December 19, 2007
Republicans Raising Taxes: Again
The Republicans in the White House, the Senate, and the House of Representatives have already raised taxes on Americans by 3.4 Trillion dollars since 2001. That is the amount that has been added to the national debt under their rule, to be paid by future American taxpayers like your and my children and grandchildren. But, it gets very much worse.
The interest on that 3.4 trillion dollars will amount to at least half that amount again, as it is paid year after year for decades on the principle borrowed from Saudi Arabians, the Chinese government, and India and American treasury lenders. The fact is Republicans have raised taxes by 5.1 Trillion dollars. The raise conveniently was passed on to future taxpayers who are not old enough to vote or have a say in the matter, yet.
Rep. Roy Blunt (R-Mo) said today on the House floor that Republicans refuse to raise taxes to pay for this Alternative Minimum Tax relief bill today costing 50 billion dollars. But, he is lying through his teeth, as Republicans have since 2001. The fact is, this Congress IS raising taxes on our children: by not only the 50 billion dollars they won't tax current payers for, but, an additional 30 billion dollars in interest on that 50 billion by the time it is paid off, if it is ever paid off.
So, the reality is, not only are Republicans passing the cost of the Alternative Minimum Tax bailout for wealthy and middle class on to future taxpayers, they are electing to raise that cost by 30 billion in interest over what it would cost if they raised taxes or cut spending for it today. Rep Steny Hoyer (D) said this is a very sad day for his grandchildren.
And it is a very sad day for America's children. In fact, it has been a very sad seven years for our children and grandchildren whom we have denied the quality of life we enjoy by passing the cost of our enjoyment on to them in their work lives and careers through their taxes which will have to shoulder this national debt and interest payments.
This country was founded on a revolution against taxation without representation. Yet, the nearly 9.2 trillion dollars in national borrowing is precisely a tax levied on future generations who have no representation or voice in the matter. Pretty damned clever of these politicians to come up with a way to play the thief on the one hand, while professing to be tax defenders to their voting constituents on the other. And today's voters are just as guilty as they continue to vote more than 90% of these thieving politicians back into office election year after election year.
If American voters would only ask themselves if they, at the age of 5, would have wanted their parents to raise their taxes for the entire rest of their lives, just so a thousand companies could enjoy Cayman Island tax breaks, or so hedge fund managers making 1+ billion dollars a year could buy a 4 foot longer yacht, they would surely vote these thieving politicians out of office.
Posted by David R. Remer at December 19, 2007 03:33 PMright on David
Been my point for along time
The Right wing is all against “taxes” (for the upper class, us middle and lower class get to pay for their share of the bill) and they SAY they are FOR personal responsiblity — but when it comes time to pay to play, they prefer to play now, and let someone else pay later and then
point proudly to the fact that they didn’t raise taxes (which to me means they are freeloading and skipping out on their bills!! — not really the role model of Personal responsiblity)
Just another thing we can thank progressives for, before FDR and his failures at handling the depression until WWII came along, the thought of deficit spending was an abomination. Now it is an every day occurance because so many now think that they are owed something by the government and if we can’t afford it now, just charge it!
In 1929, federal expenditures constituted only 3% of the GDP. Between 1933 and 1939, they tripled, funded primarily by a growth in the national debt. The debt as proportion of GNP rose under Hoover from 20% to 40%. Roosevelt kept it at 40% until the war began, when it soared to 128%.Posted by: Rhinehold at December 19, 2007 05:14 PM
Will all the spending and spending with no end in sight, why would Congress (Dems and Reps) continue to pack the Omnibus with pork?
Admittedly, CNS and The Heritage Foundation are right wing sites, but they do have a good idea.
Take a vacation. Yep, take a vacation to all the places YOU have already paid for…with PORK in the budget.
Some of the places you can visit because YOU paid for it with Congressional PORK.
Posted by: Jim T at December 19, 2007 05:22 PMJim T-
You know, if you weren’t so busy bashing us, you might find that many liberals dislike pork, waste, and deficit spending, too.
If Democrats and Republicans both got together and made their wishes clear, we could get somewhere.
What it would take is more compromise on the notion of what constitutes proper spending, a definition of pork that is effective.
That is one problem in defining the problem, since some Republicans are so extreme in their definition of government waste.
This is one of many problems Republicans could take care of better if they were more willing to compromise with others.
Posted by: Stephen Daugherty at December 19, 2007 06:16 PMDavid:
Your article completely misses the point. And it is one you have made many many times.
Our current federal debt situation ($9 Trillion) is not a huge problem. Show me an economy for instance that has a debt to GDP ratio like ours that is near collapse. They simply do not exist.
In addition you mention interest expense. Interest expense is actually on a historical basis not that bad because interest rates have fallen. So when you measure the effect of interest on the economy it’s not that bad at all. Certainly nothing to worry about.
This amazes me, to bring up your issue. The issue is the future. It is promise made that cannot be paid for. That is the issue.
America can run at debt levels of 60% of GDP for ever without a problem. That means our debt can grow at the same rate of Nominal GDP forever, get that, forever without a problem.
THEE problem, which again is your issue that you didn’t touch is entitlement spending in the future.
The last five years have not been that big of a deal. We have a war and had a recession and debt to gdp went up a few percentages and has been stable for the last several years and may now be declining.
Proof that we are currently ok is the bond market. There is no way on God’s green earth you can have a country in fiscal difficulty with 4-5% interest rates on it’s notes. Can’t be.
We do have a problem. It’s entitlements, entitlements entitlements. Actually to me more specific it’s medical medical medical. Our medical system is not working and needs to be fixed. Fix our medical system and our future fiscal problems decline dramatically.
Craig
Posted by: Craig Holmes at December 19, 2007 06:46 PMRhinehold:
Exactly how did WWII rescue the economy, if it wasn’t through deficit spending? Was it a reaction to bullets penetrating the ozone? What is the magical link exactly that you think expanded the money supply?
Deficit spending isn’t any more evil than a gun.
You love to curse FDR. Is it Hitler or Tojo we need to thank?
Libertarians really need to study economics.
Things have changed since 1913 and 1929 in many fields. The Fed may be evil, but it is also based in fact, rather than fantasy.
Craig, you said the sub-prime mortgage bubble wasn’t going to be a problem too. I can no longer accept your incredible optimism that there is no debt too great until an economic collapse occurs. That manner of thinking utterly fails any kind of conservative principle prophylaxis to prevent negative outcomes BEFORE they occur.
Posted by: David R. Remer at December 20, 2007 01:18 AMCraig,
Actually, its violating trust funds and irresponsible spending, and expansion of entitlements irresponsibly that is the problem.
Irresponsible spending is a problem, not entitlements, per se. It’s the redistribution of wealth to thieves that’s a problem.
David,
It isn’t the size, it’s what you do with it.:)
Seriously, it’s relative size (although, in a fiat system that’s not real important) and RESPONSIBLE deficit spending that resolves a contraction.
Prosecuting fraud, limiting profiteering and promoting trust are important in stabilizing an economy.
Posted by: googlumpus at December 20, 2007 01:32 AMgooglumpus,
I’ve responded in the other thread, albeit a bit more rationally and without breaking the Rules For Participation…
Posted by: Rhinehold at December 20, 2007 02:56 AMBTW, the deficit spending did not put an END the depression, it helped curb it until a real solution could be found, which was after WWII.
Along with the Holocaust of WWII came a revival of trade with America’s Allies. The war’s destruction of people and resources did not help the US economy but this renewed trade did.Posted by: Rhinehold at December 20, 2007 03:22 AMNot until both Roosevelt and the war were gone did investors feel confident enough to set in motion the postwar investment boom that powered the economy’s return to sustained prosperity.
googlumpus said the size of the debt isn’t the problem.
Tell that to the USSR in the 1980’s, or Brazil in the 1970’s and 1980’s. The size is important when it exceeds any reasonable expectations of repayment.
The sub-prime mortgage industry bubble is a prime example of how size of debt comes crashing down when repayment is no longer possible.
C’mon, man, this is economics 101. You don’t borrow more than you can repay in a relatively short time. Otherwise the interest denies you savings by eating all your increases in revenue in perpetuity, thus keeping you indebted, poor, and limited as to options and choices.
Which accurately depicts America’s future from this point forward, indebted, poorer, and increasingly limited in its affordable options. There are a minimum of 44 Trillion dollars in borrowing staring America square in the face with Soc. Sec. and Medicare. That’s a total of 53 Trillion dollars of national debt.
There isn’t a single rational economist in America who will tell you we can float that kind of debt and enjoy the wealth of choice, lifestyle, health we experience today. The size does matter to the next generations shouldering it.
Posted by: David R. Remer at December 20, 2007 09:18 AMStephan,
You said…
“You know, if you weren’t so busy bashing us, you might find that many liberals dislike pork, waste, and deficit spending, too.”
Well, then why don’t the Dems in Congress SHOW it?
I know beyond a shadow of a doubt that Reps never met a pork program that they didn’t like.
So, why don’t the Dems LEAD in cutting pork instead of saying, “Me too!”? I mean, the Dems have the majority. Why doesn’t Nancy Pelosi or Harry Reid stand up and say, “No pork in this budget from the Dems! If there is pork in the Omnibus, it is Rep pork!”?
Why? Why not take the high moral ground on this instead of packing the Omnibus with pork and just keeping their mouths shut?
One of the parties needs to take the lead…to take the moral high ground on this and castigate the other party until it drops its pork packing as well.
I have no doubt that many Libs hate pork and waste as well.
Just have the cajones to SHOW it…and MEAN it!
Posted by: Jim T at December 20, 2007 11:55 AMJim T, and excellent retort. And of course the answer to you inquiry is, political parties get their office holders reelected on that pork.
Until voters vote out 30% or more of incumbents in a single election on both sides of the aisle, pork will be politician’s first priority when it comes spending.
Posted by: David R. Remer at December 20, 2007 12:31 PMdavid
the amt needs to be fixed. i’de say we pay for it by cutting spending in other places. i also find it interesting that this tax which took affect in i believe 1969 was not set up to be ajusted for inflation each year. i’m sure that was no mistake. the dems who championed this, knew it would be a big money maker over time, probably the same reason the estate tax was never indexed for inflation either. i don’t believe we should keep running up the national debt, but we also cannot allow congress to keep spending money they don’t have, and then putting out thier hands and demanding more. i would say a possible fix would be to freeze federal spending at it’s current level for the next few years. not everything needs to be increased every year. we could then evaluate the situation. we hear the whinning every year about those mean old republicans wanting to cut funding for social programs, when in reality thier not cutting funding only the size of the increase in funding.
Posted by: dbs at December 20, 2007 12:40 PMdbs said: “the amt needs to be fixed. i’de say we pay for it by cutting spending in other places.”
Well, Democrats have been trying since Jan. to cut spending in Iraq. Republicans won’t hear of it. Republicans have been trying to get an across the board cut without any prioritization (simple solution for simple minds), but the Democrats won’t hear of it.
If spending cuts are off the table by both parties, that only leaves raising taxes on some or all next year to pay for the AMT lost revenue resulting from the band aid approach, or passing the 50 billion onto the national debt, which is the play the Republicans forced, since they rejected raising taxes for current tax payers.
Posted by: David R. Remer at December 20, 2007 03:51 PM
David:
Craig, you said the sub-prime mortgage bubble wasn’t going to be a problem too.
Here are some of your comments on the Housing slump:
As for your predictions this year, get back to me next week after the Fed responds at its FOMC meeting. And we will see how your prediction a year ago held up. And again early in 2009, as the spill over from the housing slump and sub-prime problems take a more substantial hold on economic data.
You seem to be implying an economic downturn, or recession.
Here are some comments of mine.
In a year from now the subprime issue will be gone and you and I will be debating another issue taking the same stance. I will be saying that the new economic issue is normal and you will be taking the position that it is yet another sign of doom.
I stand by my comments. You would need to provide me quotes of where I ever thought the housing issue wasn’t a problem. David, we always have, and always will have problems. Of course the housing issue is a problem. It looks like it will slow the economy for a while only to pick up speed again later in the year.
I can no longer accept your incredible optimism that there is no debt too great until an economic collapse occurs.
My incedible optimism is that America will continue to grow at or near it’s mean average. Meaning we will muck through. This is of course shared by Alan Greenspan and Bernanke whose economic forcasts are about the same.
That manner of thinking utterly fails any kind of conservative principle prophylaxis to prevent negative outcomes BEFORE they occur.
You fail to show examples of economies in distress with 60% debt to gdp rations. If you find some let me know.
Posted by: Craig Holmes at December 20, 2007 06:52 PMgooglumpus
Irresponsible spending is a problem, not entitlements, per se. It’s the redistribution of wealth to thieves that’s a problem.
Actually if you really drill into the problem it’s medical expenses on the rise that is the long term threat.
Greenspan says that at some point they will begin to rise at levels that are consistent with gdp nominal growth.
I agree with your comments on responsible deficit spending. We need a valid government securities market in a modern economy to manage our trade etc. In general we are doing a reasonable job.
I am concerned about what is coming over the horizon with out reform. I firmly believe however that reform will come.
Craig
Posted by: Craig Holmes at December 20, 2007 07:14 PMCraig Holmes wrote: David: Your article completely misses the point. And it is one you have made many many times. Our current federal debt situation ($9 Trillion) is not a huge problem.No?
On which planet?; in which galaxy?; in which dimension?
Maybe in the land of Zanadu?
Let’s see:
- $9.2 Trillion National Debt
- Interest alone on the National Debt is over $1 Billion per day!
- $12.8 Trillion borrowed and spent from Social Security; great timing too with a 77 Million Baby-Boomer bubble.
- $450 Billion PBGC Pension Debt
- The U.S. Dollar falling like a rock.
- Two wars with no end in sight in Iraq and Afghanistan, costing many tens of billion per month.
- Hundreds of Billion$ of unfunded liabilities for Medicare.
- A tax system that is regressive (among other regressive/oppressive systems).
By the way, Article V is being violated.
That is not the only Constitutional violation.
Let one violation pass, and you can expect more to follow.
QUESTION: When will voters finally understand that rewarding Congress with 95% to 99% re-election rates ain’t workin’ ?
ANSWER: When failing to understand that becomes to painful.
Other than that, yeah boy! Everything is rosy!
Keep those rose-colored glasses on and see where it gets us.
We don’t need to raise taxes.
We need to fix it so that it isn’t REGRESSIVE, among these other many REGRESSIVE/OPPRESSIVE systems that did not all come about by mere accident.
Hmmmmm … do ya think repeatedly rewarding incumbent politicians with 95% to 99% re-election rates may be a tiny bit of the problem?
Anyone who doesn’t thing massive debt, regressive taxation, and these many regressive/oppressive systems are not a problem, then please send me a pair of those rose-colored glasses you are wearing. I very much want to visit La-La land where you can believe anything you like.
Don’t pay anymind to the massive and growign problems behind that curtain.
Posted by: d.a.n at December 20, 2007 07:58 PMDan:
Simply show me an economy with debt to gdp ratios in the 60’s in a fiscal crisis because of debt. THERE ARE NONE.
Also, please point to a country that you admire their fiscal policies so I can review them.
CH
Posted by: Craig Holmes at December 20, 2007 08:02 PMCraig,
I agree it is healthcare that is causing problems. It has outstripped inflation since the 50’s. Some are making a killing, even though the aging population and technology partly play into this. The Insurance industry has handled this irresponsibly, in my opinion, and turned from common sense into a cost plus boondogle.
This is why I am for National Healthcare. I too, believe a solution will arrive.
Rhinehold,
Actually you haven’t responded with a rational answer, IMO, you mostly falsely accused me of a Rules Violation. Playing victim to dismiss my question’s doesn’t answer my questions.
I agree trade with Europe and Japan helped our economy. I agree destroying Europe did not help our economy, except in the full employment of our workforce. Do you really believe it was the Death of Roosevelt that cured the Depression? Do you think the Mercantilism (or Trade, if you prefer)of the post War, the phenomemal deficit spending of the War, or the stability of the Marshall Plan had nothing to do with it? You treat Roosevelt as if he were Hitler. That’s bizarre, IMO. This is why I find many Libertarians strange in Economics.
David,
I was joking about size, and said relative size in the serious portion of my answer. I agree with Craig on this. I only finished Econ 101 thru 103, but I did get an A.
googlumpugus:
I agree it is healthcare that is causing problems. It has outstripped inflation since the 50’s. Some are making a killing, even though the aging population and technology partly play into this. The Insurance industry has handled this irresponsibly, in my opinion, and turned from common sense into a cost plus boondogle.Posted by: Craig Holmes at December 20, 2007 11:40 PMThis is why I am for National Healthcare. I too, believe a solution will arrive.
googlumpugus:
Oooops. Sorry about previous post.
I think that the solution will appear when medical expenses start to show up in increases in the federal budget as a whole. Since the 1950’s other expenses have roughly declined by about the same percentage. (Defense spending comes to mind).
When that is over and medicare costs mean tax increases I think change will come.
Actually you haven’t responded with a rational answer, IMO, you mostly falsely accused me of a Rules Violation. Playing victim to dismiss my question’s doesn’t answer my questions.
Falsly accused? Do you want me to go over it again here too? The *BEST* you could say is that you were accusing the ASE of being Nazis (with a smiley face) and that I was spewing their propaganda as a libertarian would. You can play it off all you want to but you don’t seem to understand that I find this very offensive and that you can’t even for a second acknowledge that and instead use my indignance as another attack against me is telling.
As for a rational answer, please tell me in what way is my answer not ‘rational’? You have yet, once, to even address anything that I’ve actually said, just repeating that it was the monopolists and free marketers that caused the depression and the holy FDR that saved us all when the FACTS do not at all back this up. Why was there a depression in 1937? Why did we not have an actual recovery until after the war? For a decade FDR could not spend us into recovery, his finance secretary during that time admitted that they failed miserably and the people in 1939 were two to one blaming FDR for the continued state of affairs because of how he was treating business.
So now that I’ve stated just a FEW of the things to back up my point, what say you? What caused the recession of 1937 as a start?
I agree trade with Europe and Japan helped our economy.
Good
Do you really believe it was the Death of Roosevelt that cured the Depression?
I think I made it pretty clear what cured the depression, it was the removing the clenched fists from around the throat of business that created an atmosphere for investment that spurred on the recovery. This occured partially during (business was needed to move forward with the war effort) and mostly after the war. Which is when the recovery actually occured, not during the 1930s. (And seriously, attempting to tax 100% of all income over 25,000 with a signing statement? 90% income tax and taxing the middle class for the first time, you think those were GOOD policies?)
Do you think the Mercantilism (or Trade, if you prefer)of the post War, the phenomemal deficit spending of the War, or the stability of the Marshall Plan had nothing to do with it?
Nothing to do with it? No, they were indeed helpful in creating that atmosphere of investment I talk about. But so was lessoning the stranglehold on business. This all occured during and after the war, not the 1930s when the New Deal was helping PROLONG the effects of the Depression.
You treat Roosevelt as if he were Hitler. That’s bizarre, IMO. This is why I find many Libertarians strange in Economics.
Of course it is bizarre because I do no such thing. FDR was FDR, not Hitler, not anyone else. He did some good things to get assistance to people and put in (what should have been temporary) programs to get people working again. He then went overboard and started fighting with business, the people who actually create the jobs and keep the economy going with re-investment business growth, causing them to scale back and put their money away in safe areas until it was clear what was going to happen to the economy. More than not, it was the constant up and down, changing field of play that business had to operate in during that time that caused them to be overly cautious against investing and spurring the economy that was needed at the time.
Perhaps it is because you don’t listen to libertarians and instead see us as nothing but Nazi propogandists that causes your issues with them?
Posted by: Rhinehold at December 21, 2007 12:21 AMI too, believe a solution will arrive.
Actually, the solution is already here in the form of Healthcare Savings Accounts.
The real problem, the dirty secret that no one wants to talk about, is why healthcare costs are increasing so much. To put it bluntly, there is nothing in the current system (put in place with the assistance of government, I might add) that insents people to watch what they spend on healthcare. People pay their 20 copay and just keep going, never paying any attention at all to the cost of what they are paying for, never challenging, never saying that they will start going to a different doctor because the rates are better. To them there is no difference.
The doctors then, having to maintain such a huge and unwieldy billing system, have to hire a whole industry just to maintain the paperwork shuffle. HMOs now fight with the doctors on the back end about costs, neither one actually be a) rational or b) the purchaser of the services.
HSAs put that power back into the hands of the individual who can either decide if he/she wants to pay 150 for an aspirin during a hospital stay or whether they will fight that billing until it become reasonable.
Only when an actual free market is in place, or a completely facsist healthcare system that the democrats want to implement is in place, will the costs get better. The ‘middle of the road nonsense’ that we have instituted now just doesn’t work, it is, to borrow a phrase from the Depression era, a boondoggle.
I think that the HSAs is the answer and helps retain our liberty. The progressives offer a different opinion, but what is a few loss of liberties between friends, eh?
Posted by: Rhinehold at December 21, 2007 12:28 AMRhinhold said: “I think I made it pretty clear what cured the depression, it was the removing the clenched fists from around the throat of business that created an atmosphere for investment that spurred on the recovery.”
Your view of history is so contrived as to be laughable. Government, BIG Government CONTRACTS with private companies for the War Machine and the vast expansion of the work that ensued is what strengthened the economy during the war years and long after as the production plants were converted to produce cars, refrigerators, radios, and air conditioners, as the men and women who had been earning wages during the war in the plants saved their money and unleashed those savings in the newly developed consumer product market after the war.
BIG Government saved the economy, by taxing present and future Americans and spending those taxes on the war and private production companies geared to the war. Those are the facts. Spin them however you wish, but, that was the cause and effect. In direct contradiction to Libertarian philosophy about small and unobtrusive government.
Posted by: David R. Remer at December 21, 2007 02:23 AMCraig said: “This is of course shared by Alan Greenspan and Bernanke whose economic forcasts are about the same.”
Why do you continue to perpetuate this falsehood to defend your position when time and again I have proven your statement false with Bernanke’s statement that the time to address entitlements was 10 years ago, and Greenspan’s comment that the debt and entitlement crisis threaten democratic capitalism itself?
Your comments no longer contain any accuracy and therefore have lost their credibility for me, at least.
Posted by: David R. Remer at December 21, 2007 02:29 AMRinehold
Spending accounts are not the answer when you don’t have enough to put into spending accounts
and spending accounts are not good when any surplus at the end of the year just disappears
(no one has explained to me how that is right)
The problem is not people using their insurance
The problem is NOT people going to the doctor — in fact, the problem would be lessened if people went to their doctors more often, and sooner.
The problem is people that cannot afford to go to the doctor at all — and no system that allows them to visit a doctor early, when the disease might be easily and cheaply cured or treated.
The uninsured utilize ER’s (the most expensive health care there is) as their clinics — our system FORCES them to. There is no other place where the law REQUIRES the hospitals to treat the patient. — so they wait until they are too sick to do anything else, and then they go to the hospital. My wife treats these people all the time, and they are VERY sick, and their treatment is VERY expensive — and you and I get to pay for it!!
It is a dirty little secret that you right-wingers or libertarians or whatever you are want to dismiss. We have socialized medicine — poor people DO get treated all the time, but because of YOUR paranoia about “socialized medicine” and what a hobgoblin it might be, we are forced to pay for an inefficient, expensive, ineffective form of socialized medicine.
Sooo, where do you think the money comes from to treat all the indigents that end up being treated at ER’s throughout the country??? Hmmmmm every wonder why it is sooooo damned expensive for a hospital stay, doctor visit, whatever??
two things actually
make up for the indigents (as above)
and make up for the piss poor reimbursements by the insurance companies.
We could start controlling health care costs if we had a system that encouraged everyone to go to the doctor MORE often — get an annual physical (why do you think the insurance companies FINALLY wised up and agreed to PAY for annual checkups??? — IT IS CHEAPER IN THE LONG RUN)
Let people get treated before they are so sick they
end up staying in 3,000 dollar a day hospital bed
end up losing their job — hurting their employer by being out of work
losing their home (and the bank losing their mortgage)
Hurting the economy by being out of work
Socialized medicine of some form — one that we acknowledge, instead of our current underground form, would go along way toward controlling health care costs.
Spending accounts are not the answer when you don’t have enough to put into spending accounts and spending accounts are not good when any surplus at the end of the year just disappears
Russ,
In the HSAs that I talk about that have just been ok’d, the money does NOT disappear at the end of the year. It in fact ends up being a ‘401k for healthcare’ that you can pump full of money (there is a yearly limit at the present time) that rolls over, earns interest, and can be used after you retire.
And it comes with catastrophic insurance (at least the one my employer offers does) that kicks in after a certain threshold of money has been spent in a single year.
It is a dirty little secret that you right-wingers or libertarians or whatever you are want to dismiss. We have socialized medicine — poor people DO get treated all the time, but because of YOUR paranoia about “socialized medicine” and what a hobgoblin it might be, we are forced to pay for an inefficient, expensive, ineffective form of socialized medicine.
‘whatever I am?’ It doesn’t take much investigation to find I am a libertarian and your post in the other column tells me that you really don’t know what that is.
But besides the point, I clearly stated that our current plan drives up prices because no one is ‘minding the store’ so to speak. Either a full fledged fascist system needs to be in place or the purchaser of the service has to be responsible/incented to keep the costs down. The middle of the road is not working.
I’m all for people being healthy, etc.
But catastrohpic healthcare is available to all it is not that expensive. Let the entire cost of that be reduced from every individual’s taxes if they purchase it. I think you’d find more people buying it then. There is no need to bring in governmental administration of the program if we just make it cost effective to have. Currently we do not do that, but the notion that a fascist healthcare system is the only solution is nonsense.
Posted by: Rhinehold at December 21, 2007 03:41 AMGovernment, BIG Government CONTRACTS with private companies for the War Machine and the vast expansion of the work that ensued is what strengthened the economy during the war years and long after as the production plants were converted to produce cars, refrigerators, radios, and air conditioners, as the men and women who had been earning wages during the war in the plants saved their money and unleashed those savings in the newly developed consumer product market after the war.
That goes against what googlumpus says ended the Depression, David, not me.
If the pre-war attitude towards business had still existed after the war, the recovery that the deficit spending during the war created would not have continued. In fact, Keynes was wrong about this as well when he predicted that just that would happen:
To Keynesians, the war economy showed just how large the fiscal stimulus required to end the downturn of the Depression was, and it led, at the time, to fears that as soon as America demobilized, it would return to Depression conditions and industrial output would fall to its pre-war levels
In fact, it most likely would have had the business environment been as brutal as it was before. But it wasn’t. People wanted to buy and businesses were able, because of this new environment, to invest in new businesses to sell those things that they wanted to buy, keeping the employment up and recovery going.
As I said, the war helped get to that point, I’ve never denied that, googlumpus did in the other column. But also wasn’t the end of the story, business can and will be chocked off when no profit is to be made…
My point, though, was that it was not DEFICIT SPENDING that ended the Depression and in fact, FDR’s war against big business (that really started in earnest in 1936 (re-election time)) that keep the recovery from coming sooner and caused the recession of 1937.
Please read the other thread to see my full point… In fact, this was my first comment:
it was the agressive actions taken against ‘big business’ that was the culprit, and when the noose around their necks was lessoned as they were needed for the lend/lease program and other military buildups, only then did the economy rebound.Posted by: Rhinehold at December 21, 2007 04:07 AM
Craig Holmes wrote: d.a.n: Simply show me an economy with debt to gdp ratios in the 60’s in a fiscal crisis because of debt. THERE ARE NONE.False.
- You are conveniently excluding a huge portion of the total $22 Trillion federal DEBT, which is 160% of GDP. Only a few other nations have a DEBT to GDP ratio that huge.
- To make matters worse, $12.8 Trillion has been borrowed and spent from Social Security, and the timing couldn’t be much worse with the approaching 77 million baby-boomer bubble (around 13,175 new Social Security recipients per day!).
- And the PBGC pension system is about $450 Billion in the hole.
- And Medicare is already in big trouble with hundreds of billions of unfunded liabilities.
- And the two wars in Iraq and Afghanistan also represent hundreds of billions of unfunded liabilities for many years in the future.
- And there is NO other nation (NONE) that has as much federal debt as the United States.
- In fact, the U.S. federal debt probably exceeds the debt of hundreds of nations, combined.
Craig Homes wrote: Also, please point to a country that you admire their fiscal policies so I can review them.There are a few nations that are more fiscally responsible than the U.S. So? Does that mean we should follow in their footsteps? Haven’t you seen the U.S. Dollar lately? It’s falling against the British Pound, Australian Dollar, Canadian Dollar, Chinese Yuan, Japanese Yen, and even the Argentine Peso (which we used to joke about for excessive inflation). A 1950 U.S. Dollar is now worth about 11 cents (or less).
The massive debt is being heaped onto tax payers now, and those of future generations. You think that’s fair? Nothing to worry about? Just because a few other nations are more fiscally irresponsible than the U.S. does not mean we should emulate them.
The warfare on the middle-income groups is real, as evidenced by these many regressive/oppressive systems, which did not all come about by mere coincidence. And please don’t tell me about GDP growth and assets, when:
- 1% of the U.S. population owns 40% of all wealth (up from 20% in year 1980) while household incomes have been stagnant for many decades (or falling if you consider that there are more workers per household)
- the tax system it unfair and REGRESSIVE
- too many taxes; especially too many REGRESSIVE taxes (i.e. sales taxes)
- inflation and the falling U.S. Dollar from an abused and diehonest money system
- a severely bloated, FOR-SALE, wasteful government that is essentially a plutocracy, as evidence by 83% of all federal campaign donations from only 0.15% of all 200 million eligible voters
- illegal immigration; our politicians are despicably pitting American citizens and illegal aliens against each other
- lies, blunders, and Constiutional violations
- Greedy banks, ridiculously high and usurious interest rates, predatory lending practices, and the Federal Reserve creates 89% of every new loan out of thin air and then collects the interest on it. What’s up with that? Hell of a deal, eh?
- $20 Trillion personal nation-wide debt
Rhinehold said: “My point, though, was that it was not DEFICIT SPENDING that ended the Depression”
And your point is point blank WRONG! During WWII America created the highest deficit spending and national debt to GDP ratio on record. Since, you make the point that the war did help end the depression, it certainly was not dying soldiers that caused it. It was the DEFICIT SPENDING on the war, much of which went to private contractors for munitions and equipment and energy development and replenishment. In addition, in the post war era, all those Savings Bonds sold to the AMERICAN public to fund the war, returned dividends to help fuel the new unleased pent up consumer demand.
Your whole attempt to paint FDR as anti-business when in fact, his entire war effort was dependent upon business, and they were profitable indeed under FDR during the War, is a prejudice and bias that simply isn’t born out by the facts. FDR’s criticism of business was primarily focused at Wall Street investors and speculators who were key to the 1929 Stock Market crash which precipitated the 1930 run on the banks and devastated so many small family savings accounts and earnings.
Which in turn fueled an enormous distrust of banks, speculators, and the industrial barons, whose laissez faire lobbying in Congress paid back the American people with a depression (actually not all that severe in unemployment terms, but compounded by the great dust bowl era to follow on its heels, which devastated so many family owned farms with foreclosures.) FDR is the founder of the comparatively safe and reliable REGULATED markets which investors enjoy and rely upon today.
Note that the sub-prime mortgage industry was entirely unregulated as are hedge funds, causing so very much financial, credit, liquidity, and economic problems in today’s business headlines.
Posted by: David R. Remer at December 21, 2007 09:28 AMRhinehold,
That goes against what googlumpus says ended the Depression, David, not me.
Actually it doesn’t, and apparently is a logical leap you make.
Deficit spending in a contraction expands the money supply and stabilizes aggregate demand and supply without restricting output. continued deficit spending in absence of a contraction causes inflation and overheating of an economy in macroecoomics as Keynes predicts and most rational economists accepted long ago.
Your conclusion that it was restrictive government policy towards business that was “released” during and post WWII isn’t supported by anything other than your contention that it was.
While I agree overly aggressive action toward business is detrimental, we apparently disagree on this definition.
Your blindness to a lack of oversite that led to some overreactive legislation such as Smoot Halley leads you to conclude erroneously that a return to this Laissez Faire (although you vigorously deny you support this) types of policy. You fail to define what is adequate oversite. You aver for gutting Government which will then be unable to provide oversite. This leads many to see Libertarians as Corporatists who use Liberty and as a disguise for promoting unrestricted business interests.
FDR did not do everything right. It was Keynes who understood the macroeconomic effects at play in the depression. This is pro government intervention. Government policy must be responsible and can have large economic effect. Now we arrive into today’s economy. Libertarian economics as I’ve read them will return us into the problems of the 19th century by ignoring the lessons or misrepresenting the history of the Depression. That is a problem for the Libertarian party.
googlumpus said to Rhinehold: “Your conclusion that it was restrictive government policy towards business that was “released” during and post WWII isn’t supported by anything other than your contention that it was.”
Quite correct. Since, it was the government that underwrote the vast increases in productivity that were adopted by whole industries borrowing from the Henry Ford model of specialized station production and time and motion studies, and to no small extent, the Henry Ford economic model as well, making products with wages that make one’s employee’s consumers of one’s products. It was dynamic and not the least bit restrictive in these regards.
The very concept of the government hiring civilian workers for public works projects, which in turn stimulated vast amounts of economic activity in the private sector after those public works were finished had an incredible long term economic effect, as in the Tennessee Valley Authority.
Posted by: David R. Remer at December 21, 2007 10:14 AMActually, the solution is already here in the form of Healthcare Savings Accounts.
LMAO…
Posted by: Rachel at December 21, 2007 10:49 AMDavid,
Greenspan is not God, but has clarified that as a solvable problem that becomes more difficult with time. He was not predicting the end of the US economy.
The only difference between your and Craig’s position, as I see it, is pessimism vs. optimism.
I, too, am an optimist about America.
Rhinehold,
I agree that unfettered and unmonitored spending is the problem and the half way solution is not a solution.
I think a National Healtcare system rather than HSA is more pratical, depending on how it is implemented. The system is now so corrupt a few players need to simply be removed. Insurance is one of them, frivilous lawsuits, and the AMA lack of oversite is another. Drug companies need to be reintroduced to a free market and deprived of advertising.
Healthcare should become a basic service of a wealthy industrialized nation. This is the moral choice. We don’t leave police, fire, or justice to the market place.
I’m not sure what liberties you insist this would deprive one of, but when your sick, I suspect liberty is rather moot.
Dan:
Ok, so here is what I conclude from your comments.
1. You know of no country with debt to gdp ratios in the 60% range that are in fiscal crisis before debt.
You state my numbers are incorrect but you use the same ones on your website.
2. You know of no other country that you care to name that you can point to who do a better job.
That means that insite of all your criticism we are still among the best in the world at managing our money IN YOUR OPINION.
Craig
Posted by: Craig Holmes at December 21, 2007 12:48 PMDavid:
Why do you continue to perpetuate this falsehood to defend your position when time and again I have proven your statement false with Bernanke’s statement that the time to address entitlements was 10 years ago, and Greenspan’s comment that the debt and entitlement crisis threaten democratic capitalism itself?
Because you take tiny quotes from them and build you case out of context.
Bernanke’s position on the economy and entitlements is that if we do nothing our children could see, I said could see as much as a 14% drop in standard of living over what it would have been assuming that we address the issue now. That means that their standard of living will still be higher than ours as productivity increases a 2% a year.
Second Greenspan is his recent book says that between now and 2030 GDP growth will be fine.
My simple answer to your question is that you are not well read in Bernanke and Greenspan and simply take a few quotes and run with them.
Posted by: Craig Holmes at December 21, 2007 12:52 PMCraig, it is you who are not well read. If you read the context of their rosier predictions you will find a number of contingencies that must be met for those scenarios to play out. IF you read their negative scenarios, you will see they are contingent on the status quo.
NOW, look at the prescriptions for the rosier scenarios and compare them to government action from 1990 to the present. They aren’t taking place. The status quo is remaining - and that is all that needs to happen for their far more dire predictions to occur.
Posted by: David R. Remer at December 21, 2007 01:08 PMDavid:
I will say I don’t admit to being an “expert” on these men. I have however read Greenspans recent book, and read nearly every speech Bernanke gives listed on the Federal Reserve website.
Both are good writers who speak plain english wish is more that Greenspan did when he provided testimony.
Neither is anywhere near your view point of a serious crash of our economy in the works. Both see Entitlements as an important issue that needs to be addressed. Basically they are far less extreme than you are. They don’t deny the issues you bring up. Actually they discus them frequently.
Just to give you a dividing line to measure, both believe standard of living will continue to rise in our country going forward. Their concern is that entitlements will slow that growth.
Unless I have missed something big time, you are of the opinion that unless drasitic action is taken up to and including voting out incumbants from office a serious downturn is in our future.
When they talk about a problem that doesn’t mean that they believe the economy is going to tank. That is the difference between what I read from your writings and what I read from theres.
I hope that clarifies things.
Do you still believe that a serious downturn will start in January because of the subprime issue?
Posted by: Craig Holmes at December 21, 2007 01:15 PMgooglumpus said: “Greenspan is not God, but has clarified that as a solvable problem that becomes more difficult with time. He was not predicting the end of the US economy.”
Another comment which speaks out of context. OF course Greenspan is not god, he is a Republican and he is partially responsible for the current sub-prime mortgage debacle. But, that’s another topic.
By solvable problem, if you are referring to national debt and unfunded entitlement mandates, he was indeed predicting the end of not only the U.S. economy as we know it, but, also the end of the democratic capitalist model for emerging nations, since its shining example will have been reduced to ashes by its own inherent flaws and weaknesses: public ignorance, corporate influence, and political gridlock in the face of prolonged and growing problems requiring sustained and consistent action years and even decades in advance of the problems becoming a political, economic nightmare.
His prediction was simply that if government cannot or will not get its fiscal house in order immediately, points of no return along the way to ruin will be passed by at increasing speeds and frequency.
Simply ending the entitlement programs does not solve the problem. All that does is push 100 million or more Americans into poverty in the coming decades and dramatically increase the risk of civil insurrection and revolution: collapse of the democratic capitalist model.
In using the words Democratic and Capitalism together he is depicting the double edged problem. A capitalist solution alone would cause a revolution against the government. A political solution alone, (increasing national debt to keep reelection bid successful) results in economic collapse as inflation hits with a vengeance as money is printed in ever larger amounts in a losing battle to pay the interest on the mountainous national debt of 25, 40, and 50 trillion dollars.
The solution must be both political and economic, and painful. There are no painless solutions to our future entitlement crisis. But, doing nothing will be catastrophic and doing nothing is precisely what politicians have been about for the last 15 years that this has been a growing emergency.
Like Bernanke said early this year, ‘The time to deal with the entitlement problem is 10 years ago’. Anything we do now will be painful. Anything we do later, will be even more so. Doing nothing will be catastrophic. The political landscape between Dem’s and Rep’s is such that neither side is going to propose painful solutions and risk losing political advantage. Ergo, the path forward is to do nothing.
So, yes, Greenspan was referring to the inevitable collapse of the economy and the political system as well, if we do not act responsibly today politically and fiscally. And therein lies the great threat to Democratic Capitalism, and not just here, but, around the world. If our system fails, other nations will move away from our failed model. That too should be plainly obvious.
Posted by: David R. Remer at December 21, 2007 01:28 PMCraig Holmes wrote: d.a.n: Ok, so here is what I conclude from your comments. 1. You know of no country with debt to gdp ratios in the 60% range that are in fiscal crisis before debt.False.
You just stated 60% above. However, our total $22+ Trillion federal debt is 160% of the $14 Trillion GDP.
Craig Holmes wrote: You state my numbers are incorrect but you use the same ones on your website.False.
I use the following numbers over and over and over, which also mentions ALL federal debt:
- $9.2 Trillion National Debt, with over $1 Billion of interest on it per day!
- $12.8 Trillion borrowed and spent from Social Security; now it is pay-as-you-go, with a 77 million baby boomer bubble approaching
- $450 Billion PBGC Pension debt
- hundreds of billions of unfunded Medicare liabilities for the next year
- hundreds of billions of unfunded liabilities for the wars in Iraq and Afghanistan
Craig Holmes wrote: 2. You know of no other country that you care to name that you can point to who do a better job.There are lots of countries that are doing better in a number of ways with regard to debt. That’s why their currencies aren’t falling like a rock like the U.S. Dollar has in the last five years:
- $1 U.S. Dollar fell from 0.98 EURO to 0.6825 EURO between Jan-2003 and Oct-2007
- $1 U.S. Dollar fell from 1.80 British Pound (GBP) to 1.07 GBP between Jan-2003 and Oct-2007
- $1 U.S. Dollar fell from 1.57 Canadian (CAD) to 0.926 CAD between Jan-2003 and Oct-2007
- $1 U.S. Dollar fell from 1.78 Austrailian (AUD) to 1.077 AUD between Jan-2003 and Oct-2007
- $1 U.S. Dollar fell from 1.46 Swiss Franc (CHF) to 1.13 CHF between Jan-2003 and Nov-2007
- $1 U.S. Dollar fell from 3.51 Argentine Peso (ARS) to 3.13 ARS between Jan-2003 and Nov-2007
- $1 U.S. Dollar fell from 31.8 Russian Roubles (RUB) to 24.59 RUB between Jan-2003 and Nov-2007
Craig Holmes wrote: That means that insite of all your criticism we are still among the best in the world at managing our money IN YOUR OPINION.That’s some of the most circular logic I’ve ever seen to date.
Where did I ever even imply that “we” (i.e. the U.S.) are among the best in the world at managing our money?
Especially when I’ve stressed over and over our:
- $22 Trillion of total federal debt
- $20 Trillion of nation-wide personal debt
- Trillions in trade deficits
- millions of foreclosures each of the last few years; the current housing slump is the worst since the Great Depression
- 1% of the U.S. population owns 40% of all wealth; up from 20% in year 1980; never worse since the Great Depression
- stagnant (or falling) household incomes (especially considering there are more workers per household)
- the money system is dishonest and mismanaged; incessant inflation is why a 1950 U.S. Dollar is now worth 11 cents.
Other than that, everything is rosy!
That is, if you are the 1 in 5 people that own 83% of all wealth in the nation.
I don’t give a damn how any other nation is doing.
This nation can be doing MUCH better.
Elimination of unfair and the 10 regressive systems mentioned above would be a good start.
The path we are on now, if we stay on it, will lead to more economic instability.
Another Great Depression is not far fetched.
And trying to constantly paint a rosy picture, rationalize mediocrity (or worse), is not helping get on a better path.
Craig said: “Just to give you a dividing line to measure, both believe standard of living will continue to rise in our country going forward. Their concern is that entitlements will slow that growth.”
You are grossly misunderstanding what they are saying. If entitlements go forward, our national debt goes up to 54 Trillion dollars by 2075. There isn’t Econ 101 student, let alone a single Federal Reserve Board governor who would say our economy can shoulder that kind of debt and survive. Entitlements will NOT slow our growth, they will destroy our economy by exacting taxes for service on that debt which almost entirely will be paid to foreign interests. Our economy would collapse with that kind of net export of American wealth to foreign nations and investors.
On the other hand, simply voting to end the entitlement programs and send workers out in the cold without their lifetime payments into the system and no benefits in return either, would create a political unrest whose potential could be nothing short of revolutionary. It is not a political reality. Politicians KNOW they would not be reelected if they cancelled these programs.
So, what is the solution? You see, this is where you have to read between Bernanke’s and Greenspan’s lines, real close. Because you won’t find an answer in the lines or between them. Both are excellent at outlining the problem, but neither will venture to lay out the details of the solution, because they don’t have one. The problem is that enormous, and so, Greenspan and Bernanke on the one hand make these statements about dire consequences of the entitlement crisis and just as quickly say it is a political and fiscal problem, not a Fed Reserve or monetary problem.
Then, they turn right around and use the assumption that government will somehow find a solution to the fiscal/political problem of entitlements, as a basis for saying: going forward, the economy will do just fine from their monetary perspective.
Posted by: David R. Remer at December 21, 2007 01:45 PMSo Dan which countries do you look to as doing a better job than we are?
Which are your shining examples?
Posted by: Craig Holmes at December 21, 2007 02:11 PMDavid:
So, what is the solution? You see, this is where you have to read between Bernanke’s and Greenspan’s lines, real close. Because you won’t find an answer in the lines or between them. Both are excellent at outlining the problem, but neither will venture to lay out the details of the solution, because they don’t have one.
Have you read Greenspan’s book?.
Posted by: Craig Holmes at December 21, 2007 02:15 PMCraig, no, I haven’t read his book. But, then his book is not about the future, it is about his past. He calls it “psychoanalysis of himself”. I prefer to let the data and community of historians speak about Greenspan’s experience and tenure as economist and Fed Governor, rather than his autobiographical explanation, which some have called his ‘apologetic vindication’.
Posted by: David R. Remer at December 21, 2007 02:56 PMIt was the DEFICIT SPENDING on the war, much of which went to private contractors for munitions and equipment and energy development and replenishment.
Again, this helped bring the country to the point where it could being a recovery, but had the environment been as it was between 1933 and 1939 the Keynsians would have been right in their suggestion of a return to a depression. Deficit spending alone could not end the depression because at some point that debt has to be paid back, which plays into it. Had decifit spending been enough we would have been out of the depression in 1937 instead of entering another recession because of these new attacks on business.
Your whole attempt to paint FDR as anti-business when in fact, his entire war effort was dependent upon business, and they were profitable indeed under FDR during the War, is a prejudice and bias that simply isn’t born out by the facts.
Bull. I’ve posted several facts that support my point, none of them have been challenged or refuted. Just ignored. 100% tax on all income over 25,000 via a signing order? Taxing the middle class for the first time? Changing the price of gold by 21 cents because 3 and 7 are lucky numbers? Implementing the NLRB that enforced saying no to a union demand illegal? But the real problem was the seemingly bipolar policies that FDR was putting into place, changing from month to month, causing businesses to not even begin to guess what the long term future was going to bring and backed off on most if not all investments and expansions.
What is invalid about this statement:
Roosevelt was pulled toward greater spending by Hopkins and Ickes, and as the 1936 election approached he decided to gain votes by attacking big business. Roosevelt rejected the advice of Morgenthau to cut spending and decided big business was trying to ruin the New Deal by causing another depression that voters would react against by voting Republican. It was a “capital strike” said Roosevelt, and he ordered the FBI to look for a criminal conspiracy (they found none). Roosevelt moved left and unleashed a rhetorical campaign against monopoly power, which was cast as the cause of the new crisis. Ickes attacked automaker Henry Ford, steelmaker Tom Girdler, and the superrich “Sixty Families” who supposedly comprised “the living center of the modern industrial oligarchy which dominates the United States.” Left unchecked, Ickes warned, they would create “big-business Fascist America—an enslaved America.” The President appointed Robert Jackson as the aggressive new director of the antitrust division of the Justice Department, but this effort lost its effectiveness once World War II began and big business was urgently needed to produce war supplies.
These were the actions of a pro-business administration? FDR was as anti-business as they come right up until the war started.
And then he became a great war president. Much like Bush didn’t… Had Bush taken the 9/11 situation as FDR did WWII and brought the country together as a leader, he would have huge numbers right now. But he failed miserably. Thankfully, FDR didn’t and backed off of his attack on businesses in order to fight the war and those relaxations of his 1936-1939 attacks on business helped ensure the economic environment was ripe when presented with the opportunities that the post war era provided.
Historian Jim Powell, in FDR’s Folly, points out that the median joblessness rate throughout the New Deal was 17.2 percent and never went below 14 percent. He says the Depression was worsened and prolonged “by doubling taxes, making it more expensive for employers to hire people, making it harder for entrepreneurs to raise capital, demonizing employers, destroying food…breaking up the strongest banks, forcing up the cost of living, channeling welfare away from the poorest people and enacting labor laws that hit poor African Americans especially hard.” However as Alvin Hansen pointed out at the time, few businesses were attempting to expand. The poor voted at the 80-90% level for Roosevelt according to public opinion polls. A study by Harold L. Cole and Lee E. Ohanian concludes that the “New Deal labor and industrial policies did not lift the economy out of the Depression as President Roosevelt and his economic planners had hoped,” but that the “New Deal policies are an important contributing factor to the persistence of the Great Depression.” They say that the “abandonment of these policies coincided with the strong economic recovery of the 1940s.”
Even his finance secretary admitted that they failed to do what they set out to do.
We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and now if I am wrong somebody else can have my job. I want to see this country prosper. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this administration, we have just as much unemployment as when we started. And enormous debt to boot.Posted by: Rhinehold at December 21, 2007 03:38 PM
I’m not sure what liberties you insist this would deprive one of, but when your sick, I suspect liberty is rather moot.
Have you heard of the phrase ‘Give me liberty or give me dealth’? Why do you think it no longer applies…
YOU may not care about your liberties that much but there are millions of people who do. Are their liberties just to be ignored because the majority says so? What about other liberties then, like privacy, life, property, etc? Subjects of the whim of the majority are they?
If there are two ways to do something, and one of them takes away personal liberty, shouldn’t we be trying to enact the other instead of taking the easy way out? Maybe put a little more thought behind it and come up with BETTER plans that don’t have to stomp on our personal liberties even further than they are now?
David:
He addresses many of your concerns in his book. Greenspan’s book has several chapters about the future. He has chapters on the future of energy, the future of entitlements and the future of the economy in general along with globalization, China, Russia etc. Public education. It’s actually quite comprehensive.
Here are some of his solutions:
On Income inequality. Greenspans view is that this issue has two causes, immigration and pubic education. He believes the only way to raise the bottom is through reforming public education. The ONLY way to improve the lower classes in his view is through increasing their skills.
In terms of lowering the top, Greenspan believes we should open our borders to well skilled immigrants to increase the labor supply of well skilled laborers.
On Entitlements here is a quote:
In the end, I expect Medicare funding imbalance to be resolved by rescinding the benefits of the more affluent. The frenzy of politics and the so-far intractable continued increase in income inequality, in my judgement, leave no other credible political alternative. Restored balance could occur through the development of private accounts (which I support) or through legislation requiring Medicare to be means-tested (as is Medicaid)
He has many thoughts on the future of our country and it’s problems. And actually is quite optimistic. He expects for instance GDP growth to average about 2.5% which is a bit under the mean but still good!!
Greenspan has ideas and solutions for every problem you mention, and looks to an optimist future.
Posted by: Craig Holmes at December 21, 2007 03:56 PMCraig if this is all he has to say: “In the end, I expect Medicare funding imbalance to be resolved by rescinding the benefits of the more affluent.”
He does not Address the issue at all. First, simply removing the wealthy from the benefit rolls in NO WAY compensates for the 40 Trillion unfunded Medicare mandate.
Second, he does NOT offer ANYTHING to base his expectation on. Certainly NOT the past, since the past is full of increasing the unfunded mandate not decreasing it, as in the Rx drug legislation.
Thanks for showing that his book offers nothing of relevance regarding the future, though.
Posted by: David R. Remer at December 21, 2007 04:14 PMRhinehold asked: “What is invalid about this statement:”
First of all the fact that it lacks a source and context. That will do for starters.
Posted by: David R. Remer at December 21, 2007 04:19 PMDavid:
Every comment you make shows me you need to reed Greenspan. You should read him more.
Posted by: Craig Holmes at December 21, 2007 04:28 PMCraig Holmes wrote: So d.a.n which countries do you look to as doing a better job than we are? Which are your shining examples?
Take your pick. The United States places 4th in the nations with highest total federal debt as a ratio of GDP of 121 nations:
- 001 Lebanon 209.00% (2006 est.)
- 002 Japan 176.20% (2006 est.)
- 003 Seychelles 166.10% (2006 est.)
- 004 United States 160.00% (2006 est.)
- 005 Jamaica 133.30% (2006 est.)
- 006 Zimbabwe 108.40% (2006 est.)
- 007 Italy 107.80% (2006 est.)
- 008 Greece 104.60% (2006 est.)
- 009 Egypt 102.90% (2006 est.)
- 010 Singapore 100.60% (2006 est.)
- 011 Belgium 90.30% (2006 est.)
- 012 Sri Lanka 89.60% (2006 est.)
- 013 Israel 89.00% (2006 est.)
- 014 Moldova 84.50% (2006 est.)
- 015 Nicaragua 82.70% (2006 est.)
- 016 Bhutan 81.40% (2004 est.)
- 017 Ethiopia 80.30% (2006 est.)
- 018 Jordan 72.20% (2006 est.)
- 019 Morocco 70.90% (2006 est.)
- 020 Uruguay 70.60% (2006 est.)
- 021 Cote d’Ivoire 69.40% (2006 est.)
- 022 Hungary 68.60% (2006 est.)
- 023 Malawi 68.40% (2006 est.)
- 024 Portugal 67.40% (2006 est.)
- 025 Honduras 67.10% (2006 est.)
- 026 Germany 66.80% (2006 est.)
- 027 Zambia 65.70% (2006 est.)
- 028 Canada 65.40% (2006 est.)
- 029 Cyprus 64.80% (2006 est.)
- 030 France 64.70% (2006 est.)
- 032 Turkey 64.70% (2006 est.)
- 033 Austria 63.00% (2006 est.)
- 034 Philippines 61.60% (2006 est.)
- 035 Panama 61.30% (2006 est.)
- 036 Argentina 61.00% (2006 est.)
- 037 Sudan 59.60% (2006 est.)
- 038 Mauritius 57.90% (2006 est.)
- 039 Tunisia 57.30% (2006 est.)
- 040 Croatia 56.20% (2006 est.)
- 041 Pakistan 55.00% (2006 est.)
- 042 Papua New Guinea 53.70% (2006 est.)
- 043 Costa Rica 53.40% (2006 est.)
- 044 Serbia 53.10% (2005 est.)
- 045 India 52.80% (2006 est.)
- 046 Switzerland 51.00% (2006 est.)
- 047 Netherlands 50.80% (2006 est.)
- 048 Kenya 50.50% (2006 est.)
- 049 Brazil 50.00% (2006 est.)
- 050 Poland 49.00% (2006 est.)
- 051 Vietnam 47.50% (2006 est.)
- 052 Bangladesh 46.70% (2006 est.)
- 053 Malaysia 46.70% (2006 est.)
- 054 Sweden 46.40% (2006 est.)
- 055 Aruba 46.30% (2005)
- 056 Dominican Republic 45.60% (2006 est.)
- 057 Colombia 45.30% (2006 est.)
- 058 Norway 44.80% (2006 est.)
- 059 Indonesia 43.80% (2006 est.)
- 060 Thailand 43.50% (2006 est.)
- 061 El Salvador 42.60% (2006 est.)
- 062 United Kingdom 42.20% (2006 est.)
- 063 Macedonia 41.50% (2006 est.)
- 064 Spain 39.90% (2006 est.)
- 065 Ghana 38.60% (2006 est.)
- 066 Syria 37.90% (2006 est.)
- 067 Finland 37.70% (2006 est.)
- 068 Trinidad and Tobago 36.60% (2006 est.)
- 069 Slovakia 36.10% (2006 est.)
- 070 Ecuador 36.00% (2006 est.)
- 071 Republic of China(Taiwan) 34.60% (2006 est.)
- 072 Bahrain 34.20% (2006 est.)
- 073 Peru 33.80% (2006 est.)
- 074 South Africa 32.90% (2006 est.)
- 075 Angola 32.70% (2006 est.)
- 076 Saudi Arabia 32.50% (2006 est.)
- 077 Korea, South 31.90% (2006 est.)
- 078 Namibia 31.60% (2006 est.)
- 079 Paraguay 31.30% (2006 est.)
- 080 Tanzania 30.50% (2006 est.)
- 081 Yemen 30.00% (2006 est.)
- 082 Uzbekistan 29.70% (2006 est.)
- 083 Uganda 29.30% (2006 est.)
- 084 Czech Republic 29.10% (2006 est.)
- 085 Slovenia 29.00% (2006 est.)
- 086 Gabon 28.60% (2006 est.)
- 087 Cameroon 28.40% (2006 est.)
- 088 Venezuela 28.40% (2006 est.)
- 089 Denmark 28.10% (2006 est.)
- 090 Bulgaria 25.60% (2006 est.)
- 091 Iran 25.30% (2006 est.)
- 092 Bosnia and Herzegovina 24.50% (2006 est.)
- 093 Qatar 23.60% (2006 est.)
- 094 Iceland 23.50% (2006 est.)
- 095 Mozambique 23.20% (2006 est.)
- 096 Ireland 22.80% (2006 est.)
- 097 People’s Republic of China 22.10% (2006 est.)
- 098 Romania 21.40% (2006 est.)
- 099 Mexico 20.70% (2006 est.)
- 100 New Zealand 19.90% (2006 est.)
- 101 Algeria 18.60% (2006 est.)
- 102 Guatemala 18.60% (2006 est.)
- 103 Lithuania 18.00% (2006 est.)
- 104 Senegal 17.80% (2006 est.)
- 105 Australia 14.10% (2006 est.)
- 106 Ukraine 12.70% (2006 est.)
- 107 Kazakhstan 11.00% (2006 est.)
- 108 Latvia 11.00% (2006 est.)
- 109 Azerbaijan 10.40% (2006 est.)
- 110 Nigeria 10.40% (2006 est.)
- 111 United Arab Emirates 9.00% (2006 est.)
- 112 Kuwait 8.10% (2006 est.)
- 113 Russia 8.00% (2006 est.)
- 114 Botswana 7.10% (2006 est.)
- 115 Libya 5.60% (2006 est.)
- 116 Wallis and Futuna 5.60% (2004 est.)
- 117 Equatorial Guinea 4.70% (2006 est.)
- 118 Oman 4.50% (2006 est.)
- 119 Chile 3.90% (2006 est.)
- 120 Estonia 3.60% (2006 est.)
- 121 Hong Kong 1.00% (2006 est.)
Total U.S. Federal Debt is from:
- $9.2 Trillion National Debt, costing over $1 Billion per day in interest per day!
- $12.8 Trillion borrowed and spent from Social Security; it’s not pay-as-you-go, with an approaching massive 77 million baby boomer bubble; the fictitious surpluses are nothing but government paper; where’s the money going to come from?
- $450 Billion PBGC Pension debt
- Hundreds of Billions of unfunded Medicare liabilities for the next 12 months
- Hundreds of Billions of unfunded liabilities for the two wars in Afghanistan and Iraq
- tens-to-hundreds of Billions of annual pork-barrel, graft, corporate welfare, subsidies, etc.
- inflation will exacerbate all of that above; a 1950 Dollar is now only worth 11 cents; the Canadian Dollar is worth more than the U.S. Dollar for the first time in history.
But, other than that, every thing is rosy!
That is, if you are the 1 in 5 people that own 83% of all wealth in the nation.
That is, unless you are the in the majority of Americans that are being hammered by these regressve/oppressive systems, which did not all come about by mere coincidence.
Craig, What is interesting about all of your excuses and rationalizations is the message: It is worse somewhere else; So we are doing great!
… as evidenced by your comment a few weeks ago:
America as a whole has never been this rich, and it’s getting richer all the time. It’s a great time to be an American
If we keep ignoring the warning signs (like Do-Nothing Congress), another Great Depression is not far fetched. There are already some signs. Some things now have never been worse since the Great Depression:
- total federal debt of $22 Trillion
- foreclosures in the millions for the past few years, and millions predicted for next year
- 1% of the wealthiest now own 40% of all wealth (up from 20% in 1980), which has never been worse since the Great Depression
- stagnant-to-falling household incomes for over 30 years
- many regressive/oppressive systems for the past 30 years
Every comment you make shows me you need to reed Greenspan. You should read him more.Funny!
What’s obvious about the Federal Reserve Chairman of the Board is their rosy outlooks. If they say something serious, it’s probably more serious than they are making out.
Posted by: d.a.n at December 21, 2007 04:45 PMDan:
So which one is your economy that in your opinion we should emulate?
Posted by: Craig Holmes at December 21, 2007 05:34 PMDan:
What is the sourse of your figures?
CH
Posted by: Craig Holmes at December 21, 2007 05:35 PMDan:
What’s obvious about the Federal Reserve Chairman of the Board is their rosy outlooks.
Remember your definition of Rosy is that the economy will grow under it’s long term mean average. That is Greenspan’s prediction. 2.5% real growth between now and 2030.
So if you say growing less than average is rosy, then your prediction must be,,,,,,,, draconian?
Both you and David are on the far far pessimistic side. Actually way off the charts on the pessimistic side.
Posted by: Craig Holmes at December 21, 2007 05:43 PMFirst of all the fact that it lacks a source and context. That will do for starters.
Ok, let’s say that passage was from Freedom from Fear: The American People in Depression and War, 1929-1945 By David M. Kennedy.
Now, let’s address what was actually stated, is it valid or not?
Posted by: Rhinehold at December 21, 2007 06:15 PMRhinehold,
Again what liberties would National Healthcare deprive one of? Patrick Henry is a great quote, but not an answer.
I wanted to add to all here d.a.n., David, Rhinehold, Craig…and any I’ve missed…this is a delicious thread. You guys are amazing at your abilties to source and edify, I’ve been reading this with joy. Thanks to all and continue please.
Posted by: googlumpugus at December 21, 2007 08:45 PMDan:
I get a list nearly identical to the one you show above for debt of countries. My sourse is here:
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html
The difference of course is that the United States is ranked 4th on your scale and 26th on the CIA handbook scale.
To what do you account for the difference? In fact if you look at your list it there is a mark at number 26 where the United States should fit in.
It looks like you doctored the chart. In addition if you look on your website one simple idea, you list federal debt at about the same percentage of gdp as would be on the CIA list.
Anyway which country do you want to compare us with?
How about Estonia? They have low debt.
Posted by: Craig Holmes at December 21, 2007 10:52 PMCraig, there you go again, saying d.a.n and I are the ones way too pessimistic when it was your own quoted sources Bernanke and Greenspan issuing the pessimistic warnings. Bernanke said of entitlement mandates: “The longer we wait, the more severe, the more draconian, the more difficult the objectives are going to be. I think the right time to start was about 10 years ago.” And Greenspan said: “The income gap between the rich and the rest of the U.S. population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself.” which is precisely what the entitlement crisis bodes for the income gap.
These are the words of the very sources you cite for a more optimistic view of wishful thinking that Congress and the White House are going to make nice and responsible and solve the entitlement crisis, global climate change, wealth disparity, and energy dependence in the next couple of years. Oh, yes, Craig, your optimism is stoic, but, unfounded in any actions currently demonstrated by those with the power to act toward an optimistic future outcome on these issues.
Bernanke and Greenspan CLEARLY set the conditions for a pessimistic outcome and those conditions currently exist. You have no evidence of any kind currently extant to support your optimism.
Posted by: David R. Remer at December 22, 2007 12:43 AMDavid,
My grandfather, when I was about 10, was sitting on his front porch with me, on his Tobacco farm. The farm in eastern Ky, consisted of small allotments of Tobacco patches equaling a few acres in a valley. The surrounding hills were covered in trees. He looked up at the trees and told me that that hill used to be planted in corn, he had plowed it with mule teams during the 20’s and 30’s. He said he didn’t think people would work that hard again meaning they’d starve rather than struggle. I don’t agree. With pain comes struggle and work to remove it, and people while perhaps softer, can become tougher.
The thing about the 30’s was the Depression wasn’t understood by many of influence, except Keyne’s. No one believed or understood the massive deficit spending required to correct the contraction. Some have agenda or lack experience to grasp these concepts today.
Today that IS understood by many, however. While I don’t disagree with you that irresponsible spending will lower living standards due to inefficiencies and other instabilities, I do not think anyone could get away with the stupidity of repeating the mistakes of the 30’s. As generations grow away from that pain they are likely to tempt fate, but ultimately there is enough written history to understand how to set monetary and fiscal policy. There may not be the same wisdom about Nuclear War, overpopulation, or environmental contamination, or political extremism.
Ultimately fiscal deficits are monies Americans owe themselves. Monies are an artifice to facilitate exchange of labor and goods. As long as goods and labor do not disappear, contractions and expansions are perceptions, mostly and psychological in nature. I didn’t understand that when our professor discussed that in Econ 101 or 102 (I had the same professor throughout), but feel I have a grasp of that now. I realize I am oversimplifying things grossly.
The point I’m making and ultimately that I believe Greenspan was making is that America suffered through the depression, and he can see similar perturbations, but he has not and does not believe we are doomed to them.
We risked democracy in the 30’s, there are always risks. There may be pain, but I doubt we’ll see the thirties repeated without major catastrophes of a real nature, rather than a fiscal nature. Global economics could even bleed our economy, but I am positive we understand much better about stability and recovery. We have 80 years of unprecedented growth. That isn’t unfounded positive optimism.
googlumpus, one major flaw in your analysis, when you say : “Ultimately fiscal deficits are monies Americans owe themselves.”
More than 45% of our current national debt is owed foreign investors. That percentage will rise dramatically going forward with entitlement borrowing. The consequences of this are geo-political in monumental ways, some of which constitute direct threats upon our sovereignty, security, and economic longevity.
You said: “The point I’m making and ultimately that I believe Greenspan was making is that America suffered through the depression, and he can see similar perturbations, but he has not and does not believe we are doomed to them.”
While you are certainly free to believe what you like about Greenspan’s words while disregarding them in the same instance, his words could not have be phrased more deliberately or dramatically. Their meaning is quite clear: “the end of democratic capitalism”. If you choose to believe it was his poor language skills, or senility, or despite the context, an attempt at levity, go ahead. But, taken in context, his words have but one serious and sincere meaning. If Congress and the President continue to dodge this bullet, we will pass a point of no return on route to economic and political demise. So, far the evidence is 100% on the side Congress and the President will continue to dodge this responsibility as they have for the last 15 years; Which fulfills Greenspan’s pessimistic warning.
Your preference to dismiss his warning as not serious, is very akin to the disbelief of the investors and bankers in 1929 before the crash, as they considered a crash absolute fantasy in light of the long and recent gains. All declines are preceded by refusal to believe they can happen. This is a priori true, because if people believed a decline was coming, they would act to prevent it. So a kind of cognitive dissonance takes place, a rationalization that prevents one from taking COSTLY preventive measures. And of course, decline follows with far greater costs to be incurred.
Posted by: David R. Remer at December 22, 2007 12:07 PMCraig Holmes wrote: d.a.n: So which one is your economy that in your opinion we should emulate?
- 028 Canada 65.40% (2006 est.)
- 030 France 64.70% (2006 est.)
- 033 Austria 63.00% (2006 est.)
- 046 Switzerland 51.00% (2006 est.)
- 047 Netherlands 50.80% (2006 est.)
- 054 Sweden 46.40% (2006 est.)
- 058 Norway 44.80% (2006 est.)
- 062 United Kingdom 42.20% (2006 est.)
- 064 Spain 39.90% (2006 est.)
- 067 Finland 37.70% (2006 est.)
- 089 Denmark 28.10% (2006 est.)
- 094 Iceland 23.50% (2006 est.)
- 096 Ireland 22.80% (2006 est.)
- 100 New Zealand 19.90% (2006 est.)
- 105 Australia 14.10% (2006 est.)
Craig Holmes wrote: d.a.n: What is the sourse of your figures?Wikipedia. However, when all of the $22 Trillion of U.S. federal debt, the U.S. is 4th on the list.
- 004 United States 160.00% (2006 est.) $22T/$14T
- 026 United States 65.71% (2006 est.) $9.2T/$14T
Craig Holmes wrote: d.a.n: Remember your definition of Rosy is that the economy will grow under it’s long term mean average. That is Greenspan’s prediction. 2.5% real growth between now and 2030.That’s not my definition.
Besides … Whhoooooppppdeeeedoooo !
1 in 5 persons owns 83% of all wealth. While GDP is and has been rising, median household incomes have stagnated or fallen since 1976 (especially considering that there are more workers per household).
- 80% of Americans own ONLY 17% of all wealth in the U.S.
- 1% of Americans own 40% of all wealth.
- 5% of Americans own 60% of all wealth.
- 10% of Americans own 70% of all wealth.
- 20% of Americans own 83% of all wealth.
Craig Holmes wrote: So if you say growing less than average is rosy, then your prediction must be,,,,,,,, draconian?Nonsense.
That some more circular logic.
Just because GDP grows doesn’t prove everything is OK.
Expecially when these 10 REGRESSIVE/OPPRESSIVE SYSTEMS are hammering the middle-income group.
I don’t give a damn if GDP grew when the wealth is only going to the very wealthy as a result of those regressive/oppressive systems.
Craig Holmes wrote: Both you and David are on the far far pessimistic side. Actually way off the charts on the pessimistic side.Nonsense.
It only appears that way in the land of Zanadu where everyone wears rose-colored glasses and thinks only rose-colored (or circular) thoughts.
Craig Holmes wrote: d.a.n: I get a list nearly identical to the one you show above for debt of countries. My sourse is here: www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html The difference of course is that the United States is ranked 4th on your scale and 26th on the CIA handbook scale. To what do you account for the difference? In fact if you look at your list it there is a mark at number 26 where the United States should fit in.I already explained that above.
Again, Your list is the same as mine (from Wikipedia), with one exception, in which I showed two ratios:
- the U.S. as 4th on the list if you included all $22 Trillion of federal debt (157% = $22T_DEBT / $14T_GDP)
- and I also showed the U.S. as 26th on the list if you used ENRON-style book-keeping and ONLY considered the $9.2 Trillion National Debt (about 65.7% = $9.2T_DEBT / $14T_GDP)
Craig Holmes wrote: It looks like you doctored the chart.False.
I included BOTH viewpoints.
It is misleading to look at ONLY the $9.2Trillion National Debt only when …
The total U.S. Federal Debt is really around $22 Trillion, based on:
- $9.2 Trillion National Debt, costing over $1 Billion in interest alone per day!
- $12.8 Trillion borrowed and spent from Social Security; it’s not pay-as-you-go, with an approaching massive 77 million baby boomer bubble; and the fictitious surpluses are nothing but government paper; Where’s the money going to come from? Get ready for more inflation.
- $450 Billion PBGC Pension debt
- Hundreds of Billions of unfunded Medicare liabilities for the next 12 months
- Hundreds of Billions of unfunded liabilities for the two wars in Afghanistan and Iraq
- tens-to-hundreds of Billions of annual pork-barrel, graft, corporate welfare, subsidies, etc.
- massive trade deficits; Trillions of dollars leaving the nation; China holds a Trillion (or more) of it, which is an obvious vulnerability (not to mention the numerous other nations foolishly investing in the massive U.S. Federal Debt).
- all of the debt (above) represents many tens of Trillions of interert on the debt, will take literally centuries to pay-down, and massive unfunded liabilities will make it difficult to cut spending and stop excessive money printing and borrowing.
- inflation will exacerbate all of that above; a 1950 Dollar is now only worth 11 cents; the Canadian Dollar is worth more than the U.S. Dollar for the first time in history.
Craig Holmes wrote: In addition if you look on your website one simple idea, you list federal debt at about the same percentage of gdp as would be on the CIA list.The $9.2 Trillion / $14 Trillion GDP = 65.7% is based ONLY on the $9.2 Trillion National Debt; NOT all $22 Trillion of Federal Debt.
Craig Holmes wrote: Anyway which country do you want to compare us with? How about Estonia? They have low debt.See list above. So, what is wrong with Estonia?
Still, despite Estonia having only a 3.60% Debt/GDP ratio, is not on my list, because it scores even lower than the U.S.A. for corruption.
Corruption and lawlessness are important factors too.
A good example of it in the U.S.A. is the refusal of government to enforce existing immigration laws. The majority of our politicians choose to despicably pit American citizens and illegal aliens against each other for profits and votes. Also, the Constitution is being flagrantly violated (e.g. especially Article 5).
Craig, the $9.2 Trillion National Debt is only ONE of many pressing problems.
It is wise (not mere pessimism) to look at all of these disturbing factors, and see how it could lead to more economic instability.
Another Great Depression is not far fetched; especially if we stay on the path we’ve been on for 30+ years (see 10 REGRESSIVE/OPPRESSIVE SYSTEMS above).
You’ve already conceded that same thing MANY times (i.e. if we stay on the same course).
Well, I am not as convinced as you that we will suddenly change course.
Many of these problems are a result of deep-rooted corruption, and that does not simply disappear on its own (not without some pain); especially with such prevalent levels of apathy and complacency, and Congress’s 95% to 99% re-election rates since year 1980.
The longer we allow corruption to grow, the longer and more painful it will be later, and the less likely we will change course in time to avoid the painful consequences.
Review history (and its repetitiveness; 2.00 steps foward, 1.99 steps backward) and then factor in human nature and psychology.
Change (including progress) does not come without painful consequences.
Progress is often lost and often has to be regained.
There will most likely be painful consequences for the past 30+ years of so many regressive/oppressive systems.
googlumpugus wrote: I wanted to add to all here d.a.n., David, Rhinehold, Craig…and any I’ve missed…this is a delicious thread. You guys are amazing at your abilties to source and edify, I’ve been reading this with joy. Thanks to all and continue please.Thanks! Posted by: d.a.n at December 22, 2007 01:15 PM
Dan:
Ok so you want us to emulate socialist countries:
028 Canada 65.40% (2006 est.) 030 France 64.70% (2006 est.) 033 Austria 63.00% (2006 est.) 046 Switzerland 51.00% (2006 est.) 047 Netherlands 50.80% (2006 est.) 054 Sweden 46.40% (2006 est.) 058 Norway 44.80% (2006 est.) 062 United Kingdom 42.20% (2006 est.) 064 Spain 39.90% (2006 est.) 067 Finland 37.70% (2006 est.) 089 Denmark 28.10% (2006 est.) 094 Iceland 23.50% (2006 est.) 096 Ireland 22.80% (2006 est.) 100 New Zealand 19.90% (2006 est.) 105 Australia 14.10% (2006 est.)
Why would we emulate you list when according to this list
http://www.heritage.org/research/features/index/countries.cfm
Only one ranks higher than the United States in terms of economic freedom?
Posted by: Craig Holmes at December 22, 2007 02:32 PMDan:
Let’s take that list apart. Do you want us to emulate a country like france that has government expenditures that are about 50% higher than in the United States? What about countries with over 50$ of GDP going to federal programs? Finland has 50% going to government programs, as does Austria. Norway is at I think 45%.
Did you intend to choose the largest spending governments on earth for us to emulate? Is that really our position?
Or do you want to refine your list?
Posted by: Craig Holmes at December 22, 2007 02:37 PMDavid:
Craig, there you go again, saying d.a.n and I are the ones way too pessimistic when it was your own quoted sources Bernanke and Greenspan issuing the pessimistic warnings. Bernanke said of entitlement mandates: “The longer we wait, the more severe, the more draconian, the more difficult the objectives are going to be. I think the right time to start was about 10 years ago.” And Greenspan said: “The income gap between the rich and the rest of the U.S. population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself.” which is precisely what the entitlement crisis bodes for the income gap.
With all do respect David you are simply taking tiny quotes out of their thoughts that fit your view of the world.
You need to read them more to get a better feel for what their views are on these important subjects.
YOu need to build a context around their comments.
With all
Posted by: Craig Holmes at December 22, 2007 02:42 PMDavid:
Let me try again. Your thesis is basically that America has peaked and without serious action there is going to be an huge finanical crisis like we have never seen since the great depression and maybe even greater.
Not so Bernnake. Bernnake’s thesis is about economic justice between generations. If you read him completely you will see time and time again that he will say that if we do not act now, then our children will not have the same opportunites that we do. He even WITH MANY DISCLAIMERS says that the federal reserve has estimated that without action their standard of living will be about 14% less than it would have been without prompt action. Now he also estmatates productivty to increase by about 2% a year. So he is basically saying that our inaction will set the country back by about 7 years.
Above Dan gave his suggestion of modeling socialism. Bernanke says that is an option. However he says that a country that spends 50% of GDP on government behaves far different that one that spends 20% or so like we do. What he sees is that we could become like Europe.
Dan has a solution. We can emulate the countries he is listing I would cross link your earlier article about how high spending could go on Entitlements and then look at Norway, Austria etc and see what they are spending in government solutions.
Dan’s solution works. Bernanke’s point is that if we choose Dan’s approach, we need to be aware that it has it’s opporutnity costs as well.
You see the future in terms of “If we don’t take drastic action america is really in trouble”. Bernanke take the position that we can help our children to have a better future with prompt action. You see finacial ruin as the end if we don’t take action. Bernanke sees that our children will not be quite as well of if we don’t take prompt action.
Again you are far more alarmist about entitlements and America’s future than either Bernanke or Greenspan.
You can of course pick out statements that agree with your conclusion. It is just the Bernanke and Greenspan say those things to draw a different conclution th
Posted by: Craig Holmes at December 22, 2007 03:05 PMDavid:
Sorry I am having trouble with my internet explorer.
To finish:
It is just that Bernanke and Greenspan say those things to draw a different conclusion than you do.
Posted by: Craig Holmes at December 22, 2007 03:07 PMCraig said: “It is just that Bernanke and Greenspan say those things to draw a different conclusion than you do.”
Ahhh… so now you are a mind reader of Bernanke and Greenspan, in order to circumvent the obvious meaning of their words.
Thanks, I suspected something similar as a reply.
NOWHERE, does Bernanke speculate on the political and social upheaval of a 14% decline in standard of living. Remember that the Great Depression ONLY saw 10% of the workforce put out of work.
But, for you, I guess Bernanke has to spell it out or you will keep you glass happily half full. But, Greenspan DID spell it out. But, you won’t accept that either.
Delude on!
Craig said: “With all do respect David you are simply taking tiny quotes out of their thoughts that fit your view of the world.”
Au contraire, mon ami, It is you who is taking their rosier discussions OUT OF THE context of their more dire predictions IF certain things don’t happen. Bernanke speaks positively about the economy all the time, BUT, he does so on the assumptions that Congress and the White House address EFFECTIVELY the entitlement looming crisis and in a timely fashion, or, he does so on the assumption that he is looking at the economy on a short time line.
The only time I am aware, Bernanke HAS spoken of the long term economic scenarios are in the article I linked to from January of this year. He is afterall, a political appointee, and hence, may not mar the reputations of those who keep him in his position. HIS FOMC reports are all very short range estimates and don’t yet encompass the coming deficit spending from Soc. Sec. or the dramatic increases in Medicare. So, they sound just fine.
Posted by: David R. Remer at December 22, 2007 03:35 PMDavid:
David:
He is not saying they will see a 14% cut in standard of living. Wow you jump to the negative quick!!
He is saying it is 14% lower than it would have been!! IE standard of living is increasing but it will increase less!!
READ BERNANKE!!!!
David:
I can see from this remark the sourse of your information:
The only time I am aware, Bernanke HAS spoken of the long term economic scenarios are in the article I linked to from January of this year. He is afterall, a political appointee, and hence, may not mar the reputations of those who keep him in his position. HIS FOMC reports are all very short range estimates and don’t yet encompass the coming deficit spending from Soc. Sec. or the dramatic increases in Medicare. So, they sound just fine.
Use this sourse:
http://www.federalreserve.gov/newsevents/speech/2007speech.htm
This gives the entire speech.
I do apologize. I understand now why your comments on Bernanke are sound bites. You are getting them from major news sourses.
It is better to read the entire speech. If you stroll through his speeches you will see many times where he looks long term.
Here is the best Bernanke on the subjects you care most about that I know of.
http://www.federalreserve.gov/newsevents/speech/bernanke20061004a.htm
Best of luck!!
Roosevelt was pulled toward greater spending by Hopkins and Ickes, and as the 1936 election approached he decided to gain votes by attacking big business. Roosevelt rejected the advice of Morgenthau to cut spending and decided big business was trying to ruin the New Deal by causing another depression that voters would react against by voting Republican. It was a “capital strike” said Roosevelt, and he ordered t