Doctor Fate wrote:danivon wrote:Yeah, instead he reduced taxes for the vast majority of Americans (not a bad idea as a stimulus). I bet you seethed over that one, with all the 'socialist' overtones...
It was a sliver of the Stimulus.
It was $288B, over a third of the Bill. Rather more than a 'sliver'
Had he just given us the money, we might have done something useful with it. Instead, he doled it out to wasteful State governments, union projects, and speculative "investments." I think my tax cut just about covered my water bill.
So, if it was so useless, send it back and help your country out! Of course, that money meant you didn't have to find it from somewhere else. Multiplied by most taxpaying Americans (and a fair few companies) it makes a difference.
It was $8T when Democrats took over Congress. In the two-plus years since Obama took over, it's gone up about $4T. That's getting it done!
I seem to recall the 2008 bank bailout being a bipartisan bill. I seem to recall that both sides of the aisle (and the GOP more than the Dems) supported expensive foreign wars that started in 2002 and 2003, and went way over projected budget and into the period 2007-8.
The only two ways to reduce the size of that debt are to have revenue higher than income, or to inflate it away. The latter is not nice, if done too quickly. But for now, the priority should be a growing economy.
Even if it leads to us HAVING to inflate it away at some point?
Well, you won;t be able to stop inflation. Oil prices are up again, food prices are up, commodities are up. Not within the government's control.
But low inflation combined with steady growth is a fairly painless way to draw down debts. It takes both. Point is, the bill will be being paid, but the longer it lasts, the easier it gets (just like a mortgage)
Really, what would be the "disaster" of going back to 2008 spending levels?
What would be the "disaster" of going back to 1990 taxation levels?
I think you need to take a longer view. And, if you can show something in Keynes' writings that suggested he would approve of massive borrowing while in massive debt, please feel free to reference it.
I did last time someone (you?) made such a challenge. It's his book, known as the General Theory, and in the advice he gave to governments in the 1930s who were trying to deal with massive recession at a time of high deficits and (for the time) huge debt. Hwo about you try reading some of this stuff before attempting to deny what Keynes was saying?
As an aside, Laffer is a big fan of Bill Clinton. How does that fit your worldview?
Not a problem. I was talking about the 'curve' that people make all kinds of assumptions about, including the man himself. For example, how do you know that it has only one peak?
How about interest on the debt as a percentage of our budget? Is that consistent with the 80s and 90s? How about the projected interest?
Actually, it is pretty consistent. In the 80s and 90s interest rates were high. The US was paying about 3-4% of GDP in debt interest. Now it pays pays about... 3-4% of GDP on interest payments, because while debt is higher, interest rates are much lower.
For example, in 2007, debt interest was about $240Bn. In 2009, it went down to $190Bn, even though the total debt was higher.
As the budget is a bit higher as a proportion of GDP that it was in the 80s and 90s, the proportion of your budget spent on interest is lower than it was back then. Like the answer?
But if stimulus leads to a growing economy faster and earlier than otherwise, that's a good thing.
Until the bills come due.
But you don't get it. It's easier to pay the bills off if you have a growing economy. Just like it's easier to pay off the mortgage if your income increases.
It's all about the elections with you, isn't it?
I'm here to help.
No, you are here to parrot partisan lines and pretend that I'm a Democrat.
There are rumblings about moving away from the dollar as the standard for trade.
There have been for a long time, since the advent of the Euro, and as developing countries grow. It's as much a reflection of global trends as anything else.
You act as if borrowing is harmless. It's not.
Sometimes it's very beneficial. Indeed, it is often vital. You are a capitalist, right? You believe that capitalism is a good system? Wlell, here's a newsflash:
When a company is started up, it starts up in debt. It borrows (from it's owners, or from investors, or both), and it uses that debt to establish itself. It often makes a loss at first, leading to further debts. The initial debt is the 'capital' in 'capitalism'.
You think home ownership is a good thing, don't you? As long as it can be afforded? Well, a mortgage of around 3x annual income is considered pretty safe. And the borrowing is considered a good investment, as long as property prices rise over the period of repayment. By comparison, the US government is only about 1x annual national income in debt. It has been even deeper and got out of it, and it can do it again.
As long as people aren't relentlessly doing the country down and panicking, of course.