Congress risks "manufacturing crisis" by prevaricating over raising the debt ceiling

boards of FL wrote:You still don't seem to understand the underlying subject, Bob.

Should the US pay its bills or default?  Which would be more sound fiscal advice?  What should we do?  Pay or default?

We should pay the bill and then do nothing else to change anything about our fiscal situation.  Or if we do make a change,  we need to elect Bernie Sanders and elect democrats to congress because they are the fiscal conservatives.

Bob wrote:

boards of FL wrote:You still don't seem to understand the underlying subject, Bob.

Should the US pay its bills or default?  Which would be more sound fiscal advice?  What should we do?  Pay or default?

We should pay the bill and then do nothing else to change anything about our fiscal situation.  Or if we do make a change,  we need to elect Bernie Sanders and elect democrats to congress because they are the fiscal conservatives.

Why not simply pay our bills - as we always have - and then continue working to reduce the deficit - as we have for the last six years?

Rather than frame everything in incredibly extreme ways that do not reflect reality or advance the discussion in any way, why not take a more common sense approach?

Pay our bills and continue working to reduce the deficit. Here again, Intro to Policy101 for beginners.

boards of FL wrote:

Bob wrote:

boards of FL wrote:You still don't seem to understand the underlying subject, Bob.

Should the US pay its bills or default?  Which would be more sound fiscal advice?  What should we do?  Pay or default?

We should pay the bill and then do nothing else to change anything about our fiscal situation.  Or if we do make a change,  we need to elect Bernie Sanders and elect democrats to congress because they are the fiscal conservatives.

Why not simply pay our bills - as we always have - and then continue working to reduce the deficit - as we have for the last six years?  

Rather than frame everything in incredibly extreme ways that do not reflect reality or advance the discussion in any way, why not take a more common sense approach?  

Pay our bills and continue working to reduce the deficit.  Here again, Intro to Policy101 for beginners.

That's a very sound approach.  It got us to $18 trillion in debt and the debt is still growing.

WIFE:  "Honey,  even though our credit card statement is now at $18 million,  we still spent more than we took in again last month so the balance is even bigger".
Why don't we try it Bob's way for a change and spend only the amount we're taking in?"

HUSBAND:  "You stupid bitch,  you're always talking about extremes that do not reflect reality".  Listen to Hillary,  Bernie and Paul Krugman.  They're very smart people and you're just a dumb blonde."

Bob wrote:

boards of FL wrote:

Bob wrote:

boards of FL wrote:You still don't seem to understand the underlying subject, Bob.

Should the US pay its bills or default?  Which would be more sound fiscal advice?  What should we do?  Pay or default?

We should pay the bill and then do nothing else to change anything about our fiscal situation.  Or if we do make a change,  we need to elect Bernie Sanders and elect democrats to congress because they are the fiscal conservatives.

Why not simply pay our bills - as we always have - and then continue working to reduce the deficit - as we have for the last six years?  

Rather than frame everything in incredibly extreme ways that do not reflect reality or advance the discussion in any way, why not take a more common sense approach?  

Pay our bills and continue working to reduce the deficit.  Here again, Intro to Policy101 for beginners.

That's a very sound approach.  It got us to $18 trillion in debt and the debt is still growing.

WIFE:  "Honey,  even though our credit card statement is now at $18 million,  we still spent more than we took in again last month so the balance is even bigger".
Why don't we try it Bob's way for a change and spend only the amount we're taking in?"

HUSBAND:  "You stupid bitch,  you're always talking about extremes that do not reflect reality".  Listen to Hillary,  Bernie and Paul Krugman.  They're very smart people and you're just a dumb blonde."

That approach is not what got us to $18 trillion in debt. Good god, Bob. Do you watch the news? We had a perennial budget surplus. Had we stayed the course, we likely would not have any where near $18 trillion in debt today. Unfortunately, we did not stay the course. Three tax cuts, two wars/occupations, and a Great Recession later, we now have $18 trillion in debt.

That said, we have seen the budget deficit fall for the last six years so we are currently back on track. Next year's election will determine if we stay the course or change again.

I hope voters have learned from history.

boards of FL wrote:
That approach is not what got us to $18 trillion in debt.  Good god, Bob.  Do you watch the news?  We had a perennial budget surplus.

Well what actually happened after that has been in the news off and on ever since. 
As our country transitioned from a manufacturing economy to a service economy,  we experienced a loss in wages and personal wealth.  And the diminished wages led to diminished government revenues.  And all the while we've been attempting to maintain government spending with less government revenues.  So we resorted to increased borrowing.

Yes,  the Bush tax cuts did not revive our economy (and government revenues) as was claimed.  And the useless wars helped to exacerbate what was already happening. 
But the growth in entitlements at a time of diminished revenues also contributed to it.

Your take on this is just like markle's take on what caused the real estate/financial collapse.  He puts it all on Barney Frank.  When in reality,  it's not that simple.  Frank's policies did contribute to it but so did the greed of many in the private sector.  And so did the greed of many ordinary citizens.

You and markle both have your chosen boogeymen who you always rely on to provide you the explanation for everything and anything.

Bob wrote:

boards of FL wrote:
That approach is not what got us to $18 trillion in debt.  Good god, Bob.  Do you watch the news?  We had a perennial budget surplus.

Well what actually happened after that has been in the news off and on ever since. 
As our country transitioned from a manufacturing economy to a service economy,  we experienced a loss in wages and personal wealth.  And the diminished wages led to diminished government revenues.  And all the while we've been attempting to maintain government spending with less government revenues.  So we resorted to increased borrowing.

Yes,  the Bush tax cuts did not revive our economy (and government revenues) as was claimed.  And the useless wars helped to exacerbate what was already happening. 
But the growth in entitlements at a time of diminished revenues also contributed to it.

Your take on this is just like markle's take on what caused the real estate/financial collapse.  He puts it all on Barney Frank.  When in reality,  it's not that simple.  Frank's policies did contribute to it but so did the greed of many in the private sector.  And so did the greed of many ordinary citizens.

You and markle both have your chosen boogeymen who you always rely on to provide you the explanation for everything and anything.

Our economy has been transitioning away from manufacturing for at least 70 years, so your theory there is hilarious.  This isn't rocket science, Bob.  We used to have higher tax rates, less military engagement, and perennial surplus.   Then we cut taxes three times, increased military engagement, and watched that perennial surplus turn into ballooning deficits - which were further exacerbated by the Great Recession.

Your attempt to paint our woes as a symptom of a transition from a manufacturing economy to a service economy is about a laughable (and useful) as your extreme framing of the discussion of debt in this thread.  You don't actually know what you're talking about, and yet you're confidently framing the discussion of debt in the most extreme, useless ways and saying "That is exactly how each side is arguing this".   Well, no.  It isn't.  

This chart indicates manufacturing jobs as a percentage of the entire workforce.  Notice how they have been on the decline for the last 70 years.





Being it the case that these jobs have been on the decline - steadily - for 70 years, we can't really say that the relatively recent increase in debt is due to that decline, can we?  

If only there were some sort of painfully obvious factors that influence the budget which ultimately influence debt.  Alas, If only we knew what elements of the federal budget influence whether or not we have a deficit or surplus, perhaps we could figure this out.  Gosh, if only there were a word for the stream of revenue that comes into the government and the stream of spending that goes out, perhaps we could look at that stuff and then really get to the bottom of this.   And if only we had a past to look to in order to see how all of these other things influence debt, perhaps we could use that to arrive at sound policy by continuing things that worked and discontinuing things that did not work, perhaps we could pull ourselves out of this mess.

Oh well, I guess we don't have any of that so I suppose the discussion will have to be framed as an argument between an arguing married couple.  That how the smart people would figure all of this stuff out, right, Bob?

I mean, simply saying "We should pay our bills" is nothing but out-to-lunch, loony bullshit in the same vein as Markle, right, Bob? The smart people who are fortunate enough to have a supreme vantage point from atop the fence are doing the real work in this area by simulating extreme discussion between man and wife. Good job, Bob.

Your rocking chair is over there next to Markle's.

boards of FL wrote:
Being it the case that these jobs have been on the decline - steadily - for 70 years, we can't really say that the relatively recent increase in debt is due to that decline, can we? 

I mean, simply saying "We should pay our bills" is nothing but out-to-lunch, loony bullshit in the same vein as Markle, right, Bob? 

Well what can I say.  With this you've destroyed my argument.

We started losing all our manufacturing jobs in 1945 so that has no relevance to what happened.

And the idea that we should pay our bills is loony bullshit.

You've convinced me.

If my husband talked to me like that...well, you can just use your imagination.

Bob wrote:

boards of FL wrote:
Being it the case that these jobs have been on the decline - steadily - for 70 years, we can't really say that the relatively recent increase in debt is due to that decline, can we? 

I mean, simply saying "We should pay our bills" is nothing but out-to-lunch, loony bullshit in the same vein as Markle, right, Bob? 

Well what can I say.  With this you've destroyed my argument.

We started losing all our manufacturing jobs in 1945 so that has no relevance to what happened.

And the idea that we should pay our bills is loony bullshit.

You've convinced me.

Bob, if the national debt is a function of manufacturing jobs - as you just tried to say that it is - shouldn't we see a correlation between the national debt and manufacturing jobs?

Here is national debt from 1940 to present:




Notice how - in spite of the fact that we were steadily losing manufacturing jobs - the national debt remains relatively low through the 40s, 50s, and 60s.  Then notice how things obviously begin to change in the 70s.   Now, if we are to believe what you just asserted - debt is a function of manufacturing jobs - should we have seen debt increase relative to the decrease in manufacturing jobs throughout the 40s, 50s, and 60s?  Do we see that?  No.  We don't.

Also, since there is an obvious uptick in debt in the 70s, shouldn't we see a corresponding downtick in the rate of manufacturing job loss?  Do we see that?  No.

So can't we confidently assert - as you have - that our debt is the result of manufacturing job loss?  Not likely.  Manufacturing job less is almost perfectly linear whereas debt appears to be exponential.

But here again, if only there things we could look to to truly explain that.  If only our federal budgets consisted of clearly defined streams of revenue and clear outflows, perhaps we could look at those.  Alas.


Anyways, in unrelated news, I just found this neat little picture and I'm trying to figure out what it is.  Looks kinda like a pointy mountain next to a fat mountain.  Kinda weird how the right side of the mountain begins to slope downward between the numbers 1960 and 1970, and steadily downward thereafter.  I wonder what all of those line thingies mean?

Can someone explain this picture to me as if it were an argument between a married couple?  I want to feel smart.

About that graph and this notion of yours that our manufacturing jobs began to steadily decline in 1945.  When during my entire youth the country was experiencing the greatest economic boom in history and my old man and everybody else's old man was able to get a good job with good benefits because we were the world's manufacturing "superpower" during that time.
Fuck, I wasn't even born until 1949 and it was already going full bore.  And continued to do so for a long time afterwards.
That graph,  or more accurately what you're trying to infer from it,  is the best example I've seen yet for what Mark Twain said about statistics.  lol

Later on when the corporate power brokers colluded with both political parties to take advantage of an unbelievably cheap and unlimited source of labor in China,  that's when we started to transition from a manufacturing to a service economy. 
Not in 1945.  That's so fucking absurd that it makes me wonder if you actually have been taught anything of value in school.

Bob wrote:I don't know what those right-wing teabagging reactionaries are caterwalling about.
Paul Krugman is a nobel prize winning economist and he says we need more debt,  not less.   I wish those know-nothings would listen to him.

WOW, a SOCIALIST, PAUL KRUGMAN, GIVEN AN AWARD BY A...SOCIALIST COUNTRY.

I am shocked...SHOCKED I SAY!

Why should I listen to a SOCIALIST when AMERICA is not a SOCIALIST COUNTRY?

Here's a possible explanation for that graph,  bds.  I'm guessing it defines "manufacturing jobs" as applying only to the people who were employed directly inside a manufacturing facility.

First of all,  that won't tell the overall story because it doesn't take into account the fact that a thriving manufacturing sector itself will serve to pull up all the other sectors of the economy.  It formed the basis of an overall economy which included all the jobs that spun off from it.

That early decline in the actual number of jobs engaged directly in manufacturing is probably due an increase in productivity.  Increasing automation would also probably be a factor.  And who knows what else.
But regardless of the explanation,  our economy was continuing to thrive and
it was based primarily on our world leadership as a manufacturing country.
I was there and I saw it with my own eyes.  And so was everybody else reading this who is my age.

bds,

Here's some history for you.

It's hard to believe now,  but when we boomers were young,  "made in japan" meant what "made in china" means today.  It meant inferior quality.
During our youth,  virtually everything anyone wanted to own was made in America.

It wasn't until about 1960 when we first began to accept imported products of any kind (other than European cars which were imported much earlier but that was just a niche market). 
It started off slowly with the import of Japanese pocket transistor radios.
And then later on Japanese motorcycles.
And then over time Japanese products became more available and began to take a significant share of the market.
But that didn't really happen until the 70's and 80's.
Prior to that American manfacturing ruled.
And even after that it still provided us an economic base.

And then along came China.  But not in 1945.  lol

And since you only believe what college professors tell you,  just ask one who's my age and he'll confirm this.  lol

Bob wrote:About that graph and this notion of yours that our manufacturing jobs began to steadily decline in 1945.  When during my entire youth the country was experiencing the greatest economic boom in history and my old man and everybody else's old man was able to get a good job with good benefits because we were the world's manufacturing "superpower" during that time.
Fuck, I wasn't even born until 1949 and it was already going full bore.  And continued to do so for a long time afterwards.
That graph,  or more accurately what you're trying to infer from it,  is the best example I've seen yet for what Mark Twain said about statistics.  lol

Later on when the corporate power brokers colluded with both political parties to take advantage of an unbelievably cheap and unlimited source of labor in China,  that's when we started to transition from a manufacturing to a service economy. 
Not in 1945.  That's so fucking absurd that it makes me wonder if you actually have been taught anything of value in school.

So tell me if I'm understanding you correctly. I just showed you that manufacturing jobs as a percent of the workforce - which you say is the chief cause of our national debt - have been on the decline for 70 years; and your response there is to basically say "I don't believe you because my old man worked in manufacturing"?

To clarify, you're saying that you simply don't believe in the manufacturing jobs graph?

I misspoke.  What I should have said is this.

For decades following World War 2,  our country was thriving because our economy was based on our being a world leader in manufacturing goods.
And slowly and over time,  other parts of the world began to compete with us  (chiefly Japan,  Hong Kong and Taiwan). 
BUT, it wasn't until later on when our industrial and business leaders discovered the unlimited supply of dirt cheap labor China provided,  that everything really started to change.
If you want to better pinpoint the time,  find out what year it was when Sam Walton took down all those Donald Trump-sized signs in his stores which said "WE SELL PRODUCTS MADE IN THE USA".

That's when the downward spiral began.  And that's what led to the "rust belts" and not just in Michigan and Ohio and that part of the country.  It was shortly after that that the textile plant closed in Elkin NC where my first cousin had operated a car dealership very successfully for ten years.
And when that plant closed and the jobs went to China,  it took most of the jobs in town with it and his car dealership went bankrupt.
That story was repeated over and over in all of the manufacturing regions of the country. 
Because 50 cent/hr labor with no benefits looked a whole lot better to the business magnates than American union wages with benefits.
And the public went along with it because it let them buy products a lot cheaper than could be made with American union labor.

And this graph of yours correlates pretty well to the timeline of it...

Bob wrote:I misspoke.  What I should have said is this.

For decades following World War 2,  our country was thriving because our economy was based on our being a world leader in manufacturing goods.
And slowly and over time,  other parts of the world began to compete with us  (chiefly Japan,  Hong Kong and Taiwan). 
BUT, it wasn't until later on when our industrial leaders discovered the unlimited supply of dirt cheap labor China provided,  that everything really started to change.
If you want to better pinpoint the time,  find out what year it was when Sam Walton took down all those Donald Trump-sized signs in his stores which said "WE SELL PRODUCTS MADE IN THE USA".

That's when the downward spiral began.  And that's what led to the "rust belts" and not just in Michigan and Ohio and that part of the country.  It was shortly after that that the textile plant closed in Elkin NC where my first cousin had operated a car dealership very successfully for ten years.
And when that plant closed and the jobs went to China,  it took most of the jobs in town with it and his car dealership went bankrupt.
That story was repeated over and over in all of the manufacturing regions of the country. 
Because 50 cent/hr labor with no benefits looked a whole lot better to the business magnates than American union wages with benefits.
And the public went along with it because it let them buy products a lot cheaper than could be made with American union labor.

And this graph of yours correlates pretty well to the timeline of it...

This new explanation doesn't fit with reality either.  Manufacturing jobs have been steadily converted into other types of jobs since 1945.  Debt didn't begin to explode until the 70s/80s.  Therefore, we can exclude your theory by simply looking at the 50s and 60s - an era when manufacturing jobs were steadily transitioning to other types of jobs and also when debt was not exploding, as you say it should have been.

Bob, do you think it be due to tax rates?

I will give you this, however;  as more and more manufacturing moved overseas, incomes of top tier earners likely increased.  If we look at income growth over the the last 30 years or so for various income tiers, we see that the vast majority of income gains have gone to top tier earners.  Put another way, the share of income has been skewed so that more and more goes to the upper tiers and less and less goes to the lower tiers. Perhaps the decline in manufacturing jobs is at play there, among other things.  If we combine that fact with the fact that tax rates on top tier earners have plummeted over that same time period...well...

I think both you and Sal have asked me "don't you watch the news?" today.

Yes I do.  And the news over the last decade has been that those replacement jobs have not provided the wages and benefits we enjoyed with the jobs before.  It's been in all the papers.  And on the tv.  And on the internet.  lol

And that decline in income has led to a decline in government revenues from taxation. 
And,  as I already said,  even though it's experienced declining revenues,  our government has tried to maintain spending levels.   And it's done that with borrowing and debt.

boards of FL wrote:

I will give you this, however;  as more and more manufacturing moved overseas, incomes of top tier earners likely increased.  If we look at income growth over the the last 30 years or so for various income tiers, we see that the vast majority of income gains have gone to top tier earners.  Put another way, the share of income has been skewed so that more and more goes to the upper tiers and less and less goes to the lower tiers.  Perhaps the decline in manufacturing jobs is at play there, among other things.  If we combine that fact with the fact that tax rates on top tier earners have plummeted over that same time period...well...

You edited your post and added this paragraph while I was replying to the first part of your post.

I don't disagree with this.  And yes the thing can be explained with a combination of factors.
It's just that before,  you were ignoring one of the big ones.  lol

Bob wrote:

boards of FL wrote:

I will give you this, however;  as more and more manufacturing moved overseas, incomes of top tier earners likely increased.  If we look at income growth over the the last 30 years or so for various income tiers, we see that the vast majority of income gains have gone to top tier earners.  Put another way, the share of income has been skewed so that more and more goes to the upper tiers and less and less goes to the lower tiers.  Perhaps the decline in manufacturing jobs is at play there, among other things.  If we combine that fact with the fact that tax rates on top tier earners have plummeted over that same time period...well...

You edited your post and added this paragraph while I was replying to the first part of your post.

I don't disagree with this.  And yes the thing can be explained with a combination of factors.
It's just that before,  you were ignoring one of the big ones.  lol

It's not that I'm ignoring your claim that our debt is due to manufacturing jobs being lost, it's that that claim is simply wrong. That claims is neither a "big one" or even a "one". It is a "wrong".

It's not just the manufacturing jobs.  It's the manufacturing jobs and all the other jobs that the manufacturing jobs supported. 

Think of it this way.  If Eglin and Hurlburt and NAS Pensacola and Whiting and Saufley all shut down because all those jobs went to China,  what do you think would happen to the panhandle economy?  Do you think all the rest of the jobs around here would remain? 
And when all those jobs are lost,  and they're replaced by hamburger flipping and walmart clerking,  do you think local tax revenues would stay the same?  lol

Are you actually convinced the Bush tax cuts are the only reason we have a deficit?  And if we just take back those tax cuts we won't have a deficit any longer?  Do you truly believe that?  lol

Bob wrote:It's not just the manufacturing jobs.  It's the manufacturing jobs and all the other jobs that the manufacturing jobs supported. 

Think of it this way.  If Eglin and Hurlburt and NAS Pensacola and Whiting and Saufley all shut down because all those jobs went to China,  what do you think would happen to the panhandle economy?  Do you think all the rest of the jobs around here would remain? 
And when all those jobs are lost,  and they're replaced by hamburger flipping and walmart clerking,  do you think local tax revenues would stay the same?  lol

Are you actually convinced the Bush tax cuts are the only reason we have a deficit?  And if we just take back those tax cuts we won't have a deficit any longer?  Do you truly believe that?  lol

I'm convinced that one of the chief reasons we have a deficit today is the Bush tax cuts.  It's a combination of the Bush tax cuts, the two wars, and the Great Recession.  Those are the three "big ones", as you would say.  Prior to all of that, we had a steady surplus.  Lurking behind all of that is a gross redistribution of income which by some stretch of the imagination could be what you're trying to say here in this thread.

Regarding the rest of your post and your continuous rehashing of the same argument (our debt comes from the loss of manufacturing jobs), imagine a public water fountain with a slight leak.  You notice it every day when you walk past on your way to wherever.  You see the leak every day for an entire decade.  Then one day you're on your usual walk and you notice that the street is completely flooded.  There is a fire hydrant in view that is clearly open up and spewing water everywhere.  Someone else approaches you - who doesn't yet see the hydrant - and asks "Whoa!  What is going on here!"

Bob:  It's the leaky water fountain.  lol  I seen it every day for ten years on my walk.  lol.  

Other person:  But if you've seen it every day for ten years and it's been doing the same thing that entire time why would we just now being seeing this effect?

Bob:  Oh, I guess you told me.  The leaky fountain that has leaked for ten years couldn't possible flood the street. lol.


I can't argue with logic like that.


And note that regardless of our thoughts on the deficit and how it came to be, that still doesn't address the underlying subject of this thread - which is the debt limit.  We should pay our bills.  Have you anything to say on the actual subject matter of the thread beyond an extreme conversation between a married couple?  Which is the more optimal path forward:  Paying our bills or default?

Well my answer to that last question all depends.

If shutting down the government means my social security and medicare benefits get shut down with it,  then by all means I say pay the bill.

But if it doesn't,  I say shut her down. 

I am,  of course, a member of the worst generation ever.  Just ask Sal.  lol

Of course the ultimate solution would be for Congress to create and stick with a budget that is less than expected revenue. What a concept, I believe Bill Clinton advocated for something like that and it worked pretty well as I recall.

Dems love DEBT