The Economy • Hacker News Board

Re: The Economy

#201

Post by jeffdavis » Mon, Jun 30, 2014, 10:00 PM UTC

muzz wrote: post #184

jeffdavis wrote: post #166

Earlier quoted context omitted.

"Things won't get interesting until B approaches D." I'd say things would get pretty interesting well before that point. B=D is just the point at which a default is inevitable (unless much higher tax revenue is achievable without causing other problems). But the problem is that the interest rates are so low now that large increases are not outlandish. 7 years ago, the rate was more than double what it is now. Looking…

Interest payments as a percentage of GDP are actually much lower now than they've been in the past: http://research.stlouisfed.org/fred2/series/FYOIGDA188S

That doesn't dispute my point at all. I'm not worried about the payments now. I'm worried about the payments if interest rates go up.

And we shouldn't be surprised if rates go up substantially, because they are at historic lows right now.

Re: The Economy

#202

Post by kevinskii » Mon, Jun 30, 2014, 10:01 PM UTC

ef4 wrote: post #195

timr wrote: post #129

Earlier quoted context omitted.

For those asking, here are some links that will start you down the path to reading all about said research: http://www.npr.org/blogs/money/2013/10/25/240590433/what-hap... http://freakonomics.com/2013/06/04/should-we-all-just-give-c... http://freakonomics.com/2013/09/26/would-a-big-bucket-of-cas... http://freakonomics.com/2013/11/27/fighting-poverty-with-act... http://poverty-action.org/project/0522 I'm glad I could…

Thank you for responding before I could and saving me the link gathering effort.

You made a very specific claim:

When you actually conduct the experiment -- a randomized controlled trial where you give some poor people cash and others in-kind services, the cash group outperforms.

None of the above links appear to support it. Please let me know if I'm mistaken, otherwise please do provide a relevant citation. Like many others here, I'm genuinely interested in learning about such a study.

Re: The Economy

#203

Post by magoghm » Mon, Jun 30, 2014, 10:02 PM UTC

"On the positive side, but as you’d expect with near-zero rates, US equities are at record levels." I'm no so sure this should be on the positive side. Those equities are artificially inflated by central bank (indirect) manipulation. Those prices might not reflect the real value of the underlying assets and could collapse, which would once again put the whole financial system at risk.

Re: The Economy

#204

Post by JetSpiegel » Mon, Jun 30, 2014, 10:02 PM UTC

toomuchtodo wrote: post #197

hipcactus wrote: post #192

Earlier quoted context omitted.

Tech Innovation kills existing jobs by replacing 100 humans with one machine, this is true. If you're a cab driver, you may not be ecstatic about self-driving cars. But those same technological advances invent new goods and services for an ever increasing population. More people are fighting over the same set of resources, which technology allows markets to distribute more efficiently. The new tech creates new demand…

> But those same technological advances invent new goods and services for an ever increasing population. While I'd agree this has been the case historically, I'd argue this is no longer the case. > While it's tough luck for the 99 workers who are not in a position to learn new skills, the bet is that tech advancing will create more economic opportunities for the next generation (while improving the quality of life) a…

>> But those same technological advances invent new goods and services for an ever increasing population.

>While I'd agree this has been the case historically, I'd argue this is no longer the case.

Better kill ourselves now, we've reached the End of History.

Re: The Economy

#205

Post by rogerbinns » Mon, Jun 30, 2014, 10:10 PM UTC

I believe tax breaks don't show up as government spending. If for example Boeing is given a billion dollar tax break, then the government has a billion dollars loss and Boeing has a billion dollars more. But that won't show up as a billion dollars going to the government, and then spent on Boeing, even though that is exactly what is happening.

I suspect that if tax breaks were accounted for, then government spending would be higher. It looks like US corporate welfare is around $200bn/year, although there are many larger estimates out there (eg count the banking bailouts). I haven't seen numbers for personal tax breaks, but adding them will make the number larger.

Re: The Economy

#206

Post by Rodeoclash » Mon, Jun 30, 2014, 10:11 PM UTC

toomuchtodo wrote: post #197

hipcactus wrote: post #192

Earlier quoted context omitted.

Tech Innovation kills existing jobs by replacing 100 humans with one machine, this is true. If you're a cab driver, you may not be ecstatic about self-driving cars. But those same technological advances invent new goods and services for an ever increasing population. More people are fighting over the same set of resources, which technology allows markets to distribute more efficiently. The new tech creates new demand…

> But those same technological advances invent new goods and services for an ever increasing population. While I'd agree this has been the case historically, I'd argue this is no longer the case. > While it's tough luck for the 99 workers who are not in a position to learn new skills, the bet is that tech advancing will create more economic opportunities for the next generation (while improving the quality of life) a…

They'll live in a utopia free to pursue artistic and self improvement endeavours!

Re: The Economy

#207

Post by thaumaturgy » Mon, Jun 30, 2014, 10:18 PM UTC

gone35 wrote: post #193

thaumaturgy wrote: post #176

Earlier quoted context omitted.

I was specifically thinking of the European Union (which didn't exist 100 years ago) and its relationship with the Greek economy, and the extent to which a Greek default in 2011 or 2012 might have affected economies across Europe and overseas, as well as the effects of the U.S. economic recession in 2008 on the rest of the world. You're right to point out that all (edit: many) of the pieces of globalization were well…

Again, I don't blame you because it is counterintuitive, but I invite you to read Section 6 ("Financial Crises") of the Bordo, Eichengreen and Irwin 1999 paper (linked above), to appreciate the extent to which globalization then was indeed similar to today's --even in terms of the number of countries involved, the role of supranational institutions, and the "contagion" effects of local crises via economic linkages. I…

I'm reading that paper now (and I'll read the other later tonight). Thank you for linking to it, it's interesting so far.

I'm a little confused though: in the beginning of the paper, it seems to be supporting some of my thesis, that the modern global economy is more interconnected than it has been at any recent point in history. e.g., "We conclude that our world is different: commercial and financial integration before World War I was more limited. ...integration is deeper and broader than a hundred years ago."

...maybe they go on to refine that point in a way that refutes me. I'll keep reading.

Re: The Economy

#208

Post by jeffdavis » Mon, Jun 30, 2014, 10:20 PM UTC

Humjob wrote: post #66

tdees40 wrote: post #24

I'm not clear on how any of this will lead to a recession. Why will high Debt-to-GDP or government spending send the economy into a recession? Q1 GDP numbers were clearly affected by dismal weather (although still bad), but labor markets are improving markedly, and there are reasons for optimism. I don't see this as a very convincing bear case. For the bull case, see this post, from a guy who's been right about every…

If government debt grows high enough then an increasingly large percentage of federal spending will be devoted to paying interest on that debt rather than on arguably more useful areas which create future prosperity, such as education and scientific research. After a certain point this becomes unsustainable and bad things start to happen, ranging from total political & economic collapse (Germany in the 1920s) to hype…

"the current left-right political divide is largely a debate over the point at which government taxation and spending becomes undesirable and inefficient"

I disagree. It's more about a notion of "fairness": whether you think that the government can improve fairness, in what situations, and at what cost of efficiency.

Re: The Economy

#209

Post by humanrebar » Mon, Jun 30, 2014, 10:26 PM UTC

lukasm wrote: post #191

It's intriguing that US economy is slowing down since WWII. What are the reasons? 1. No significant improvements like agriculture. 2. Increasing regulations 3. Big middle class that have no strong motivation to advance further or have "enough money" for good living (modulo individuals) 4. Growth in domain which GDP doesn't capture e.g. Open Source 5. No obvious investments opportunities e.g. Highway

6. Retirement of the baby boom generation.

7. Low birth rates.

Re: The Economy

#210

Post by jerf » Mon, Jun 30, 2014, 10:27 PM UTC

againblah wrote: post #159

jerf wrote: post #52

Earlier quoted context omitted.

I don't think you get what a "dog whistle" is. Everyone calls them entitlements.

Everyone huh? Try Google-ing entitlements and racism.

I don't see the relevance. All I'm getting is a lot of criticism of some comment Scalia once made which seems to have nothing to do with whether things should be called entitlements.

Further, if that was somehow your point, bear in mind that "everyone" in this context is pretty clearly something like "the vast majority". I could find traces of evidence of people trying to redefine the term, sure, but no evidence they're being particularly successful. Even the NYT calls them entitlements with no apparent irony. Call them mainstream or call them leftist, either way, it's evidence on my side.