171–180 of 242 posts
As long as our political system continues to be run on professional politicians who pander to their base in order to keep their jobs we will never fix anything. Anyone who runs a household, a business, or both, clearly understands that sometimes you have to make decision that are painful in order to survive and grow. Our elected officials know that the masses would boot them if they make the right decisions for the n…
Please don't SHOUT; use apostrophes for emphasis.
S&P's mistake is certainly incredibly embarrassing but apart from that I'm asking myself a much more fundamental question: Why is the ability to pay considered at all when it comes to the US? A country that is indebted in its own currency can theoretically never default on its nominal obligations. Not due to inability to pay at least. I don't think that credit rating agencies even try to pass judgement on the likelyh…
I was wondering about the exact same thing. Ability and willingness to pay should mean ability and willingness to pay in real terms. Anything else doesn't seem to make sense. Also: If the US defaults, how does it go down? Here's why I'm confused: Given that the US can't default on its nominal obligations, how does it default on its real obligations, so to speak? Printing money, aka inflation, is one way, but there's…
Anyone know if this is correct?
Earlier quoted context omitted.
Our tax burdens are not the lowest by any means. My total tax rate partially due to living in California (although it is mostly Federal) is ~40%. There are plenty of countries in Europe that would be happy to tax me less. My buddy in Singapore pays about 8% all told and he's in the same income range. The temptation to become an expat gets stronger as I earn more money. My sin is not being a fat cat living off capital…
How do you manage to get an effective 40% tax rate in California? I could see that as a marginal rate on the last few dollars, but you'd have to make in the millions to get there for your overall tax rate. For example, if you make $100k and take only the standard deduction, you'll pay $19k in federal taxes (19%) and $6k in California taxes (6%), for 25% total. If you include payroll taxes, that's another ~7.5%, so 32…
From Naomi Klein's The Shock Doctrine: In February 1993, Canada was in the midst of financial catastrophe, or so one would have concluded by reading the newspapers and watching TV. “Debt Crisis Looms,” screamed a banner front-page headline in the national newspaper, the Globe and Mail. A major national television special reported that “economists are predicting that sometime in the next year, maybe two years, the dep…
Yikes. I refer you to Tyler Cowen's review of Klein: http://www.nysun.com/arts/shock-jock/63867/ Some highlights: "Ms. Klein's rhetoric is ridiculous. For instance, she attaches import to the fact that the word 'tank' appears in the label 'think tank.'" "What the reader will find is a series of fabricated claims, such as the suggestion that Margaret Thatcher created the Falkland Islands crisis to crush the unions." "…
Earlier quoted context omitted.
My preferred solution is this: 1. Every year, the US Government figures out how much money it wants to spend. 2. Then, it figures out what the (flat) tax rate would need to be in order to rustle up that much money. 3. Then, it sets the tax rate and sends everyone a bill. You could do this a year in advance just to make sure everybody knew how much they'd be getting taxed. But the important thing is that everybody in…
Then a financial crisis hits and the government finds itself unable to react to the needs of a paralyzed market. It's a nice idea in principle. But any time something like this or a balanced budget law/rule comes up in congress, it never has a provision for reacting to emergencies.
Earlier quoted context omitted.
Hate to just post a +1, me too, but this, it seems, just isn't be said or recognized enough. The US, with one of the lowest tax burdens in the western world ( the lowest?) can easily afford to pay down it's debts but without any support for raising taxes in the slightest, not just amongst republicans but from what it seems are a vocal and loud minority (majority?) of Americans, no one can really act surprised by S&P'…
It isn't our current debts that have people concerned. It's the combination of current debts and unsustainable future obligations, which are so large that they in fact can't be paid down by just raising taxes. Barring an adjustment in what they are, they grow to the point that they eventually consume 100% of the economy in something like 40 years in conjunction with interest payments, but of course they become comple…
Who is proposing that we only raise taxes, without cuts? The entire Democratic 'compromise' is effectively all cuts.
> The "evil Republicans" are the only ones taking actions that may mean that Social Security still exists for anyone in 2050.
The "evil Republicans" hyperbole might be helpful in dismissing the fact that both parties are horribly complicit in the problem we have now. Neither one of them have done anything meaningful to cut budgets for any of their favorite projects. And that hyperbole ignores the fact that there is a significant percentage of Americans that do not identify with either party [1], and as such are not blaming the 'evil Republicans'.
1 - http://www.rasmussenreports.com/public_content/politics/mood...
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Our downgrades aren't about our ability to pay - it's about our willingness to pay. That has gone out the window. As S&P says, the Republican Party is now so rabidly anti-tax that their new baseline assumes the indefinite extension of the '01 and '03 Bush tax cuts, meaning that we will run structural deficits forever.
Hate to just post a +1, me too, but this, it seems, just isn't be said or recognized enough. The US, with one of the lowest tax burdens in the western world ( the lowest?) can easily afford to pay down it's debts but without any support for raising taxes in the slightest, not just amongst republicans but from what it seems are a vocal and loud minority (majority?) of Americans, no one can really act surprised by S&P'…
Earlier quoted context omitted.
Infinite borrowing and defaulting are consequentially the same. I'm absolutely amazed that people believe otherwise.
Simply false. If interest payments can be made sustainably, there is no default.
Earlier quoted context omitted.
Modern Monetary Theory reveals the entire premise of this issue to be false. The private sector does not fund the public sector in the way that most people believe. Non-convertible floating FX currency regimes (ie fiat money) such as the US,UK, and Japan can meet any and all financial obligations by issuing currency. Thus: 1) Taxes do not fund government. ( they 'back' the currency) 2) Treasury securities do not fund…
Sure, if you choose to look at it that way. But if you're going to make "Non-convertible floating FX currency regimes (ie fiat money) ... can meet any and all financial obligations by issuing currency", then you've got to consider that entire reference frame. Issuing currency is identically equal to inflation, which is itself nothing more than a tax levied against those holding assets denominated in that currency. Us…
continually increasing deficit and debt is unsustainable. Yes but you have to have a model to tell you when to stop increasing deficits and arbitrary numbers like 10 Trillion or 4 Trillion don't mean dick. With modern money, the size of the deficit is equal to the savings of the private sector. Paying off the deficit decreases savings to the private sector which either leads to a recession or credit bubble ( to make up for the lost money.) Deficits need to be targeted based upon the level of inflation and unemployment in the economy that policy makers wish to achieve. Obama cannot on the one hand call for "fixing the deficit problem" while on the other hand calling for more jobs. The two are pretty much antithetical.
From Naomi Klein's The Shock Doctrine: In February 1993, Canada was in the midst of financial catastrophe, or so one would have concluded by reading the newspapers and watching TV. “Debt Crisis Looms,” screamed a banner front-page headline in the national newspaper, the Globe and Mail. A major national television special reported that “economists are predicting that sometime in the next year, maybe two years, the dep…
Yikes. I refer you to Tyler Cowen's review of Klein: http://www.nysun.com/arts/shock-jock/63867/ Some highlights: "Ms. Klein's rhetoric is ridiculous. For instance, she attaches import to the fact that the word 'tank' appears in the label 'think tank.'" "What the reader will find is a series of fabricated claims, such as the suggestion that Margaret Thatcher created the Falkland Islands crisis to crush the unions." "…
Have a look at The Economist's blog that did a round up of reviews of the Shock Doctrine:
http://www.economist.com/blogs/freeexchange/2007/10/naomi_kl...
I remember reading 'No Logo' and wondering why on earth a book about how 'teh evil capitalists' exploit people would pick MS an example of an exploitative company. MS, afterall, has made thousands of millionaires out its employees. Then she goes on further to cite South Korea as an example of how terrible capitalism is because low skill production is moving elsewhere not realising that South Korea is one of the countries you do not mention if you want to talk about how capitalism is evil as it is a stunning success of wealth increase.
The Economist's own review of her earlier work that states:
"Ms Klein's harshest critics must allow that, for an angry adolescent, she writes rather well. It takes journalistic skill of a high order to write page after page of engaging blather, so totally devoid of substance. What a pity she has turned her talents as a writer to a cause that can only harm the people she claims to care most about. But perhaps it is just a phase."
is probably the sharpest criticism of all.