Why debt is a good thing

Hospital Bob · 26 Re: Why debt is a good thing 4/2/2013, 6:20 pm

Hospital Bob

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Japan has been trying to borrow and spend it's way out of recession for 20 years. It now has a debt which is 200% of it's GDP, the largest in the industrialized world. And it's economy is still in shambles. All that "stimulus" has accomplished is to create a staggering public debt for it's citizenry.

And what is it's solution to this? Yep you guessed it. In January of this year the Japanese government yet again instituted another massive "stimulus".

Sal · 27 Re: Why debt is a good thing 4/2/2013, 6:20 pm

Sal

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Bob wrote:

We're adding trillions to the debt every year and Sal honestly believes the Washington politicians are engaged in "austerity" and debt cutting.
Good god if they weren't doing "austerity", I shudder to even think what the fucking deficit would be then. lol

ALL what Sal calls "austerity" is pure rhetoric and nothing else. Neither the republican politicians nor the democrat politicians are actually doing anything to bring this borrowing and spending binge under control. They're afraid to because the public wants them to borrow and spend every dollar and they know it.

Bush did not count the cost of the Iraq and Afghan wars in their bookkeeping. Obviously these huge expenditures that were not accounted for, but the money was spent.

Obama properly put these two wars on the books.

Bush passed, but never funded the cost of the Medicare Part D drug benefit, another huge unaccounted for expense.

The Obama administration does fund the Medicare Part D drug benefit.

The Bush Tax Cuts were unfunded and unaccounted for.

The Obama Administration temporarily continued the tax cuts due to economic hardship in the country, and Republican intransigence to have wealthy Americans pay their fair share.

The Great Recession inherited upon assuming office necessitated emergency stimulus to keep the country from falling into a depression. It worked.

The recession's job losses resulted in a significant decrease in tax revenue to the Treasury since January of 2009 President Obama took office.

These are the driving forces behind the national debt.

Spending under Obama has risen at the slowest pace since WWII.

That's too bad.

The situation calls for borrowing and spending on infrastructure projects nationwide, or better yet a new WPA program.

Unemployment is the biggest problem facing the economy, not deficits and debt.

Sal · 28 Re: Why debt is a good thing 4/2/2013, 6:22 pm

Sal

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PkrBum wrote:https://mises.org/daily/3788

pfffft ...

Hospital Bob · 29 Re: Why debt is a good thing 4/2/2013, 6:28 pm

Hospital Bob

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Sal wrote:

The situation calls for borrowing and spending on infrastructure projects nationwide, or better yet a new WPA program.

That last $700 billion "stimulus" was the worst example of pork-barrel nonsense and wasteful spending in the history of the country. And BOTH political parties had a hand in it.
Obama and the Congress adamantly proclaimed "there will be no earmarks" and the fucking thing turned out to be NOTHING BUT earmarks.
There is absolutely NO reason to believe that another stimulus would be any different.

Last edited by Bob on 4/2/2013, 6:29 pm; edited 1 time in total

Margin Call · 30 Re: Why debt is a good thing 4/2/2013, 6:29 pm

Margin Call

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Bob wrote:Japan has been trying to borrow and spend it's way out of recession for 20 years. It now has a debt which is 200% of it's GDP, the largest in the industrialized world. And it's economy is still in shambles. All that "stimulus" has accomplished is to create a staggering public debt for it's citizenry.

And what is it's solution to this? Yep you guessed it. In January of this year the Japanese government yet again instituted another massive "stimulus".

Some would say we would be lucky to be like Japan for the foreseeable future considering the enormity of the credit bubble that burst in December 2007. While I don't agree with many of the policy responses to the crisis, Ben Bernanke is an expert on the Great Depression. So far, his method has worked.

Sal · 31 Re: Why debt is a good thing 4/2/2013, 6:33 pm

Sal

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Bob wrote:

Sal wrote:

The situation calls for borrowing and spending on infrastructure projects nationwide, or better yet a new WPA program.

That last $700 billion "stimulus" was the worst example of pork-barrel nonsense and wasteful spending in the history of the country. And BOTH political parties had a hand in it.
Obama and the Congress adamantly proclaimed "there will be no earmarks" and the fucking thing turned out to be NOTHING BUT earmarks.
There is absolutely NO reason to believe that another stimulus would be any different.

I agree.

It was too small and a mess.

And, it still worked.

Expansionary policies are expansionary.

Contractionary policies are contractionary.

Ask Great Britain.

Guest · 32 Re: Why debt is a good thing 4/2/2013, 6:35 pm

Guest

Sal wrote:

PkrBum wrote:https://mises.org/daily/3788

pfffft ...

I expect nothing less from you. A realistic review of historical events requires many sources these days. You seem disinterested in a full accounting and analysis... willing to have it spoon fed from those that would subjugate you. Power to the people that have the power comrade.

Hospital Bob · 33 Re: Why debt is a good thing 4/2/2013, 6:38 pm

Hospital Bob

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Bob wrote: So many of the states are hurting for money and it seems to me they should start running huge deficits and pile up debt like Washington because there's no doubt that would fix their money problems. Especially states like California and Florida.

It appears none of you want to respond to this. If you were consistent you would be telling me it's a good idea.
If this borrowing and spending and adding to debt is such a wonderful idea for the federal government, then there would be no reason the same policy would not work to "stimulate" the state economies either.
But not even you debt lovers are willing to tell us that. lol

Margin Call · 34 Re: Why debt is a good thing 4/2/2013, 6:42 pm

Margin Call

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Bob wrote:

Bob wrote: So many of the states are hurting for money and it seems to me they should start running huge deficits and pile up debt like Washington because there's no doubt that would fix their money problems. Especially states like California and Florida.

It appears none of you want to respond to this. If you were consistent you would be telling me it's a good idea.
If this borrowing and spending and adding to debt is such a wonderful idea for the federal government, then there would be no reason the same policy would not work to "stimulate" the state economies either.
But not even you debt lovers are willing to tell us that. lol

It only works if you can print your own currency. Ergo, Greece, Cyrpus, etc.

Hospital Bob · 35 Re: Why debt is a good thing 4/2/2013, 6:47 pm

Hospital Bob

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Margin Call wrote:

It only works if you can print your own currency.

Japan prints it's own currency too. lol

Guest · 36 Re: Why debt is a good thing 4/2/2013, 6:48 pm

Guest

Bob... did you read my post from the previous page about the 1920 depression?

Hospital Bob · 37 Re: Why debt is a good thing 4/2/2013, 6:55 pm

Hospital Bob

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PkrBum wrote:Bob... did you read my post from the previous page about the 1920 depression?

Yes I did. And especially this part...

In order to make sure that this version of events sticks, little, if any, public mention is ever made of the depression of 1920–1921. And no wonder — that historical experience deflates the ambitions of those who promise us political solutions to the real imbalances at the heart of economic busts.

The conventional wisdom holds that in the absence of government countercyclical policy, whether fiscal or monetary (or both), we cannot expect economic recovery — at least, not without an intolerably long delay. Yet the very opposite policies were followed during the depression of 1920–1921, and recovery was in fact not long in coming.

The economic situation in 1920 was grim. By that year unemployment had jumped from 4 percent to nearly 12 percent, and GNP declined 17 percent. No wonder, then, that Secretary of Commerce Herbert Hoover — falsely characterized as a supporter of laissez-faire economics — urged President Harding to consider an array of interventions to turn the economy around. Hoover was ignored.

Instead of "fiscal stimulus," Harding cut the government's budget nearly in half between 1920 and 1922. The rest of Harding's approach was equally laissez-faire. Tax rates were slashed for all income groups. The national debt was reduced by one-third.

The Federal Reserve's activity, moreover, was hardly noticeable. As one economic historian puts it, "Despite the severity of the contraction, the Fed did not move to use its powers to turn the money supply around and fight the contraction."[2] By the late summer of 1921, signs of recovery were already visible. The following year, unemployment was back down to 6.7 percent and it was only 2.4 percent by 1923.

Guest · 38 Re: Why debt is a good thing 4/2/2013, 6:59 pm

Guest

And I'm not saying that the same result would've been expected... just that it's never been tried in total again.

Margin Call · 39 Re: Why debt is a good thing 4/2/2013, 7:00 pm

Margin Call

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Bob wrote:

Margin Call wrote:

It only works if you can print your own currency.

Japan prints it's own currency too. lol

And they've made it 20+ years post crisis. Take your idea down to an even smaller scale.... Birmingham, AL sewer bonds or Stockton, CA.

I'm not advocating QE^infinity, but the reason countries like Greece are in so much trouble is that they cant print Euros.

Margin Call · 40 Re: Why debt is a good thing 4/2/2013, 7:06 pm

Margin Call

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PkrBum wrote:And I'm not saying that the same result would've been expected... just that it's never been tried in total again.

Obviously, that response worked in 1921. I wonder how well it would've worked with synthetic collateralized debt obligations and some pretty messed up accounting rules in the mix???

Last edited by Margin Call on 4/2/2013, 7:19 pm; edited 1 time in total

Guest · 41 Re: Why debt is a good thing 4/2/2013, 7:11 pm

Guest

Margin Call wrote:

Bob wrote:

Margin Call wrote:

It only works if you can print your own currency.

Japan prints it's own currency too. lol

And they've made it 20+ years post crisis. Take your idea down to an even smaller scale.... Birmingham, AL sewer bonds or Stockton, CA.

I'm not advocating QE^infinity, but the reason countries like Greece are in so much trouble is that they cant print Euros.

I'm not sure that's the reason... the ability to print most likely would've just made a bigger mess down the road.

Growth is a delicate condition.

Guest · 42 Re: Why debt is a good thing 4/2/2013, 7:15 pm

Guest

Margin Call wrote:

PkrBum wrote:And I'm not saying that the same result would've been expected... just that it's never been tried in total again.

Obviously, that response worked in 1921. I wonder how well it would've worked with synthetic credit debt obligations and some pretty messed up accounting rules in the mix???

Agreed... You know those complexities much better than I. I just think real value is a more desirable baseline.

Margin Call · 43 Re: Why debt is a good thing 4/2/2013, 7:21 pm

Margin Call

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PkrBum wrote:

Margin Call wrote:

Bob wrote:

Margin Call wrote:

It only works if you can print your own currency.

Japan prints it's own currency too. lol

And they've made it 20+ years post crisis. Take your idea down to an even smaller scale.... Birmingham, AL sewer bonds or Stockton, CA.

I'm not advocating QE^infinity, but the reason countries like Greece are in so much trouble is that they cant print Euros.

I'm not sure that's the reason... the ability to print most likely would've just made a bigger mess down the road.

Growth is a delicate condition.

Right. Watching Greece is probably like watching Japan (US) at 100x normal speed.

Hospital Bob · 44 Re: Why debt is a good thing 4/2/2013, 7:39 pm

Hospital Bob

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Well we'll all get to see how this stimulation-by-government-debt policy plays out. Because Sal is dreaming if he thinks there is any actual will to do "austerity" in this country.

Guest · 45 Re: Why debt is a good thing 4/2/2013, 7:43 pm

Guest

Margin Call wrote:

PkrBum wrote:

Margin Call wrote:

Bob wrote:

Margin Call wrote:

It only works if you can print your own currency.

Japan prints it's own currency too. lol

And they've made it 20+ years post crisis. Take your idea down to an even smaller scale.... Birmingham, AL sewer bonds or Stockton, CA.

I'm not advocating QE^infinity, but the reason countries like Greece are in so much trouble is that they cant print Euros.

I'm not sure that's the reason... the ability to print most likely would've just made a bigger mess down the road.

Growth is a delicate condition.

Right. Watching Greece is probably like watching Japan (US) at 100x normal speed.

I think that's part of my unwillingness to act. I expect that we will grow the economy with some level ground. But right now it's so artificial I'm worried about another bust... or another govt solution. I want to get back to work... but I can't figure out my goal.

Hospital Bob · 46 Re: Why debt is a good thing 4/2/2013, 8:08 pm

Hospital Bob

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Margin Call wrote:

Obviously, that response worked in 1921. I wonder how well it would've worked with synthetic collateralized debt obligations and some pretty messed up accounting rules in the mix???

Go back and find that link to the Stockman interview and watch it. Because that question is exactly what he addresses.

Guest · 47 Re: Why debt is a good thing 4/2/2013, 8:14 pm

Guest

Bob wrote:
First we had neoconservatism which had it's share of people in positions of authority and influence to tell us the way to conduct foreign policy is to adopt this ideology that we need to become the policeman for the world.
And now we have something we could call neoeconomics which has people in positions of authority and influence (the krugmans, the summers etc) with this crap that tells us debt is good for us.

Both are predicated on some really bold assumptions. The first, that the world is gonna tolerate us being it's policeman and cowtow to it.
And the second theory, that this debt fueled attempt to rescucitate the economy is going to restore us to economic greatness.

I'm certain we'll get to test the second theory because the Washington politicians WILL keep adding to the debt.
And all I can say about the first theory is "how's that workin out for you".

Bob, I hate to admit it, but I really have no damn idea what you are talking about

Guest · 48 Re: Why debt is a good thing 4/2/2013, 8:17 pm

Guest

That's a shame GR.

Margin Call · 49 Re: Why debt is a good thing 4/2/2013, 8:29 pm

Margin Call

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Join date : 2012-06-14

Bob wrote:

Margin Call wrote:

Obviously, that response worked in 1921. I wonder how well it would've worked with synthetic collateralized debt obligations and some pretty messed up accounting rules in the mix???

Go back and find that link to the Stockman interview and watch it. Because that question is exactly what he addresses.

Watched it.

AIG was not a contagion?? Huh? It was very glaring that he didn't mention Lehman..something I believe TPTB will never let happen again.

$20Trillion in insolvent balance sheets wouldn't be disastorous? WTF? It's not just US banks, but the foreign banks that the Fed continues to bail out.

He's talking about how the economic fallout isn't bad (using post-bailout observations), but says we shouldn't have had the bailouts. Maybe I need to watch it again, but that didn't make sense.

Savers got screwed. He's correct, in a way. However, they may have lost more if the Fed not acted.

He mentioned the stock market bubble, but corporate profits are at record highs. There is not a stock market bubble.

Guest · 50 Re: Why debt is a good thing 4/2/2013, 8:42 pm

Guest

"they may have lost more if the Fed not acted." sry... but that irritates me. The leftists should be pissed by it.

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Why debt is a good thing

26 Re: Why debt is a good thing 4/2/2013, 6:20 pm

Hospital Bob

27 Re: Why debt is a good thing 4/2/2013, 6:20 pm

Sal

28 Re: Why debt is a good thing 4/2/2013, 6:22 pm

Sal

29 Re: Why debt is a good thing 4/2/2013, 6:28 pm

Hospital Bob

30 Re: Why debt is a good thing 4/2/2013, 6:29 pm

Margin Call

31 Re: Why debt is a good thing 4/2/2013, 6:33 pm

Sal

32 Re: Why debt is a good thing 4/2/2013, 6:35 pm

Guest

33 Re: Why debt is a good thing 4/2/2013, 6:38 pm

Hospital Bob

34 Re: Why debt is a good thing 4/2/2013, 6:42 pm

Margin Call

35 Re: Why debt is a good thing 4/2/2013, 6:47 pm

Hospital Bob

36 Re: Why debt is a good thing 4/2/2013, 6:48 pm

Guest

37 Re: Why debt is a good thing 4/2/2013, 6:55 pm

Hospital Bob

38 Re: Why debt is a good thing 4/2/2013, 6:59 pm

Guest

39 Re: Why debt is a good thing 4/2/2013, 7:00 pm

Margin Call

40 Re: Why debt is a good thing 4/2/2013, 7:06 pm

Margin Call

41 Re: Why debt is a good thing 4/2/2013, 7:11 pm

Guest

42 Re: Why debt is a good thing 4/2/2013, 7:15 pm

Guest

43 Re: Why debt is a good thing 4/2/2013, 7:21 pm

Margin Call

44 Re: Why debt is a good thing 4/2/2013, 7:39 pm

Hospital Bob

45 Re: Why debt is a good thing 4/2/2013, 7:43 pm

Guest

46 Re: Why debt is a good thing 4/2/2013, 8:08 pm

Hospital Bob

47 Re: Why debt is a good thing 4/2/2013, 8:14 pm

Guest

48 Re: Why debt is a good thing 4/2/2013, 8:17 pm

Guest

49 Re: Why debt is a good thing 4/2/2013, 8:29 pm

Margin Call

50 Re: Why debt is a good thing 4/2/2013, 8:42 pm

Guest

51 Re: Why debt is a good thing

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