It looks like it is really going to hit the fan soon.
http://www.athensnews.gr/portal/9/43673
Quote from: guido911 on June 28, 2011, 11:30:46 AM
It looks like it is really going to hit the fan soon.
http://www.athensnews.gr/portal/9/43673
Meh. You must be having focus trouble. They're just going to exchange old debt for new debt. It's kinda like taking bankruptcy and telling the creditors "look, maybe we'll dig our way out of this mess and you'll get something rather than nothing further down the road."
read up: http://online.wsj.com/article/BT-CO-20110628-706804.html
IMO the reason that Greece is such a hot button for the world economy is that it's only an entrypoint into general chaos in the Eurozone. Spain and Portugal and Italy and Ireland, etc are all ripe for similar strikes and disruptions (and upheaval?), since they've all had to deal with similar -- though not as strict -- austerity regimes.
If you're looking for a major contributing factor to why American businesses aren't hiring, look no further.
Austerity doesn't really work in general. Problem is that with the Euro it's just about the only option for getting Greece back in line relative to the rest of the Euro area. With their own currency, inflation would take care of the problem without as much pain to the populace unless it took off into hyperinflation, which is unlikely in an economy with some there there. (as opposed to Zimbabwe, for example, which has only a very small economy in the local currency)
Germany and everybody else are just too different. We deal with it better in the US because we have national policy that operates upon all 50 states. In the Eurozone, not so much. But the fact that preventing German pain is the only thing preventing inflation of the Euro, which would solve most of the periphery's problems, is a large part of why Greece and others have their hands out expecting more German bailouts. Combine that with the fact that the reason bailouts are even truly necessary is bad loans made by German banks, you can see why the Greeks are rightly pissed off.
They know that some cuts are necessary, but they don't see why they should have to be in worse shape just to keep Germans happy when Germany appears to be one of the sources of their present difficulty.
Edited to add: IMO, Greece will be far better off if they dump the Euro. Problem is the chaos that will be unleashed if the CDS contracts get triggered. This will likely either bring down several large European banks or require vast new bailouts. I don't see how it can be avoided, though, so it seems to me like it would just be better to go ahead and get it over with.
Try reading someone other than Krugman, Nathan. You are starting to sound an awful lot like him.
"The point is that Greece & Co. are in trouble because of excessive borrowing. Between 1999 and 2010 the structural deficit of the Greek government rose from 2 percent of gross domestic product to nearly 18 percent. Ireland went from surplus to minus 11 percent. Portugal was little better. The result was a debt explosion. The net government debt of Greece, the worst offender, soared from 76 percent of GDP to 142 percent last year.
As it became clear that there was no automatic mechanism to transfer funds from the relatively frugal European core to the profligate periphery, bond investors started to fear defaults. They dumped the debt, driving up the yield on Greek 10-year bonds—and hence the interest rate on new borrowing—to 17 percent. That simply made matters worse, necessitating ever more desperate spending cuts and tax hikes to avoid national bankruptcy.
The British story is different. Starting in a very similar fiscal hole—the structural deficit was 8 percent of GDP in 2009 and the debt–GDP ratio had doubled in seven years—the new Tory-led government acted preemptively, announcing deep budget cuts before the financial markets freaked out. As a result, Britain's borrowing costs have actually come down.
Members of the Deficits Forever club are intellectually lazy when they assert that the U.K. economy is growing slowly because austerity doesn't work, implying that things would be better had the spending binge continued. Maybe. But maybe not. A responsible politician wouldn't take the gamble because the costs of being wrong are too high. Just ask the Greeks."
http://www.newsweek.com/2011/05/29/austerity-works.html
Yes, Greece borrowed too much money. I'm not saying they didn't. What I am saying is that it wouldn't require such drastic measures if they could inflate the currency somewhat to help out. Clearly they can't completely inflate away the debt, but it would at least be more tolerable to the people that way. The Greeks are basically being asked to endure significant deflation, which will make paying off their debt even harder.
It goes beyond Greece, though. Other Eurozone periphery economies haven't dug themselves such a deep hole of debt (Spain, for example, was running a surplus before the meltdown) are being asked to do the same thing just to save the Germans some inflation.
I do read more than Krugman, by the way. Unfortunately, most economists are stuck on stupid right now. They keep looking at things as if we were in a normal situation. That's why we get the Fed doing QE and QEII even though it's clearly not going to do any good when liquidity is not the issue. That's why we get the Germans being overly concerned with interest rates, even though interest rates are and have remained completely depressed despite the dire predictions of a year or a year and a half ago.
The world economy is still severely broken right now, and anyone who is pretending it's not is making useless predictions that have repeatedly turned out to be untrue. Right now, I place a lot of trust in Krugman because he's been consistently correct. He's been saying that we're on track to repeat Japan's lost decade, thus viewing events through that lens, and thus far it's clearly been the correct way to look at things. The ironic thing is that Bernanke was apparently a student of Japan's issues, yet he continues to make the same mistakes. Whether that's because he can't get the rest of the Board of Governors to go along or what, I can't say, but so far his efforts have been a complete failure.
I think it's because Bernanke keeps approaching everything from a theoretical standpoint instead of listening to what business says it needs to be able to hire more people and expand. We definitely don't need more cash out there as there's plenty waiting to be spent.
Something else I'm reading lately is you can't even look back ten years for lessons to apply to what's happening today. In other words, I'm taking it that some economists are seeing the economy as being far more dynamic these days than it was 30 years ago and most certainly more dynamic than it was in the 1930's and that's why the old Keynesian tricks simply do not appear to be working. In the 1930's business was far more centralized. These days you have millions of small businesses compared to a lot fewer corporate giants. The herd of smaller players has gotten a whole lot bigger, and management is far more direct and perhaps more prone to emotional direction rather than theoretical or even rational direction.
I completely agree with borrowing for expansion, it's a wise business proposition if you are certain expansion will be financially rewarding. I even agree with borrowing to pay the electric bill or payroll during an off month.
The problem is, we've been paying the gas, electric, water, payroll, and mortgage with borrowed funds for more or less the last three decades, but more so the last 10 years.
I agree with you that we have been doing the wrong thing for a long while with regard to our borrowing, in the general sense. I think there are unique circumstances that make this less of a problem than it would otherwise be, however. Despite the magnitude of our debt, it's not yet to a level that is terribly problematic.
We clearly have been on the wrong track with regard to deficit spending during good economic times. If you accept that deficit spending through lean years is the right thing to do, why should we not do that now? Having done things the wrong way round before doesn't seem like a great reason to do the wrong thing now.
Greece I believe has no way of tracking income tax on the people there.....So they end up not paying or paying very little.....
Quote from: Conan71 on June 28, 2011, 04:43:47 PM
I think it's because Bernanke keeps approaching everything from a theoretical standpoint instead of listening to what business says it needs to be able to hire more people and expand. We definitely don't need more cash out there as there's plenty waiting to be spent.
Something else I'm reading lately is you can't even look back ten years for lessons to apply to what's happening today. In other words, I'm taking it that some economists are seeing the economy as being far more dynamic these days than it was 30 years ago and most certainly more dynamic than it was in the 1930's and that's why the old Keynesian tricks simply do not appear to be working. In the 1930's business was far more centralized. These days you have millions of small businesses compared to a lot fewer corporate giants. The herd of smaller players has gotten a whole lot bigger, and management is far more direct and perhaps more prone to emotional direction rather than theoretical or even rational direction.
I completely agree with borrowing for expansion, it's a wise business proposition if you are certain expansion will be financially rewarding. I even agree with borrowing to pay the electric bill or payroll during an off month.
The problem is, we've been paying the gas, electric, water, payroll, and mortgage with borrowed funds for more or less the last three decades, but more so the last 10 years.
The tax code needs to be calibrated to allow corporations to hire more people. For example, it's coming in the form of "tax holidays" for multinationals. They'll qualify for credits after exhibiting their application of funds devoted to hiring new employees. But this is not a Fed function.
Conan, I'm really tired of your Keynesian theory doesn't work and theoretical analysis. Your comment "These days you have millions of small businesses compared to a lot fewer corporate giants" is laughable. The fewer corporate giants are so big today they wield all the power. The real problem is that you keep drawing up those household comparable budget situations with our government function and the economies are completely dissimilar.
BTW, those with tons of cash are starting to loosen up and invest. The second half of the year will show improvement. The debt ceiling crisis will pass. Then you can find some other Obama bashing reason to whine over the good things out there in light of just 4 years ago.
Quote from: Teatownclown on June 28, 2011, 09:37:31 PM
The tax code needs to be calibrated to allow corporations to hire more people.
Are you advocating a corporate tax break?
Quote
But this is not a Fed function.
Then, given your opening statement, where does it belong?
[/quote]
Quote from: Red Arrow on June 28, 2011, 09:43:00 PM
Are you advocating a corporate tax break?
Then, given your opening statement, where does it belong?
It belongs to congress as worthless as they are. And I will always be in favor of corporate tax relief when there's a direct correlation to employment and giving employees a hand up.
Quote from: Teatownclown on June 28, 2011, 09:53:27 PM
It belongs to congress as worthless as they are.
I agree. It thought you were referring to the Fed(eral government) rather than "the Fed".
Rolling dumpsters, the cobblestones of the new age.
we could use some of that Greece on our MacDonalds....
Quote from: Teatownclown on June 28, 2011, 09:37:31 PM
The tax code needs to be calibrated to allow corporations to hire more people. For example, it's coming in the form of "tax holidays" for multinationals. They'll qualify for credits after exhibiting their application of funds devoted to hiring new employees. But this is not a Fed function.
Conan, I'm really tired of your Keynesian theory doesn't work and theoretical analysis. Your comment "These days you have millions of small businesses compared to a lot fewer corporate giants" is laughable. The fewer corporate giants are so big today they wield all the power. The real problem is that you keep drawing up those household comparable budget situations with our government function and the economies are completely dissimilar.
BTW, those with tons of cash are starting to loosen up and invest. The second half of the year will show improvement. The debt ceiling crisis will pass. Then you can find some other Obama bashing reason to whine over the good things out there in light of just 4 years ago.
Show me where the stimulus, which was pure Keynes, has had a lasting impact on the economy. Just this morning on the news there was a piece on jobs which now must be eliminated because they were funded with temporary stimulus funds. The alternative is to pay with state funds or jobs will be lost. States are in budget dilemas as well. Small business in the U.S. employs more people than corporate giants. That's an immutable fact and entirely relevant when you consider that they wield the hugest chunk of non-government employment opportunities. That's real power in making economic progress.
Many of those small businesses are privately held and not subject to the whims or demands of shareholders and the banksters on Wall Street. In other words, they've got far more flexibility when it comes to optimistic investing in the economy right now or hanging on to money and keeping the payroll pretty lean. Many also are not as well-equipped to deal with the mandates contained in Obamacare. In order to fully appreciate what's happening economically, you cannot ignore personal behavior which completely defies classic economic theory.
Your comment on corporate tax holidaze sounds like corporate welfare to me which you have always eschewed. Please expand on what you mean by calibrating the tax code, it still sounds like the government is having to subsidize the jobs in that case, but I'm all ears.
Nathan, what's problematic to me is risking our debt rating and our ever-increasing interest expense. Think how many disadvantaged Americans could receive a completely paid college education, or how many people could receive a seed grant to start a business which would employ other Americans in lieu of paying interest on our debt to foreign debt holders which only helps bolster their economy.
I'm glad to see most of us are trying to get beyond pointing a finger at who is at fault and actually looking at solutions. Positive dialogue like that on a national scale might restore some semblance of sanity to our political landscape and we might actually start working on the same goals and learning compromise doesn't mean one side or the other has lost. Yeah, I know, I'm dreaming again. 8)
Quote from: Conan71 on June 28, 2011, 11:53:58 PM
Nathan, what's problematic to me is risking our debt rating and our ever-increasing interest expense. Think how many disadvantaged Americans could receive a completely paid college education, or how many people could receive a seed grant to start a business which would employ other Americans in lieu of paying interest on our debt to foreign debt holders which only helps bolster their economy.
I'm glad to see most of us are trying to get beyond pointing a finger at who is at fault and actually looking at solutions. Positive dialogue like that on a national scale might restore some semblance of sanity to our political landscape and we might actually start working on the same goals and learning compromise doesn't mean one side or the other has lost. Yeah, I know, I'm dreaming again. 8)
Luckily, from your perspective, about half of the public debt (this doesn't count the amounts owed to the Social Security Trust Fund, for example) is owned by US persons/entities. I'd rather we not have overspent through the good years, but Bush was elected along with a bunch of borrow and spend Republicans and here we are.
Regarding the interest expense on the debt, I agree that I'd rather be spending that productively. But again, we foobared up and borrowed through the good years, so here we are. On the bright side, it's cheap for the federal government to borrow right now, so we actually had less interest expense last year than we did in 2007. I'm trying to find a breakdown as to how much of that is flowing out of our economy into foreign hands, how much is the government paying itself and how much is being paid to US persons, but it's proving difficult.
As far as Keynes goes, the $350 billion we spent on that was a drop in the bucket to the supply side tax cut BS and even that was a drop in the bucket compared to the bailouts which we may or may not be on the hook for in the end (that's a large part of the increase in our debt, actually)
Your numbers are incorrect.
According to http://www.recovery.gov/Pages/default.aspx
Thus far $653B has been spent under the ARRA of 2009 which includes tax benefits (yes, this would be a real figure according to the logic that tax cuts are an expense), grants, loans, and contracts, and entitlements.
I'd like to be excited about our interest expense being less than that in 2007, but it's sort of like the excitement one feels when waking up from a near fatal wreck only to find out you are paralyzed from the neck down.
Tax cuts are not Keynesian stimulus, sorry.
Quote from: nathanm on June 29, 2011, 05:04:53 PM
Tax cuts are not Keynesian stimulus, sorry.
Someone forgot to tell John Maynard Keynes that. Both President Bush with his $170 billion stimulus in 2008 and President Obama's proposed stimulus of $785 billion comes to $955 billion. Might as well call it a trillion. Considering actual expenditures, the total between Bush and Obama is $823 billion.
"Democratic Tax Cuts - Keynesian Theory
The theory favored by the Democrats is the Keynesian theory put forward by the British economist John Maynard Keynes in the 1930s and 1940s. Keynes' theory sought to manage an economy so as to keep it on an even keel and avoiding fluctuations in the business cycle - both the booms with their rising prices and busts (recessions / depressions) with their unemployment.
Keynes'
prescription for downturns in the economy was to stimulate demand by increasing government spending and/or cutting taxes. The idea was to get money into the hands of consumers so that they would begin buying, which would cause business inventories to decline and this, in turn, would cause businesses to replenish the inventories by re-hiring laid off workers and putting idle factories and machinery back into production. As workers were re-hired, they would begin spending their new paychecks which would further stimulate demand and so on until the economy was back to full employment and full production. Of course, at this point, the government would have to pull back by reducing spending and/or increasing taxes, least demand outpace production and lead to serious inflation.
Since the objective of
Keynesian tax cuts during a recession was to put money into the economy and encourage people to spend money, deficits were encouraged. To provide the stimulation needed to get the economy going, Keynes insisted that the government increase, or at leas maintain, current spending levels. Offsetting tax cuts with corresponding cuts in government spending, would, according to Keynes' theory, be self defeating in that the object was to encourage spending by consumers. Further, to be effective, Keynesian tax cuts had to be directed toward the lower income brackets since these brackets contained the people with the lower incomes. The lower a household's income, the more of that income the household has to spend to survive.
http://hubpages.com/hub/Democrat_vs_Republican_Tax_Cuts_
(http://www.mamapop.com/wp-content/uploads/2010/09/the-more-you-know.jpg)
You'd prefer %12 unemployment as opposed to the current %9? The QE2 program, TARP, Cash for Clunkers, and the stimulus all worked. Get over it.
btw, my check to Michele Bachman went out this morning.
Quote from: Teatownclown on June 30, 2011, 11:30:47 AM
You'd prefer %12 unemployment as opposed to the current %9? The QE2 program, TARP, Cash for Clunkers, and the stimulus all worked. Get over it.
btw, my check to Michele Bachman went out this morning.
No, I'd prefer 6% as opposed to the sustained 9%. Those were all temporary measures which, I agree, helped things from getting worse, but what are they currently doing for unemployment and growth in GDP?
Quote from: Conan71 on June 30, 2011, 11:36:33 AM
No, I'd prefer 6% as opposed to the sustained 9%. Those were all temporary measures which, I agree, helped things from getting worse, but what are they currently doing for unemployment and growth in GDP?
It might have gone to %30 if it was computed realistically thank you GOP. ;D
Quote from: Conan71 on June 30, 2011, 11:36:33 AM
No, I'd prefer 6% as opposed to the sustained 9%. Those were all temporary measures which, I agree, helped things from getting worse, but what are they currently doing for unemployment and growth in GDP?
If things had gotten worse, we'd be at a sustained 10 or 12% unemployment rate. I agree it didn't work as well as it could have, but I was saying it wouldn't before the stimulus even passed, thanks to half of it being tax cuts and people's present propensity for paying off debt and saving money. When people and business won't spend for their own good, it's up to Government to create the demand necessary to prevent the fall being even larger.
The more we lose now, the worse off we are later.
Quote from: nathanm on June 30, 2011, 04:44:05 PM
If things had gotten worse, we'd be at a sustained 10 or 12% unemployment rate. I agree it didn't work as well as it could have, but I was saying it wouldn't before the stimulus even passed, thanks to half of it being tax cuts and people's present propensity for paying off debt and saving money. When people and business won't spend for their own good, it's up to Government to create the demand necessary to prevent the fall being even larger.
The more we lose now, the worse off we are later.
What constitutes spending for one's own good? Are you saying it would have been good for the overall economy for them to spend instead of saving or getting out of debt? Keep in mind many of us have parents born in the depression which means we had grandparents who lived through and had to wade their way through the depression. My grandparents got really thrifty, saved what they could in the event my grandfathers would have found themselves without work, and didn't borrow money. Many of us had that lesson handed down.
Personal survival will always trump the survival of the herd when it comes to humans.
Oh, and I disagree about the government creating demand with this stimulus. They simply funded a lot of projects which states and cities didn't have the funds to do and extended U/E benefits.
Maybe it's just semantics between your assertion of "demand" and people spending for their own good. Oh, and I was at least hoping you'd acknowledge I pwn3d you on Keynes and tax cuts. ;)
Quote from: Teatownclown on June 30, 2011, 11:30:47 AM
You'd prefer %12 unemployment as opposed to the current %9? The QE2 program, TARP, Cash for Clunkers, and the stimulus all worked.
It worked? Really? Because I thought Obama's team said if we passed stimulus, unemployment would not exceed 8%. Instead, we got 10%. Here's Greenspan's take:
QuoteThe Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports, Federal Reserve Governor Alan Greenspan told CNBC Thursday.
In a blunt critique of his successor, Fed Chairman Ben Bernanke, Greenspan said the $2 trillion in quantative easing over the past two years had done little to loosen credit and boost the economy.
"There is no evidence that huge inflow of money into the system basically worked," Greenspan said in a live interview.
"It obviously had some effect on the exchange rate and the exchange rate was a critical issue in export expansion," he said. "Aside from that, I am ill-aware of anything that really worked. Not only QE2 but QE1."
http://nation.foxnews.com/alan-greenspan/2011/06/30/greenspan-stimulus-failed#ixzz1QookmD8V
Now, I am NO fan of this "let's raise taxes" guy, but I am likely to take his opinion over yours clown.
Greenspan was talking about QE and QE2, which have nothing to do with the stimulus. One is the Federal Reserve, the other is the Federal Government. Congress and the President get no say over monetary policy. Bernanke gets no say over fiscal policy.
QE did thaw out the credit markets and QE2 did manage to push commodity prices up, but I don't know that they had much effect otherwise. Banks are using most of the QE money for their own purposes rather than lending it out. Yet another example of how allowing commercial banks to have prop trading desks isn't a particularly great thing.
Quote from: nathanm on June 30, 2011, 10:31:00 PM
Greenspan was talking about QE and QE2, which have nothing to do with the stimulus. One is the Federal Reserve, the other is the Federal Government. Congress and the President get no say over monetary policy. Bernanke gets no say over fiscal policy.
QE did thaw out the credit markets and QE2 did manage to push commodity prices up, but I don't know that they had much effect otherwise. Banks are using most of the QE money for their own purposes rather than lending it out. Yet another example of how allowing commercial banks to have prop trading desks isn't a particularly great thing.
Did you bother reading the damned post I was responding to? NO. As for Greenspan on stimulus, chew on this.
QuoteThe former head of the Federal Reserve said fiscal stimulus efforts have fallen far short of expectations, and the government now needs to get out of the way and allow businesses and markets to power the recovery.
"We have to find a way to simmer down the extent of activism that is going on" with government stimulus spending "and allow the economy to heal" itself, former Fed Chairman Alan Greenspan told a gathering held at the Council on Foreign Relations in New York on Wednesday.
At this point, "we'd probably be better off doing less than more" because "you'd be far better off to allow the normal market forces to operate here," Greenspan said. That's largely because stimulus spending is not proving as effective as many had hoped. "To the extent the evidence suggests very large deficits concurrently crowd out capital investment, there is a debit to the stimulus program that is somewhere between a third and a half of what the gross stimulus is," he said.
[
Emphasis added]. http://blogs.wsj.com/economics/2010/09/15/greenspan-fiscal-stimulus-worked-far-less-than-expected/?mod=rss_WSJBlog&mod=marketbeat
And in March 2011:
QuoteBut with Republicans in control of the House, Greenspan's views are starting to gain an audience again. Many Republicans share his opinion that intervention has created uncertainty and deterred private sector investing.
Greenspan targeted deficits created by the $787 billion 2009 Recovery Act as the main culprit behind the current sputtering recovery.
Why are deficits to blame?
Greenspan said the Treasury Department's borrowing "crowds out" companies from finding similarly low interest rates to borrow funds for capital investments on equipment and plants.
[
Emphasis added]. http://money.cnn.com/2011/03/15/news/economy/alan_greenspan_recovery/index.htm
Please interpret for us what Greenspan meant in the two above articles? Because to me, it seems stimulus, QE, and QE2, all failed in his eyes.
lol, you actually listen to the guy whose policies caused the housing bubble?
Quote from: nathanm on June 30, 2011, 11:28:58 PM
lol, you actually listen to the guy whose policies caused the housing bubble?
And here we go again. Change the subject or
(http://t2.gstatic.com/images?q=tbn:ANd9GcTvc_FfyJCU9aakM011lTaZWre17h6EpCCbOV8E1c-DOih1sksnRA)
Quote from: guido911 on July 01, 2011, 01:58:24 PM
And here we go again. Change the subject or
Ladies and gentlemen, the expert on this subject. Please hold your applause.
Quote from: Townsend on July 01, 2011, 02:01:24 PM
Ladies and gentlemen, the expert on this subject. Please hold your applause.
Okay Kirk, where's Spock?
Quote from: guido911 on July 01, 2011, 02:25:03 PM
Okay Kirk, where's Spock?
Originality Trixie. You need some.
Modified to add:
You hear that dude? I'm Kirk.
Only issue is now we know what he imagines while at the keyboard and bitching at us.
Hey, expert? You think that state and local governments bleeding jobs might have something to do with the lackluster recovery?
(http://www.cbpp.org/images/cms//6-28-11sfp-f1-elert.jpg)
Also, people much smarter than me (and much more talented at making pretty graphs) have a strong belief, along with some evidence to back it up, that the deficits aren't the issue. It's a demand side problem, not a supply side problem. Greenspan, being an apostle of Reagan doesn't appear to grasp that there are two sides to every transaction. You can't sell stuff to people who aren't willing to buy it, and you can't buy stuff from people who aren't willing to sell it. Bernanke is also caught in this trap, annoyingly enough.
If the deficit or even fears of future inflation were the issue, interest rates would be higher.
(http://www.cbpp.org/images/cms//6-3-11ui-stmt-f1-infocus.jpg) (http://www.cbpp.org/cms/index.cfm?fa=view&id=3507)
(you can click on the image for the article that goes with it)
Nate, I don't like Greenspan either, but for different reasons. My point is that whatever we are doing right now, or even on Bush's watch for that matter, is not making any noticeable difference. We have unemployment over 9%, and I hope it comes down, massive deficits/debts, and no real plan being offered by the dems. Ryan has his idea, but as soon as it was released the left went into full orgasm. We get grandmother in a wheelchair going over the cliff--oh that's great was to start a discussion. Demagogue it.
The only sector really doing well, save about 3 weeks in the past month, is business and the investment markets. No one is really interested in taking all the money just sitting out there and using it to hire people. Personally, I have no interest in taking any risk, which I sense is the same problem with many many others with far more liquidity. Honestly, do you blame them? And if so, give them a reason why they should invest.
They should invest because it would make them money. And regarding Ryan's budget, see the chart I posted on another thread. It's not all that.
Also, I saw an interesting statistic yesterday. The unemployment problem is largely not a problem for white people. Unemployment among whites is up about 3.5 percentage points from its minimum, or about 7% right now, or about 1 point over what is normally considered a pretty good unemployment rate. Among blacks? Up almost 8 points, for a total of about 16%.
I think crappy consumer demand is probably a bigger part of this stagnant economy than anything else. I'm surprised demand hasn't picked up as the overall percentage of people's income devoted to debt service has decreased and sentiment regarding people's individual economic outlook has improved. What confuses me is that both the saving rate and outstanding consumer credit has ticked up somewhat over the past few months, but we're still not seeing much job growth. It's not all being spent on imported goods, so pancakes are people doing with the money?
Quote from: nathanm on July 01, 2011, 06:32:12 PM
They should invest because it would make them money. And regarding Ryan's budget, see the chart I posted on another thread. It's not all that.
Also, I saw an interesting statistic yesterday. The unemployment problem is largely not a problem for white people. Unemployment among whites is up about 3.5 percentage points from its minimum, or about 7% right now, or about 1 point over what is normally considered a pretty good unemployment rate. Among blacks? Up almost 8 points, for a total of about 16%.
I think crappy consumer demand is probably a bigger part of this stagnant economy than anything else. I'm surprised demand hasn't picked up as the overall percentage of people's income devoted to debt service has decreased and sentiment regarding people's individual economic outlook has improved. What confuses me is that both the saving rate and outstanding consumer credit has ticked up somewhat over the past few months, but we're still not seeing much job growth. It's not all being spent on imported goods, so pancakes are people doing with the money?
Then why don't they? After all, most of those people are self-made and got that way by thinking clearly (presumably) and taking risks. Yet you know more about how they can make more money than they do? Come on. Unless you are in the camp that the rich are deliberately not spending in order to tank Obama, chances are these people know more than the both of us.
Other than do away with the Bush tax cuts, what else are the dems doing to fix our mess? I want to know because as I see it they are just being Bleacher Creatures.
The wealthy folks I work for are spending money, but it's more of buying up cheap properties, cash poor businesses with otherwise good prospects, and opening new offices with existing employees than the sort of spending that creates new jobs. What's to be done to get them to redirect their investment into new businesses and that sort of thing? I can't say.
I do know that fiscal expansion would help, and I know that tax cuts aren't going to do a damn thing, but beyond that, who the hell knows? I also know that if I had $20 million (or a willing bank/angel investor/whoever to provide most of it) I'd be creating some new jobs, but I don't, so I'll keep dreaming.
Quote from: nathanm on July 01, 2011, 07:44:28 PM
The wealthy folks I work for are spending money, but it's more of buying up cheap properties, cash poor businesses with otherwise good prospects, and opening new offices with existing employees than the sort of spending that creates new jobs. What's to be done to get them to redirect their investment into new businesses and that sort of thing? I can't say.
I do know that fiscal expansion would help, and I know that tax cuts aren't going to do a damn thing, but beyond that, who the hell knows? I also know that if I had $20 million (or a willing bank/angel investor/whoever to provide most of it) I'd be creating some new jobs, but I don't, so I'll keep dreaming.
I know I should be buying up real estate like a crazy man, but I am playing it same for now. Munis is where I am most active. As for hiring, believe it or not the law "business is a boomin'" (h/t Lt. Aldo Raine: http://www.hark.com/clips/tycspptxfm-business-is-a-boomin) and I will be looking to hire folks in the near future. Being on my own is much better, get to pick and choose my fights and less mechanical/repetitive that the firm life can occasionally be.
Quote from: guido911 on July 01, 2011, 07:56:41 PM
I know I should be buying up real estate like a crazy man
As long as you can afford to take losses for the next couple of years. I'm not too comfortable with municipal bonds right now what with all the budget crises everywhere I look. Bank debt isn't a bad deal, though, at least for a little while longer. Not that equity funds have been looking bad lately, either. I'm left wondering how long the streak can last now that QE2 is done.