

by Landbeyond on 09/06/2010 07:04:27 AM EST

[ Parent ]
too over the top (none / 0)
While a agree with your concern, it's just too much of a defeatist postion.  Will is our biggest short fall.

by sisco66 on 09/06/2010 08:46:21 PM EST

[ Parent ]
I understand (none / 0)
Will is essential for achieving all that is physically possible. Of course, what I sketched out above is not my position, but rather that of many sober, hard-headed, bona fide experts in various fields, including the military, geology and the oil industry. It rests on a wealth of research and numerous studies, both private and government-sponsored.

There's no lack of debate in the energy field, especially about what the future holds, but it is anchored in the sciences and mathematics, rather than economics. It's about what is true and what is not true of the physical world, and its leading participants tend to be as objective as can reasonably be expected of human beings.

But this is a notoriously touchy subject, and I've already inadvertently offended one person on this thread, so I can only reiterate that the essential facts are not hard to check for anyone who cares to look.

Meanwhile, here's hoping you're right and it's all potentially fixable.

by Landbeyond on 09/07/2010 05:13:49 PM EST

[ Parent ]
experts...... (none / 0)
on very narrow subjects too often become trapped by their own specialties. The old can't see the forest through the trees....

I am running half of my oversized poorly insulated house on a small solar array.  Solar is only 30 years behind it's sister chips. There is so much room for advancement and job creation in this field alone.  Nano technology is going to be a game changer in for solar, not to mention mass production by chip makers.

by sisco66 on 09/07/2010 10:34:04 PM EST

[ Parent ]
Words are versatile (none / 0)

I think investment in infrastructure is both, short-term stimulus AND long-term investment. If economists say those two are mutually exclusive, that's fine, but not that relevant for anybody outside of their profession. I agree that any "stimulus" (notice the quotation marks) should always be as much of a long-term investment as possible. That makes infrastructure and education spending the preferred means that the government can implement. Tax cuts, on the other hand, are useless in the long run, and, as you pointed out, in some cases counter-productive. I think Cenk is very much aware of this, and he has come out against tax cuts numerous times.

As for the value of pure stimulus spending, i.e. just getting the economy out of its current ditch, that's currently a double-edged sword. On the one hand, the world economy is growing again, and America would fall behind if the current slow growth were to be continued for, say, another decade. Reduced economic activity in and of itself leads to less employment, fewer tax revenues, worse education, higher crime rates and a lot of other bad developments that have a long-term impact. A stimulus may be essential to stop that downward cascade. On the other hand, the financial market is heading towards another cliff, and that problem isn't going to be solved, so the next collapse will come either way.

Because of this inevitability of the next collapse, you're right on the substance, which is that any spending must have long-term goals in mind in this particular situation, or it would be completely useless. For most people, however, the word "stimulus" doesn't exclude this, and words tend to follow the majority rather than vice versa.

by OldGerman on 09/04/2010 01:18:59 PM EST

A doctors visit (none / 0)
The problem with "stimulus" and the overall ARRA was that it was in fact geared toward a short term stop gap and not the long term growth we needed. It was the wrong diagnosis, therefore the wrong prescription.

Unless we restore a manufacturing base and make major advances in our energy production and consumption we will never get out of this.

While I agree that Cenk gets most of it, his framing and regurgitation of blanket CBO numbers lays support for Obama continuing to drive the car down the ditch. Let's not forget it was not Bush who drove the car into the ditch, it was Larry, Ben, Greenspan, G eithner and Paulson.

Obama may have switched some seats around but the same drunks are driving the bus.


by sisco66 on 09/04/2010 08:47:48 PM EST

[ Parent ]
"the world economy is growing again" (none / 0)
But for how long, and where can it continue longest? What is the "growth" trend in the US? Do you think any kind of investment will rectify that?

I'm not being argumentative. Do you think there are real solutions?

by Landbeyond on 09/05/2010 03:41:12 AM EST

[ Parent ]
It can grow as long as there's demand for goods (none / 0)

For well-developed countries like the US, the future is IMO the production goods of very high quality, which justify higher costs and prices than the ones manufactured by cheap labor in less developed countries. Production of fewer but more efficient and long-lasting goods should theoretically lead to less consumption of natural ressources and energy as well.

The investments needed for this are in education and infrastructure; that's pretty much it. A highly educated workforce is most important. This is a pretty commonplace answer, but I think it's true.

Other systemic troubles such as the financial system and the imbalanced (mainly in the sense of false priorities) budget need to be fixed, or the economy will always be in some trouble regardless of anything else. I also think that unemployment will rise simply because fewer and fewer people can produce more and more goods, thanks to technical progress. In the long run, I think developed societes will have to find a way to accept and manage a lack of demand for human labor, e.g. by having people work fewer hours, and still ensure that they make enough money to be a happy consumer.

by OldGerman on 09/05/2010 05:05:13 AM EST

[ Parent ]
This is where the rubber meets the road... (none / 1)

our infrastructure is old and failing.  The cost of upgrading exceeds the cost of building it.  On education, it appears to be a nightmare.  As a teacher I have to stay on top of trends and they don't look good.

Schools are spending too much time on developing the whole child and making up for the lack of parental involvement instead of just educating.  Test scores are falling rapidly and most teachers are beginning to question what the point is.  Without a concerted effort to return to the basics, students will not be up to the task of supporting advanced manufacturing.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/05/2010 05:56:35 AM EST

[ Parent ]
Consider the goal (none / 1)
Test scores are falling rapidly and most teachers are beginning to question what the point is

They should. And while they're at it, they should take a cautionary lesson from Japan. Here, teaching knowledge instead of skill is the tradition -- not to mention the cause of widespread inability, barring attendance of "cram schools," which may as well replace traditional Japanese schools altogether.

(All Japanese study English for at least five years in school, yet less than 10% of those whose English studies are limited to those five years can hold their own in a casual conversation, or even introduce themselves without sounding like C3PO. This is because of the infuriating tendency of Japanese schools to teach material so that students pass the test...and then promptly forget everything. If a student's ultimate goal is passing a test, that's all he'll ever achieve.)

by OneHitKill on 09/05/2010 07:52:25 AM EST

[ Parent ]
I won't argue the point, it's the same... (none / 0)

in Hanoi where I am.  Parents want their kids to go to university and nobody wants to give them the bad news that their child isn't going to make it.  However,  their math skills blow away most American students simply because they spend so much time practicing.

I was the best student at French in my school and I could barely hold a conversation before I went to live in a French speaking country.  If the students don't have a way to practice English daily then, yes it is just studying for the test.  Here there is a 98% literacy rate on 1/50th of the US budget.

Go figure.

Don't waste your vote, vote Green or Independent in the next election.

by mcamelyne on 09/05/2010 09:25:14 AM EST

[ Parent ]
I don't think it's that easy (none / 0)
    "education and infrastructure; that's pretty much it"

But improving education and infrastructure requires even more energy than the stagnant/falling level at present available, while the current infrastructure is already quietly crumbling for lack of maintenance.

Such production as still takes place in the US tends already to be relatively energy-efficient. That's just as well, as some production is likely to return, requiring yet more energy, as international shipping becomes more expensive.

Less waste and reduced obsolescence are good, especially as production is almost totally dependent on oil.

Maybe you saw this report on a German military study, discussed here. Have you seen it covered in the US MSM?

Add to that your "other systemic troubles" and maybe you can see there are difficult times ahead.

by Landbeyond on 09/05/2010 10:44:59 AM EST

[ Parent ]
no need to panic (none / 0)

I don't think the study contains a lot of new revelations. Of course, oil reserves will at some point be depleted. But it will be a slow decline in oil supply and accordingly rising oil prices. This gives governments and industries some time to prepare and develope other sources of energy. Sure, there will be some, probably significant economic and geo-political impact, but I don't expect it to be entirely negative, as the study seems to suggest.

However, investing in other energy sources now would certainly be a good choice, as you'd rather produce the technology than buy it from elsewhere. Education is the basis of that as well, of course, as ignorant people are less likely to make the right choices, and even less likely to succeed.

by OldGerman on 09/05/2010 03:54:25 PM EST

[ Parent ]
Slow decline is a big problem (none / 0)
Well, okay. If you think warnings of:

    'shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the "total collapse of the markets" and of serious political and economic crises'

and similar conclusions from now numerous other studies, including industry, the Pentagon and the Department of Energy, can be downplayed as "some, probably significant economic and geo-political impact", then you can continue believing that economic recovery is only a matter of time, as the MSM and the politicians and economists will keep reassuring you.

When you look at this DoE graph:

From a DoE presentation

and when you bear in mind that the dwindling number of oil-producing countries (especially in the Middle East) are using increasing percentages of their output for their own development, I'm not sure how you can maintain such equanimity.

    "investing in other energy sources now would certainly be a good choice"

Maybe a better choice would have been to invest in them when the enormous quantities of fossil fuels needed to transition to other energy sources was still available and when the economy wasn’t entering permanent depression.

    "ignorant people are less likely to make the right choices"

The last few decades have provided ample proof of that.

    “I'd put my money on solar energy… I hope we don't have to wait til oil and coal run out before we tackle that.” — Thomas Edison, in conversation with Henry Ford and Harvey Firestone, March 1931

by Landbeyond on 09/06/2010 05:46:40 AM EST

[ Parent ]
Okay, then... (none / 1)
...panic! We're all going to die!

by OldGerman on 09/06/2010 08:05:40 AM EST

[ Parent ]
That's a tad childish (none / 0)
But a common reaction on this issue when people run out of arguments.

A little surprised to see you resorting to it though.

You've probably seen that Germany looks set to extend the life of its nuclear power plants. Maybe someone has been doing their sums regarding renewables and fossil fuel availability a few years down the road. 

by Landbeyond on 09/06/2010 12:02:12 PM EST

[ Parent ]
Hey! (none / 0)
You're still alive?

by OldGerman on 09/06/2010 12:16:02 PM EST

[ Parent ]
Reduced to four words? (none / 0)
Perhaps I should apologize for inferring from your earlier comments that you were interested in the issue; that perhaps there were younger people in your family or of your acquaintance for whose future welfare you might have some concern, and that you might therefore wish to see TPTB and the public in general trying to make the best of a bad situation.

If you respond with a grunt I'll take it as confirmation that I was incorrect and that we were wasting each other's time. Or you may have retreated into emotional denial :o< -- again, not uncommon, and it's a phase that usually passes.

On the other hand, perhaps others are now a little better informed.

    "Have the courage to use your own understanding!" – Immanuel Kant

by Landbeyond on 09/06/2010 02:01:02 PM EST

[ Parent ]
Let me help interpreting my words (none / 0)
Thanks for your psychoanalysis, but as Opposition said, you didn't make any new points but just said "Study XYZ says that it will be terrible." So yes, discussing this any further would be pointless and a waste of time. You just seem to throw the words "Peak Oil!" around and expect everybody to be outraged. But no, it's obvious that oil will run out, it's not news. We'll have to wait and see how the world deals with it, and do whatever most of us do anyway by casting our votes on election day. It's not like nobody knows or cares about it, okay? You don't have to do any missionary work. Now if you don't mind, stop attacking me and go about your life. I hate it when people think "the end is neigh" and that nobody else knew about it, and I hate it even more when they throw out ad hominem attacks because reactions they recieve aren't excited enough. 

by OldGerman on 09/06/2010 02:39:32 PM EST

[ Parent ]
Much clearer - but puzzling (none / 0)
It appeared to me that it was me who was being subjected to ad hominem attacks, rather than vice versa. Perhaps if you'd used a few more words?

I don't recognize your characterization of my earlier comments. I had thought we were merely exchanging views.

Peak oil has nothing to do with oil running out.

by Landbeyond on 09/06/2010 06:03:52 PM EST

[ Parent ]
Arguments? (none / 0)
You are always just repeating that the whole world will collapse and there is nothing anybody can do about it.

If we can't do anything, why care about it?

Are you greeting your friends every day with the words:
"You are going to die sooner or later!"?

"The first thing Fascists usually try to do is silencing the opposition."

by opposition on 09/06/2010 12:36:57 PM EST

[ Parent ]
scary (none / 0)

If we don't do anything, yes. we already have the solution for energy, it's only a question of building enough windmills right now and research more advanced energy extraction at the same time. 20 percent of energy in my country is from sustainable green tech. right now. Why not just copy paste. 

sweden has a goal of 49 percent green energy in 2030, this progress could be continued till approximate 100% in less than 60 years, at current rate.

But, accelerate it, raise taxes on companies that sells unnecessary products to pay for it the investment. 

by Valhalla on 09/06/2010 08:52:48 AM EST

[ Parent ]
At least Sweden is trying (none / 0)
Unfortunately it finds itself in a world where most "leaders" can't or won't see and articulate what should be obvious.
 
We are currently seeing the first, mild effects of the situation we have created. There is no sign of a general end to high-level denial, which means no serious large-scale efforts at mitigation of whatever difficulties we may be facing before too long.

    “He that will not apply new remedies must expect new evils, for time is the greatest innovator.” — Francis Bacon, Essays

by Landbeyond on 09/06/2010 01:18:23 PM EST

[ Parent ]
So is China (none / 0)
and Germany.

"The first thing Fascists usually try to do is silencing the opposition."

by opposition on 09/06/2010 04:52:52 PM EST

[ Parent ]
Yes (none / 0)
Correct.

by Landbeyond on 09/06/2010 06:06:07 PM EST

[ Parent ]
yep (none / 0)
and we have barely scratched the surface

by sisco66 on 09/07/2010 10:12:03 PM EST

[ Parent ]
Structural vs Stimulus | 82 comments (82 topical, 0 hidden)
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