Swiss Mercenary on 4/3/2009 at 02:22
I don't think incresing the income tax for millionaires by 2% is going to break their backs.
Might have to reneg on their country club memberships though. Don't think the economy will tank, though.
Chade on 4/3/2009 at 02:43
Thief13x, I'm not talking about what administrations are saying ... I'm talking about what economists are saying (at least, as far as I can tell).
Also, USA debt is not that bad as a percentage of GDP. It's not good either, but you are still on par with a lot of other developed nations.
the_grip on 4/3/2009 at 04:28
SM, it is $250K plus earners, not millionaires exclusively. I don't have the numbers in front of me but it comes out to a $2M loan or so for twenty years (I believe) per person that they pay $120K on a year. It doesn't work.
Chade, you are right, the classic Keynesian economics is going to say that spending IS the way out of recession. I've got two qualms here:
1. This "stimulus" (as I mentioned above) really does not get spent until well into 2010. How is that stimulus spending? It isn't. It is just spending.
2. I don't know of an example in history (outside of war) that has shown this to be true. Look at the 1970s, or, better yet, look at Japan. Japan is the quintessential example of gov't spending out of problems and how it hasn't worked. They are no better than they were 20 years ago when they started.
RE: debt vs. GDP - you also have to account for a. the GDP is cratering and b. the *rate* of debt is increasing exponentially
In the end I think we are headed down a very bad road here, but I don't see how we can get things on the right track. This is not coming from some right wing left-hating perspective - I really like Obama, I like his social policies in principle, but I think he is much more chatter and populist pleasing now than I did when he was elected.
I hope this all turns out better than I fear, but I really think we're fucked. The sad thing is this is all done in the name of good ideas.
To boot, all the retiring middle-class boomers are now officially screwed. Their retirements that they have saved have been halved in value. This will be the largest retiring demographic move in our history, and it is going to be an enormous strain without savings and a huge increased need for healthcare. Unfortunately, how will we finance it? I have a coworker who is mid to upper 60s and who supports an autistic son and he is up shit creek.
the_grip on 4/3/2009 at 04:46
I should restate a little bit... gov't spending in a recession on things like infrastructure, etc., can be good, but we are talking about broad spending that invariably includes the Washington premium of bacon.
Chade on 4/3/2009 at 05:03
Christina defended the "shotgun" approach to spending in the pdf that I linked you to. Her arguments sounded reasonable to me. She also defended the long tail with other reasonable sounding arguments.
Here is a graph of the stimulus spending:
(
http://4.bp.blogspot.com/_nSTO-vZpSgc/SY1KMO58iSI/AAAAAAAAFj8/pXvjoLutRZU/s1600-h/Spending+Over+Time.png)
Note that the years are fiscal years, so the start of 2010 is actually mid-way through 2009. I think. I'd guess that half the spending is due to be spent by half-way through 2010 (calender year).
As far as "Japan did this, it didn't work for them", and other similar arguments: I have heard different bloggers pick different examples, or take different factors into account, and come to completely different conclusions.
At the end of the day, it is not possible to run well controlled experiments in macro-economics. So it is really hard (if not impossible) to argue rigorously about the subject. This doesn't mean that you are wrong, by any means. But I am going to go with what appears to me to be the majority opinion, which is pro-spending (with appropriate caveats - which I know nothing about).
Muzman on 4/3/2009 at 05:29
I would have thought staggered 'stimulus' made more sense (or about as much sense as anything else). A huge and sudden influx of government cash is going to look like mere defibrilation. We're only trying to get lenders to come back out of their holes while keeping everyone else going in the mean time. Sudden loud noises only make them suspicious. A gentler, more constant rhythm and they'll get used to it.
BEAR on 4/3/2009 at 06:03
Quote Posted by armchair economist
Hey, just wanted to let you all know, I know how all this money should have been spent. I'm incredibly dissapointed that nobody asked me to tell them how to do it. The fact that the stimulus isn't perfect is of particular issue to me, how an imperfect piece of legistlation could be crafted by so many different people is really quite beyond me.
If they don't spend it exactly according to my specifications, then I will pitch a tantrum and cry foul for all time. This will never happen, and if they were to craft it perfectly by what seems like my ideals, and it didn't work, I would simply change them and complain that they don't meet my new standards.
If anyone is interested, I'll be glad to post fifty to a hundred links from some really quite well researched blogs that are independent as only people with zero accountability can be.
Your welcome.
Seriously, I'm really getting sick of these people. I thought things would get less shitty after the election, but these chudfuckers seem to be just as loud as before (if not worse), and the utter inanity of their positions just makes it that much harder to bear. Its like we're having two different arguments. Its like arguing Science vs. Religion, you just can't fucking do it. I don't think the stimulus is perfect, but its a fucking negotiation, its never going to be perfect, nothing is. Also I only wrote this because stupid forums wouldn't let me post just a big fucking quote.
Swiss Mercenary on 4/3/2009 at 08:19
Quote Posted by the_grip
SM, it is $250K plus earners, not millionaires exclusively.
You don't have to earn a million a year to be a millionaire. You just have to be worth that much. Multi-milionnaire would probably be the better term.
Unless you spend it all on snorting crack off hookers.
Mmm.
Hookers.
Quote:
2. I don't know of an example in history (outside of war) that has shown this to be true. Look at the 1970s, or, better yet, look at Japan. Japan is the quintessential example of gov't spending out of problems and how it hasn't worked. They are no better than they were 20 years ago when they started.
The only Japanese family I've spoken with blamed the government for dragging their feet in taking action to help the economy, but they could well be mistaken.
As for pork, pork spending is still spending... Paying someone to dig a hole, and fill it still gets money moving in the economy, although we'd obviously far rather see it be spent on something that'll also benefit society.
june gloom on 4/3/2009 at 10:00
I can think of some people I'd like to see filling that hole.
analyze that
the_grip on 4/3/2009 at 13:04
Nice post BEAR. That's why I'll exit the discussion at this point... once we get the "if you disagree with me you are a chudfucker throwing a tantrum louder than before" then I can see where the thread is headed.
p.s. never mind that I voted for Obama, I like the guy, and I want this shit to work. I guess having doubts in the abilities of our elected officials puts me in some camp you don't like unless said officials are the ones you despise?
