U.S. Budget problem

More like they didn't have a clue. Economics is not predictable in the sense of "Step 1: Pump money into economy via stimulus. Step Two: Businesses begin hiring again like clockwork. Step Three: Political profit!".

Historically, Keynesianism hasn't worked at least in the sense that economies are that predictable that merely pumping money into the system will predictably fix things.

So in essence they didn't know what the fuck they were doing thus wasted our money and we have nothing to show for it.

edited 27th Apr '11 7:33:51 AM by MajorTom

"Allah may guide their bullets, but Jesus helps those who aim down the sights."

ITT: Tom ignores points in favor of posting talking points, Film at 11.

(In all seriousness, any economic prediction is, as they pointed out in their very report, subject to significant margins of error. Their prediction was wrong, which wasn't good, but that's about all you can say.)

Also while the stimulus didn't work in terms of unemployment so much, in terms of the larger economy it did work pretty well, by and large prevented a double-dip recession, etc. It's just that unemployment is lagging a lot more than usual.

Like I said in the previous post. It's productivity gains being cashed in. We simply don't need nearly as many people to do the necessary work as we used to. But because demand is growing slowly in comparison, there's very little need for expansion.

The problem is if you want a solution, you have to increase the demand base. And for that, you're better off looking to the left for outside the beltway solutions, and not the right.

Democracy is the process in which we determine the government that we deserve

Those kinds of people make Nancy Pelosi look moderate. Nationalize the health care system and all the banks and more, give handouts to those who don't deserve it, amnesty for illegal immigrants (when they should have learned from the last time in 1985) and then giving them handouts all the while hiking taxes left and right with no regard to consequences and no intention of fixing the code.

They are the kinds of people who populate Daily Kos, not Congress.

"Allah may guide their bullets, but Jesus helps those who aim down the sights."

And conservatives will wanna turn this country into a fundamentalist christian theocracy where the poor are kept as wage slaves while the rich get all the tax breaks.

See I can play the stereotype game too.

I love reading political posts from Major Tom because they are a stark reminder of how much contempt Conservatives have for the masses.

—R.J.

At least it's a plan.

Actually, speaking for myself, here's what I would do. Forget about a national single-payer system. You're cutting too many jobs that way. If you could do it without cutting the jobs, however, you would create an entrepreneurship boom. If you don't understand how reliance on group health care insurance really undermines entrepreneurship, then you don't really know a thing.

I would not increase income taxes. I would increase taxes on capital gains and put a financial transaction tax into place in order to combat bubble-creating behavior, as well to make long-term stable profit, instead of focusing on valuation gains, more tax friendly. (Or to put it the other way, to make focusing on valuation gains tax unfriendly).

Clean up the corporate tax code, dumping all the deductions and lower the base tax rate, trying to keep it revenue neutral. I'd also add a corporate surtax while unemployment is above a certain rate, to encourage corporations to "pitch in" and help fix things.

Card check and strengthen unions, to give workers more negotiating power.

I'd probably tie the minimum wage to a percentage (maybe 33%) of productivity gains. (My leftist part says that eventually most of us will probably be making near minimum wage, so we should start to find ways to actually make it livable)

What else economically...oh yeah. My personal #1.

A temporary reduction in the retirement age, paid for by the corporate surtax listed above. This could potentially act to get us back to full employment much quicker, resulting in better wages, resulting in more tax revenue, etc.

Edit: I should add that I don't particularly like Daily Kos, although Markos himself is quite good. If you want a better "left" blog to read, I highly recommend Balloon Juice. If you want something more wonkish, try either Kevin Drum's blog at Mother Jones (he's really quite centrist) or Steve Bennen's blog at Washington Monthly. (Note. Drum actually used to blog at Wa Mo then he moved to Mother Jones. TIL).

edited 27th Apr '11 8:24:12 AM by Karmakin

Democracy is the process in which we determine the government that we deserve

Since Daily Kos is essentially a blog repository, the quality will vary according to the individual bloggers involved.

—R.J.

Indeed. And the run the gambit from people from the far-ultra left to neoliberals. And there's a name for a common thing that happens there.

Pie Fight. And it's a constant thing.

If people think it's some monolithic entity, then quite frankly, they know nothing. Daily Kos is actually more similar to Reddit or Digg than a traditional blog such as what Atrios does. And during primary season? Forget about it.

Edit:I should add the reason I don't like D Kos isn't because of any particular writer or anything like that. It's simply too big and too noisy.

edited 27th Apr '11 11:36:42 AM by Karmakin

Democracy is the process in which we determine the government that we deserve

How would single-payer result in job losses? The only part of our current “system” it would replace is the insurance industry (and at that, only the part of the insurance industry offering products that would be undercut by the government.) Even then, MORE insurance personnel would be required in all likelihood, since there would be more customers doing (due to full copay) more business, so the auditing load would increase.

As for taxing the wealthy, every approach helps, higher taxes on personal income (they were over 90% throughout most of the 50s & 60s, 35% now, so there's lots of room today,) on capital gains, on corporate income, eliminate bogus writeoffs, etc, etc… It's like whack-a-mole, any opening will be seized upon as a weakness in the tax code, so the more the merrier, until altogether they're paying their fair share.

Eric,

The majority of the medical insurance industry is comprised of claim deniers and marketing. So the total number of jobs would significantly decrease (perhaps by 30% if we were to assume that per capita jobs of the medical industry matches Canada, the closest in the style of system).

Actually, the vast majority of what America needs to do is get a better government. That's a significantly more difficult issue than balancing any single budget.

If we cut spending, increase taxes and so on, then manage to balance the budget, we have to guarantee that future governments also run the country well (if we ever get a current government that runs the country well). I don't think the idea would be tighter legislation, although I like a single auditor general as a solution to lower corruption. The big thing is really the political campaigning: a focus on facts and scientific analysis with empirical observation/data collection versus attack ads or ideological arguments.

Perhaps true, but I think the number of healthcare jobs (doctors, nurses, pharmacists, etc…) would more than compensate for any losses that might occur.

I think a lot of corruption would naturally clean itself up simply by the elimination of wasteful, iniquitous money flow. If you look at military spending, other industrial subsidies (corporate welfare,) and tax expenditures (tax breaks,) I'd ballpark all three together at about $2.5-3 trillion a year, with excessively low top end/corporate taxes accounting for another $2-3 trillion, and finally the gap between the American worker's productivity versus pay, benefits, and other compensation likely amounts to another few trillion. If that money were gone, the corruption it's being used to fuel now would also vanish.

Granted, not all corruption can be traced to money the government may reasonably be described as holding authority over today. Money aside, the only real, long term fix would be proportional representation, as the two-party system is the source of pretty much all corruption. That would require extensively rewriting the constitution's electoral procedures, so it's pretty unlikely for now, but I guess if it was embraced at the state and local level, the path for constitutional reform might be smoothed considerably. Kind of off-topic though.

Eric,

That's a big problem, don't assume alternative consumption will go exactly as you plan, let alone exist in the first place. Bread laid it out, it's the massive parallel bureaucracies that do a lot of the work in terms of raising costs as well as creating jobs. I know in Canada doctors have a receptionist, and that's about it in terms of staff. In America, often there's a team in order to handle the various billing/insurance systems. You could think about it like this, we're paying doctors a lot more who are turning around and paying a lot more for staffing.

Now to be fair, I think for America, it's either a case of real health care reform (the Obama package wasn't bad, but it does nothing about the waste) or bankruptcy. Not even of just the government, but having health care strangle the economy as a whole...that never is good. It's just that real health care reform, that is, getting rid of the private red tape, is going to have to come as a part of or after real labor reform, otherwise the short-term economic shock is going to be a nightmare.

Democracy is the process in which we determine the government that we deserve

And yes. The end result of getting the deficit back into order is probably going to be tax cuts for the rich.

Democracy is the process in which we determine the government that we deserve

And with this Congress, that will never happen.

Related.

Stagflation mentioned. Dissapointing GDP growth numbers and some causes mentioned.

Happiness is zero-gee with a sinus cold.

Wasn't Keynesian economics supposed to prevent that?

Now we have no other choice on the matter but to look at alternatives beyond spending money.

"Allah may guide their bullets, but Jesus helps those who aim down the sights."

Considering the US economy hasn't been Keynesian for the last 20 years or so, I fail to see the point you're trying to make.

—R.J.

Now we have no choice but to look for alternatives to giving the rich tax cuts.

Blind Final Fantasy 6 Let's Play

^^^See post 407 for a start.

I actually agree. The amount of stimulus that it would take in order to overcome the demand shortage was never really politically feasible. Actually, to take it a step further, real stimulus, that is, a complete national infrastructure program, is culturally unfeasible. Too many people see trains as being a direct threat to their SU Vs. The problem is that I don't think either side understands this. (Tax cuts are Keynesian economics in another form)

The key is getting money out of corporate profits into the pockets of workers. Everything that's done should revolve around that one point. And it's the one point that's basically being ignored.

edited 28th Apr '11 2:41:09 PM by Karmakin

Democracy is the process in which we determine the government that we deserve

Yeah. I think the problem is the stimulus failed to account that people are greedy fucks.

Cash for clunkers was a great success so they shouldn't say government spending cant help.

And one of the problems, I remember reading, with the stimulus was that corporations/banks were taking money from the government and then loaning it back at absurdly high rates to fleece the government. So, there is some merit to thorn's statement.

Very big Daydream Believer. "That's not knowledge, that's a crapshoot!" -Al Murray "Welcome to QI" -Stephen Fry

^^I don't even think it's that. We simply don't need as many people to cover the aggregate demand in the West. Employers are not going to hire out of the goodness of their heart, they're going to hire when a lack of workers is costing them money. And business practices are much better these days in determining these things.

Here's an exercise I give to people to learn about this. Go to your local supermarket. Look around the customer service counter, or another similar place on the front of the store. You'll probably see some pithy cheesy display showing off the "top performers" for the week. Usually it'll be measured in RPM (Rings per minute, I believe), which is basically the number of products that are swiped through the scanner each minute. They give performance bonuses to the top performers (maybe like a gift certificate), etc.

What does this do in the big picture? Well, say if they went from 70RPM to looking for over 100RPM. That's roughly a 25% increase or so. That means, if demand (traffic) remains constant, that you need 25% less labor hours to check all your customers out.

By and large that's what happened all across the economy. Workers are much more efficient, and instead of being rewarded in terms of higher wages, they're actually punished in terms of lower or static wages.

Getting a portion of the productivity gains over the last two decades into the hands of the working class, or the lack-there of is what is behind a huge portion of the current budgetary issues.

edited 28th Apr '11 2:55:44 PM by Karmakin

Democracy is the process in which we determine the government that we deserve

Cash for Clunkers: Trashing perfectly useable cars and making people incur more personal debt by buying a new vehicle.

Yes, it did increase productivity of the car factories and they saw some good sales from it, but how much debt did we add to citizens by dangling a few thousand dollars off the price of a new car?

But I'm kind of a car nut, so I might be biased. Cars are only good for trashing when they're pretty much trashed already. Trashing a good-running car is just... wasteful.

I would've liked it much better if some of those traded "clunkers" would've been donated to Kidney Cars and other charitable organizations to give out at greatly reduced price to those who don't have a car, or have a piece of crap beater but can't afford a new car on their own. The resale market for used cars got rather barren, and not everyone can afford to buy new.

Happiness is zero-gee with a sinus cold.

I can't be sad that a lot of junk cars that are terrible to be around are off the road. The stench of an older car can make me gag. (Yes, I know not every car scrapped was like that, but I'll take any being away from me!)

Personally I'd have preferred a lasting program rather than a burst initiative, but nobody asked me to design the program.