Ornery.org
  Front Page   |   About Ornery.org   |   World Watch   |   Guest Essays   |   Contact Us

The Ornery American Forum Post New Topic  Post A Reply
my profile login | register | search | faq | forum home

  next oldest topic   next newest topic
» The Ornery American Forum » General Comments » Looks like we'll get a twofer (Page 5)

 - UBBFriend: Email this page to someone!   This topic comprises 10 pages: 1  2  3  4  5  6  7  8  9  10   
Author Topic: Looks like we'll get a twofer
AI Wessex
Member
Member # 6653

 - posted      Profile for AI Wessex   Email AI Wessex   Send New Private Message       Edit/Delete Post   Reply With Quote 
The sooner we destroy the economy (we don't need no stinkin' economy), the sooner we can restore the Founders' vision. Agrarian and Libertarian! Hope and Change!

[ June 02, 2011, 05:06 PM: Message edited by: AI Wessex ]

Posts: 8393 | Registered: Feb 2011  |  IP: Logged | Report this post to a Moderator
TCB
Member
Member # 1677

 - posted      Profile for TCB         Edit/Delete Post   Reply With Quote 
These metrics rise and fall, but there's still no way to confidently predict a recession. Remember last year when the falling price of copper were a surefire sign of imminent recession? Then it shot back up. Now supposedly it's housing prices that portend doom.

If we fall back into recession at this point, will it even be a double-dip? Depending on the definition of recession, we've either been out of it for a couple years already, or we never got out of it.

Of course, no one's optimistic about the economy these days. With Congress paralyzed, maybe it's time for QE3?

Posts: 824 | Registered: Apr 2004  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
quote:
Originally posted by Pyrtolin:
And yet, instead of taking action to pump up the money supply, people are trying to argue that we need to reduce it even further, just like we did in 1937, so that we can delight in repeating history.

Between loans, loan guarantees and bailouts, etc the US Government has already pumped several trillion dollars into the US economy. Depending on how you count it, between $20 and $50 trillion has been pumped into global economies over the last couple of years. Obviously that has had zero impact. What makes you think doing it again will have a different outcome?
IP: Logged | Report this post to a Moderator
TomDavidson
Member
Member # 99

 - posted      Profile for TomDavidson   Email TomDavidson   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
We're right at the 12 month mark since I posted that...
Well, to be fair, you posted that the canary had been dead for ten months already, and therefore we should see problems in two months. [Smile]
Posts: 22935 | Registered: Nov 2000  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
quote:
Originally posted by TomDavidson:
quote:
We're right at the 12 month mark since I posted that...
Well, to be fair, you posted that the canary had been dead for ten months already, and therefore we should see problems in two months. [Smile]
No, I said it should start around the end of 2010. Trillions of dollars in QE seems to push the results out a few months. Although, how is it you don't see that there are huge problems? Did you believe the federally mandated summer of recovery was real? [Wink]

[ June 02, 2011, 05:43 PM: Message edited by: G2 ]

IP: Logged | Report this post to a Moderator
AI Wessex
Member
Member # 6653

 - posted      Profile for AI Wessex   Email AI Wessex   Send New Private Message       Edit/Delete Post   Reply With Quote 
"Obviously that has had zero impact. What makes you think doing it again will have a different outcome?"

If that was a mistake or isn't helping, what should be done?

Posts: 8393 | Registered: Feb 2011  |  IP: Logged | Report this post to a Moderator
AI Wessex
Member
Member # 6653

 - posted      Profile for AI Wessex   Email AI Wessex   Send New Private Message       Edit/Delete Post   Reply With Quote 
G2?
Posts: 8393 | Registered: Feb 2011  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by G2:
quote:
Originally posted by Pyrtolin:
And yet, instead of taking action to pump up the money supply, people are trying to argue that we need to reduce it even further, just like we did in 1937, so that we can delight in repeating history.

Between loans, loan guarantees and bailouts, etc the US Government has already pumped several trillion dollars into the US economy. Depending on how you count it, between $20 and $50 trillion has been pumped into global economies over the last couple of years. Obviously that has had zero impact. What makes you think doing it again will have a different outcome?
That's not obvious at all. What's obvious by all the numbers is that we spend just enough to break even, but not enough to provide upward motion. SP now that the boost that kept us hovering has run out, we're going to go back into freefall since we aren't committing enough to achieve escape velocity.

You come in crowing about how lack of enough money to feed the economy is a sure sign that we're in for a crash, but yet you throw up your hand in horror at the only practical way to actually add money to the economy to close the real deficit. (Never mind blindly tossing out numbers without any context to make them meaningful and trying to pretend that they actually represent an increase in actual money supplies) The federal debt is just an accounting artifact that's meaningless so long as the economy itself is well tended. Well paying jobs and currency in circulation are the real deficits that we're facing now, and unless we actively close them, we're in for a crash.

Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
Here's the rest of the Reich article that G2 was quoting, for example:

http://robertreich.org/post/6072567291
Notably, right after his excerpt:
quote:
The problem isn’t on the supply side of the ledger. Corporate profits are still healthy. Big companies continue to sit on a cash hoard. Large and middle-sized companies can easily borrow more, at low rates.

The problem is on the demand side. American consumers, who constitute 70 percent of the total economy, can’t and won’t buy enough to get it moving. They justifiably worry they won’t be able to pay their bills or afford to send their children to college or to retire. Banks, with equal justification, are reluctant to lend to them. But as long as consumers hold back, companies remain reluctant to hire new workers or raise the wages of current ones, feeding the vicious cycle.

The timing is unfortunate. Foreign consumers won’t help much even if the dollar continues to slide. Europe’s debt crisis and embrace of austerity, Japan’s tragedy, and China’s fiscal tightening have reduced global demand. At the same time, the federal stimulus here has about run its course. The Federal Reserve is about to end its $600 billion of purchases of Treasury bills, designed to bring down long-term interest rates and make it easier for homeowners to refinance. Worse yet, state governments – starved for revenue and constitutionally barred from running deficits – continue to cut programs. Local governments are now in worse shape, laying off platoons of teachers and fire fighters.


Under normal circumstances, this would be the time for the federal government to take bold action to ward off a double dip.

For example, it could put more cash in peoples’ pockets while giving employers an extra incentive to hire by exempting the first $20,000 of earnings from payroll taxes, for a year or two. It could lend money to state and local governments. It could launch a new WPA (modeled after its antecedent during the Great Depression) to put the long-term unemployed to work on public projects.

It could amend the bankruptcy law to allow people to include their prime residences in personal bankruptcy, thereby giving homeowners more leverage to get mortgage lenders to mitigate the terms of their loans. It could enlarge and expand the Earned Income Tax Credit so that the bottom 60 percent got a wage subsidy instead of a tax bill.



[ June 03, 2011, 07:36 AM: Message edited by: Pyrtolin ]

Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
AI Wessex
Member
Member # 6653

 - posted      Profile for AI Wessex   Email AI Wessex   Send New Private Message       Edit/Delete Post   Reply With Quote 
It's expected that G2 will read in an article until he realizes that the author is going to make a point other than the one he wants to hear. He excerpts (without attribution to discourage people finding what he left out) only the portion that gives him his thrill and pretends (by said omission) that the rest simply doesn't exist. When somebody calls him on it (me in this case, not Pyrtolin who merely added some of the missing bits), G2 accuses that person of some sort of misconceived logical fallacy or delivers a stinging taunt that any 2nd grader would be proud of. There's a saying in physics (Pauli?) that some student arguments are not only not right, they're not even wrong because they don't have sufficient grounding to be falsifiable. I don't pay attention to what G2 tries to say because most of the time, by the way he selects what he reports here, he's not even wrong.

[ June 03, 2011, 08:16 AM: Message edited by: AI Wessex ]

Posts: 8393 | Registered: Feb 2011  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
quote:
Originally posted by Pyrtolin:
Here's the rest of the Reich article that G2 was quoting, for example:

Good deal, thanks. I got my piece from FT.com which only allowed me to see the first paragrpah without registering (which I hate to do). Although, always good to see AI (pronounced A-eye) go for the tried and true ad hominem. Still a logical fallacy machine and too ignorant to know more than one. Christ. [LOL]

Let's ignore the dancing monkey and look at the rest of Reich:
quote:
The problem is on the demand side. American consumers, who constitute 70 percent of the total economy, can’t and won’t buy enough to get it moving. They justifiably worry they won’t be able to pay their bills or afford to send their children to college or to retire. Banks, with equal justification, are reluctant to lend to them. But as long as consumers hold back, companies remain reluctant to hire new workers or raise the wages of current ones, feeding the vicious cycle.
You know why consumers worry? Because jobs are disappearing at an increasing rate. Unemployment and underemployment accounts for over 14% of the workforce and that number is increasing every month. Since the federally mandated summer of recovery, over 500,000 jobs have been lost. That's with the trillions invested that you claim will improve the situation. Just how many trillions more do you think it will take? You assert that this is "the only practical way to actually add money to the economy" yet the unprecedented and massive amount already added did absolutely nothing. If pumping money was the panacea you claim, we'd be in a boom right now. Obviously, your theory does not conform to reality so something else is in play that makes a bigger impact than money supply.

It's not that I blindly oppose increasing money supply as you demand to frame this so you're comfortable in ideological bliss, it's that it did not work. The evidence is right before us. Pumping trillions into the money supply did *not* work. Do you have any ideas why business and consumers are frozen in hiring and spending despite the trillions available to them?

IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Since the federally mandated summer of recovery, over 500,000 jobs have been lost.
Yes, the census ended. IT's not more reasonable to count those jobs on the way out than it was on the way in, which is why most reputable sources used the ex-census numbers.
Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
TomDavidson
Member
Member # 99

 - posted      Profile for TomDavidson   Email TomDavidson   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
You know why consumers worry? Because jobs are disappearing at an increasing rate. Unemployment and underemployment accounts for over 14% of the workforce and that number is increasing every month. Since the federally mandated summer of recovery, over 500,000 jobs have been lost.
I'm not sure you understand what a "vicious cycle" is, G2. This was specifically addressed in Reich's article. In other words: yes, consumers are nervous because their jobs are not safe. This makes them buy less, which dissuades businesses from expanding (and hiring) even though they have the capital they need to do so.

quote:
If pumping money was the panacea you claim, we'd be in a boom right now.
This does not necessarily follow. Even if "pumping money" is a panacea, it is logical to assume that there is a right and a wrong amount of money, and a right and a wrong place to pump. I think everyone agrees, for example, that the TALF program was the wrong place to pump.
Posts: 22935 | Registered: Nov 2000  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
That's with the trillions invested that you claim will improve the situation. Just how many trillions more do you think it will take? You assert that this is "the only practical way to actually add money to the economy" yet the unprecedented and massive amount already added did absolutely nothing. If pumping money was the panacea you claim, we'd be in a boom right now. Obviously, your theory does not conform to reality so something else is in play that makes a bigger impact than money supply.
How long do you keep the rocket boosters on to get into orbit? Long enough to reach escape velocity. Anything short of that doesn't leave you hovering in the upper atmosphere- it leaves you crashing back down to earth. And even given that, if you only thrust at 9.8m/s2 it doesn't matter how long you do it. Throwing numbers around that look big is just scope boggling; it takes a lot of zeros to run an economy as large as ours is, especially after having been intentionally underfunded for so long. There isn't enough money being spent to drive our economy; the only solution is to spend more until there is enough being spent to promote growth for long enough to get us back to self sustaining growth levels. What's the shortfall between what's being spent now and how much needs to be spent to get us back on track? That's how much we need to spend. For how long? Until we're back on track. The faster and more we spend up front, the less total we'll need to spend overall to get there. If we don't step up and spend it, it will be spent for us in the form of lost jobs and declining economic output.

In terms of actual spending, we spent just enough at the Federal level to counter the cuts that the states made, we didn't spend enough to compensate for the drop in private sector spending, never mind enough to eliminate the overhang of personal debt and under water mortgages or to bring worker pay back into line with productivity increases- factors that are at the root of the current consumer weakness that is creating the current unemployment situation.

How much do we need to spend? Enough to fill most of that M3 gap that you pointed out so that we can have a much stronger overall foundation for our money supply instead of having to depend on private sector loans and debt to fill the gap.

Your are also still conflating large amounts of accounting tricks with actual money put into the economy. QE2, for example, put almost nothing into circulation. It wall went into bank reserves, supporting them so that they could continue normal operations. While, in theory, they could have drawn on some of those reserves to distribute as cash, few, if any did, so that money essentially just remained a balance book notation at the Fed, and had minimal direct economic effect other than simply maintaining the status quo by preventing banks from having to freeze operations.

Only the Federal Government actually can effectively spend money directly into the economy, ant that's what needs to be done- hiring as many people as possible to cut the unemployment level and set good benchmarks for wages until their collective income pays off the private debt overhang and translates into enough realized demand to bring the economy back to a self-sustaining growth rate. Tax cuts only have limited effect, because there's only so much that you can cut from the taxes of people that most need the support to drive consumption (and nothing at all from the currently unemployed), while hiring is already money that's exempt from income taxation, so actual spending is what's needed, and we're dropping the ball on that big time at the Federal level. Perhaps the FR will finally realize that it needs to figure out a way to do a helicopter drop because the government has stuck its head in the sand over deficit boogeymen, but I wouldn't count on it.

Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
AI Wessex
Member
Member # 6653

 - posted      Profile for AI Wessex   Email AI Wessex   Send New Private Message       Edit/Delete Post   Reply With Quote 
Two points, G2. One is to read for content rather than just skimming the first few sentences of an article on a complex topic. The other is that you really did come through and accuse me of the logical fallacy and the taunt. Also as I predicted, eh? [Smile]

[ June 03, 2011, 12:08 PM: Message edited by: AI Wessex ]

Posts: 8393 | Registered: Feb 2011  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
http://streetlightblog.blogspot.com/2011/06/contractionary-fiscal-policy-and-us-job.html

quote:
In other words, in the absence of the sharp cutbacks in government spending that have been prevalent in the US over the past year or two, about 1.3 million additional people would be working now compared to 8 months ago, rather than the actual job growth we've experienced over that time of about 1 million - a 30% difference. That's a pretty tough headwind to fight, especially for an economy that's already struggling.
And this is just assuming that we'd made no employment cuts since October 2010. If we go all the way back to the beginning of the decline and had, at a minimum, put up full funding to ensure no cuts until well clear of the crisis, we'd easily be looking at better than half a million jobs directly preserved, and many, many more nth degree jobs saved representing the motion of the money from their increased demand moving though the economy.

http://www.offthechartsblog.org/state-and-local-job-losses-top-half-a-million/

That's just holding course, The numbers would be even better if we'd actually pushed toward maintaining expected growth across that time.

Comparing the results of fiscal policy that simply maintains expected GDP growth vs austerity measures:
http://streetlightblog.blogspot.com/2011/05/comparing-two-approaches-toward-deficit.html
quote:
At the end of the fifth year, the country will still be running budget deficits under either approach (though they'll be somewhat smaller under the austerity program). It will also have a roughly similar amount of debt under either scenario, at approximately 75% of GDP. But the path the country followed to get there will be very different depending on which policy they pursued.

Under the austerity program, the country will have experienced a sharp recession (and possibly deflation), so that by the fifth year the average family will still have less real income than they did before the austerity program. Under the growth program, on the other hand, income will have increased steadily, so that after five years the average family's annual income will be almost 20% higher in real terms than under the austerity program -- while the government's debt burden is no greater. (Of course in year 6 the government may decide to change its policies under either scenario.)


Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
Also this, using basic economic identities:

http://neweconomicperspectives.blogspot.com/2011/05/what-happens-when-government-tightens.html

quote:
Because the economy’s financial flows are a closed system – every payment must come from somewhere and end up somewhere – one sector’s surplus is always the other sector’s deficit. As the government “tightens” its belt, it “lightens” its load on the teeter-totter, shifting the relative burden onto you.

This is not rocket science, but it appears to befuddle scores of educated people, including President Obama, who said, “small businesses and families are tightening their belts. Their government should, too.” This kind of rhetoric may temporarily boost his approval ratings, but the policy itself will undermine the efforts of the very families and small businesses that are trying to improve their financial positions.

http://neweconomicperspectives.blogspot.com/2011/06/what-happens-when-government-tightens.html
quote:
Again, this is simply a property of the sectoral balance sheet identities. Whenever the government’s deficit is too small to offset a deficit in the current account, the private sector will experience a net loss. The result my ruffle your feathers, but it is an unimpeachable fact.

So let’s go back to President Obama’s comment and the reason I wrote this blog in the first place. The President said:

“[S]mall businesses and families are tightening their belts. Their government should, too.”

Wrong! When we tighten our belts, it means that we are trying to build up our savings. We do this by spending less. But spending drives our economy. Sales create jobs. So unless Obama has a secret plan to reverse three decades of current account deficits, the Government needs to loosen its belt when we tighten ours. If it doesn’t, then millions of us will lose our shirts.


Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
ken_in_sc
Member
Member # 6462

 - posted      Profile for ken_in_sc   Email ken_in_sc       Edit/Delete Post   Reply With Quote 
I guess this means we have to have a war. Not these piddly-assed wars like we have now, but a big one. We need a big war that kills millions of Americans, and multi-millions of others. That's how we got out of the last depression.
Posts: 159 | Registered: May 2009  |  IP: Logged | Report this post to a Moderator
philnotfil
Member
Member # 1881

 - posted      Profile for philnotfil     Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by ken_in_sc:
I guess this means we have to have a war. Not these piddly-assed wars like we have now, but a big one. We need a big war that kills millions of Americans, and multi-millions of others. That's how we got out of the last depression.

That would be the easy solution. Kill off 9.1% of our population and our unemployment problem is gone. Since we will probably kill more of the enemy than they kill of us, that will get rid of our outsourcing problem as well. Win-Win.
Posts: 3719 | Registered: Jul 2004  |  IP: Logged | Report this post to a Moderator
TheRallanator
Member
Member # 6624

 - posted      Profile for TheRallanator   Email TheRallanator       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by ken_in_sc:
I guess this means we have to have a war. Not these piddly-assed wars like we have now, but a big one. We need a big war that kills millions of Americans, and multi-millions of others. That's how we got out of the last depression.

It is? And here I was thinking the New Deal might've had something to do with it.
Posts: 503 | Registered: Oct 2010  |  IP: Logged | Report this post to a Moderator
Pete at Home
Member
Member # 429

 - posted      Profile for Pete at Home   Email Pete at Home   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by TheRallanator:
quote:
Originally posted by ken_in_sc:
I guess this means we have to have a war. Not these piddly-assed wars like we have now, but a big one. We need a big war that kills millions of Americans, and multi-millions of others. That's how we got out of the last depression.

It is? And here I was thinking the New Deal might've had something to do with it.
Might have. I think it did, but there's room for reasonable disagreement on that point. What's completely without question is that Europe being devastated, and the US emerging from the war as the sole surviving megaproducer for the following decade, made us fabulously rich, and created expectations that are very unlikely to ever get realized at any future point in history.
Posts: 44193 | Registered: Jun 2001  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by TheRallanator:
quote:
Originally posted by ken_in_sc:
I guess this means we have to have a war. Not these piddly-assed wars like we have now, but a big one. We need a big war that kills millions of Americans, and multi-millions of others. That's how we got out of the last depression.

It is? And here I was thinking the New Deal might've had something to do with it.
It could have, but FDR was always too tentative with it. Then in 1937, they declared recovery accomplished prematurely (under almost exactly the same conditions that we're looking at now) and tried to balance the budget, turning the weak recovery into another crash.

It wasn't until WWII forced us pull out all the stops and spend enough to get the job done without worrying about how much was being spent that we actually committed to enough spending to fill the hole we were in.

Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
AI Wessex
Member
Member # 6653

 - posted      Profile for AI Wessex   Email AI Wessex   Send New Private Message       Edit/Delete Post   Reply With Quote 
The New Deal created a sustainable foundation where the government shared responsibility for the financial stability of the citizenry that was and still is critically important to the general welfare. WWII provided the fundamental transformation to the industrial and consumer society that allowed the economy to grow. We may have reached a threshold where it can no longer grow using the same principles. Change is needed in both the economic model and the government's role, but pulling the rug out from under the government's part unilaterally will bring the economy to its knees for at least a generation.
Posts: 8393 | Registered: Feb 2011  |  IP: Logged | Report this post to a Moderator
ken_in_sc
Member
Member # 6462

 - posted      Profile for ken_in_sc   Email ken_in_sc       Edit/Delete Post   Reply With Quote 
The New Deal prolonged the Great Depression.
Posts: 159 | Registered: May 2009  |  IP: Logged | Report this post to a Moderator
AI Wessex
Member
Member # 6653

 - posted      Profile for AI Wessex   Email AI Wessex   Send New Private Message       Edit/Delete Post   Reply With Quote 
How?
Posts: 8393 | Registered: Feb 2011  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by ken_in_sc:
The New Deal prolonged the Great Depression.

Experimentation with labor law caused a few setbacks, but also ensured decades of stability afterwards once the kinks were worked out. That a few historical revisionists want to try to cast that, almost purely by assertion, as extending the Depression doesn't actually make it true.

The number one thing that extended the depression was pulling the rug out from under the economy in 1937 by declaring victory too quickly. Nothing holds a candle to the fallout from that.

Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
And now it looks like the GOP has successfully managed to completely block the leading expert on reducing unemployment from appointment to the Federal Reserve:

http://economistsview.typepad.com/economistsview/2011/06/when-a-nobel-prize-isnt-enough.html

Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
kmbboots
Member
Member # 6161

 - posted      Profile for kmbboots   Email kmbboots   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by ken_in_sc:
I guess this means we have to have a war. Not these piddly-assed wars like we have now, but a big one. We need a big war that kills millions of Americans, and multi-millions of others. That's how we got out of the last depression.

I realized that, as a nation, we lack enthusiasm for other projects but,the government could actually spend money on something other than killing people.

[ June 06, 2011, 12:13 PM: Message edited by: kmbboots ]

Posts: 2635 | Registered: Jul 2008  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
quote:
Originally posted by G2:
quote:
Originally posted by TomDavidson:
quote:
We're right at the 12 month mark since I posted that...
Well, to be fair, you posted that the canary had been dead for ten months already, and therefore we should see problems in two months. [Smile]
No, I said it should start around the end of 2010.
The facts:
GDP 2010 Q4 was revised down from 3.1% to 2.3%.
GDP 2011 Q1 was revised down from 1.9% to 0.4%
GDP 2011 Q2 estimated at 1.3%

So yeah, that leading indicator was shockingly good. It appears the wheels began to come off again around the end of 2010, right on schedule.

Based on durable goods orders, consumer spending and saving patterns and the persistent joblessness experienced over the last 4 months, what do you suppose the revisions for 2011 Q2 will look like when the planned restatements in August and September come out? Anybody got the balls to predict it?

All this has occurred within the framework of loans, loan guarantees and bailouts, etc such that the US Government has already pumped several trillion dollars into the US economy. Depending on how you count it, between $20 and $50 trillion has been pumped into global economies over the last couple of years.

Obviously, that didn't work did it?

IP: Logged | Report this post to a Moderator
NobleHunter
Member
Member # 2450

 - posted      Profile for NobleHunter   Email NobleHunter   Send New Private Message       Edit/Delete Post   Reply With Quote 
The more important question would be: why didn't it work?

Some members of the board would say that it was because the infusions of money were too small, others would say that it was simply the wrong thing to do. It could also be that the money was given to the wrong people or spent on the wrong things. Also, it could be that governments did not have the effective tools needed to fully deal with the situation.

Declaring that a course of action didn't have the desired results is a starting point. Ideally the next step would be to figure out how and what could be done differently. Especially since the crisis is ongoing.

Posts: 2581 | Registered: May 2005  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
Money has o be spent to be pumped into an economy. Money that's dropped into reserve aggounst and sits in reserve accounts, isn't going t make people who are under water and businesses anticipating reduced demand suddenly want to actually go looking for loans, no matter how you dress up the terms.

We put about $500 billion into actual spending, when, especially in light of these numbers the necessary correction need was closer to, if not in excess of $2 trillion. As such it's exactly following the prediction that the stimulus package was too small- we stabilized for a bit, but never got far enough out of the doldrums to return to a stable, self supporting growth path.

It turns out that they underestimated what was needed more than they even realized up to this point.

Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
JWatts
Member
Member # 6523

 - posted      Profile for JWatts   Email JWatts   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by G2:
The facts:
GDP 2010 Q4 was revised down from 3.1% to 2.3%.
GDP 2011 Q1 was revised down from 1.9% to 0.4%
GDP 2011 Q2 estimated at 1.3%

Based on durable goods orders, consumer spending and saving patterns and the persistent joblessness experienced over the last 4 months, what do you suppose the revisions for 2011 Q2 will look like when the planned restatements in August and September come out? Anybody got the balls to predict it?

Yeah, I got balls. Now whether I have any brains is debatable.

I think the Q2 1.3% is correct +- 0.2%.

* I don't believe (I'm hopeful anyway) that unemployment will get any worse, but will start gradually improving.
* I think the national housing market has bottomed out and is starting a slow recovery.

I don't think that any of this amounts to a booming recovery and clearly we are perilously close to a double dip recession, but I think the inflection point is past and we are headed upward. Admittedly, this is a gut call because the underlying data is clearly not good. I just don't think it's horrible. And let's face it a 1.3% growth is bad.

[ July 29, 2011, 11:08 AM: Message edited by: JWatts ]

Posts: 4700 | Registered: Oct 2009  |  IP: Logged | Report this post to a Moderator
Wayward Son
Member
Member # 210

 - posted      Profile for Wayward Son   Email Wayward Son   Send New Private Message       Edit/Delete Post   Reply With Quote 
Of course, this whole thread is liable to be moot by next week.

At the rate Congress is getting on in not passing the debt ceiling increase, it looks like there is going to be a downturn caused by that.

Which means no one will be able to agree on how much the downturn was going to happen anyway, and how much was caused by not raising the debt ceiling.

So get your posts in now. This thread is shutting down next week (along with our economy). [Wink]

Posts: 8681 | Registered: Dec 2000  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
My predictions are heavily contingent on the debt ceiling issue:

If we hit it and don't dodge it, we've going to suffer a massive shock to employment as spending freezes translate to layoffs in just about every sector. The limited supply of new bonds and market dive will send treasury rates through the floor and the Fed will be forced to release securities that it currently holds to meet the overall market demand. GDP growth will go negative immediately and accelerate downwards along with employment levels. Our crash will bring most of the rest of the world down with us as our imports dive. The Lesser Depression will become the Greater Depression.

If we raise the debt limit with significant near term spending cuts, then we'll see a slower decline- the market will jump a bit and then drop off as the layoffs that the cuts require quickly compound into further job losses. Bonds will hold at nearly zero, growth will drop to less than .5% for Q3 do a little seasonal bounce back over it in Q4, and then go negative in Q1 or Q2 at the latest. The outlook is improves slightly if some manner of tax expenditure reductions are part of the bill, based on additional capital spending prompted by them to avoid tax liabilities (and the fact that they'd displace damaging cuts).

If we get a clean raise, the Treasury mints a few platinum coins, or the Obama administration decides that budget obligations supersede the debt limit, or the like, we'll continue the current slow decline as state government cuts undermine private sector growth. we'll be some where between 5.% and 1% for Q3, back to almost 1% for Q4 , and probably looking at another recession by the second half of 2012.

Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
JWatts
Member
Member # 6523

 - posted      Profile for JWatts   Email JWatts   Send New Private Message       Edit/Delete Post   Reply With Quote 
So Pyr you are predicting a double dip recession in every case?
Posts: 4700 | Registered: Oct 2009  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by JWatts:
So Pyr you are predicting a double dip recession in every case?

Not every case, only the cases that are most likely given the current Congress and Executive administration.

We could avert it easily by making the proper investments in doing so, but it didn't seem worth the time to project based on those.

I suppose I did, however, neglect to add in the compounding effect of bringing more soldiers home and cutting funding to the domestic contractors supporting them. That's usually recession material in its own right, never mind when heaped on top of a dud economy to begin with.

Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
quote:
Originally posted by NobleHunter:
The more important question would be: why didn't it work?

Damn good question.

quote:
Originally posted by NobleHunter:
Some members of the board would say that it was because the infusions of money were too small...

And that is exactly what they say (see just below your post). But the cash infusions were HUGE. Trillions of dollars huge. Biggest in history. If that didn't work, and it didn't, just how much should it have been? Whatever number is put forth, they'll always tell you it should be more.

quote:
Originally posted by NobleHunter:
...others would say that it was simply the wrong thing to do.

Obviously it wasn't the right thing to do which pretty much makes it, if not the wrong thing to do, a pretty pointless thing to do.


quote:
Originally posted by NobleHunter:
Ideally the next step would be to figure out how and what could be done differently. Especially since the crisis is ongoing.

What would you suggest?

[ July 29, 2011, 01:32 PM: Message edited by: G2 ]

IP: Logged | Report this post to a Moderator
JWatts
Member
Member # 6523

 - posted      Profile for JWatts   Email JWatts   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by G2:
quote:
Originally posted by NobleHunter:
...others would say that it was simply the wrong thing to do.

Obviously it wasn't the right thing to do which pretty much makes it, if not the wrong thing to do, a pretty pointless thing to do.

I disagree with this statement to some degree. I don't actually believe that the idea of a heft stimulus was bad. Nor do I think we necessarily spent too much money.

I do believe that the money we did spend was very poorly spent with little immediate return. A lot of it was pork barrel spending designed to reward certain groups rather than optimally spent to boost the economy.

I think a better President would have led to a better recovery. I'm not sure that McCain would have been a better option, but Obama turned out to be a poor one. It's clear he spent an enormous amount of effort on health care legislation early, when focusing on the economy was needed.

Posts: 4700 | Registered: Oct 2009  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
It's clear he spent an enormous amount of effort on health care legislation early, when focusing on the economy was needed.
So, right after getting the stimulus package through- which he'd already pushed for a point well under what his advisers recommended and then compromised even lower, he should have moved immediately on to another one? (Not to mention the ticking clock that was hanging over Ted Kennedy's head at that point)

Also account for the 10 other jobs bills that passed the house but died in Senate procedural hangups because there imply wasn't time to get to them with all of the delay tactics that were being applied.

Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
quote:
Originally posted by Pyrtolin:
Also account for the 10 other jobs bills that passed the house but died in Senate procedural hangups because there imply wasn't time to get to them with all of the delay tactics that were being applied.

If only the Democrats would have had something like a filibuster proof majority ... oh, wait ...
IP: Logged | Report this post to a Moderator
  This topic comprises 10 pages: 1  2  3  4  5  6  7  8  9  10   

Quick Reply
Message:

HTML is not enabled.
UBB Code™ is enabled.
UBB Code™ Images not permitted.
Instant Graemlins
   


Post New Topic  Post A Reply Close Topic   Feature Topic   Move Topic   Delete Topic next oldest topic   next newest topic
 - Printer-friendly view of this topic
Hop To:


Contact Us | Ornery.org Front Page

Powered by Infopop Corporation
UBB.classic™ 6.7.1