Krugman: GOP Austerity Causing Unemployment

[bigrebnc1775]

None. When did I claim it produced any? However, it does keep the likes of Osama bin Laden from wasting your sorry ass.

iF IT WASN'T FOR DEFENSE WE WOULDN'T OWN OUR OWN WEALTH AS ANOTHER NATION WOULD OWN US. Hell, as we have open borders another nation will be owning us pretty fucking soon. Maybe by 2040

Really?

Then how come someone doesn't 'own' all these other countries, who spend tiny fractions of what we spend on defense?

Some of that defense spending goes to paying the troops, so now you want more unemployment with defense spending cuts?

 

[bripat9643]

Really?

Then how come someone doesn't 'own' all these other countries, who spend tiny fractions of what we spend on defense?

Because the United States is the world's policemen. We step in whenever country 'A' tries to own country 'B.' You recall the First Iraq war, don't you?

If China was the world's policemen, the outcome of such events would be far different. I'm sure you would approve of the result.

 

[Oldstyle]

Deficit = Spending -Revenue. There are two variables in the equation, something that's often forgotten.

Trust me, I haven't forgotten revenue. But when even Christina Romer is cautioning against raising taxes in as fragile an economy as we have...then it's pretty plain to see that we aren't going to be going that way anytime soon despite all the rhetoric from the Democrats. So if you can't raise taxes, how about we lower spending? Are you seriously telling me there isn't rampant waste in the Federal Government? Come on...you KNOW it has to be done! So let's stop the political game playing and do it!

Of course there is waste. Government by it's very nature is wasteful.

In order to have real deficit reduction, we are going to have to cut into entitlement programs and defense and many of other programs. That's going to require bipartisan support which means a balanced approach. Cutting Medicare, Medicaid, and Social Security will effect over 70 million people. That's nearly 25% of the population. If the cuts are not tempered by tax increases for the wealthy, there would be a huge backlash.

IMHO, the American people are far more likely to support a plan based on shared sacrifice rather than a plan that puts most of the burden on the poor and middle class.

Whenever we talk deficit reduction the left always demands a "balanced approach" which you know as well as I do, is simply a nice way of saying increased taxes on the wealthy. Since even Christina Romer...that little chipmunk faced Obama appointee...is admitting that a tax increase on the wealthy is not a good idea in this economy then WHY do you guys keeps saying that has to be in the mix? If you raise taxes you're going to slow down the economy...something the Democrats were well aware of because they didn't do so when they had their majorities and could have quite easily.

 

[LibocalypseNow]

I only wish our country would practice Austerity. I don't know where Krugman's been. He's criticizing Austerity but there is none. It just hasn't happened yet. I think he's just covering for his Hopey Changey failure again. I'm willing to criticize Austerity when or if i see it. But i haven't seen it yet.

 

[Zander]

I only wish our country would practice Austerity. I don't know where Krugman's been. He's criticizing Austerity but there is none. It just hasn't happened yet. I think he's just covering for his Hopey Changey failure again. I'm willing to criticize Austerity when or if i see it. But i haven't seen it yet.

There has been "Austerity" in government. State and local government spending (which accounts for about 18-20% of GDP) have cut back on spending and employees. 46 of the 50 states have made budget cuts. The budget pressures that make these cuts necessary have not abated. Because unemployment rates remain high — and are projected to stay high well into next year — revenues are likely to remain at or near their current depressed levels. This has caused a new round of spending cuts and that trend will likely continue.....


The Feds haven't cut back. Yet.

 

[freedombecki]

If government spending is necessary to sustain the recovery, is it crazy to pursuing cuts in spending now, while unemployment is still about 9%?

Conservatives don't want to believe this, but if the government fires people that means more people unemployed.

Hard to believe, I know.

When the government releases people, they can find jobs in the private sector, and it could be they're tired of the bureaucracy, also.

 

[freedombecki]

I only wish our country would practice Austerity. I don't know where Krugman's been. He's criticizing Austerity but there is none. It just hasn't happened yet. I think he's just covering for his Hopey Changey failure again. I'm willing to criticize Austerity when or if i see it. But i haven't seen it yet.

There has been "Austerity" in government. State and local government spending (which accounts for about 18-20% of GDP) have cut back on spending and employees. 46 of the 50 states have made budget cuts. The budget pressures that make these cuts necessary have not abated. Because unemployment rates remain high — and are projected to stay high well into next year — revenues are likely to remain at or near their current depressed levels. This has caused a new round of spending cuts and that trend will likely continue.....

The Feds haven't cut back. Yet.

The feds truly have no other choice but to pull in the belt another notch on a regular basis, with Congress having brought spending to its knees.

 

[NYcarbineer]

Really?

Then how come someone doesn't 'own' all these other countries, who spend tiny fractions of what we spend on defense?

Because the United States is the world's policemen. We step in whenever country 'A' tries to own country 'B.' You recall the First Iraq war, don't you?

If China was the world's policemen, the outcome of such events would be far different. I'm sure you would approve of the result.

You talk about being the world's policeman as if it's a good thing, which proves how fucking stupid you are.

 

[NYcarbineer]

iF IT WASN'T FOR DEFENSE WE WOULDN'T OWN OUR OWN WEALTH AS ANOTHER NATION WOULD OWN US. Hell, as we have open borders another nation will be owning us pretty fucking soon. Maybe by 2040

Really?

Then how come someone doesn't 'own' all these other countries, who spend tiny fractions of what we spend on defense?

ask Truman and Acheson....and I would not go inbto areas in which you have ZERO, and I mean ZERO expertise or inate knowledge, 30 seconds of googling doesn't count.

You know it was only the other day that I became aware you're a girl.

 

[bripat9643]

You talk about being the world's policeman as if it's a good thing, which proves how fucking stupid you are.

I didn't take a position one way of the other. However, having the USA as the world's policeman is definitely preferable to have Russia or China as the world's policeman.

The fact that turds like you don't see the difference tells us all we need to know about you.

 

[Zander]

I only wish our country would practice Austerity. I don't know where Krugman's been. He's criticizing Austerity but there is none. It just hasn't happened yet. I think he's just covering for his Hopey Changey failure again. I'm willing to criticize Austerity when or if i see it. But i haven't seen it yet.

There has been "Austerity" in government. State and local government spending (which accounts for about 18-20% of GDP) have cut back on spending and employees. 46 of the 50 states have made budget cuts. The budget pressures that make these cuts necessary have not abated. Because unemployment rates remain high — and are projected to stay high well into next year — revenues are likely to remain at or near their current depressed levels. This has caused a new round of spending cuts and that trend will likely continue.....

The Feds haven't cut back. Yet.

The feds truly have no other choice but to pull in the belt another notch on a regular basis, with Congress having brought spending to its knees.

Exactly. What today's Neo-Keynesians seem to conveniently forget about Keynes is that while he did believe in deficit spending during economic recessions, he also believed in running surpluses during expansions.

 

[Quantum Windbag]

Yes, dollars are a government imposed fiction. They don't "control" trade, though, they make it more efficient. That's one of their great advantages. Providing dollars is one of the most important functions government performs.

They do control trade. By forcing the use of dollars the government makes itself a part of every transaction that takes place in the economy. That is more efficient for the government in that it makes it easier to collect taxes, but it adds a layer of complexity for everyone else. That actually makes trade less efficient. Instead of me trading my product for what I want, I have to sell my product for dollars, and then buy what I want with those dollars

Expenses and losses are not the same thing. A disaster is a loss. Rebuilding is an expense.

I told you it was an extreme example to make a point. That loss comes as an expense on the balance sheets, and rebuilding is an additional expense.

GDP creates wealth, but wealth is not GDP. Suppose a country built everything it needed, and everyone retired. Its GDP would be zero, even though everyone in the country was rich. If, on the other hand, everything was destroyed, the people would be poor, but GDP would rise, once they started to rebuild. GDP is work, measured in dollars. It is not wealth, and it's not dollars.

GDP does not create wealth, it is a measure of the aggregate wealth within an economy. Until you understand that we are going to be talking about the real world and some imaginary world where wealth is a function of government fiat, not productivity.

If your example was correct Luxemburg would have a much lower per capita GDP. It actually has the highest GDP per capita in the world.

It is possible to create wealth, without paying anyone. For example, if you raise your child, you contribute nothing to GDP, but if you pay someone else to do it, GDP goes up. That's one of the long-standing criticisms of GDP.

The government creates money by spending, and destroys money by taxing. When there's not enough money, the government should spend more and tax less. When there's too much, the government should tax more and spend less. The government sucks money out of the economy only when it taxes more than it spends.

Think of it this way: Suppose everyone paid their taxes in cash, and bales of dollars showed up on the steps of IRS buildings throughout the country. Suppose the government paid for everything with cash, and mailed all the cash from Washington DC.

Should the government gather up all those old dollars, put them on planes, and fly them to DC? Or would it make more sense to shred them, and print new ones?

What difference would it make?

That depends, are we talking about monetary or fiscal policy? The answers are different in both. If we are talking monetary, it makes more sense to ship the money to keep it in circulation. If we are talking fiscal it makes more sense to shred it and control the money supply centrally. It would make more sense to make it a simple either/or question, but economics is not a simple subject.

 

[Sundial]

The government creates GDP by doing things like building roads, educating children, and defending the country.

Every dollar anybody ever spends comes from somewhere else. That has nothing to do with anything.

Every expense is also income. If you pay anyone anything it's an expense to you, and income to someone else.

When somebody says such-and-such "consumes" X% of GDP, they're simultaneously it produces that same percent.

No they aren't. People on Social Security aren't producing jack squat.

That's why Social Security payments are called "transfers".

Neither are Medicare recipients,

Medicare payments - to my understanding - go to doctors for performing services. Money that's paid for goods and services is part of GDP.

Welfare Queens, etc. When I go to Lowes and buy a lawn tractor, I have received something in exchange for my "expense." When I pay my FICA taxes, I receive nothing.

The payment of taxes is not part of GDP. Government spending - for goods and services (not transfer payments) - is part of GDP.

Furthermore, the government doesn't educate children. It merely warehouses them and indoctrinates them. Now one would pay for the "education" the government provides voluntarily - which means its worthless. It's like calling drilling a hole in your head a "service."

I'm as much of a critic of public education as anyone. But there's a difference between "It's not as good as it should be, so we should abolish it," and "It's not as good as it should be so we should make it better." Private schools take mostly good kids from mostly good homes and have a relatively easy job. Public schools' job is massively more difficult. Which is why it's done by public schools in the first place. If it were a job capable of being done by private schools, there would be no public schools.

Medicare is similar. There is no private market for insuring the people Medicare protects. And there never will be. Because there's no profit in it. The private market exists for the purpose of enriching private interests. When it comes to protecting the health and welfare of our nation generally, only the government is capable of doing it.

That doesn't mean it does it well. Whether it does it well is up to us.

(Or more specifically, it's up to Democrats, since your side shirked the responsibility a long time ago.)

 

[Toro]

if tjhey are Toro it is infinitesimal, imho. I am not ever sure we have accurate figures on what homes a) are IN foreclosure, b) have been foreclosed, c) how many short sales are extent, e) how much damage this law suites vs. the banks et al are going to cause, what the banks are hiding as it applies to the a b and c....

Again, if you do the math, we are building far less homes than household formations. Now, does the excess get wiped away in 2012, 13 or 14? I don't know. But at some point, we will be at equilibrium again, and the dominant ethos when it ends will almost certainly be "Housing prices are going lower. There are too many homes." Etc.

the deficit spending adds to the debt. does it not? eventually the trade down as to debt servicing vs. keeping the economy afloat eats itself, just driving more of the same.

At some point, that's true. But we are far from that point.

We are not as bad as Canada was in 1995. We could spend like this for another five years and still be better off than Belgium or Italy. We could spend like this for 15 years and be like Japan. We were far more indebted in 1945 than today. Absolutely agree that we have to get this under control. If not, we are fracked. But is it OhMyGodTheWorldIsGoingToEndIfWeDon'tCutSpendingThisVeryInstant! ?? No. The market doesn't believe it either, not with 10 year Treasury bonds at 2%. But I do believe a good portion of the GOP believes it. So it will be interesting to see what happens in 2013 when they control everything.

 

[Quantum Windbag]

FDR was not running his new deal at "full bore" before WWII.

Post WWII we had a boom because

1. People had lots and lots of money (thanks to war production work); and

2. There was enormous pent up demand for consumer goods and housing as those demands were not met during WWII


Now note that the first thing above? People had lots of money? In other words the DEMAND side had enough money to make it worthwhile for the SUPPLY side to start producing things.

The 50s were the payoff from the net effect of Keynesian spending.

There we go again, a Keynesian thinking that there are seperate econimies.

The post WWII boon came about because there was worldwide demand for US production because we had the only complete supply chain that existed on the entire planet. That had nothing to do with Keynesian spending during WWII.

 

[Quantum Windbag]

The government creates GDP by doing things like building roads, educating children, and defending the country.

Every dollar anybody ever spends comes from somewhere else. That has nothing to do with anything.

Every expense is also income. If you pay anyone anything it's an expense to you, and income to someone else.

When somebody says such-and-such "consumes" X% of GDP, they're simultaneously it produces that same percent.

No they aren't. People on Social Security aren't producing jack squat. Neither are Medicare recipients, Welfare Queens, etc. When I go to Lowes and buy a lawn tractor, I have received something in exchange for my "expense." When I pay my FICA taxes, I receive nothing.


Furthermore, the government doesn't educate children. It merely warehouses them and indoctrinates them. Now one would pay for the "education" the government provides voluntarily - which means its worthless. It's like calling drilling a hole in your head a "service."

Math and science is left-wing indoctrination.

Outstanding.

Be fair.

Public education was supported by corporations in order to create workers that were uniform. Now it is supported by government to create citizens that accept government overreach. The fact that it throws in some math and science is either a benefit or an unfortunate side effect, depending on you POV.

 

[Quantum Windbag]

Really?

Then how come someone doesn't 'own' all these other countries, who spend tiny fractions of what we spend on defense?

Because the United States is the world's policemen. We step in whenever country 'A' tries to own country 'B.' You recall the First Iraq war, don't you?

If China was the world's policemen, the outcome of such events would be far different. I'm sure you would approve of the result.

That is part of it.

The bigger part is that defense spending includes the DHS, which means that federal defense spending includes your local police and fire department, which is not a proper function of the federal government. That is why defense spending should be part of the cuts to the budget.

 

[Rocko]

Krugman is a Marxist activist masquerading as an economist.

I think his Nobel prize is even more insulting than Yasser Arafat's or Barry's.

 

[Big Fitz]

I have one question. Since no cuts and "austerity" programs have yet been passed or made...

... WHAT Austerity could be causing unemployment?

Couldn't have put it better myself, Fitz.

I can only assume that the board's progressives believe that a "promise" to cut spending is the same as already having done so.

An extension of the "intentions matter more than results" philosophy I guess.

 

[Big Fitz]

I have one question. Since no cuts and "austerity" programs have yet been passed or made...

... WHAT Austerity could be causing unemployment?

Local governments have lost 550,000 jobs since September 2008. For starters. That doesn't include private sector jobs lost when governments cut back on purchasing goods and services.

That was Krugman's point.

You conservatives should be happy. Mass unemployment in the area of jobs directly or indirectly connected to government spending is what you people want,

isn't it?

Budget shortfalls brought about by overspending and not reacting properly to economic downturns, are not austerity programs, nor cuts.

Can you not tell the difference between a failure of government and deliberate budgetary cuts?