Republicans fall quiet in face of Obama deficit success

[AmazonTania]

Man you've managed to unload just about every popular myth and misconception about economics here!

Americans do need to spend more.

What I have highlighted in bold is the popular myth. And when someone spouts this rethoric, I already know to refer to my 'Economic Comebacks to Keynesian Nonsense' hand-guide.

Your spending is my income and vice versa. The economy is depressed because we don't spend enough to employ all those looking for a job.

Point out the lack of spending. I really want to know where it is.

Debt is not a problem for the economy as a whole. Your debt is my savings, and vice versa.

And what savings would that be?!

You must be talking about national savings. This should be interesting.

We only have problem when debtors try to reduce their debt to fast and savers don't pick up the slack by increasing their spending. But that is not a fundamental problem - rather it's a technical issue, which can be easily resolved given some political will.

You are assuming that a private individual is purchasing your debt, or in this case, the government's debt. Not to mention this rhetoric employs the "correlation equals causation." Governments all throughout history have had zero deficits, even surpluses, and there were positive savings for the nation. If the public sector is not issuing a new bond, then the private sector has gained a new net financial asset. Corresponding liability remains and always remains with the Government, not the private sector. When government runs deficits, it sucks savings out of the private sector and reduces private investment. Sorry, but your fallacy doesn't hold up to snuff.

Competitiveness, or lack of it, do not cause unemployment. Here, if you really want to learn something:

The Unofficial Paul Krugman Web Page

I didn't read all of it, then again, why should I? It's fairly old and really long. All I have learned was that someone probably took this article at face value and American manufacturing has been cut off at the knees.

If you'd like to make your point, feel free to do so. But if I wanted to debate Krugman, I might as well try to do it directly. But I'll briefly discuss the points listed at the bottom of the page.

1. A trade surplus may be a sign of national weakness, a deficit a sign of strength

A trade surplus is never a sign of weakness. The more you export, the more competitive you are, the greater the demand for your goods and services. Not only this, having one creates an international demand for your currency. The only strength regarding a trade deficit is that it means foreign countries really want to invest in your country. That's all.

2. Countries do not compete with each other the way corporations do.

Countries do not compete with on another the same way athletes do. This point is irrelevant. Countries are competitive by creating an demand for their goods and their currency. The idea that countries must compete the way corporations do is the same sort of rubbish which starts Currency Wars.

3. Competitiveness advocates are eerily inept in their handling of the numbers

Pure opinion.

4. Competitiveness risks distorting the quality of domestic economic policy.

If domestic developers cannot compete with foreign developers, then said developers shouldn't be in the business at all. End of story.

Same for trade deficit -- having them does not mean the nation is broke or something.

Having one doesn't necessarily mean that the country is broke, but having one at the level the United States has is not a good thing.

Decline in manufacturing is global phenomenon and the world is better because of it:

http://1.bp.blogspot.com/-JEZXR9XK7vc/Tbr46ReInRI/AAAAAAAAPQ0/HlLXeVin_g0/s400/worldmfg.jpg[/IMG[/quote]

The decline in manufacturing is an American problem. It's not a global problem. Other countries are experiencing a downturn from a position of strength. America decline is from a position of weakness, and the economy is practically cut off at the knees.

[quote][url=http://mjperry.blogspot.com/2011/04/decline-of-manufacturing-is-global.html]CARPE DIEM: "Decline of Manufacturing" is Global Phenomenon: And Yet the World Is Much Better Off Because of It[/url][/quote]

What am I suppose to be seeing here?

[quote]Anyways, try to read some knowledgeable economist, like Krugman or DeLong. Good luck :)[/quote]

Ah, I was wondering why you weren't making any sense. I thought I spotted a Krugman protege.

 

[ilia25]

Point out the lack of spending. I really want to know where it is.

Here, I zoom it in for you:

Notice how we are below the pre-crisis trend? That's the reason for high unemployment. UK is the same story, BTW.

And what savings would that be?!

I don't know what you call it, but you can only borrow someone else's savings. That's why debt as such is never a problem.

You are assuming that a private individual is purchasing your debt, or in this case, the government's debt.

No, I was talking in general. Private, or public, or corporation debt is always a saving by some other entity -- a private individual, a company, or a government agency.

Not to mention this rhetoric employs the "correlation equals causation."

What are you talking about? Correlation between what?..

Governments all throughout history have had zero deficits, even surpluses, and there were positive savings for the nation. If the public sector is not issuing a new bond, then the private sector has gained a new net financial asset. Corresponding liability remains and always remains with the Government, not the private sector.

Is that English?

When government runs deficits, it sucks savings out of the private sector and reduces private investment.

So what? Government spending adds to GDP just as private investment. So if deficit reduces private investment by X dollars and increases government spending by the same amount, the effect on GDP is fat zero.

The above is true, though, only if the economy is at full employment. When it is depressed, like now, there is no crowding out -- reducing deficits will not increase private investment and, therefore, it will be contractionary. Increasing deficit spending is expansionary.

I didn't read all of it, then again, why should I? It's fairly old and really long. All I have learned was that someone probably took this article at face value and American manufacturing has been cut off at the knees.

OK, I can make it even simple -- have you heard about comparative advantage? If country A produces all goods more efficiently than country B, even then it would be beneficial for country A to outsource producing some goods to country B.

Being less productive does not make workers in country B unemployed. It only makes them earn lower wages than in country A -- which is an expected outcome.

So all this "competitivness" talk is mostly nonsense. Being "less competitive", whatever it means, does not cause unemployment.

A trade surplus is never a sign of weakness.

Can't you read? It can be result of low wages. Actually it always is. Trade surplus simply means you consume less than you produce. If that is a sign of strength, I prefer weakness.

The more you export, the more competitive you are, the greater the demand for your goods and services.

Again, that "more competitive" thing is just empty words.

Not only this, having one creates an international demand for your currency

Yes, and that eventually brings your surplus down, correcting the trade imbalances.

The only strength regarding a trade deficit is that it means foreign countries really want to invest in your country.

They not just want to invest, they do -- that is how you end up with trade deficit in the first place. What's wrong with that?

Countries are competitive by creating an demand for their goods and their currency.

And what are they competing for, may I ask?

If domestic developers cannot compete with foreign developers, then said developers shouldn't be in the business at all. End of story.

Reading comprehension. Krugman was talking about domestic policy, not domestic "developers".

Having one doesn't necessarily mean that the country is broke, but having one at the level the United States has is not a good thing.

Why? Too much of foreign investment?

The decline in manufacturing is an American problem. It's not a global problem.

No, it's a global problem, look at the chart.

Other countries are experiencing a downturn from a position of strength. America decline is from a position of weakness, and the economy is practically cut off at the knees.

Empty words. The US were manufacturing powerhouse after WWII, now it just corrected that imbalance.

Ah, I was wondering why you weren't making any sense. I thought I spotted a Krugman protege.

Well, I take my advice back. You'll need to learn to read first -- nothing personal, but you are clearly having troubles with reading comprehension.

 

[Eric Cartman]

Man you've managed to unload just about every popular myth and misconception about economics here!

Americans do need to spend more.

What I have highlighted in bold is the popular myth. And when someone spouts this rethoric, I already know to refer to my 'Economic Comebacks to Keynesian Nonsense' hand-guide.

If you believe that GDP is a good measure for the health of the economy then should accept that Americans spending more would help.

 

[ABikerSailor]

Man you've managed to unload just about every popular myth and misconception about economics here!

Americans do need to spend more.

What I have highlighted in bold is the popular myth. And when someone spouts this rethoric, I already know to refer to my 'Economic Comebacks to Keynesian Nonsense' hand-guide.

If you believe that GDP is a good measure for the health of the economy then should accept that Americans spending more would help.

Interestingly enough, all the countries in the EU that went with full blown austerity measures saw their economies go into double dip, or even triple dip recession.

The US didn't cut as much, and we actually saw our economy grow a full point and a half over those that went with austerity.

Wanna know where a good place would be to start? Having the government start hiring construction companies to fix our infrastructure. Those jobs would stay here and could be worked by Americans, because of the nature of the job and the location.

 

[PMZ]

Only one president has paid off the debt and that president was a Democrat. Reagan tripled the debt and then Bush doubled it again, the country almost went under. The nation survived, however, and now Republicans complain that Obama should have paid off the debt when he took office.

national debt when obama took office---------9T from all previous presidents--43 of them

national debt today--------------------16.5T

nothing more needs to be said. except----------------obama has been a total fiscal failure.

This would be an extremely valuable insight if debt was caused by dates. Unfortunately, it's caused by policies. Based on policies, continuing Clinton's would have had us debt free by 2006 according to the CBO. Bush's policies, and their consequences, like the holy wars, the wealth redistribution tax cuts, the housing boom and bust, the Great Recession recovery, account for our entire debt now.

Ouch.

 

[PMZ]

Man you've managed to unload just about every popular myth and misconception about economics here!

Americans do need to spend more.

What I have highlighted in bold is the popular myth. And when someone spouts this rethoric, I already know to refer to my 'Economic Comebacks to Keynesian Nonsense' hand-guide.

If you believe that GDP is a good measure for the health of the economy then should accept that Americans spending more would help.

Media extreme conservatives are taught many myths in their training to make the package consistent even though wrong. One is the myth of supply side economics.

The first to produce a reliable macro economic model was John Maynard Keynes.

Here's what Wikipedia says about Keynesian Economics.

"Prior to the publication of Keynes's General Theory, mainstream economic thought was that the economy existed in a state of general equilibrium, meaning that the economy naturally consumes whatever it produces because the needs of consumers are always greater than the capacity of the economy to satisfy those needs. This perception is reflected in Say's Law[5] and in the writing of David Ricardo,[6] which is that individuals produce so that they can either consume what they have manufactured or sell their output so that they can buy someone else's output. This perception rests upon the assumption that if a surplus of goods or services exists, they would naturally drop in price to the point where they would be consumed."

"Keynes's theory was significant because it overturned the mainstream thought of the time and brought about a greater awareness that problems such as unemployment are not a product of laziness, but the result of a structural inadequacy in the economic system. He argued that because there was no guarantee that the goods that individuals produce would be met with demand, unemployment was a natural consequence. He saw the economy as unable to maintain itself at full employment and believed that it was necessary for the government to step in and put under-utilised savings to work through government spending. Thus, according to Keynesian theory, some individually rational microeconomic-level actions such as not investing savings in the goods and services produced by the economy, if taken collectively by a large proportion of individuals and firms, can lead to outcomes wherein the economy operates below its potential output and growth rate."

"Prior to Keynes, a situation in which aggregate demand for goods and services did not meet supply was referred to by classical economists as a general glut, although there was disagreement among them as to whether a general glut was possible. Keynes argued that when a glut occurred, it was the over-reaction of producers and the laying off of workers that led to a fall in demand and perpetuated the problem. Keynesians therefore advocate an active stabilization policy to reduce the amplitude of the business cycle, which they rank among the most serious of economic problems. According to the theory, government spending can be used to increase aggregate demand, thus increasing economic activity, reducing unemployment and deflation."

This virtually undeniable truth is inconvenient however to the idea that tax cuts bring about anything other than the massive debt that Republican Administrations typically turn over to, and blame on, Democrats.

Thus, the recovery from Bush's Great Recession was spending to keep the unemployed whole, and consuming, while business fixes their great American job giveaway. Just one of the components of Obama's spending made necessary by Bush's policies.

 

[AmazonTania]

Here, I zoom it in for you:

I'm willing to ignore the fact that you just tried to change the component, along with the metric the component is measured in. Where is the lack of spending? I still don't see it.

Notice how we are below the pre-crisis trend? That's the reason for high unemployment. UK is the same story, BTW.

No we aren't. Personal Consumption Expenditures are above crisis levels, even when measured in real terms. Your own chart (which is merely my chart, which you have distorted) shows this. You are making things up. Either that, or you are living in the past.

I don't know what you call it, but you can only borrow someone else's savings. That's why debt as such is never a problem.

That's not what the public, nor the government, is doing. Which is why it is a problem.

What are you talking about? Correlation between what?..

Government deficits = Non Government Savings. Which is absolutely false.

Is that English?

I had no problem reading it, and browsing sentence constructor had no problem reading it as well. So it is obviously English, with the fact that my computer currently has English settings. The fault probably lies with your ability to keep up.

So what? Government spending adds to GDP just as private investment. So if deficit reduces private investment by X dollars and increases government spending by the same amount, the effect on GDP is fat zero.

The terms of GDP, nothing really happened. The economy will have a different sentiment, on the other hand.

The above is true, though, only if the economy is at full employment. When it is depressed, like now, there is no crowding out -- reducing deficits will not increase private investment and, therefore, it will be contractionary. Increasing deficit spending is expansionary.

There is no crowding out simply because the public has alternative methods of spending.

And are ultimately forced to tap into their savings,

or turn to credit to maintain their artificial lifestyle:

This doesn't change the fact that the private sector has less money, more spending and absolutely nothing to show for it.

OK, I can make it even simple -- have you heard about comparative advantage? If country A produces all goods more efficiently than country B, even then it would be beneficial for country A to outsource producing some goods to country B.

Being less productive does not make workers in country B unemployed. It only makes them earn lower wages than in country A -- which is an expected outcome.

So all this "competitivness" talk is mostly nonsense. Being "less competitive", whatever it means, does not cause unemployment.

Even in your scenario, country A and country B are still competing with one another. Perhaps you are confused. Uncompetitiveness (or less competitive) doesn't stem when a country starts outsourcing goods and services to another country. This happens when a domestic country decides to enact policy to either deter foreign providers (tariffs, quotas, etc) or when said country enacts laws on business which makes it more difficult for any business to compete in the global marketplace.

Can't you read? It can be result of low wages. Actually it always is. Trade surplus simply means you consume less than you produce. If that is a sign of strength, I prefer weakness.

You don't know what you are talking about. Trade surpluses increase the value of wages and the purchasing power of the currency. There are rarely any countries around today with trade surpluses and low wages or low purchasing power.

Again, that "more competitive" thing is just empty words.

Only because you don't understand what it is or what it entails. Or maybe you truly believe they are empty words, because daddy Krugman told you so.

Yes, and that eventually brings your surplus down, correcting the trade imbalances.

Because a country with a trade deficit will be forced to export more to keep the rate of exchange balanced. Therefore, making this country more competitive.

They not just want to invest, they do -- that is how you end up with trade deficit in the first place. What's wrong with that?

Never said it was wrong. Trade deficits are self correcting. $500 Billion a year trade deficits are not.

And what are they competing for, may I ask?

To sell exports. To buy imports. Plenty of other reasons. The point you don't seem to understand is that a strong currency in Country A makes imports unattractive to Country B. However, importing from Country B is very attractive to Country A, as their imports are relatively cheaper. Country B doesn't want to sell it's imports for dirt cheap, as this is a cost disadvantage. So Country B has to export in order to increase demand for their currency and their exports. This balance the trade along with the rate of exchange and makes both countries competitive as a result.

As basic as this is, it's pretty sad that I have to explain it...

Reading comprehension. Krugman was talking about domestic policy, not domestic "developers".

I was talking about developers. As I have said earlier, Domestic policy makes it more difficult to compete against Foreign developers. If domestic developers cannot compete with foreign developers, then they shouldn't be in the business of developing goods or services at all...

But sure, shoot off at the mouth and make an ass out of yourself without clarifying the points of view. What are we trying to do, have a debate here? I don't think so.

Why? Too much of foreign investment?

No. Too much leverage against the US dollar.

No, it's a global problem, look at the chart.

What chart would that be? The US being far below the world's average? I also see the world's average decreasing, but I don't really see how this is a global problem.

Empty words. The US were manufacturing powerhouse after WWII, now it just corrected that imbalance.

It was a manufacturing powerhouse for decades. What is going on is hardly a correction. But as I have said before, other countries are declining from a position of strength. America is practically on life support. The decrease in the manufacturing sector hasn't put much of a dent in their exporting or industrial production. This trend is perfectly normal for a post-industrial economy, when the service sector creates more wealth than the manufacturing sector of the economy. There really isn't much need for as many factories or factory workers, especially when these countries are more productive than they've ever been.

Well, I take my advice back. You'll need to learn to read first -- nothing personal, but you are clearly having troubles with reading comprehension.

Your first fault is that you believe Krugman is a knowledgeable economist. Your second fault is that you confuse reading comprehension with getting straight to the point. Your final problem is that assume far too much. In addition relying not on your own knowledge, but someone else's. Sorry if I have a hard time taking your words seriously. I thought this was a debate, not an essay stacking contest. If I want to debate Krugman, I might as well do it directly. Otherwise, post his blog on the forum and I'll leave a comment on whatever nonsense he has written for the day.

 

[AmazonTania]

Man you've managed to unload just about every popular myth and misconception about economics here!

Americans do need to spend more.

What I have highlighted in bold is the popular myth. And when someone spouts this rethoric, I already know to refer to my 'Economic Comebacks to Keynesian Nonsense' hand-guide.

If you believe that GDP is a good measure for the health of the economy then should accept that Americans spending more would help.

It's not. Consumer Spending is already 71% of GDP. Where should it be before we get to the point of it 'helping.' 75%? 80%?

I'll just accept the fact that your another economic illiterate passing off GDP as a bogus metric, and you can be on your merry way.

 

[AmazonTania]

Interestingly enough, all the countries in the EU that went with full blown austerity measures saw their economies go into double dip, or even triple dip recession.

You don't understand much of EU economics, do you (or basic economics, I'm guessing)? Except for Lithuania, not a single EU nation has made drastic cuts in Deficit Spending or attempts to shrink their debt to GDP ratio. Lithuania is one of the better preforming EU countries today. The rest of them never made any attempt to cut deficit spending, as spending was too low relative to the size of the budgets.

There was no Austerity, at all. Then again, anything is Austerity. compared to the US.

The US didn't cut as much, and we actually saw our economy grow a full point and a half over those that went with austerity.

And the economy still sucks, and it's inherently worse. The only thing keeping the spot light off America is the defuct countries in Europe.

Wanna know where a good place would be to start? Having the government start hiring construction companies to fix our infrastructure. Those jobs would stay here and could be worked by Americans, because of the nature of the job and the location.

With what money?

 

[AmazonTania]

Media extreme conservatives are taught many myths in their training to make the package consistent even though wrong. One is the myth of supply side economics.

Supply-Side Economics has never been implemented. Already a historical inaccuracy, before I've even gotten to the historical part.

The first to produce a reliable macro economic model was John Maynard Keynes.

And the world certainly rewarded that for him too, by giving the first Noble Prize in Economics to an Austrian (sort of). Granted, it was long after Keynes died, but as long as it wasn't a Keynesian, I guess it was fine with the Noble Committee.

This virtually undeniable truth is inconvenient however to the idea that tax cuts bring about anything other than the massive debt that Republican Administrations typically turn over to, and blame on, Democrats.

Thus, the recovery from Bush's Great Recession was spending to keep the unemployed whole, and consuming, while business fixes their great American job giveaway. Just one of the components of Obama's spending made necessary by Bush's policies.

Not sure I can get this sentence to make any more sense if I tried. So I won't.

 

[ilia25]

Notice how we are below the pre-crisis trend? That's the reason for high unemployment. UK is the same story, BTW.

No we aren't. Personal Consumption Expenditures are above crisis levels, even when measured in real terms.

OMG! Really? Do you even know what "trend" means? Here, let me draw it for you:

That gap is the difference between want we spend now and what we should spend to achieve full employment.

Oh, and your citing spending as percentage of GDP is comical. You are somehow not aware that GDP is abnormally low, so comparing anything to depressed GDP is not helpful.

And what are they competing for, may I ask?

To sell exports. To buy imports. Plenty of other reasons.

Wha..what??? Does "to sell exports" mean countries are competing to have the biggest trade surplus? Or is to buy imports, meaning they compete to have the biggest trade deficit?

And more importantly, why would a country want to sell more exports? Or to buy more imports?

It should be a simple question. Athletes compete for medals at a sporting event. Corporations compete for customers. What countries are competing for?

You don't have an answer because you don't have a coherent model of how the world works in your head.

Let me help you a bit. The reason countries have an economy in first place is to achieve higher living standard. In other words higher GDP per capita. That, in turn, means higher labor productivity and full employment. What I don't know (and neither do you) is why and how can a country "compete" with others toward achieving those goals?

So Country B has to export in order to increase demand for ... their exports.

LOL, that statement speaks volumes about the state of your mind. I'm done here

 

[ilia25]

What I have highlighted in bold is the popular myth. And when someone spouts this rethoric, I already know to refer to my 'Economic Comebacks to Keynesian Nonsense' hand-guide.

If you believe that GDP is a good measure for the health of the economy then should accept that Americans spending more would help.

Interestingly enough, all the countries in the EU that went with full blown austerity measures saw their economies go into double dip, or even triple dip recession.

The US didn't cut as much, and we actually saw our economy grow a full point and a half over those that went with austerity.

Wanna know where a good place would be to start? Having the government start hiring construction companies to fix our infrastructure. Those jobs would stay here and could be worked by Americans, because of the nature of the job and the location.

Another good place would be federal help to the states and local governments, so they can hire back teachers and firefighters they had to lay off.

 

[ScienceRocks]

Only one president has paid off the debt and that president was a Democrat. Reagan tripled the debt and then Bush doubled it again, the country almost went under. The nation survived, however, and now Republicans complain that Obama should have paid off the debt when he took office.

national debt when obama took office---------9T from all previous presidents--43 of them

national debt today--------------------16.5T

nothing more needs to be said. except----------------obama has been a total fiscal failure.

This would be an extremely valuable insight if debt was caused by dates. Unfortunately, it's caused by policies. Based on policies, continuing Clinton's would have had us debt free by 2006 according to the CBO. Bush's policies, and their consequences, like the holy wars, the wealth redistribution tax cuts, the housing boom and bust, the Great Recession recovery, account for our entire debt now.

Ouch.

1. Maybe you're right about the wars, I.o.U's and SSI not being budgeted=most of the debt could of been because of the Bush policies. Would you admit that Obama has kept them? I'll admit Bush fucked up!

2. We were attacked so we want to war! So you feel we shouldn't of want after the terrorist at all?

3. What's wrong with people having lower taxes? You'd think that a stronger private free market would mean stronger economy.

 

[AmazonTania]

OMG! Really? Do you even know what "trend" even means? Here, let me draw it for you:

Again, that is still not the chart I used.

And who is talking about trends? Comparing past trends with a future trend tells you nothing. I am comparing spending levels, not trends. I thought I had the reading comprehension. Or maybe this was your sad attempt at a 'gotcha' moment. I can't tell. Someone else please figure it out.

That gap is the difference between want we spend now and what we should spend to achieve full employment.

If going back to bubble trends are your idea of a recovery, then you would understand why trends are generally meaningless in the context you are using. Again, comparing previous average to a new average tells you nothing. There are stock trading classes online who can teach you this much.

Oh, and your citing spending as percentage of GDP is comical. You are somehow not aware that GDP is abnormally low, so comparing anything to depressed GDP is not helpful.

The rate at which GDP is increasing is abnormally low. Then again, you are comparing a today's growth with asset bubble growth. Doesn't ignore the fact that consumer spending has made up a greater percentage of that now than at any point in US history.

Wha..what??? Does "to sell exports" mean countries are competing to have the biggest trade surplus? Or is to buy imports, meaning they compete to have the biggest trade deficit?

A currency war is a competition to have the largest trade surplus. This is done by devaluing your own currency so you can sell more exports. This is not what is happening. I'll explain once more.

Trade deficits are not bad. We can both agree on this. However, a country cannot consecutively have an increasing trade deficit. If a country keeps this trade imbalance growing, the value of their currency will shrink and imports will become drastically expensive. This is bad for the economy as well as the cost of living in the economy. The only way to correct this imbalance is to export.

And more importantly, why would a country want to sell more exports? Or to buy more imports?

I already explained this to you. Did it not catch on?

It should be a simple question. Athletes compete for medals at a sporting event. Corporations compete for customers. What countries are competing for?

They're not competing FOR anything. They're doing this to improve their economy and currency. This is merely a means, not an end. Owning a currency is like owning a share of a country, no more than owning a share of a corporation. As having a strong currency instills confidence in your country and economy.

You don't have an answer because you don't have a coherent model of how the world works in your head.

I gave you an answer. I gave you several answers. It's really not my fault that it's not an answer that you like. Perhaps you should rephrase the question if you want a different answer.

Let me help you a bit. The reason countries have an economy in first place is to achieve higher living standard. In other words higher GDP per capita. That, in turn, means higher labor productivity.

Please, do go on.

What I don't know (and neither do you) is why and how can a country "compete" with others toward achieving a higher productivity?

They're not. That's is why you are still having a hard time understanding this basic concept of trade.

I'll make it simple for you. If you want what a country has, you need it's currency. If a country is exporting, it is creating demand for it's currency. This means countries like America are selling US Dollars so they can buy Aussie Dollars to trade. The value of the AUD appreciates versus the value of the US Dollar.

I'm not even going to discuss currency pairs because this is probably above your understanding, but the currency pair would be AUD/USD. In this instance, the pair would be 1:1. If Australia exports to the US more than it imports, the balance will slightly higher. 1:1.33 perhaps. If Australia exports alot, the trade balance will be 1:2. And so on, and so forth.

In the end, both countries are competing against one another in the global marketplace. They're not competing for tangible, like consumers or market share. A country exports to increase the value of the nation's currency, and other countries will be forced to do the same, as a nation cannot rely on importing for far too long. Eventually the purchasing power of this currency will depreciate, and importing from other nations will be far to expensive.

Understand, now?

LOL, that statement speaks volumes about the state of your mind. I'm done here

Yeah, speaks volumes. Especially if you edit the mid-part of the sentence out. What a joke you've turned out to be.

 

[Mertex]

Have you ever seen a budget surplus which makes the public debt increase for 3 years in a row?

No.


Debt held by the public relative to GDP rose rapidly again in the 1980s. President Ronald Reagan's economic policies lowered tax rates and increased military spending, while congressional Democrats held fast against attempts to reverse spending on social programs.[12][13] As a result, debt as a share of GDP increased from 26.2% in 1980 to 40.9% in 1988, and continued to rise during the presidency of George H. W. Bush, reaching 48.3% of GDP in 1992.[10][14]

Debt held by the public reached 49.5% of GDP at the beginning of President Clinton's first term. However, it fell to 34.5% of GDP by the end of Clinton's presidency due in part to decreased military spending, increased taxes (in 1990, 1993 and 1997), and increased tax revenue resulting from the Dot-com bubble.[[/B]10][11][15][16][17] The budget controls instituted in the 1990s successfully restrained fiscal action by the Congress and the President and together with economic growth contributed to the budget surpluses at the end of the decade.[18]

In the early 21st century, debt relative to GDP rose again due in part to the Bush tax cuts and increased military spending caused by the wars in the Middle-East and a new entitlement Medicare D program. During the presidency of George W. Bush, debt held by the public increased from $3.339 trillion in September 2001 to $6.369 trillion by the end of 2008,
National debt of the United States - Wikipedia, the free encyclopedia

I am willing to forget the fact that you confused Debt to GDP with Total Public Debt Outstanding IF you point out where the surplus is:

09/30/1997 - 5,413,146,011,397.34
09/30/1998 - 5,526,193,008,897.62
09/30/1999 - 5,656,270,901,615.43
09/30/2000 - 5,674,178,209,886.86
09/30/2001 - 5,807,463,412,200.06

Government - Historical Debt Outstanding - Annual 1950 - 1999
Government - Historical Debt Outstanding - Annual 2000 - 2012

Never seen a budget surplus which increases the national debt. Not only for just one year, but for three years of a 'surplus.' Strange anomaly that was...

No, I didn't confuse anything. I changed it to red type above, so you wouldn't miss it this time. Apparently you are the one that is confusing Deficit/Surplus with the Debt. You and many conservatives try to use the Treasury figures as proof that there was no surplus, but the fact is that the government took in more money than it spent for four straight years - that is a Surplus.

When it spends more than it takes in, it is a Deficit. The Debt is a different matter.

You probably need a refresher course in government accounting. Receipts into any federal trust fund INCREASE the public debt, they do not reduce it. Due to the funds being immediately invested in Treasury securities so they can earn interest until that time when they are obligated and expended. Any issuance of Treasury securities increases the public debt. When spent/layed out Treasury securities are redeemed by the trust funds and the cash is used to fund the outlays authorized. This causes public debt to go down. Thus, an increase in debt associated with these trust funds is evidence of a SURPLUS of taxes and other receipts over expenditures made.

You are "confused" as to the actual relationship between debt and deficit. Bogus right-wing articles try to pull the very same hoax. Just because you are using numbers taken from valid sources (Treasury) does not mean that the numbers are being used correctly, and in these cases, they most definitely are not.



Assume an on-budget balance and determine the effect of an off-budget surplus. That surplus will increase the intra-government debt in the form of special purpose bonds which the Treasury issues to the appropriate trust funds. Since the Treasury has no other use for those funds, it will spend them to redeem some of the public debt. Thus the increase in intra-government debt will be balanced by an equal decrease in the public debt, leaving the official debt unchanged.
Official Debt and Public Debt

 

[Dragonlady]

1. Maybe you're right about the wars, I.o.U's and SSI not being budgeted=most of the debt could of been because of the Bush policies. Would you admit that Obama has kept them? I'll admit Bush fucked up!

2. We were attacked so we want to war! So you feel we shouldn't of want after the terrorist at all?

3. What's wrong with people having lower taxes? You'd think that a stronger private free market would mean stronger economy.

1. Obama has pretty much dumped most of the worst of Bush's economic policies. I don't know whether the federal government is still outsourcing to Haliburton and their ilk. That was a disasterous policy under Bush and certainly put the lie to "private industry can do it quicker, better and cheaper than government". Outsourcing much of the Iraq war to private contractors is why the Iraq war was so expensive, and why the Iraqi people were so pissed. Bringing in foreigners to rebuilt Iraq after the war is the reason why Bush won the war and lost the peace.

2. Should you have gone after the terrorists - yes, but they weren't in Iraq and Bush knew it. Iraq should never have been invaded unless Bin Laden was there.

3. A stronger private free-market doesn't mean a strong economy. Usually it means the rich are getting richer and the poor are getting poorer. Free-market economies always favour the wealthy at the expense of the working classes. A mixed economy is far healthier and economically balanced than free-market.

 

[ilia25]

national debt when obama took office---------9T from all previous presidents--43 of them

national debt today--------------------16.5T

nothing more needs to be said. except----------------obama has been a total fiscal failure.

This would be an extremely valuable insight if debt was caused by dates. Unfortunately, it's caused by policies. Based on policies, continuing Clinton's would have had us debt free by 2006 according to the CBO. Bush's policies, and their consequences, like the holy wars, the wealth redistribution tax cuts, the housing boom and bust, the Great Recession recovery, account for our entire debt now.

Ouch.

1. Maybe you're right about the wars, I.o.U's and SSI not being budgeted=most of the debt could of been because of the Bush policies. Would you admit that Obama has kept them? I'll admit Bush fucked up!

And I'll admit that Obama fucked up the response to Great Recession. He was obsessed with pleasing GOP (a.k.a finding a bipartisan solution) much more than actually helping the economy and the unemployed. That is the sole reason the economy hasn't recovered years after 2008.

2. We were attacked so we want to war! So you feel we shouldn't of want after the terrorist at all?

I don't see problems with that (I see problems with execution -- Iraq war was a disaster).

3. What's wrong with people having lower taxes? You'd think that a stronger private free market would mean stronger economy.

That's a myth -- lower taxes do not make for a stronger economy (unless taxes were really high to begin with, which they weren't). But they do add to deficits and they benefit the rich at the expense of the poor.

 

[ilia25]

No.


Debt held by the public relative to GDP rose rapidly again in the 1980s. President Ronald Reagan's economic policies lowered tax rates and increased military spending, while congressional Democrats held fast against attempts to reverse spending on social programs.[12][13] As a result, debt as a share of GDP increased from 26.2% in 1980 to 40.9% in 1988, and continued to rise during the presidency of George H. W. Bush, reaching 48.3% of GDP in 1992.[10][14]

Debt held by the public reached 49.5% of GDP at the beginning of President Clinton's first term. However, it fell to 34.5% of GDP by the end of Clinton's presidency due in part to decreased military spending, increased taxes (in 1990, 1993 and 1997), and increased tax revenue resulting from the Dot-com bubble.[[/B]10][11][15][16][17] The budget controls instituted in the 1990s successfully restrained fiscal action by the Congress and the President and together with economic growth contributed to the budget surpluses at the end of the decade.[18]

In the early 21st century, debt relative to GDP rose again due in part to the Bush tax cuts and increased military spending caused by the wars in the Middle-East and a new entitlement Medicare D program. During the presidency of George W. Bush, debt held by the public increased from $3.339 trillion in September 2001 to $6.369 trillion by the end of 2008,
National debt of the United States - Wikipedia, the free encyclopedia

I am willing to forget the fact that you confused Debt to GDP with Total Public Debt Outstanding IF you point out where the surplus is:

09/30/1997 - 5,413,146,011,397.34
09/30/1998 - 5,526,193,008,897.62
09/30/1999 - 5,656,270,901,615.43
09/30/2000 - 5,674,178,209,886.86
09/30/2001 - 5,807,463,412,200.06

Government - Historical Debt Outstanding - Annual 1950 - 1999
Government - Historical Debt Outstanding - Annual 2000 - 2012

Never seen a budget surplus which increases the national debt. Not only for just one year, but for three years of a 'surplus.' Strange anomaly that was...

No, I didn't confuse anything. I changed it to red type above, so you wouldn't miss it this time. Apparently you are the one that is confusing Deficit/Surplus with the Debt. You and many conservatives try to use the Treasury figures as proof that there was no surplus, but the fact is that the government took in more money than it spent for four straight years - that is a Surplus.

When it spends more than it takes in, it is a Deficit. The Debt is a different matter.

You probably need a refresher course in government accounting. Receipts into any federal trust fund INCREASE the public debt, they do not reduce it. Due to the funds being immediately invested in Treasury securities so they can earn interest until that time when they are obligated and expended. Any issuance of Treasury securities increases the public debt. When spent/layed out Treasury securities are redeemed by the trust funds and the cash is used to fund the outlays authorized. This causes public debt to go down. Thus, an increase in debt associated with these trust funds is evidence of a SURPLUS of taxes and other receipts over expenditures made.

You are "confused" as to the actual relationship between debt and deficit. Bogus right-wing articles try to pull the very same hoax. Just because you are using numbers taken from valid sources (Treasury) does not mean that the numbers are being used correctly, and in these cases, they most definitely are not.



Assume an on-budget balance and determine the effect of an off-budget surplus. That surplus will increase the intra-government debt in the form of special purpose bonds which the Treasury issues to the appropriate trust funds. Since the Treasury has no other use for those funds, it will spend them to redeem some of the public debt. Thus the increase in intra-government debt will be balanced by an equal decrease in the public debt, leaving the official debt unchanged.
Official Debt and Public Debt

That is true. Here are the figures for the debt held by public. You can see clearly how it was falling at the end of Clinton years:

 

[Eric Cartman]

What I have highlighted in bold is the popular myth. And when someone spouts this rethoric, I already know to refer to my 'Economic Comebacks to Keynesian Nonsense' hand-guide.

If you believe that GDP is a good measure for the health of the economy then should accept that Americans spending more would help.

It's not. Consumer Spending is already 71% of GDP. Where should it be before we get to the point of it 'helping.' 75%? 80%?

I'll just accept the fact that your another economic illiterate passing off GDP as a bogus metric, and you can be on your merry way.

I would think, being the economic genius that you are, that you would realize that consumer spending can increase without it's percentage of GDP changing. Just like it could go down while the percentage of GDP could go up.

Also while consumer spending is 70% of our economy, it can have a positive effect on the rest of our economy.

 

[ilia25]

If you believe that GDP is a good measure for the health of the economy then should accept that Americans spending more would help.

It's not. Consumer Spending is already 71% of GDP. Where should it be before we get to the point of it 'helping.' 75%? 80%?

I'll just accept the fact that your another economic illiterate passing off GDP as a bogus metric, and you can be on your merry way.

I would think, being the economic genius that you are, that you would realize that consumer spending can increase without it's percentage of GDP changing. Just like it could go down while the percentage of GDP could go up.

Also while consumer spending is 70% of our economy, it can have a positive effect on the rest of our economy.

She commits classic fallacy by thinking about economy as she would think about a household. A family facing financial hardship reduces spending -- and it works because lower spending has no effect on family income.

But the same is not true about economy as a whole. Spending and incomes are related, because someone's income is always someone else's spending. Lower aggregate spending inevitably leads to lower aggregate income, deeper recession and higher unemployment.

Suggesting that as a cure is stupid.