81–90 of 112 posts
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Faulty generalization: Paul Ryan is not sensible, so everyone who agrees with him on anything must also be unsensible.
Straw-man much? I just said that it's funny to hold up Paul Ryan as an exemplar of sensibility.
You would be surprised how many things that exist around you are based around faulty models based on incorrect data - that's the problem with higher dimensional fields like economics and finance - it's hard to separate cause and effect and extract principal signals for an arbitrary phenomena, without getting bogged down in correlation hell. You have been warned - the further fields get from pure mathematics and isola…
A national currency being used as the international reserve and trade settlement currency affords the US quite a few unique perks, doesn't it? And has so for decades, indeed. The USD being the international "yardstick" other currencies are measured in, "valued" against allows for a surprisingly large trade deficit. Why have inflation at home when you can just "export" your fresh paper for real goods the world over? T…
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who on earth thought austerity was ever a good idea? Lots of sensible people. The point of austerity is to stop spending money you don't have on stuff which does not clearly contribute to economic improvement. Every increase in debt must be balanced with a reasonable objective expectation that it will facilitate specific & significant increase in revenue greater than the debt and servicing thereof. If you've spent yo…
IF that job last longer than 20 years and the salary increases at least in pace with inflation, then why is that so stupid? It's no stupider than a home mortgage lender spending $1,000,000 to create a $5,000/month 30-year mortgage...
Regardless, that's an interesting perspective. My follow up would be "do you think the government is well-informed and future-thinking enough to pick the jobs with 20+ year lifespans?"
Personally, I don't think anyone is. Ten years ago, Microsoft was nearly unbeatable, Google hadn't IPO'd, Facebook didn't exist, and Apple was still a bit player. Ten years from now, who knows what it will look like.
(Granted, that's one field.. but outside of tech, the home construction market was the other boom.)
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Yes they say it, but the opposing party opposes it. The Democrats most certainly do not wish to run the government as business but as more of a piggy bank that someone else fills each night. Therefore, even if the Republicans wanted to do such a thing they likely cannot. But, as you say, they haven't been very serious about such an idea for quite a while.
That's a pretty unsophisticated understanding of liberal and/or Democratic politics and policies. The broader point is that nobody actually wants to run the Government like a business (nor is that necessarily a good idea in aggregate). But even at the points where it makes sense for the government to behave in a business-like manner (and there are some), we do not and cannot get our shit together to do so.
Although I would say my opinion on the Democrat party is that it is not run by liberals just as the Republican party is not run by conservatives.
As for the rest, I agree.
What do people think about the researchers' rebuttal in the WSJ? http://blogs.wsj.com/economics/2013/04/17/reinhart-rogoff-ad... I'm too much of a layperson in statistics and economics to tell, at this early in the morning without coffee, how much of this is eloquent backtracking BS: > So do where does this leave matters on debt and growth? Do Herndon et al. get dramatically different results on the relatively short…
This episode emphasizes that the original study found no causality; one would expect a country with low growth to need to rely more on debt and less on tax revenues to fund government, especially if expenditures were planned based on a higher-growth scenario.
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A national currency being used as the international reserve and trade settlement currency affords the US quite a few unique perks, doesn't it? And has so for decades, indeed. The USD being the international "yardstick" other currencies are measured in, "valued" against allows for a surprisingly large trade deficit. Why have inflation at home when you can just "export" your fresh paper for real goods the world over? T…
If the EUR is the replacement people have in mind for the USD America is safe for a long time.
I don't think the EUR is designed as a competitor or alternative "equivalent" to the USD. Rather, it is a "readily available" option --differing in a few substantial aspects (rather than outright mimic USD)-- for anyone, anywhere to consider at their own pace.
Even if "they" wanted to, they couldn't just, as in the past, once again "compel" the world to use their national currency for your reserves and trade-settling, then remove the backing, break promises and debase and inflate for 4 decades straight. No one would fall for it again, nor is it really desirable anyway for any productive (say, net-exporting) country.
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IF that job last longer than 20 years and the salary increases at least in pace with inflation, then why is that so stupid? It's no stupider than a home mortgage lender spending $1,000,000 to create a $5,000/month 30-year mortgage...
The salary increases don't have to keep pace with inflation... they need to keep pace with the interest rate on the $1M which is generally going to be higher than the inflation rate. Regardless, that's an interesting perspective. My follow up would be "do you think the government is well-informed and future-thinking enough to pick the jobs with 20+ year lifespans?" Personally, I don't think anyone is. Ten years ago,…
And I'd like to point out that just because that hypothetical job being created pays $50,000 per year, doesn't mean it only contributes that amount of value to the economy.
But you certainly wouldn't want to bet on any job that is repetitive (or "concave" to use a michaelochurch-ism) being around longer than a few years, because that work will be distilled into a software program and handed off to a machine sooner or later. It only makes sense to invest in creating jobs that involve creative, "convex" work, which has a smaller chance at a bigger payoff in terms of value creation.
Besides, to attack austerity as a "bad idea" is like attacking having a budget for your own home income and expenses. Individuals and families are well-acquainted with the reality that you cannot indefinitely spend more than you bring in. It's idiotic to assume that a government can simply suspend this assumption and not have any consequences. Perhaps a government has a bigger "credit card," but in the end all debts must be paid or defaulted on--just like in the real world you and I live in. It is absolutely essential for a countries long-term economic well-being to keep expenses within the neighborhood of revenue. Yet the far-left seems to persist with the belief that money literally grows on trees, and that surely there's enough to be able to afford every desirable program. They're totally out-of-touch with reality. So they poo-poo the "austerity" movement as just raining on their parade. Just like the Greeks who had the nerve as their country was going down the drain to strike, wave signs around, and complain when the Piper comes to claim his due.
Last point. What we're calling "austerity" really isn't. It's a political fabrication which, in the case of the US (and I suspect many countries), means that the politicians have agreed amongst themselves to merely not increase the rate of spending as much as they had initially planned on. This is what they call "savings" and "cutting the deficit." I think people living in the real world would agree that such a definition is ridiculous. How can you be cutting the deficit when you're merely reducing the rate of the GROWTH in spending, not actually reducing the amount of spending. Does that make sense? So if they had planned to increase spending by 7% across the board, they call it "cutting the deficit" if they decide to only increase spending by 3%. Let's be real. Under Obama's recently released budget the US will hit 24 TRILLION in debt in the next decade. That's nearly DOUBLE what we're at today. Where are these horrible, painful cuts that are supposed to be reducing the deficit? Exactly. They're all wrapped up in some political hyperbole that allows the politicians on the right and left to spar without actually doing anything to make our nation more solvent.
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This is what Austrian economists have been arguing forever. They base their models on simple assumptions. Trying to figure out how an economy works just by observing it's macro behavior is insane. There are so many factors, economic models change over time as market actors use them to make decisions, and the sample size is incredibly small (not many countries to look at) and biased (differences between countries are…
Because obviously America needs zero improvements to its infrastructure. No high-speed rail, no electrical grid improvements, no roads or bridges, no fixing or improving the water system, no blue-sky scientific research, no teachers to hire to decrease class sizes.... NOTHING, YOU HEAR ME, NOTHING YOU STUPID LITTLE LIBERAL! Oh, I'm sorry, I thought I was supposed to sound like an Austrian "economist".
You would be surprised how many things that exist around you are based around faulty models based on incorrect data - that's the problem with higher dimensional fields like economics and finance - it's hard to separate cause and effect and extract principal signals for an arbitrary phenomena, without getting bogged down in correlation hell. You have been warned - the further fields get from pure mathematics and isola…
So now what we have is a powder-keg with a fuse which has already been lit. We've started borrowing from OURSELVES. This is who we can make it look like we're only paying 1-2%. When you pay one hand from the other, you can say whatever you want about how much it's costing you.
The reason this is a profoundly bad idea is because essentially we're diluting the value of every dollar already out there floating around. As we print more money, and issue more IOUs in exchange for it, all we're doing is creating shadow-inflation by diminishing the value of each existing dollar. The only reason we're getting away with it so far is that the rest of the world is worse off (fiscally) than we are and so our dilution of the dollar is essentially a tax on everyone who comes into contact with dollars. This is essentially our way of extracting wealth not just from our own citizens, but from abroad.
If however dollars start being kicked to the curb abroad, then the shadow tax will begin being felt more acutely here in the form of inflation and suddenly higher prices.
Again, there is no free lunch. It's the single truest thing that economics has to say. Yet people somehow persist in believing that there MUST be one, if they could just figure out how to have their cake and eat it too.