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07/17/2010 10:21:50 PM · #76
Originally posted by Judith Polakoff:

His latest Washington Post column is a not-very-subtle repeat of the current popular right-wing meme of Obama as scary European-like socialist and a regurgitation of the tried-and-true meme of any Democrat as a reckless spendthrift.


Truly unbelieveable. This is too comical. Charles all but states how Obama has successfully accomplished several agenda items, compared his accomplishments to a Reaganesque historical context, correctly stated they are underappreciated by his own party and you read this as a slam. No wonder you are incapable of seeing fairness. What a waste of time.

The best news I've heard lately was that Carvell was the one to publish that 55% of americans believe Obama is a socialist. Now why would Carvell do that? Certainly because he is a committed Obamaite.

Regarding independents - it matters not if they participate in demonstrations or rallys. They read and they watch the news. They understand fairness even if you don't. They do not like double standards. They are poised to rectify a percieved wrong. And please...why is Obama sueing Arizona? Please share with me all the left BS on the Arizona immigration bill and how it profiles based on race. Please regurgitate the liberal left ideology based on NOT reading the bill. Too funny.
07/17/2010 10:27:08 PM · #77
Originally posted by Judith Polakoff:

I don't recall ever saying that I know what's good for you. I DO know that conservative policies are completely bankrupt and bad for the country, having just lived through eight years with your guys in charge and now living with the consequences.


Just so I have this straight. The entire world is in the crapper - much of it liberal socialists - and the reason we are in the mix is due to a conservative administration a couple of years ago. Are you serious? You need to watch more Fox.

Message edited by author 2010-07-17 22:28:21.
07/17/2010 10:52:24 PM · #78
Originally posted by Flash:

Charles all but states how Obama has successfully accomplished several agenda items, compared his accomplishments to a Reaganesque historical context, correctly stated they are underappreciated by his own party and you read this as a slam.

No, not that part, but the remainder of the editorial is extremely derisive and riddled with conservative bias. What you're attempting with Fox News is like trying to pick out the most diplomatic reporter in Pyongyang to claim that North Korean news isn't biased against America.

Originally posted by Flash:

The best news I've heard lately was that Carvell was the one to publish that 55% of americans believe Obama is a socialist.

Unless you believe it's the responsibility of journalists to portray one side only in a positive light (i.e. you favor biased media), why wouldn't he? Aside from the nutjobs who associate socialism with communism, it's not even a negative attribute— like saying 55% of Americans believe Obama thinks the government bears some responsibility for the well-being of its citizens. So?

Originally posted by Flash:

Regarding independents - it matters not if they participate in demonstrations or rallys. They read and they watch the news. They understand fairness even if you don't.

...which is why over 90% of tea party participants AREN'T independents!

Originally posted by Flash:

why is Obama sueing [sic] Arizona?

The most obvious answer is that the law is unconstitutional. “States have no power to pass immigration laws because it’s an attribute of foreign affairs. Just as states can’t have their own foreign policies or enter into treaties, they can’t have their own immigration laws either.” Even if states could determine their own immigration rules, the law has other problems with the constitution.
07/17/2010 11:06:40 PM · #79
Originally posted by Flash:

The entire world is in the crapper - much of it liberal socialists - and the reason we are in the mix is due to a conservative administration a couple of years ago. Are you serious?

Totally serious. The world didn't suddenly go into the crapper in January, 2009. "The financial crisis of 2007 to the present is a crisis triggered by a liquidity shortfall in the United States banking system caused by the overvaluation of assets." This crisis had a cascading effect on world markets, which are often tied heavily into U.S. banks and investments because of the high return rate promised by that speculation. We were doing quite well when Clinton left office, but next administration left us with two military quagmires, a massive debt load and the biggest recession in generations. Deal with it.
07/17/2010 11:50:13 PM · #80
Originally posted by Flash:

Originally posted by Judith Polakoff:

I don't recall ever saying that I know what's good for you. I DO know that conservative policies are completely bankrupt and bad for the country, having just lived through eight years with your guys in charge and now living with the consequences.


Just so I have this straight. The entire world is in the crapper - much of it liberal socialists - and the reason we are in the mix is due to a conservative administration a couple of years ago. Are you serious? You need to watch more Fox.


Well if you watched something besides FOX (like anything else) you'd probably come to the realization that it's the capitalists or more accurately the top 1% that wield the global power not the liberal socialists who have the global strength of an amoeba in comparision.

Message edited by author 2010-07-17 23:59:09.
07/18/2010 07:13:26 AM · #81
Originally posted by scalvert:

Originally posted by Flash:

The entire world is in the crapper - much of it liberal socialists - and the reason we are in the mix is due to a conservative administration a couple of years ago. Are you serious?

Totally serious. The world didn't suddenly go into the crapper in January, 2009. "The financial crisis of 2007 to the present is a crisis triggered by a liquidity shortfall in the United States banking system caused by the overvaluation of assets." This crisis had a cascading effect on world markets, which are often tied heavily into U.S. banks and investments because of the high return rate promised by that speculation. We were doing quite well when Clinton left office, but next administration left us with two military quagmires, a massive debt load and the biggest recession in generations. Deal with it.


Flash you might want to read up on Senator Phil Gram who was extremely powerful during the Reagan administration into the Bush II years. He with other Republicans such as, Cornyn, Dole, Simposon, D'Amato ushered in pretty much all the deregulation and lack of oversight with the Gramm–Leach–Bliley Act that caused the mess and the climate for the "To big to fail" corporations that Paulson and the Bush administration first suggested that we bail out.

Every single day without fail we see on TV how big business operates in ways that are stacked against the little guy...you and me, I assume (?) and how much power they wield over congress and The Party of Big Business and Oil are squarely responsible to handing them all that power...unchecked...unregulated to the point where we're in a hole. People complain about taxes when government backed Republican policy ...let the markets take care of attitude, allowed the banks way into our pockets with fees and scams that are illegal in other parts of the world. Basically legal corruption. We won't even begin to talk about Oil companies... The Enron loophole and Bush ties, Commodity Futures Modernization Act of 2000 etc. ALL you have to do is look at who wrote these laws, who sponsored them, who backed them, which parties political parties core philosophy was at the root of the policy. It's very clear, very easy to understand...and it's right there in front of you.

eta: How much is the Iraq War costing us on a daily basis? Pretty useless war with no clear goals from the start, fought on credit. I suppose Bush/Cheney thought we'd kick some Fundamentalist butt, flex a few muscles and they'd roll over...apologize and we'd be done with it. Well, the Taliban, Al Qu Seltzer haven't exactly backed down and saluted us just yet not to mention the rest of the world that's begun to froth with ant-American sentiment. In fact, a good deal of the world is now pushing back hard against our control of their markets and are paying us far less respect (Brazil's friendship with Iran is a great example of that btw) than in the past. A lot of the anger against our country was exacerbated by the Bush administration and their unilateral, dismissive attitude. Ask any of our friends here from Europe what the tone and feeling for the USA is at this point and when their minds changed about us?

Message edited by author 2010-07-18 07:28:13.
07/18/2010 02:41:04 PM · #82
Originally posted by Flash:

Charles all but states how Obama has successfully accomplished several agenda items, compared his accomplishments to a Reaganesque historical context, correctly stated they are underappreciated by his own party and you read this as a slam.


Originally posted by scalvert:

No, not that part, but the remainder of the editorial is extremely derisive and riddled with conservative bias.


To state, as Krauthammer does, that "Obama's most far-reaching accomplishment" is "the creation of ruinous deficits as far as the eye can see" is hardly fair, and it's the meat of his argument. Yes, I read that as a slam and a regurgitation of right-wing spin.

The reality: "Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for almost $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs. [6] (The prescription drug benefit enacted in 2003 accounts for further substantial increases in deficits and debt, which we are unable to quantify due to data limitations.) These impacts easily dwarf the stimulus and financial rescues. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts and the drug benefit) do not fade away as the economy recovers (see Figure 1)."

' . substr('//www.cbpp.org/images/cms//12-16-09bud-rev6-28-10-f1.jpg', strrpos('//www.cbpp.org/images/cms//12-16-09bud-rev6-28-10-f1.jpg', '/') + 1) . '

"In February 2009, the new Obama Administration and Congress enacted a major package — the American Recovery and Reinvestment Act (ARRA) — to arrest the economy’s plunge. Mainstream economists overwhelmingly argued that, to combat the recession, the federal government should loosen its purse strings temporarily to spur demand, with a mix of assistance to the unemployed, aid to strapped state and local governments, tax cuts, spending on infrastructure, and other measures. By design, this package added to the deficit. Since then, policymakers have enacted several smaller measures to spur recovery and aid the unemployed. By our reckoning, the combination of ARRA and these other measures account for $1.1 trillion in deficits over the 2009-2019 period (including the associated debt service). Their effects are highly concentrated in 2009 through 2011 and fade thereafter, delivering a boost to the economy during its most vulnerable period.[5]"

"President Obama’s 2011 budget proposes to reduce anticipated deficits over the next ten years, chiefly by letting the Bush tax cuts for high-income taxpayers expire on schedule, closing certain tax loopholes and reforming the international tax system, keeping estate taxes at their 2009 parameters, enacting health care reform, and freezing (in aggregate) most appropriations for non-security domestic programs for the next three years. The President also supports another round of temporary recovery measures that would boost the deficit in 2010 through 2012, a proposal that is appropriate in size and well targeted.[8] Center on Budget and Policy Priorities’ analyses have found that in aggregate, the President’s proposals would reduce deficits over the 2011-2020 period by an estimated $1.3 trillion.[9]"

Excerpts from this site.

Message edited by author 2010-07-18 14:57:55.
07/18/2010 02:44:10 PM · #83
Originally posted by Flash:

Originally posted by Judith Polakoff:

I don't recall ever saying that I know what's good for you. I DO know that conservative policies are completely bankrupt and bad for the country, having just lived through eight years with your guys in charge and now living with the consequences.


Just so I have this straight. The entire world is in the crapper - much of it liberal socialists - and the reason we are in the mix is due to a conservative administration a couple of years ago. Are you serious? You need to watch more Fox.


See my post immediately prior...
07/18/2010 02:57:04 PM · #84
Originally posted by Flash:

The best news I've heard lately was that Carvell was the one to publish that 55% of americans believe Obama is a socialist. Now why would Carvell do that? Certainly because he is a committed Obamaite.


Was he reporting poll results? I can't answer the question without more context. But naturally you'd think this is good news because your definition of a socialist is someone who nationalizes business/industry and confiscates personal private property, and you'd like all Americans to take on your paranoid belief system. I'm sure you also thought it was good news when a large minority of Americans believed that health care reform would bring with it "death panels"!

Originally posted by Flash:

Regarding independents - it matters not if they participate in demonstrations or rallys. They read and they watch the news. They understand fairness even if you don't. They do not like double standards. They are poised to rectify a percieved wrong.


What "perceived wrong" are you talking about?
07/18/2010 04:02:52 PM · #85
Originally posted by yanko:

Well if you watched something besides FOX (like anything else) you'd probably come to the realization...

I doubt it. If you grew up in North Korea listening to propaganda painting the West as evil and the 'Dear Leader' as good, you're going to regard any contrary message as biased or false because it doesn't meet your expectations. The same applies to "indoctrinated" residents of Soviet Russia, Cuba, Iran or Venezuela. Fox News appeals to staunch conservatives and religious zealots because that is its entire purpose: to portray those ideologies as good and everything else evil. If someone in the DPRK watched CNN, BBC or the New York Times covering the West's effort to provide disaster relief to North Korea, those who accept the national propaganda as true wouldn't "come to the realization" that they've been fed a load of crap all their lives. Instead, they would view true facts with doubt and suspicion, as explained earlier in the article on biased reasoning.

Look no further than people who nod in agreement over Fox News' "reporting" of an environmental agreement "signed by President Clinton in 1992" (a year after he left office) or who think Obama isn't a native born American despite having a mother who was born and raised here and producing a court-verified birth certificate. You would think that simply pointing out such easily verified facts would be enough to correct the perception, but no. Biased reasoning takes over and they believe even more firmly in the false information. That is the dark side of free speech: Fox News includes a "cracker babies" video clip that took place in 2008 in its coverage of a 2009 election non-incident, uses legacy footage of a large crowd to suggest greater attendance at a tea party event, and actually sues for the right to distort the news and feed the delusions of their fan base, yet they get away with the pretense of unbiased reporting. Merely exposing a Fox News junkie to real news isn't likely to lead to some great epiphany.

Message edited by author 2010-07-18 16:04:16.
07/18/2010 04:09:40 PM · #86
Originally posted by Flash:

for the NAACP to accuse the Tea Party of racism is Hypocricy in its highest form.

The Tea Party itself apparently disagrees.
07/18/2010 06:41:41 PM · #87
Originally posted by Judith Polakoff:

The reality: "Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for almost $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs. [6] (The prescription drug benefit enacted in 2003 accounts for further substantial increases in deficits and debt, which we are unable to quantify due to data limitations.) These impacts easily dwarf the stimulus and financial rescues. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts and the drug benefit) do not fade away as the economy recovers (see Figure 1)."

' . substr('//www.cbpp.org/images/cms//12-16-09bud-rev6-28-10-f1.jpg', strrpos('//www.cbpp.org/images/cms//12-16-09bud-rev6-28-10-f1.jpg', '/') + 1) . '


I am no Bushie and I voted Obama, but this chart looks very, very slanted. First, the Bush tax cuts are set to expire on Jan 1, 2011. Second, the assumptions is that recovery spending will drastically reduce in one year. If there is one thing I know it's that congress spends money no matter if blue or red. It also looks to assume no drawdown in troops in either war from now to 2019.

I fully expect both parties to run the country fiscally into the ground. When the blues have it, they will spend. When the reds have it, they will cut revenue. Nobody will have the guts to cut defense, social security, or medicare. Those three programs, plus interest on the debt likely account for 90% of the budget (I didn't look that number up). Only a truly disaster will put the house in order. 2008 will look like good times.

I'm such an optimist.
07/18/2010 06:55:12 PM · #88
2010 US Federal Budget

07/18/2010 08:05:32 PM · #89
I'm curious would Medicare, Social Security, Farm Subsidies things like that, be considered Socialists Programs?

If the answer is yes, would people who anti-Socialism or socialist ideas/programs agree to end those programs today?
07/18/2010 08:25:59 PM · #90
Originally posted by pawdrix:

If the answer is yes, would people who anti-Socialism or socialist ideas/programs agree to end those programs today?

While we're at it, let's say every road should be a toll road, education and defense should be privatized, national parks must disappear, libraries and museums become only for the wealthy, fair labor practices should be abandoned, food and air quality are your problem, rural residents are responsible for their own electricity and phone service, if you can't afford a lawyer that's too bad for you, etc. Conservative nirvana?
07/18/2010 09:05:17 PM · #91
Well to be fair, I think the argument being made is we have too many socialist-like programs, not that we need to get rid of them all to achieve some conservative nirvana. Of course I could be wrong but that is how I understood LoudDog's first post.

Message edited by author 2010-07-18 21:05:54.
07/18/2010 09:06:35 PM · #92
Originally posted by scalvert:

Originally posted by pawdrix:

If the answer is yes, would people who anti-Socialism or socialist ideas/programs agree to end those programs today?

While we're at it, let's say every road should be a toll road, education and defense should be privatized, national parks must disappear, libraries and museums become only for the wealthy, fair labor practices should be abandoned, food and air quality are your problem, rural residents are responsible for their own electricity and phone service, if you can't afford a lawyer that's too bad for you, etc. Conservative nirvana?


Probably, more properly, Libertarian nirvana...

Thanks for the link Yank, I see I was off and those programs only add up to about 65%. Of course every year that number will get higher as our society ages and our debt gets bigger.
07/18/2010 09:36:00 PM · #93
Originally posted by DrAchoo:

Originally posted by Judith Polakoff:

The reality: "Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for almost $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs. [6] (The prescription drug benefit enacted in 2003 accounts for further substantial increases in deficits and debt, which we are unable to quantify due to data limitations.) These impacts easily dwarf the stimulus and financial rescues. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts and the drug benefit) do not fade away as the economy recovers (see Figure 1)."

' . substr('//www.cbpp.org/images/cms//12-16-09bud-rev6-28-10-f1.jpg', strrpos('//www.cbpp.org/images/cms//12-16-09bud-rev6-28-10-f1.jpg', '/') + 1) . '


I am no Bushie and I voted Obama, but this chart looks very, very slanted. First, the Bush tax cuts are set to expire on Jan 1, 2011. Second, the assumptions is that recovery spending will drastically reduce in one year. If there is one thing I know it's that congress spends money no matter if blue or red. It also looks to assume no drawdown in troops in either war from now to 2019.

I fully expect both parties to run the country fiscally into the ground. When the blues have it, they will spend. When the reds have it, they will cut revenue. Nobody will have the guts to cut defense, social security, or medicare. Those three programs, plus interest on the debt likely account for 90% of the budget (I didn't look that number up). Only a truly disaster will put the house in order. 2008 will look like good times.

I'm such an optimist.


You should read the Technical Note and some of the footnotes at the end of the article to which I linked for further information regarding the authors' assumptions, which are based on CBO assumptions. They do assume an extension of the tax cuts and a gradual draw-down in troops in Afghanistan and Iraq. So if you have a problem with this report, then I guess you have a problem with the CBO, which is the most objective, most non-partisan, and most knowledgeable organization dealing with Federal budget issues. Clearly, as of March 2010, the CBO did not think it was unreasonable to assume an extension of the tax cuts as there's uncertainty whether Obama will allow them to expire in 2011. In my opinion, if the authors of the report intended to "slant" the outcome, they would have included the Medicare Prescription Drug Program in their analysis, which CBO includes in their official projections and which inflates even further deficits arising from Bush policies and programs.

"I fully expect both parties to run the country fiscally into the ground." You mean the way Clinton ran it into the ground? The Dems did have pay-as-you-go rules in effect under Clinton, and those rules are in effect now under Obama, having been suspended under Bush. Just a reminder that the outcome you expect is not inevitable. :-)

And finally I'd just point out that even if you disregard all the projections and end that chart at the 2011 time point, it's still obvious what the relative contribution to the deficit is from Bush versus Obama.
07/19/2010 12:41:52 AM · #94
As much as I appreciate Clinton's running a surplus, let's not get ahead of ourselves. Congress was ready to spend all that surplus money the moment it came in the door. Also, much of the taxed wealth which increased revenue (the real reason we had a surplus rather than any real fiscal restraint) we now know was illusory; a bubble brought on by our pal Greenspan. The actual public debt barely levelled under Clinton's last years and then, of course, took off again under Bush and now Obama.

There is no use defending the dems as some bastions of fiscal restraint just because Clinton managed to run a surplus for a year or two. As much as I like Obama (and I think he's the best president we've had since I've been alive), he is taking an absolutely huge risk buying into Keynsian economics which is all theoretical instead of tested on this level. It also, obviously, mortgages our future. At some point all this spending is going to have to be paid for. There are three and only three ways to do it. 1) Raise taxes massively. 2) Cut spending massively. 3) Default and pay the social, economic, and military price. There's probably a fourth way, but I'd consider it under #3 which is to devalue the dollar so much that the janitor makes $1 million a year and our debt now becomes worthless. Frankly though, our creditors would wage literal war upon us before that actually happened.

The rest of the world will be little better and I see a time of great social upheaval as countries will literally fight to get to the top.
07/19/2010 06:47:40 AM · #95
I think Obamas big mistake was not to ask for a lot (and I mean a lot) in return for the TARP money given out. The companies that received aid are in good shape and posting some huge profits while little change occurred in the ways they operated...bonus hand-outs, golden parachutes, stock rewards, overpaid execs etc. On the other side the taxpayers who flipped the bill are still getting shafted some barely keeping their heads above water...if they're lucky.

I wonder how the unemployment running out will affect us?
07/19/2010 12:26:12 PM · #96
Originally posted by pawdrix:

I think Obamas big mistake was not to ask for a lot (and I mean a lot) in return for the TARP money given out. The companies that received aid are in good shape and posting some huge profits while little change occurred in the ways they operated...bonus hand-outs, golden parachutes, stock rewards, overpaid execs etc. On the other side the taxpayers who flipped the bill are still getting shafted some barely keeping their heads above water...if they're lucky.

I wonder how the unemployment running out will affect us?


I believe TARP is (or will) actually make money instead of lose it for the taxpayer. The real black holes are AIG, Freddie and Sallie. IIRC those do not count under TARP. The government will actually make money, for example, on their sale of Citibank stock.

EDIT to correct: AIG is considered part of TARP and will probably be where most (if any) loss will come from. According to a Reuters article cited in Wiki from April, 2010, the TARP cost was down to $89 billion.

Message edited by author 2010-07-19 12:31:44.
07/19/2010 01:36:47 PM · #97
Originally posted by DrAchoo:

Originally posted by pawdrix:

I think Obamas big mistake was not to ask for a lot (and I mean a lot) in return for the TARP money given out. The companies that received aid are in good shape and posting some huge profits while little change occurred in the ways they operated...bonus hand-outs, golden parachutes, stock rewards, overpaid execs etc. On the other side the taxpayers who flipped the bill are still getting shafted some barely keeping their heads above water...if they're lucky.

I wonder how the unemployment running out will affect us?


I believe TARP is (or will) actually make money instead of lose it for the taxpayer.


I think they should have been asked then and there to give back to the community, if/when things turned around AND that was the time to bang them with a little, little bit of reform OR at least had them agree to reform and stop not allow for lobbying until all the money was paid back.

As it was, pay and compensation in all forms remained high for the top few while they layed off thousands of people. The same imbalances occurred even when they were down...with our money.
07/19/2010 03:47:28 PM · #98
Originally posted by pawdrix:

Originally posted by DrAchoo:

Originally posted by pawdrix:

I think Obamas big mistake was not to ask for a lot (and I mean a lot) in return for the TARP money given out. The companies that received aid are in good shape and posting some huge profits while little change occurred in the ways they operated...bonus hand-outs, golden parachutes, stock rewards, overpaid execs etc. On the other side the taxpayers who flipped the bill are still getting shafted some barely keeping their heads above water...if they're lucky.

I wonder how the unemployment running out will affect us?


I believe TARP is (or will) actually make money instead of lose it for the taxpayer.


I think they should have been asked then and there to give back to the community, if/when things turned around AND that was the time to bang them with a little, little bit of reform OR at least had them agree to reform and stop not allow for lobbying until all the money was paid back.

As it was, pay and compensation in all forms remained high for the top few while they layed off thousands of people. The same imbalances occurred even when they were down...with our money.


I agree completely. The Congress and/or the administration should have had strict requirements for compensation at the very least. As it stands now, I'm not sure that anyone was even fired, although some of the top guys resigned. Do you know if anyone was fired?

As for unemployment running out and how it will affect us, do you mean effects on the economy, like pushing the unemployment rate even higher?
07/19/2010 04:52:14 PM · #99
Originally posted by DrAchoo:

As much as I appreciate Clinton's running a surplus, let's not get ahead of ourselves. Congress was ready to spend all that surplus money the moment it came in the door.


Which Congress are you talking about?

Originally posted by DrAchoo:

Also, much of the taxed wealth which increased revenue (the real reason we had a surplus rather than any real fiscal restraint) we now know was illusory; a bubble brought on by our pal Greenspan. The actual public debt barely levelled under Clinton's last years and then, of course, took off again under Bush and now Obama.

There is no use defending the dems as some bastions of fiscal restraint just because Clinton managed to run a surplus for a year or two.


I really have to disagree with you on this point. Clinton certainly deserves criticism on several policy points, and goodness knows I've done my share of bashing him. But the one thing, in my opinion, he deserves credit for is the surplus. You make it sound like it was just a lucky occurrence because the economy was doing well at the time (whether illusory or not). You're wrong about that. Clinton implemented a major tax increase in 1993 in order to move towards balance in the Federal budget. Spending and taxation policies constitute fiscal policy. So, to assert that there was no fiscal discipline imposed by the Clinton administration is to overlook the role of taxation as a pillar of fiscal policy. If you recall, the Republicans at the time predicted that this tax increase would be "the ruination of the country." It cost him, too, in popularity. He had to buck a lot of interests to accomplish that surplus, so it kind of perplexes me why you, or anyone else, would want to minimize it.

Originally posted by DrAchoo:

As much as I like Obama (and I think he's the best president we've had since I've been alive), he is taking an absolutely huge risk buying into Keynsian economics which is all theoretical instead of tested on this level.


What do you mean by "this level"? You probably know this already but I'll say it anyway, that economists agree it was the huge and truly unprecedented fiscal stimulus from deficit spending (100 percent of GDP) on World War II that finally jolted the American economy out of the Great Depression. Now, it is not necessary for a fiscal stimulus to take the form of military spending, but there is no debate about the fact that huge expenditures on military hardware and personnel during World War II constituted a major fiscal stimulus. In fact, there were many economists arguing that the Obama administration's stimulus should have been much larger than the weak half-measure they managed to pass through Congress. Unfortunately, deficit spending and stimulative monetary policies are really the only arrows that government has in its quiver to deal with an economic collapse of this magnitude. In fact, a downturn of the magnitude being experienced today typically renders monetary policy impotent (as a consequence of what is known as the "liquidity trap" -- in other words, interest rates pushed to almost zero percent by the Fed do not have the desired stimulative effect on the economy when businesses cannot obtain credit or have few prospects of earning a positive return on their investments or new hires). This leaves fiscal policy as the critical component to be used in combating a severe economic downturn.

And, by the way, Keynesian economics isn't just about deficit spending during a downturn. The other part of the "theory" is that when economic times are good (and there is the threat of the economy over-heating), government should rein in spending and/or raise taxes, pay down its debt, and implement restrictive monetary policy. In other words, Keynesian economics involves counter-cyclical measures, an aspect often overlooked by those who equate Keynesian policies with nothing other than piling on more and more debt.
07/19/2010 10:53:00 PM · #100
Two often in Rant when two people discuss something the assumption is that they are on polar opposites. I do want to make sure that I probably agree with Judith on a great many things, just not on everything.

My lack of faith in Keynsian economics comes in on the "second half" that Judith speaks about. If you borrow from the future to kick start the economy now with government spending, you need to pay that back in the future. The only way to do that is to either raise the effective amount of taxes or to have the economy go so well that the repeated surpluses pay off the borrowing. This is the point I have absolutely no faith that anybody in power would "do the right thing". It would be political suicide and politics rule. No matter if we were doing well or poorly, it will always be the wrong time to raise taxes.

The wiki on Keynes had this apt line: He (Keynes) argued that governments should solve problems in the short run rather than waiting for market forces to do it in the long run, because "in the long run, we are all dead."

I may be dead, but my children won't be.

Message edited by author 2010-07-19 22:53:46.
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