catallaxy files

catallaxy in technical exile

A tepid US recovery

with 98 comments

Joseph Stiglitz is in Vanity Fair talking about the origins of the GFC.

The administration talked about confidence building, but what it delivered was actually a confidence trick. If the administration had really wanted to restore confidence in the financial system, it would have begun by addressing the underlying problems—the flawed incentive structures and the inadequate regulatory system.

This is a motherhood statement, that everyone can agree with. The capitalist economy deals with flawed incentive structures via a process known as ‘bankruptcy’ and regulatory intervention has prevented that process from working. But I’m sure that isn’t what Stiglitz has in mind. He goes on

The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal.

Okay, so he suggesting then that government should be larger? That experiment has just been tried. As described by Gary Becker, Steven Davis and Kevin Murphy in the WSJ.

Liberal Democrats won a major victory in the 2008 elections, winning the presidency and large majorities in both the House and Senate. They interpreted this as evidence that a large majority of Americans want major reforms in the economy, health-care and many other areas. So in addition to continuing and extending the Bush-initiated bailout of banks, AIG, General Motors, Chrysler and other companies, Congress and President Obama signaled their intentions to introduce major changes in taxes, government spending and regulations—changes that could radically transform the American economy.

The efforts to transform the economy began with a fiscal stimulus package of nearly $800 billion. While some elements served the package’s stated purpose and helped to soften the recession’s impact, the overall package was not well designed to foster a speedy recovery or set the stage for long-term growth. Instead, the “stimulus” was oriented to sectors that liberal Democrats believe are deserving of much greater federal help. This explains why much of the stimulus money is going toward education, health, energy conservation, and other activities that would do little to soak up unemployed resources and stimulate the economy.

Reading Stiglitz is very frustrating. We can agree that institutional failure occurred leading to the GFC. It isn’t clear, however, that more government is the solution to that failure. Certainly not more government in a macroeconomic sense which is what we’re getting.
Update: Karl Rove indicates just how much more government the US is getting.

After President Obama devoted much of 2009 to health care and global warming—two issues far down Americans’ list of concerns—the White House says he will pivot to jobs and deficit reduction in his State of the Union speech in a few weeks. The White House is considering dramatic gestures, perhaps announcing a spending freeze or even a 2% or 3% reduction in nondefense spending.

But Americans shouldn’t be misled by the election year ploy: Mr. Obama rigged the game by giving himself plenty of room to look tough on spending. He did that by increasing discretionary domestic spending for the last half of fiscal year 2009 by 8% and then increasing it another 12% for fiscal year 2010.

So discretionary domestic spending now stands at $536 billion, up nearly 24% from President George W. Bush’s last full year budget in fiscal 2008 of $433.6 billion. That’s a huge spending surge, even for a profligate liberal like Mr. Obama. The $102 billion spending increase doesn’t even count the $787 billion stimulus package, of which $534 billion remains unspent.

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Written by Sinclair Davidson

January 6, 2010 at 11:39 am

Posted in Uncategorized

98 Responses

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  1. This will help re-instill discipline and see off the spectre of moral hazard.

    Not.

    Bankers Get $4 Trillion Gift From Barney Frank.

    C.L.

    January 6, 2010 at 1:12 pm

  2. we tried bankruptcy with Lehman Bros and by golly that worked well

    Butterfield, Bloomfield & Bishop

    January 6, 2010 at 2:51 pm

  3. I should also add perhaps a reading of Rogoff and Reinhart is needed.

    They wouldn’t be surprised in the least

    Butterfield, Bloomfield & Bishop

    January 6, 2010 at 2:53 pm

  4. Lehman Bros?

    The Democrats have bankrupted America.

    C.L.

    January 6, 2010 at 2:54 pm

  5. “The Democrats have bankrupted America.”
    .
    I think you’ve forgotten the other half of the story.

    conrad

    January 6, 2010 at 9:09 pm

  6. No, I’ve remembered about three quarters of the story.

    C.L.

    January 6, 2010 at 9:23 pm

  7. Galbraith points to the failure of free markets free Russia;

    the failure to build new institutions to replace the failing structures of the Soviet system, and the reliance instead on the “market” to provide, has given us a production, employment, and public health disaster, leading toward the reestablishment of a state directed by the secret police and the army

    And dont forget the costs of Iraq, which has bankrupted America.

    rog

    January 6, 2010 at 9:37 pm

  8. $3 trillion so far.

    rog

    January 6, 2010 at 9:40 pm

  9. Rogette is now quoting Galbraith a well noted anti-market left wing political operator saying free markets failed in Russia.

    The transformation into Mr’s Edelsten is now complete.

    jc

    January 6, 2010 at 10:40 pm

  10. Rog,

    Russians couldn’t own land in the normal sense well into Putin’s Presidency. The post Soviet privatisations were fraught with the old guard pilfering assets to become the new rich.

    Is that a failing of capitalism as the word is used here?

    They didn’t start from a good base either. They still have an authoritarian culture and were virtually busted after Communism became unviable.

    Semi Regular Libertarian

    January 6, 2010 at 10:50 pm

  11. Obama has already spent more than twice what Bush spent winning the Iraq War.

    Here’s Rog (before he took flight in Geoffrey’s helicopter) mocking Obama on the Iraq War:

    Funny guy that Obama, the mil net is buzzing with tacit support of GWB and repudiation of his and the Dem position on Iraq: “Under tough circumstances, the men and women of the United States military have served with honor, and succeeded beyond any expectation.”

    C.L.

    January 7, 2010 at 1:49 am

  12. CL still supports the Iraq War

    rog

    January 7, 2010 at 6:29 am

  13. ..at any price

    rog

    January 7, 2010 at 6:30 am

  14. I agree with Rog on the war in Iraq, which takes it back to about 50/50. So Republicans bankrupt the US by going to war, and the Democrats do it by silly bail-out packages. Too bad really.

    conrad

    January 7, 2010 at 7:31 am

  15. It was GWB who bailed out the banks – TARP and the Emergency Economic Stabilization Act of 2008.

    rog

    January 7, 2010 at 8:23 am

  16. And it was Obama who compounded the problem by tripling the deficit in a year.

    Rococo Liberal

    January 7, 2010 at 8:44 am

  17. I dont think so

    rog

    January 7, 2010 at 9:36 am

  18. Who actually believes that bankruptcy would have helped alleviate the problem given the the bankruptcy of Lehman bros made the credit crunch into a GFC.

    No if anyone examines the figures the stimulus is small in light of the deficit as I have showed umpteen times.
    CL never provides the Obama programs that ‘triple’ the deficit because he can’t. They do not exist.

    I also note neither the Bond market or the credit markets are pricing in defaults.

    Butterfield, Bloomfield & Bishop

    January 7, 2010 at 11:12 am

  19. Rogette:

    We’ve been through that before and you ended up as road kill .

    1. Obama was also instrumental in the TARP etc as Bush asked both candidates to support the packages as they would be running into their administrations. Obama both supported those programs and also voted in their favor in the senate.

    2. Obama has tripled the deficit going forward according to the OMB.

    Lastly, you’re too dumb to be posting here.

    jc

    January 7, 2010 at 11:19 am

  20. I also note neither the Bond market or the credit markets are pricing in defaults.

    Credit default swaps are alert to it. Shut up, homer. Rogette is a broke self-aggrandizing now broke builder’s laborer that knows shit, so what’s your excuse?

    How the hell can you make that claim as just been factual without a shred of evidence, you douche.

    These days market perception of default is done through swaps.

    jc

    January 7, 2010 at 11:24 am

  21. “Who actually believes that bankruptcy would have helped alleviate the problem given the the bankruptcy of Lehman bros made the credit crunch into a GFC.”

    Please explain the prosperity of South Korea after they refused to bail out banks in 2000. Contrast this with the terminal cancer that is the Japanese banking system.

    Semi Regular Libertarian

    January 7, 2010 at 11:43 am

  22. The Iraq War is over, Rog.

    We won.

    You should know – you were a dedicated supporter of the war before you married Dr Edelsten.

    And Bush won using almost a quarter of the money Obama has already spent bankrupting America.

    It was GWB who bailed out the banks – TARP and the Emergency Economic Stabilization Act of 2008.

    According to Homer, this saved the world economy.

    Thanks, Bush!

    C.L.

    January 7, 2010 at 12:00 pm

  23. …the bankruptcy of Lehman bros made the credit crunch into a GFC.

    In fact, the crisis existed and was extensively analysed and decried throughout the world before Lehman Bros. Homer has again bungled history.

    Here’s that WaPo/CBO graph showing the deficits under Bush and under US history’s worst fiscal deadbeat, Barack Obama.

    C.L.

    January 7, 2010 at 12:03 pm

  24. Stiglitz blames Obama for not cleaning up GWB’s mess, the “flawed incentive structures and the inadequate regulatory system.”

    Why didn’t Bush clean it up?

    rog

    January 7, 2010 at 12:07 pm

  25. And here is the NYT/CBO graph of deficit

    rog

    January 7, 2010 at 12:08 pm

  26. Bush bankrupted America.

    rog

    January 7, 2010 at 12:09 pm

  27. It all fell apart on his watch

    rog

    January 7, 2010 at 12:09 pm

  28. “flawed incentive structures”

    Agreed.

    “inadequate regulatory system”

    …how were you going to regulate a system which was designed to piggyback a Government chartered social equity programme on top of a banking system?

    You don’t. You can’t.

    To be fair, Bush did try to lessen the extent of some of the social equity policies between 2003-2005. The Senate blocked him. Go after Senator Dodd, rog.

    Semi Regular Libertarian

    January 7, 2010 at 12:12 pm

  29. So you are saying that Bush was not responsible?

    rog

    January 7, 2010 at 12:14 pm

  30. It’s not so simple rog.

    Bush was a terrible macroeconomic manager. The recession was preceded by a mini recession that culminated in the GFC which happened at a most inappropriate time given Bush and Bernanke’s bad macro policies. The mini recession stripped the heart out of an unsustainable banking and housing system laden with social equity requirements. When he “saved capitalism” by handing the keys over to Obama, Pelosi and Co., and giving them licence for waste under the rather abused name of Keynes, Congress was controlled by Democrats.

    I blame incumbency to a large extent.

    Semi Regular Libertarian

    January 7, 2010 at 12:17 pm

  31. So you are saying that Bush was not responsible?

    No Bush accumulated $US 1.8 trillion deficit on his watch. This deadbeat is going to accumulate $us12 trillion on his.

    Bush left a bad situation which this deadbeat is making much, much worse.

    jc

    January 7, 2010 at 12:18 pm

  32. I do blame Bush’s handling of the Iraq War as a major factor in screwing the Americans fiscally. He may have won, but he paid a hell of a price, but not just fiscally. Look at the pool of labour in the US, as well as investment and labour productivity trends, and more obviously energy trends but less obviously US interest (borrowing) rates. Ghastly stuff.

    Bush and his advisers didn’t listen to the brass and so turned a successful 23 day campaign into a contentious 6 years + campaign. Bremer acknowledges they ignored forecasts about troop numbers required to keep any insurgency in check. The surge was this policy applied years too late.

    Semi Regular Libertarian

    January 7, 2010 at 12:22 pm

  33. JC

    So you are saying that Bush was not responsible?

    No

    rog

    January 7, 2010 at 12:22 pm

  34. Mrs Edelsten’s graph was created by a far left New York Times journalist with assistance from Obama’s budget director.

    Here are the CBO projections showing that Obama has tripled the deficit. The CBO has also warned that if something doesn’t change, he may quadruple the defecit. He is the worst fiscal bum ever. As of last week, he also became the worst employment president since the 1940s. His first year approval rating plunge is the steepest since Harry Truman.

    C.L.

    January 7, 2010 at 12:27 pm

  35. I take it you guys are using ‘Bush’ to signify the whole Admin.

    Otherwise, the phrase “Bush was responsible for…” is more or less meaningless.

    Well, I dunno. “…wiping his own arse after taking a shit” might make sense.

    FDB

    January 7, 2010 at 12:31 pm

  36. JC

    So you are saying that Bush was not responsible?

    No

    Bush is responsible for happened on his watch
    Lord almighty.. you really have an issue with comprehension. You’re worse than Homer, Mrs. Edelsten.

    jc

    January 7, 2010 at 12:32 pm

  37. Please explain.

    Semi Regular Libertarian

    January 7, 2010 at 12:33 pm

  38. Hell of a price, fiscally? Codswallop. Now that we live in the era of Obama’s multi-trillion dollar deficits, let’s remember the (comparatively) good old days. During the Bush years, despite the 2000 recession, 9/11, the stock market scandals, Hurricane Katrina and wars in Iraq and Afghanistan, Bush reduced the deficit from $412 billion in 2004 to $162 billion dollars in 2007, a 60 percent drop. In 2004, the deficit was $412 billion. In 2005, it dropped to $318 billion. In 2006, the deficit dropped to $248 billion. And, in 2007, it fell below $200 billion to $162 billion.

    The entire Iraq War was fought and won on about a quarter of the money Obama has already spent.

    C.L.

    January 7, 2010 at 12:36 pm

  39. Both CL and Forrest are punch-drunk from being hot over the head every time this topic emerges.
    Forrest even believes the Bush tax cuts are not a contributing factor towards the deficit.

    CL cannot ans will not show the Obama policies that have ‘tripled’ the deficit.
    The reason because they aint there.

    By the way the OMB was closer to the mark on forecast the 2009 deficit than the CBO. It has a credible Director now. It hasn’t had that in 8 years.

    Iraq war is over but the cost goes on. as we saw previously.

    CL again showing a lack of understanding of the difference between the credit crunch ,which was improving , and the GFC however this is to be expected.

    SRL South korea did not have a credit crunch at the time which impacted on the world financial system.

    We have seen systematic risk is much worse than moral hazard.

    Butterfield, Bloomfield & Bishop

    January 7, 2010 at 1:01 pm

  40. Bush reduced whose deficit. He actually inherited a balanced budget. The only ‘improvement’ was the improving economy increasing revenues.
    He did little with the structural deficit he created.

    Butterfield, Bloomfield & Bishop

    January 7, 2010 at 1:03 pm

  41. SRL South korea did not have a credit crunch at the time which impacted on the world financial system.

    South Korea’s banking system went up in smoke and this Nazi economist says there was no credit crunch. Please return your degree Homer as you have no business holding one.

    jc

    January 7, 2010 at 1:04 pm

  42. wow Forrest now can’t even read.
    Go back to your ESL lessons Forrest.

    Sorry they burnt the school down to get rid of you

    Butterfield, Bloomfield & Bishop

    January 7, 2010 at 1:06 pm

  43. Sorry they burnt the school down to get rid of you

    Thats actually a pretty good insult. I’ll have to remember that one

    jtfsoon

    January 7, 2010 at 1:09 pm

  44. “SRL South korea did not have a credit crunch at the time which impacted on the world financial system.”

    So they Americans destroyed their own economy to save the world? How noble!

    Why isn’t the Korean economy and it’s debtor nations in dire poverty though?

    Semi Regular Libertarian

    January 7, 2010 at 1:11 pm

  45. Now able to speak freely, former CBO director Douglas Holtz-Eakin weighs in on ObamaCare:

    The Reid bill is already a fiscal train wreck thinly disguised by every budget gimmick in the Democratic repertoire. The taxes start in 2010, but the entitlement in 2014. Doctors’ Medicare fees are presumed to fall by more than 20 percent beginning in 2011. Hospitals and other providers would get less than inflation increases in their annual payment updates – forever. None of these assumptions stand up to the slightest scrutiny. And when the entire middle class gets on the subsidy gravy train, federal costs will soar.

    Add Pelosi’s Son of Stimulus and, possibly, a cap and trade debacle and Obama will probably end up quadrupling the deficit.

    [Link here. Sinc]

    C.L.

    January 7, 2010 at 1:16 pm

  46. SRL,

    The bankruptcy of Koreans banks had what effect on the world financial system?

    the bankruptcy of Lehman bros actually froze all credit. Imagine what would have happened if some bigger fish went bankrupt!

    Talk about comparing apples with oranges

    Butterfield, Bloomfield & Bishop

    January 7, 2010 at 1:43 pm

  47. Oops. Thanks Sinclair.

    C.L.

    January 7, 2010 at 1:46 pm

  48. Op-eds are not factual, they are opinion!

    Douglas Holtz-Eakin worked with both GWB and McCain.

    So….so what?

    rog

    January 7, 2010 at 3:17 pm

  49. Here is the data CL, straight from the horses mouth

    rog

    January 7, 2010 at 3:22 pm

  50. Now Rog the phony CBO disciple reaches for an ad hom to avoid addressing Holtz-Eakin’s facts.

    Save yourself the PDF hassle. Here’s the graph showing how Obama has tripled the deficit. The CBO has also raised the possibility of Obama quadrupling the deficit. Obama has spent three times more in a year than Bush spent fighting and winning the Iraq War.

    C.L.

    January 7, 2010 at 3:28 pm

  51. Rog

    What point are you trying to make with that link? As far as I can tell the link is talking about oranges when the discussion is about apples.

    Stop sending people out on wild goose chases. That link has nothing to do with deficit estimates or projections that Obama will put the country 12 billion in the hole.

    jc

    January 7, 2010 at 3:28 pm

  52. Nominal GDP (Billions of dollars)
    Nominal GDP (Percentage change)
    Real GDP (Percentage change)
    GDP Price Index (Percentage change)
    PCE Price Indexa (Percentage change)
    Core PCE Price Indexb (Percentage change)
    Consumer Price Indexc (Percentage change)
    Core Consumer Price Indexd (Percentage change)
    Unemployment Rate (Percent)
    Three-Month Treasury Bill Rate (Percent)
    Ten-Year Treasury Note Rate (Percent)
    Economic Profits (Billions of dollars)
    Wages and Salaries (Billions of dollars)
    Economic Profits (Percentage of GDP)
    Wages and Salaries (Percentage of GDP)

    Where’s the forward projections in there? Are you drunk?

    jc

    January 7, 2010 at 3:31 pm

  53. oops

    Where’s the forward deficit projections in there?

    jc

    January 7, 2010 at 3:31 pm

  54. CL what did he spend it on?

    please tell us.

    oops I forgot who got closest to the actual 2009 budget deficit the BO or OMB.

    Can you tel us how many times the OMB has been closer to the actual result than the CBO.

    Forrest if you look under data you might see it.

    Are you drunk?

    Butterfield, Bloomfield & Bishop

    January 7, 2010 at 3:38 pm

  55. Forrest if you look under data you might see it.

    Help me out, homer, where is it in the link Mrs. Edelsten has provided?

    Can you point to the projections in Mr’s Edelsten’s link as I can’t see them. If you can could you also point out if there are any differences with the CBo’s deficit estimates clearly shown in Cl’s link as the lighter shade ($12 trillion for the life of this administration)

    Thanks.

    jc

    January 7, 2010 at 3:42 pm

  56. It is widely accepted that the GWB tax cuts did not stimulate the economy yet they continue to cost the economy.

    rog

    January 7, 2010 at 3:43 pm

  57. Obviously JC is too stupid to tab the spreadsheet.

    rog

    January 7, 2010 at 3:45 pm

  58. Butters:

    “the bankruptcy of Lehman bros actually froze all credit.”

    This is not actually true. Citibank was offered credit at less than generous terms, but TARP is what truly froze up credit. Why have an interbank loan market when the taxpayer will pick up the tab?

    How did Lehman brother’s collapse freeze up the XCP market which did impact mortgage lenders in Australia?

    Fundamentals matter, not anecdotes. Economic pressure made mortgages financing bonds fail. A general inability to service debt broke Lehman, and would have created a credit crunch, with or without Lehman failing.

    You’re inferring bad management of one bank can cripple the world economy. Only if it is very, very large and operates under very poor, overly generous bankruptcy laws.

    Semi Regular Libertarian

    January 7, 2010 at 3:46 pm

  59. Cl describes any link to GWB as an “ad-hom”

    How telling

    rog

    January 7, 2010 at 3:46 pm

  60. I’ll make it easier for you clots

    CBO

    rog

    January 7, 2010 at 3:49 pm

  61. “It is widely accepted that the GWB tax cuts did not stimulate the economy yet they continue to cost the economy.”

    That’s not really true. The tax cuts themselves would have had some microeconomic impacts on investment and labour market decisions. You can’t blame tax cuts for increases in discretionary and military spending.

    Tax cuts and bond issues merely raised taxes inter temporally. Any micro effect was whaled by the macro side.

    Semi Regular Libertarian

    January 7, 2010 at 3:49 pm

  62. It is widely accepted that the GWB tax cuts did not stimulate the economy yet they continue to cost the economy.

    That’s an interesting “widely accepted” consensus, Edel. Would you mind providing supporting evidence and while you’re at it, should Bush have raised taxes in order to stimulate the economy?

    The “denialists” position, Mrs Edel(sten) is that Bush got that half right while not keeping a firm on runaway spending because if he did he would have been running surpluses.

    But all that is an aside. Please point me to where in that sliver bullet of a link you posted shows anything to do with deficit or deficit projections?

    Can you? Don’t be shy Edel.

    jc

    January 7, 2010 at 3:50 pm

  63. Sure thing JC

    Mark M. Zandi, “Assessing President Bush’s Fiscal Policies,” Economy.com, July 2004; William Gale and Peter Orszag, “Bush Administration Tax Policy: Effects on Long-Term Growth,” Tax Notes, October 18, 2004; “Economic Effects of Making the 2001 and 2003 Tax Cuts Permanent,” Tax Policy Center Discussion Paper No. 17, October 2004; Isaac Shapiro and Joel Friedman, “Tax Returns: A Comprehensive Assessment of the Bush Administration’s Record on Cutting Taxes,” Center on Budget and Policy Priorities, April 2004; and Douglas W. Elmendorf and David L. Reifschneider, “Short-Run Effects of Fiscal Policy with Forward-Looking Financial Markets,” prepared for the National Tax Association’s 2002 Spring Symposium.

    rog

    January 7, 2010 at 3:52 pm

  64. Obama has become the most unpopular president entering his second year among the last nine elected presidents.

    No wonder, with Obama being hammered today for lying eight times about opening up healthcare negotiations.

    Then there is the continuing scandal about Obama’s bribes.

    CBO Says Reid’s Vote Buying Cost $1.2B.

    CBO pegs Nelson’s Nebraska Medicaid deal cost at $100 million.

    He’s the worst fiscal bum in American history.

    C.L.

    January 7, 2010 at 3:53 pm

  65. Rog,

    Which cell on which sheet?

    Semi Regular Libertarian

    January 7, 2010 at 3:54 pm

  66. Rog (Edel)

    This is now from your own link dated August 2009 updating Cl’s March link

    On-Budget Deficit -642 -1,720 -1,485 -1,029 -721 -684 -711 -710 -765 -761 -747 -834 -4,630 -8,446

    So from CL’s link to yours there has been an estimate change of $554 billion improvement ($9 trillion – $8,446) that is normal in these circumstances of a widely fluctuating economy.

    The accumulated deficit under Obama is $8,446 according to your links estimates. Bush’s deficit was an accumulated $1,785 trillion.

    So Obama’s will be 4.5 times worse.

    So to summarize..

    1. You present an initial link that doesn’t have any deficit projections

    2. not admitting you idiocy you then present a link that more or less agrees with Cl’s earlier projections

    And you call other people Clots?

    Edel, you are too stupid to be posting anything here.

    jc

    January 7, 2010 at 4:01 pm

  67. Cl describes any link to GWB as an “ad-hom”

    How telling.

    No, I described this comment of yours as an ad hom:

    “Douglas Holtz-Eakin worked with both GWB and McCain.”

    That’s because it is.

    You really are a dishonest dope.

    Now able to speak freely, former CBO director Douglas Holtz-Eakin weighs in on ObamaCare:

    The Reid bill is already a fiscal train wreck thinly disguised by every budget gimmick in the Democratic repertoire. The taxes start in 2010, but the entitlement in 2014. Doctors’ Medicare fees are presumed to fall by more than 20 percent beginning in 2011. Hospitals and other providers would get less than inflation increases in their annual payment updates – forever. None of these assumptions stand up to the slightest scrutiny. And when the entire middle class gets on the subsidy gravy train, federal costs will soar.

    Now watch as Mrs Edelsten helicopters straight over the argument to run some other distraction.

    C.L.

    January 7, 2010 at 4:02 pm

  68. “It is widely accepted that the GWB tax cuts did not stimulate the economy yet they continue to cost the economy.”

    Widely accepted by statists and lefties.

    And how do tax cuts form a cost to the economy? Are you sure, Rog, that you are not confusing the Government and the economy?

    Rococo Liberal

    January 7, 2010 at 4:03 pm

  69. C.L.

    January 7, 2010 at 4:03 pm

  70. Hey JC, it was my initial projection to which rog objected.

    Rococo Liberal

    January 7, 2010 at 4:04 pm

  71. The incompetence of lefties in power always defies belief. Yet the media shills keep trying to tell us that Obama has intelligence. He certainly hasn’t demonstarted much savvy so far.

    Rococo Liberal

    January 7, 2010 at 4:07 pm

  72. Now watch as Mrs Edelsten helicopters straight over the argument to run some other distraction.

    I know, Edel can’t help herself. It’s like clubbing a baby seal to death.

    1. The complete moron posts a link that doesn’t mention a thing about deficits

    2. hilariously her/his sheltered workshop companion says it hidden in the numbers

    3 Realizing he’s a twat he bumbles around with Google and then posts an updated version of the CBO estimates that show an accumulated on budget deficit projection of $8,446 trillion which is only $554 billion less than your link provided as the CBO March estimate.

    4 And calls other people clots.

    Edel is even stupider than Homer. Despite never thinking it was possible I have been proved wrong.

    jc

    January 7, 2010 at 4:12 pm

  73. “Op-eds are not factual, they are opinion!”

    So, when writing opinion-pieces, according to rog, authors never refer to facts? This is probably true to the extent that the author is rog.

    dover_beach

    January 7, 2010 at 4:14 pm

  74. “And how do tax cuts form a cost to the economy? ”

    Interest on the deficits

    rog

    January 7, 2010 at 4:14 pm

  75. CL. “The Iraq War is over, Rog. We won.”

    What planet are you living on CL? Do you mean won like Vietnam and Afghanistan too?

    conrad

    January 7, 2010 at 4:15 pm

  76. It’s no longer Rog, DB. It’s Edel.

    jc

    January 7, 2010 at 4:16 pm

  77. Nominal GDP (Billions of dollars)
    Nominal GDP (Percentage change)
    Real GDP (Percentage change)
    GDP Price Index (Percentage change)
    PCE Price Indexa (Percentage change)
    Core PCE Price Indexb (Percentage change)
    Consumer Price Indexc (Percentage change)
    Core Consumer Price Indexd (Percentage change)
    Unemployment Rate (Percent)
    Three-Month Treasury Bill Rate (Percent)
    Ten-Year Treasury Note Rate (Percent)
    Economic Profits (Billions of dollars)
    Wages and Salaries (Billions of dollars)
    Economic Profits (Percentage of GDP)
    Wages and Salaries (Percentage of GDP)

    Where’s the forward projections in there? Are you drunk?

    err it is in the data Forrest. have another chocolate and then go to a course on excel spreadsheets.

    SRL. it froze markets around the world. Here in Australia there was a lot of wariness in the markets despite having nothing to worry about.

    You might want to read the RBA annual report on what happened. Big Banks have an effect on the world.
    It has happened before.

    hmm working for George bush and John McCain is an Adhom. interesting but untrue.

    for 2010 the main reasons for the deficit are economic downturn (26%), Tarp/Fannyetc (8%), ARRA (23%), Bush tax cuts (24%), and war costs ( 13%).

    Any president would have increased the deficit because
    1) there already was the great recession
    2) There was a need for stimulus

    Err CL even Dougy boy says the stimulus worked

    Butterfield, Bloomfield & Bishop

    January 7, 2010 at 4:21 pm

  78. The Iraq War is over, Rog. We won.

    You should know – you were a dedicated supporter of the war before you married Dr Edelsten.

    And Bush won using almost a quarter of the money Obama has already spent bankrupting America.

    C.L.

    January 7, 2010 at 4:24 pm

  79. Homes points out That i said:

    Where’s the forward projections in there? Are you drunk?

    Which in the very next post I corrected to:

    oops

    Where’s the forward deficit projections in there?

    jc

    January 7, 2010 at 3:31 pm

    Homer , please keep up with the class or get out. Just leave, as you’re slowing everyone’s learning curve with useless drivel.

    jc

    January 7, 2010 at 4:28 pm

  80. The sheer, unadulterated dishonesty and mentally deranged idiosyncracies of Homer and Rog are becoming almost too baroque to describe.

    Here’s Homer:

    “hmm working for George bush and John McCain is an Adhom. interesting but untrue.”

    Nobody said “working for George bush and John McCain is an Adhom,” Homer, you concrete-brained dope. This comment of Rog’s is an ad hom:

    “Douglas Holtz-Eakin worked with both GWB and McCain.”

    Now able to speak freely, former CBO director Douglas Holtz-Eakin weighs in on ObamaCare:

    The Reid bill is already a fiscal train wreck thinly disguised by every budget gimmick in the Democratic repertoire. The taxes start in 2010, but the entitlement in 2014. Doctors’ Medicare fees are presumed to fall by more than 20 percent beginning in 2011. Hospitals and other providers would get less than inflation increases in their annual payment updates – forever. None of these assumptions stand up to the slightest scrutiny. And when the entire middle class gets on the subsidy gravy train, federal costs will soar.

    Now watch again as Mrs Edelsten helicopters straight over the argument to run some other distraction. Iraq, Bushitler, Mary Mackillop, hubbie Geoff’s successful use of Viagra etc.

    C.L.

    January 7, 2010 at 4:30 pm

  81. The sheer, unadulterated dishonesty and mentally deranged idiosyncracies of Homer and Rog are becoming almost too baroque to describe.

    More like just clubbing baby seals.It’s ugly, ugly work as blood as guts get strewn everywhere but in the end their combined stupidity and rank dishonesty makes it worthwhile and dare I say fun.

    jc

    January 7, 2010 at 4:34 pm

  82. Interest on the deficit?!!

    Once again, that is a cost to the Government, not the economy. A Government should cut spending to overcome that problem.

    So what does the saintly Obama do but increase the projected deficit by a factor of 4.5 in a year? Yet somehow, this OK because it was a Democrat that did it? Cash for clunkers and all the other stimulus measures have added diddly squat to the economy.

    Rococo Liberal

    January 7, 2010 at 4:35 pm

  83. “Err CL even Dougy boy says the stimulus worked.”

    Oh, that must be why the US has double-digit unemployment and a tripled deficit.

    Thanks, Bazza!

    But that’s NOT what Holtz-Eakin said.

    C.L.

    January 7, 2010 at 4:37 pm

  84. Yes I agree with the motherhood statement. I suppose almost everyone does. Those who don’t are the vested interests who benefited from the initial bail-out. These same forces were all for the predominant economic orthodoxy up until they needed a bit of Keynes.
    .
    Those same forces are also very powerful in Washington making it very difficult for any president to actually address the underlying problem because there’d be too much opposition.
    .
    And right from the word go we saw the spectacle of the two camps putting forward arguments that resemble those viz the causes of the 29 crash and the effectiveness of the New Deal. Writing history while it’s still happening.
    .
    We have entrenched corruption of institutions and outdated dogma. Sounds familiar. Can anyone say Julio-Claudian dynasty?

    Adrien

    January 7, 2010 at 4:43 pm

  85. “Interest on the deficits”

    rog, that isn’t a cost, it is just a choice of how to pay for something.

    The real tax burden is always what is spent, plus what is saved.

    Butters – you’re just asserting something again and again. I want to know how Lehman failing, irrespective of the economic fundamentals, shut down the US XCP and therefore affected Australian FIs.

    “for 2010 the main reasons for the deficit are economic downturn (26%), Tarp/Fannyetc (8%), ARRA (23%), Bush tax cuts (24%), and war costs ( 13%).”

    Wrong. Bush’s tax cuts had no cause and effect on Bush’s spending.

    Semi Regular Libertarian

    January 7, 2010 at 4:44 pm

  86. Adrien, I agree that this whole senatorial class in Washington needs to be thrown out. The Roman analogy is apt.

    C.L.

    January 7, 2010 at 4:57 pm

  87. CL. “The Iraq War is over, Rog. We won.”

    So why do “we” keep paying for it?

    It’s in the US budget under “deficit”

    rog

    January 7, 2010 at 5:34 pm

  88. “that is a cost to the Government, not the economy.”

    Tell that to Sinc, he has been busy explaining that govt deficits are a drain on the economy

    rog

    January 7, 2010 at 5:35 pm

  89. “So why do “we” keep paying for it?”

    How long did the US pay for Victory in Europe and Japan? The costs incurred didn’t cease following their victory parades.

    dover_beach

    January 7, 2010 at 5:37 pm

  90. “How long did the US pay for Victory in Europe and Japan? The costs incurred didn’t cease following their victory parades.”
    .
    At least they actually won in Japan and Europe. In addition, even if you consider Iraq a victory, who cares? If you win in Iraq, what do you get? Iraq. If you lose in Iraq, what don’t you get? Iraq. Ditto for Afghanistan. It’s like winning something you never wanted anyway, so it’s a waste of money whether you’re under the delusional belief the US won or not.

    conrad

    January 7, 2010 at 5:47 pm

  91. CL says working for George bush and McCain is not an Adhom but this is “Douglas Holtz-Eakin worked with both GWB and McCain.”

    note the difference. yes there is none.

    SRL,

    err why did central banks provide so much liquidity?

    Bush’s tax cuts are a cost to the budget one dougy boy showed that back when he was in charge of the CBO .IT still does.

    If you give tax cuts and do nothing on the expenditure side that is called unpaid tax cuts.
    Get rid of those Forrest pills.
    oh yesh none of those wonderful micro-economic benefits were sighted either but the budget did go inot deficit however

    on Dougy and the stimulus read the Washington INdependent on 7/8/09

    Butterfield, Bloomfield & Bishop

    January 7, 2010 at 5:52 pm

  92. Butters – I am not going to equate someone’s intent with the effect of their actions. Our inflation rate increased, even during a downturn and a liquidity crisis. We had too much liquidity, but firms still couldn’t raise capital. It was also an asset quality problem (driven by fundamentals, not by the failure of one US bank).

    But you still haven’t explain how the collapse of Lehman, rather than the machinations of fundamentals caused the credit crunch.

    “If you give tax cuts and do nothing on the expenditure side that is called unpaid tax cuts.”

    Call them whatever you like but you’re still wrongly inferring that tax cuts cause deficits. They don’t any more than the level of spending impacts the tax rate/scales.

    Semi Regular Libertarian

    January 7, 2010 at 6:02 pm

  93. Adrien, I agree
    .
    CL, are you okay? 🙂

    Adrien

    January 7, 2010 at 6:13 pm

  94. “At least they actually won in Japan and Europe. In addition, even if you consider Iraq a victory, who cares? If you win in Iraq, what do you get? Iraq. If you lose in Iraq, what don’t you get? Iraq. Ditto for Afghanistan. It’s like winning something you never wanted anyway, so it’s a waste of money whether you’re under the delusional belief the US won or not.”

    Conrad, I merely commented on the claim that if you’re still paying for a war following the cessation of operations the claim that this indicates defeat is bunk. And so far as victory in Europe is concerned what did the UK and the US get? The cold war. What did the Poles get? Or the Czechs? Or the Slovakians? Or the Hungarians? Or the Romanians? Or the Lithuanians, Latvians, and Estonians? Was it ‘delusional’ to imagine that we won in Europe even though at least half of it was never really liberated?

    dover_beach

    January 8, 2010 at 8:27 am

  95. SRL,

    It really doesn’t matter what you think the CBO has the taxcuts contributing to how large the deficits are.end of story.

    For the GFC as I suggested perhaps a read pf the RBS annual report Gary Gorton has a long but interesting paper on how it started.

    Brender and Pisani show everything and that is the paper you perhaps should start with

    Butterfield, Bloomfield & Bishop

    January 8, 2010 at 9:40 am

  96. “It really doesn’t matter what you think the CBO has the taxcuts contributing to how large the deficits are.end of story.”

    No, it means they are wrong. Deficits are not a function of the tax rate alone. Spending is not endogenous.

    The explanation that a South to North financial flow caused the crisis, just leaves more questions and the idea that financial crises cause economic fundamentals and not the other way around is frankly, bizzare. How did either cause US mortgagors to fail on their loans en masse to begin with – and how did the financial crisis which resulted from this have backward causation?

    Semi Regular Libertarian

    January 8, 2010 at 7:22 pm

  97. sunshine taxcuts were part of the reason for the Reagan and Bush budget deficits! They contributed to the deficits. they were not the whole reason as I have shown

    I have given you some material to read.
    I do admit both are lengthy pieces but all your answers are there for you to explore

    Butterfield, Bloomfield & Bishop

    January 8, 2010 at 7:36 pm

  98. Butters,

    “They contributed to the deficits.”

    No. No one made Congress go into deficit except for Congress and the President who signed it into law.

    I’ve read the articles and they lead to more questions. i) How does a South-North finance flow cause US fundamentals to break down and lead to a downturn in output under poor macroeconomic circumstances, forcing mortgage default? ii) How does then the resulting inability to roll over funds (thus credit crunch) backward cause the preceding downturn in fundamentals including output?

    Semi Regular Libertarian

    January 8, 2010 at 7:43 pm


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