2012 Begins Now

We've had this conversation before, Loki. Most of the increased spending is either related to various stimulus measures (biggest being ARRA), various bailouts (e.g. TARP), or much higher spending on various automatic measures (e.g. unemployment benefits, which have soared). Most of the increase in discretionary spending is ARRA with minor increases in other programs (excluding defense, which continues to grow at an unacceptably high rate), coupled with higher outlays for mandatory programs.

Revenues most definitely are part of the problem - they fell sharply from 2007 through 2009 and aren't even close to pre-crisis levels now. I don't get why you don't agree. But the larger issue is that the US already had a significant deficit coming into the recession, due to a combination of structural issues (e.g. growing healthcare costs) and shitty budgeting (e.g. war spending, bloated programs, etc.). Germany's deficit was carefully controlled beforehand.

Anyways, this is all far afield. I took issue with this comment of yours:

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Originally Posted by Loki

In fact, Germany didn't really have a stimulus, and it has seen its unemployment rate plummet and has one of the highest growth rates in Europe now. All the stimulus did was temporarily keep some people in their jobs at a monumental cost to the economy. Look to Japan if you want to see what happens when the government tries to keep companies from laying off workers at all cost.

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Germany did have a stimulus, and it was bigger than most if not all European nations (~$110 billion all told). Their high growth rate hasn't brought them back to pre-crisis GDP (they're still 2% below) while the US has nearly recouped all of their losses - mainly because German output was slashed much more than the US and many other nations. And the stimulus in the US may have provided some temporary jobs, but Germany pioneered the concept of paying companies to keep people in jobs - that's why their unemployment rate never went as high as the US in this recession, albeit at the expense of a flexible labor market.

Look, I'm not saying Germany is in an awful position - I think they did an okay job recovering from a very bad recession (far worse for them in terms of output). Yet the myth of German austerity being what pulled them through is completely inaccurate. They have a sizable stimulus plan and increased their budget deficit quite a bit (not as much as the US, but we had other pressures on the budget). Austerity isn't kicking in until 2011, yet their 'recovery' (which still needs quite some time before it should be lauded) has been going on for some time.

Don't worry, I'm not singling you out - EK's ridiculous claim that the US recession was longer and deeper than the German recession is particularly amusing, especially when he says it's because Germany is an export-oriented economy. It's just that there are a lot of myths going around about Germany and it drives me crazy.

This graph is particularly illuminating:
http://www.angrybearblog.com/2010/11...ction-ecb.html

Is this where we can say "Truth has a known liberal bias?"

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Originally Posted by wiggin

EK's ridiculous claim that the US recession was longer and deeper than the German recession is particularly amusing,

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Excuse me, I didn't make that claim, I (foolishly) accepted Loki's assertion of that claim - with his false assertion they did it with no stimulus - and (worse) was parrotting it with an attempt to offer reasons why it might be true and why Germany's situation might be different from the US. Given Loki's history I damn well should have known better.

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Originally Posted by ']['ear

Is this where we can say "Truth has a known liberal bias?"

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Yes indeed. Honesty - or a desire for honesty and the truth - is apparently a liberal trait. And in politics, it weakens liberalism. :( Nobody likes the truth.

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Originally Posted by wiggin

But the larger issue is that the US already had a significant deficit coming into the recession, due to a combination of structural issues (e.g. growing healthcare costs) and shitty budgeting (e.g. war spending, bloated programs, etc.). Germany's deficit was carefully controlled beforehand.

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I'm surprised you don't acknowledge the 2003 Bush tax cuts as a reason for the deficit going into the recession. It also removed one of the quickest (if more symbolic than concrete) responses a president can make to a recession. Bush already shot the tax cut wad - during a strong economy no less - when the recession hit and the economy really needed it.

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Originally Posted by EyeKhan

Excuse me, I didn't make that claim, I (foolishly) accepted Loki's assertion of that claim - with his false assertion they did it with no stimulus - and (worse) was parrotting it with an attempt to offer reasons why it might be true and why Germany's situation might be different from the US. Given Loki's history I damn well should have known better.

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Sorry, I was just responding to this:

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Originally Posted by EK earlier

And we are dependant on consumer spending for what, 70% of our economy? You think Germany is like that? You think the fact that the US had a gigantic realestate bubble burst that was fueling consumer spending has anything to do with why our recession here might be longer and deeper than Germany's when their economy actually makes and exports things?

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Which is clearly wrong on a number of levels. If you agree with the facts, though, that's fine.

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I'm surprised you don't acknowledge the 2003 Bush tax cuts as a reason for the deficit going into the recession. It also removed one of the quickest (if more symbolic than concrete) responses a president can make to a recession. Bush already shot the tax cut wad - during a strong economy no less - when the recession hit and the economy really needed it.

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Honestly, that story isn't so clear. Deficits were manageable if not great for most of Bush's term, even with the tax cuts (they briefly edged about 3% of GDP in 2003-2004, but that's about it. The issue is that the makeup of the budget was shifting towards very high growth of entitlement spending and didn't leave much room for further cuts, especially in wartime.

I recognize that the relatively flush budgets since the late 90s (even after the dot-com crash and two wars, deficits weren't awful) were an opportunity to think sensibly about entitlement spending and reform, but comprehensive tax reform is also a good place to start. Obviously the makeup of the Bush tax cuts was not the best (I think it would have been wiser to focus on streamlining the tax code and taxing consumption rather than changing total receipts), but it wasn't an awful idea.

My bigger issue with Bush's deficits was that generally I support countercyclical spending, but with Bush's deficits already brushing 3%, there wasn't much room to maneuver. That being said, clearly some of the stimulus spending was on projects that really were dubious at best. I'd say the majority of the Obama-term deficits are due to growth in entitlements, decreases in revenue (something like $500 billion a year below trend growth?), automatic stabilizers (a la unemployment), TARP-like programs, and legitimate fiscal stimulus. But a significant portion was allocated to Democratic priorities that largely used stimulus as an excuse. These are obviously a bad idea in a tough fiscal environment.

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Originally Posted by EyeKhan

Yes indeed. Honesty - or a desire for honesty and the truth - is apparently a liberal trait. And in politics, it weakens liberalism. :( Nobody likes the truth.

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The meme that lots of House Democrats lost their seats because the body politic is stupid and just doesn't "get it" is frankly arrogant. Looking down on voters is not really a winning approach.

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I'm surprised you don't acknowledge the 2003 Bush tax cuts as a reason for the deficit going into the recession. It also removed one of the quickest (if more symbolic than concrete) responses a president can make to a recession. Bush already shot the tax cut wad - during a strong economy no less - when the recession hit and the economy really needed it.

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Iraq probably had more of an impact. I don't think it's fair to think about tax cuts as a zero-sum game. For example, a major part of the 2003 tax cut was comprised of cuts in capital gains and dividends.

The S&P 500, for example, rebounded quite a bit for several years after 2003. Obviously most of that was better economic performance. But inflation was also historically low during those times. And it's fair to say that a large chunk of the price increases was that stocks became more valuable assets now that the cost of realizing gains and earning dividends was lower. This increased value encouraged more volume, dividends and generally led to money going back to the government.

In short, raising and cutting taxes it's not a zero-sum issue. The short-term revenue calculations are not nearly as important as considering how taxes will impact economic behavior. It's easy to say that a government needs revenue, so taxes should go up to plug the hole. It's a more mature decision to say that the government has a long-term interest in nurturing a strong business environment that will be able to fund the government.

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Originally Posted by Dreadnaught

The meme that lots of House Democrats lost their seats because the body politic is stupid and just doesn't "get it" is frankly arrogant. Looking down on voters is not really a winning approach.

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The body politic isn't stupid, just incredibly vulnerable to manipulation and deceit. Knowing that, saying it, doesn't help the problem when you don't have the sort of scruples that let you lie, fear monger, cheat and steal to get power. So, after a fashion, you're depressingly right.

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The meme that lots of House Democrats lost their seats because the body politic is stupid and just doesn't "get it" is frankly arrogant. Looking down on voters is not really a winning approach.

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I think they're is a lot of truth in that though. People are just really ignorant, and it's not that they lack the ability to think, it's rather they were brainwashed in a certain way that when it comes to certain issues their critical thinking shut downs. I think it's partly due to a disinterest in politics, so they just go with the flow, I think it's because of indoctrination, I think it's because our schools don't consider understanding politics, economics, and basic life skills as core learning material. However, the way our society has evolved it needs to be. As parents work many hours, and kids are at school for many hours, there is less social bonding, discussion, and parents don't teach their kids about the world directly as much... they're raised ignorantly. The way the world works, in some regards past civilization were superior to us. In some regards technology, has made us less social, and worse off socially, and intellectually. As it makes us more independant and does thinking for us.

The people whose ideology/party are on the "losing" end always say this. Folks aren't being manipulated en-masse, they are taking a look at the situation and are unhappy with some of the major legislative and government spending trends. They want a change. Sound familiar?

Just because people always say something doesn't mean that sometimes it isn't true. My brother's a TEA Partier and his big complaint is how his taxes went up to pay for Obama's bailouts. :|. Never mind that he actually got a tax cut from Obama and the bailouts were largely the work of GW. My mother's big complaint was how Obama's health care cuts Medicare, how elderly people now would not get organ transplants and knee replacements. :|. Sorry to be anecdotal and all, but if you can't see the ignorance and deception peddling in the TEA Party nether sphere and the Right Wing propaganda network, you are denying blatant, ugly reality. There is nothing comparable from liberals. And don't start on about Moveon dot org, they have nothing even close to the influence of the right. The only thing the right attacks that I am familiar at all with is NPR and that is frankly the last major source of actual journalism in the United States, and actual journalism is the right wing propaganda machine's biggest threat. Of course they attack NPR.

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Originally Posted by Dreadnaught

The meme that lots of House Democrats lost their seats because the body politic is stupid and just doesn't "get it" is frankly arrogant. Looking down on voters is not really a winning approach.

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Fortunately Chaloobi isn't running for congress. So was there a point to this straw man?

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Iraq probably had more of an impact. I don't think it's fair to think about tax cuts as a zero-sum game. For example, a major part of the 2003 tax cut was comprised of cuts in capital gains and dividends.

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And that would have nothing to do with the impact of Dot com bubble finally dissipating?

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The S&P 500, for example, rebounded quite a bit for several years after 2003. Obviously most of that was better economic performance. But inflation was also historically low during those times. And it's fair to say that a large chunk of the price increases was that stocks became more valuable assets now that the cost of realizing gains and earning dividends was lower. This increased value encouraged more volume, dividends and generally led to money going back to the government.

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Or we could be parsimonious, and rather than waving some bizarre mechanistic wand we could assume that the economic cycle was churning through its course, and the downturn of the dot com bust was swinging back up.

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In short, raising and cutting taxes it's not a zero-sum issue.

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Totally agreed, and I at least (and I assume others) never claimed it was, and are guilty of, at most, using shorthand. Which, since we aren't writing fracking dissertations, is acceptable and should be exempt from hair splitting digressions.

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The short-term revenue calculations are not nearly as important as considering how taxes will impact economic behavior. It's easy to say that a government needs revenue, so taxes should go up to plug the hole. It's a more mature decision to say that the government has a long-term interest in nurturing a strong business environment that will be able to fund the government.

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All true. This disagreement should be about how that happens. Because, as we see now, Capital is hanging onto its money instead of plowing it back into the economy. Giving them a tax cut would be utterly foolish, especially since a) they pay a lower percentage than the middle class, and b) they're not going to spend that money. You want to increase consumption? Give money to people who live hand to mouth, They'll freakin spend it. Better, start fixing roads and bridges, which the whole political spectrum acknowledges are falling apart all over the country. Guess where most of the unemployment lies? Construction. Well, it might not be swinging a hammer, but those same guys can do something other than frame houses. They are then guys who are building our infrastructure back to acceptable levels instead of pulling in unemployment or welfare/food stamps.

It's completely not acceptable. To use a "shorthand" view of tax cuts/increases and then base your view of fiscal policy on said shorthand is actually something of a self-deception.

Claiming that a relatively minor tax cut hurt government revenues in such a profound way that we swung from a surplus to a deficit is a pretty gross oversimplification.

because its sadly "big government" is going to be coming up a lot...

http://i.imgur.com/HDA43.jpg

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Originally Posted by Dreadnaught

It's completely not acceptable. To use a "shorthand" view of tax cuts/increases and then base your view of fiscal policy on said shorthand is actually something of a self-deception.

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Short hand is communication, Dread. Not policy. :bored:

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Claiming that a relatively minor tax cut hurt government revenues in such a profound way that we swung from a surplus to a deficit is a pretty gross oversimplification.

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I said this? :confused:

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Originally Posted by Ominous Gamer

because its sadly "big government" is going to be coming up a lot...

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Because:
A) Regulation is a panacea.
B) Regulation doesn't cause problems of a similar scale.

:bored:

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Originally Posted by Loki

Because:
A) Regulation is a panacea.

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More like a (very) necessary evil.

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B) Regulation doesn't cause problems of a similar scale.

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Examples?

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Originally Posted by Loki

Because:
A) Regulation is a panacea.

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You're saying that regulation cures everything? Cool! We should just go with that then. Why are you opposed to it?

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B) Regulation doesn't cause problems of a similar scale.

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So it's not harmful either! Let's all become liberals?

{or let's all spout boilerplate}

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Originally Posted by EyeKhan

More like a (very) necessary evil.

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Quite frequently the greater of two evils.

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Examples?

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The gold standard.
Nixon's and Carter's attempts to regulate oil prices.
Different environmental regulation in different states on the sale of oil.
Numerous environmental regulations that simply lack common sense (see the one Lewk posted recently).
The entire rent control system (particularly in NYC).
Numerous business regulations whose main effect is to force out small businesses (and prevent them from entering), while increasing market share for giant corporations.

Plus all the examples given by OG actually involved regulations, so I fail to see why new regulations would function any better than old ones. :bored:

Wouldn't hurt to try to understand this concept:
http://en.wikipedia.org/wiki/Nirvana_fallacy

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Originally Posted by Loki

The gold standard.

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Not enough information provided.

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Nixon's and Carter's attempts to regulate oil prices.

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Not enough information provided.

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Different environmental regulation in different states on the sale of oil.

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This - assuming its an actual issue and no, you don't get the benefit of the doubt - is driven by the fact the Federal Government has been too paralyzed to act. It is not an indictment of regulation, but a call for centralized regulation.

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Numerous environmental regulations that simply lack common sense (see the one Lewk posted recently).

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Not enough information given. And a right-wing capitalizm fanboy doesn't get to decide what makes environmental common sense. Sorry.

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The entire rent control system (particularly in NYC).

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I'm not familiar with it, though I hear the rent in NYC is Too Damn High.

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Numerous business regulations whose main effect is to force out small businesses (and prevent them from entering), while increasing market share for giant corporations.

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Sounds like an argument to get unfettered corporate money out of the political process and stop pretending for legal purposes that corporations are people. But, you know.

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Plus all the examples given by OG actually involved regulations, so I fail to see why new regulations would function any better than old ones. :bored:

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Well, unfortunately our Executive can choose not to enforce regulations. That, again, is not an indictment of regulation, but of bad government. Becuase it's not the size that counts, but whether it works. And if the executive is allowed to set aside the law of the land when he feels like it, then you don't have a government that works no matter how small or large it is.

No use damning regulations if the regulating agency is a) gutted so they can't regulate or b) if conflicts of interest are allowed.

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Originally Posted by ']['ear

No use damning regulations if the regulating agency is a) gutted so they can't regulate or b) if conflicts of interest are allowed.

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So we can only point out systemic problems if a system is perfect? What a wonderful way to avoid criticism. Only things which can't be criticized are allowed to be criticized.

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Originally Posted by LittleFuzzy

So we can only point out systemic problems if a system is perfect? What a wonderful way to avoid criticism. Only things which can't be criticized are allowed to be criticized.

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Loki? Is that you?

You, too, have succumbed to the strawmanathon, eh? Let me know if you are actually interested in debating.

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Originally Posted by LittleFuzzy

So we can only point out systemic problems if a system is perfect? What a wonderful way to avoid criticism. Only things which can't be criticized are allowed to be criticized.

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So a system is always crap because you don't even bother improving it? Giving regulating agencies actual power and barring conflicts of interest are pretty standard to even give the system a chance to work. :bulb: Without that, the system is indeed worthless.

That, and the GOP has made a point of trying to kill unwanted federal regulation for decades by "starving the beast." Cut off the money and you get a two-fer: you decrease regulation because they don't have the people to do it, and you can then point to "yet another useless government agency." Win-win.

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Originally Posted by LittleFuzzy

Only things which can't be criticized are allowed to be criticized.

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Yossarian?

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Originally Posted by Flixy

So a system is always crap because you don't even bother improving it? Giving regulating agencies actual power and barring conflicts of interest are pretty standard to even give the system a chance to work. :bulb: Without that, the system is indeed worthless.

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Republicans specialize in fulfilling their declaration that government can't do anything right.

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Originally Posted by Flixy

So a system is always crap because you don't even bother improving it? Giving regulating agencies actual power and barring conflicts of interest are pretty standard to even give the system a chance to work. :bulb: Without that, the system is indeed worthless.

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Well said. :up:

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Originally Posted by Flixy

So a system is always crap because you don't even bother improving it? Giving regulating agencies actual power and barring conflicts of interest are pretty standard to even give the system a chance to work. :bulb: Without that, the system is indeed worthless.

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Pretty much every example Loki listed are ones where Tear's criticisms don't apply. It's not what's going on in those situations. Regulation does create problems, sometimes very serious ones which can quickly become almost impossible to fix *like rent control* It will always create problems, and criticism of those problems and of regulation because it leads to them, will always be accurate. Regulation may still be the lesser harm, that depends on a case-by-case basis, which most advocates of regulation are too tired, frustrated, and generally impatient to deal with. They'll pretend like the problems don't exist or are of no importance, rather than actually try to address them, and they will always, always insist that any issues arising in reality are because of poor quality in implementation. Most will concede that regulation inherently involves trade-offs as a theoretical concept, but won't accept it in the real world. And some, including a couple of posters on here, think that if they can just engineer it enough, they can construct it so there actually are no trade-offs, that entropy and the Demon Murphy aren't always ahead of them.

Deregulation created quite a catastrophe lately. We should go back to state chartered banks.

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Originally Posted by LittleFuzzy

Pretty much every example Loki listed are ones where Tear's criticisms don't apply. It's not what's going on in those situations. Regulation does create problems, sometimes very serious ones which can quickly become almost impossible to fix *like rent control* It will always create problems, and criticism of those problems and of regulation because it leads to them, will always be accurate. Regulation may still be the lesser harm, that depends on a case-by-case basis, which most advocates of regulation are too tired, frustrated, and generally impatient to deal with. They'll pretend like the problems don't exist or are of no importance, rather than actually try to address them, and they will always, always insist that any issues arising in reality are because of poor quality in implementation. Most will concede that regulation inherently involves trade-offs as a theoretical concept, but won't accept it in the real world. And some, including a couple of posters on here, think that if they can just engineer it enough, they can construct it so there actually are no trade-offs, that entropy and the Demon Murphy aren't always ahead of them.

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Aside from the passive aggressive jabs at forum members, I agree with this sentiment. Don't think I ever implied otherwise, did I?

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Originally Posted by Loki

The gold standard.
Nixon's and Carter's attempts to regulate oil prices.
Different environmental regulation in different states on the sale of oil.
Numerous environmental regulations that simply lack common sense (see the one Lewk posted recently).
The entire rent control system (particularly in NYC).
Numerous business regulations whose main effect is to force out small businesses (and prevent them from entering), while increasing market share for giant corporations.

Plus all the examples given by OG actually involved regulations, so I fail to see why new regulations would function any better than old ones. :bored:

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Some of those aren't really good examples, though. Like rent control or even the gold standard. The business 'regulations' that benefit giant corporations is more about our financial system that was highly un-regulated, and conflicting policy between states.

Environmental policy and rules also lack coordination between federal and state agencies, that's when common sense goes missing.

Maybe we should define Regulations and Regulatory Agencies, before throwing every policy or law in one big bag?

I think Fuzzy already established that they're not good examples because you disagree with their implications. Continue believing that there's some "perfect" regulations out there that will resolve every problem they're meant to solve without causing new ones as long as they're "properly" implemented.

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Originally Posted by Loki

I think Fuzzy already established that they're not good examples because you disagree with their implications.

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I read Fuzzy's post, too. IMO they're not good examples of what regulation means, because we're all using a different definition of the word. The way you've used it --- any legislator is a regulator....

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Continue believing that there's some "perfect" regulations out there that will resolve every problem they're meant to solve without causing new ones as long as they're "properly" implemented.

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Sorry, but my complaint is how the agencies are constructed, and when they're not coordinated with each other. Seems to me most implementation problems stem from that.

I've never claimed perfect regulation is a realistic goal, let alone a panacea. :rolleyes:

Seems to me that they're constructed the way they are and coordinate the way they do for specific reasons, and those reasons aren't going to magically vanish just because you want to create perfect regulation.

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Originally Posted by Loki

Seems to me that they're constructed the way they are and coordinate the way they do for specific reasons, and those reasons aren't going to magically vanish just because you want to create perfect regulation.

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Originally Posted by GGT

I've never claimed perfect regulation is a realistic goal, let alone a panacea. :rolleyes:

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Originally Posted by Flixy

So a system is always crap because you don't even bother improving it? Giving regulating agencies actual power and barring conflicts of interest are pretty standard to even give the system a chance to work. :bulb: Without that, the system is indeed worthless.

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:bored:

Here's a concrete example of a US Regulatory Agency:

http://en.wikipedia.org/wiki/Mineral...gement_Service

Previously, MMS was responsible as Regulators (watchdogs) as well as collecting revenue royalties. Clear conflict of interest, built into the organizational structure.

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Originally Posted by ']['ear

Aside from the passive aggressive jabs at forum members, I agree with this sentiment. Don't think I ever implied otherwise, did I?

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You're one of the people I was thinking of when I wrote "and they will always, always insist that any issues arising in reality are because of poor quality in implementation. Most will concede that regulation inherently involves trade-offs as a theoretical concept, but won't accept it in the real world." Too an extent that's normal and understandable, what we can see and understand in the abstract gets more incomprehensible when it's staring us straight in the face, but I think most people aren't making sufficient effort to step back when that happens.

I can't see why in the world you'd attribute such sentiments to me. I think all human actions are imperfect, and am well aware of the law of unintended consequences. On the flip side, I am very cynical, and don't trust people at all when large sums of money or power are involved. When lots of money is involved, the potential for corruption becomes spectacularly high. Do I need to go through the checks and balances spiel again? I can't believe that people are so dumb as to take Cs and Bs as an article of faith when political power is involved, but consider them anathema where financial power involved. That's a stunning logical disconnect.

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Originally Posted by ']['ear

Short hand is communication, Dread. Not policy. :bored:

I said this? :confused:

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I hate to be pissy, but if you're going to interject on my exchange with Chaloobs (which is fine), please don't shrug your shoulders and complain that I'm putting words in your mouth. I was addressing a point made by Chaloobi, not you. :bored: Obviously I welcome everyone talking about everything, but it's a bit frustrating for you to divert the conversation towards you like that.

Fair enough. Sorry about that. And that's not pissy.

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Originally Posted by Dreadnaught

I hate to be pissy, but if you're going to interject on my exchange with Chaloobs (which is fine), please don't shrug your shoulders and complain that I'm putting words in your mouth. I was addressing a point made by Chaloobi, not you. :bored: Obviously I welcome everyone talking about everything, but it's a bit frustrating for you to divert the conversation towards you like that.

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Hell, I lost track back at Catch-22. What are you guys crying about anyway?