Would you raise the interest rate on your own mortgage or credit card?

[itfitzme]

That wasn't the question. Your claim was that there is no history that says the debt load is a problem. I want to be sure that is your position before I slap you silly, I don't want you moving the goal posts after I prove you wrong.

Yeah, there is no history that the debt load is an issue. The United States, except that Congress fails to see that it is paid, has no problem. In the 200+ years of the US, it has never been a problem. It isn't a problem now. If it were a problem, someond would present evidence of it being a problem. At what point do you imagine it will suddenly become a problem? All at once it goes from no effect to suddenly a problem? What point?

If you want to amke claims, then you might want to consider presenting some facts.

You moved the goal posts, what a surprise.

What do you think your talking about? There are no "goal posts". You can't say anything specific about the debt, deficit and the economy. There is no "goal post" to move.

Just to be clear, I read the posts again. I said, in no uncertain terms, exactly what you wanted to be certain I was saying. Not only are their no goal posts to be moved, I broadened my statement by removing any goal posts for you.

You are entirely out of touch with reality. I said, in no uncertain terms that in the 200+ years, there has never been a problem. Surely you can kick tue football through that football field wide "goal posts".

 

[itfitzme]

It had to do with the political disfunction that increased the odds an interest payment would not be made on time. Ergo, it had more to do with debt ceiling.

That isn't what S&P said. Or, if it is, they are blaming the lack of will power to implement the type of policies recommended by Simpson-Bowles and the long term debt a lot more than they are the debt ceiling.

The political brinksmanship of recent months highlights what we see as *America's governance and policymaking becoming less stable, less *effective, and less predictable than what we previously believed. The *statutory debt ceiling and the threat of default have become political *bargaining chips in the debate over fiscal policy. Despite this year's *wide-ranging debate, in our view, the differences between political *parties have proven to be extraordinarily difficult to bridge, and, as *we see it, the resulting agreement fell well short of the comprehensive *fiscal consolidation program that some proponents had envisaged until *quite recently. Republicans and Democrats have only been able to agree *to relatively modest savings on discretionary spending while delegating *to the Select Committee decisions on more comprehensive measures. It *appears that for now, new revenues have dropped down on the menu of *policy options. In addition, the plan envisions only minor policy *changes on Medicare and little change in other entitlements, the *containment of which we and most other independent observers regard as *key to long-term fiscal sustainability.

The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

S&P | United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative | Americas

"It had more do with the debt ceiling" means "It had more to do with the political dysfunction than it does with spending." *The statement says that political dysfunction is making it difficult to cut spending and raise taxes. *It doesn't just say "cut spending." *S&P doesn't care if the deficit is closed 100% by spending cuts or 100% by tax increases.

They do specifically say, "The *statutory debt ceiling and the threat of default have become political *bargaining chips in the debate over fiscal policy."

That is debt ceiling.

 

[itfitzme]

It is perfectly clear that Quantum Windbag is completely out of touch with reality and unable to comprehend the clear meaning of what he reads. It is an interesting example of psychosis. Presented with clear statements that use the very words he should be looking for, like "debt ceiling", and "never in 200+ years of history", he is completely unable to grasp their very meaning.

 

[Quantum Windbag]

It had to do with the political disfunction that increased the odds an interest payment would not be made on time. Ergo, it had more to do with debt ceiling.

That isn't what S&P said. Or, if it is, they are blaming the lack of will power to implement the type of policies recommended by Simpson-Bowles and the long term debt a lot more than they are the debt ceiling.

The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

S&P | United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative | Americas

"It had more do with the debt ceiling" means "It had more to do with the political dysfunction than it does with spending." The statement says that political dysfunction is making it difficult to cut spending and raise taxes. It doesn't just say "cut spending." S&P doesn't care if the deficit is closed 100% by spending cuts or 100% by tax increases.

If it was about the debt ceiling and political dysfunction why wasn't it dropped any of the previous 16 times the debt ceiling was used to force a government shutdown over policy issues?

By the way, I didn't say anything about just cutting spending, I said the problem is the debt. That is not going to be dealt with unless we start implementing a lot more than tax hikes on the rich

 

[Quantum Windbag]

Of course we can afford more debt regardless of how fast the economy grows.

What matters is not the absolute debt but the debt relative to output. If the debt is growing at 4% and nominal GDP is increasing at 6%, then the financial condition of the country is improving. An increase in the debt may not be the optimal outcome but we can certainly afford it if its growing less fast than the nominal output of the economy.

The one thing everyone who is not named Krugman agrees upon is that our current debt is unsustainable, even Krugman agreed with it when Bush was president. We might be able to pretend we can handle the debt, but we cannot, and we need to start making plans based on the reality that we cannot, even if those plans mean increasing the debt now.

Of course the current debt is sustainable. What is questionable is whether the future debt is sustainable. If nominal GDP grows faster than future debt, then it is sustainable. If future debt grows faster than nominal GDP, then its questionable whether its sustainable.

We should assume that GDP is going to do wonderful things just so that we can offload the problem to someone else? How did that work out for Greece?

 

[Quantum Windbag]

I have an MBA, an BSEEE, a cert in applied stats and have taken grad econ.

The only math and econ you have presented is posting the words "math" and "economics".

You want to discuss the supply and demand curves in micro economics? Want to do differential equations? Like, what is the integral of e^x? How about the function for a hyperbolic saddle surface?

A fake engineer that thinks he understands complex subjects. Rdean, is that you?

By all means, let's discuss engineering. You know you won't because it would mean actually facimg reality instead of sticking your head in the sand and pretending everyone else is lying. Funny how convenient that excuse is for you. You can believe anything then

I am the one that is here saying that the debt is a major problem, and you are claiming I have my head in the sand?

Do you have any idea hos stupid that makes you look?

FYI, when you disagree with someone about something they say is a problem you should accuse them of being crying wolf, or saying the sky is falling. You want to belittle them on the basis of them seeing disasters that are not real, not try to say they are hiding from it. If you can't even get something that simple right, why should I attempt to explain something really complex to you?

 

[boedicca]

And the reality is, if you study econ and the money supply, the only problem is that of it just looks bad in the accounting.

They are just numbers.

Wow. For someone who claims to be so "credentialed", you really don't know much about it.

QE^Infinity - have you heard of it?

ZIRP - have you heard of it?

Not a problem? Tell that to retired people who are earning nothing on their retirement savings. Tell that to people who see food price rising 10-20% (the government's inflation statistics are not truthful). Have you checked gasoline prices lately? How do they compare to 2008?

We are being set up for a massive amount of stagflation. The only ways to deal with the debt are: dramatic increases in taxes, reductions in spending, and inflating away the debt. Our cowardly overlords are doing the latter. And tools like you fall for the spin that it doesn't matter.

You are a moron.

 

[Quantum Windbag]

Yeah, there is no history that the debt load is an issue. The United States, except that Congress fails to see that it is paid, has no problem. In the 200+ years of the US, it has never been a problem. It isn't a problem now. If it were a problem, someond would present evidence of it being a problem. At what point do you imagine it will suddenly become a problem? All at once it goes from no effect to suddenly a problem? What point?

If you want to amke claims, then you might want to consider presenting some facts.

You moved the goal posts, what a surprise.

What do you think your talking about? There are no "goal posts". You can't say anything specific about the debt, deficit and the economy. There is no "goal post" to move.

Just to be clear, I read the posts again. I said, in no uncertain terms, exactly what you wanted to be certain I was saying. Not only are their no goal posts to be moved, I broadened my statement by removing any goal posts for you.

You are entirely out of touch with reality. I said, in no uncertain terms that in the 200+ years, there has never been a problem. Surely you can kick tue football through that football field wide "goal posts".

I have said specific things, and you keep talking about magic.

 

[Quantum Windbag]

That isn't what S&P said. Or, if it is, they are blaming the lack of will power to implement the type of policies recommended by Simpson-Bowles and the long term debt a lot more than they are the debt ceiling.




S&P | United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative | Americas

"It had more do with the debt ceiling" means "It had more to do with the political dysfunction than it does with spending." *The statement says that political dysfunction is making it difficult to cut spending and raise taxes. *It doesn't just say "cut spending." *S&P doesn't care if the deficit is closed 100% by spending cuts or 100% by tax increases.

They do specifically say, "The *statutory debt ceiling and the threat of default have become political *bargaining chips in the debate over fiscal policy."

That is debt ceiling.

Umm, no it isn't.

 

[boedicca]

You moved the goal posts, what a surprise.

What do you think your talking about? There are no "goal posts". You can't say anything specific about the debt, deficit and the economy. There is no "goal post" to move.

Just to be clear, I read the posts again. I said, in no uncertain terms, exactly what you wanted to be certain I was saying. Not only are their no goal posts to be moved, I broadened my statement by removing any goal posts for you.

You are entirely out of touch with reality. I said, in no uncertain terms that in the 200+ years, there has never been a problem. Surely you can kick tue football through that football field wide "goal posts".

I have said specific things, and you keep talking about magic.

Well, what else would you expect from one of Obama's flying monkeys?

 

[itfitzme]

A fake engineer that thinks he understands complex subjects. Rdean, is that you?

By all means, let's discuss engineering. You know you won't because it would mean actually facimg reality instead of sticking your head in the sand and pretending everyone else is lying. Funny how convenient that excuse is for you. You can believe anything then

I am the one that is here saying that the debt is a major problem, and you are claiming I have my head in the sand?

Do you have any idea hos stupid that makes you look?

FYI, when you disagree with someone about something they say is a problem you should accuse them of being crying wolf, or saying the sky is falling. You want to belittle them on the basis of them seeing disasters that are not real, not try to say they are hiding from it. If you can't even get something that simple right, why should I attempt to explain something really complex to you?

The only reason you think it makes me look stupid is that you simply don't know how the money supply and the economy functions. I have yet to hear any specific explanation of how the debt level is a problem. I have asked this same question, over and over and over. And I get the same response, the same response you give, no actual deductive reasoning, no empirical evidence, just "you are stupid". But, just saying "you are stupid" doesn't make it true. And just because you are sure it must doesn't make is so. Your intuition based on your personal economics isn't relevant.

I've tried simply asking. I've tried saying your a fucking retard. I've tried every manner of reply to get a decent response. It doesn't matter. All you have is you don't like my response. So what? What does my response have to do with deductive reasoning and empirical evidence? Not shit.

And, I really don't care if you think I look stupid. Why, because you are not giving me anything intelligent to reply to. One fucking thing that makes me stop and think. I am begging you because I really enjoy learning new things and seeing solid evidence that yields it. I am frustrated from reading years of the same old and tired meaningless clap-trap. Yes, in my humble opinion, it is meaningless claptrap.

You would think that everyone would know graph of balance of funds. The government debt is exactly balanced by savings in the private sector. A government surplus is debt in the private sector. Have you not seen the graph? What, you are complaining because I didn't put it up? You haven't put up any real details, so you got nothing to complain about.

Okay, you are "crying wolf", "saying the sky is falling". What, you need me to say you are very pretty? You have some "rules" you made up? So what, deductive reasoning and empirical evidence doesn't require that I call you pretty in order for it to be presented.

Yes, it is really convenient for you to just say, "oh, you look stupid" or "oh, they are lying". That is typical of people that have been hospitalized for delusions and paranoia. It is really convenient.

You haven't even explained anything simple, let alone complex. Saying, "If you can't even get something that simple right" is just another bullshit sidestep from actually presenting some real explanation.

Look, if you present something that is actual evidence, deductive reasoning, I'd be all over it. I would be left just frustrated and the mind numbing posts.

Hey, if you have really presented something, in terms of deductive reasoning or empirical evidence, based on sound description of the flow of funds in the economy, I apologize for missing it. Try pulling it forward. But, I have yet to see it in a response to my posts.

The reality is that the only significant effect that taxes have is in a) the rate of change in rate and b) the relative difference from one income bracket to another or sector to another. Beyond that, they have absolutely no direct bearing on prices or standard of living.

The size of the debt and deficit has absolutely no significant mechanical difference. That you "feel it does" doesn't mean doo-squishy.

What really matters is the level of employment, the resources available, the efficiency of production, and the balance of types of goods. The money simply counts stuff, that is all. As long as the money flows, in a balanced manner, then it doesn't matter. And until this is the rock solid foundation of your perception of econ, there is no sense in discussing what "balanced" means.

The reality is, that when you and I pay taxes, everyone in our income bracket pays the exact same taxes. What counts in terms of pricing is the amount of spendable income we have. Production is production, then prices adjust to be a percentage of the total money supply (spendable, in circulation of actual buying stuff, not including what is flowing as taxes, not until it gets spent on goods.) If your taxes are lowered, so are mind and so is everyone else's. We can't buy more stuff because all the stuff being made is being made. Prices just go up to consume the available spendable funds.

That is the short of it.

The debt and deficit, as themselves, have absolutely no effect on the economic output except that they represent funds that are flowing. If taxes were increased, by 1% per year, for the next ten years, and it was done across the board, equally to all income brackets, that extra 10% would have no effect on the economic output or standard of living. Why? Because if everyone is working and producing, then the standard of living is determined by the amount of goods that are being produces. The prices adjust to the spendable income.

The only thing that those taxes represents is that the really big company that has a particular pricing scheme called taxes is producing some sort of service that is consumed and using resources in some manner. There are refined questions of crowding out, etc, but those are refined questions. The actual debt and deficit are just numbers in an accounting system. They don't represent anything except just numbers.

So, now I ask again, what is this mechanism that is the problem with the debt and deficit?

 

[itfitzme]

What do you think your talking about? There are no "goal posts". You can't say anything specific about the debt, deficit and the economy. There is no "goal post" to move.

Just to be clear, I read the posts again. I said, in no uncertain terms, exactly what you wanted to be certain I was saying. Not only are their no goal posts to be moved, I broadened my statement by removing any goal posts for you.

You are entirely out of touch with reality. I said, in no uncertain terms that in the 200+ years, there has never been a problem. Surely you can kick tue football through that football field wide "goal posts".

I have said specific things, and you keep talking about magic.

Not in any post I have replied to. Often I am on an i-pod, I read what I can. If I missed these specifics, I apologize, so pull them forward or something because the posts I have managed to read don't have anything specific in terms of the mechanism that is this terrible problem. If I missed em, then you just got damned unlucky or you post a lot of non-details too.

So you know, I generally start from the end of the tread and work backward. Sometimes I page back a few pages and start. It depends on my mood. It isn't my fault if you post vague stuff after you post some relevant detailed explanation. It's a forum. You have control and responsibility for your posts, your participation. And obviously, there is no guarantee that everyone is going to read everything you post.

Well, what else would you expect from one of Obama's flying monkeys?

But I will tell you this, saying "one of Obama's flying monkey" just demonstrates that you are an ignorant asshole. I don't know Obama. I don't work for a government agency. I didn't go to Harvard.

But I do have an education, I am intelligent (probably more so than you), and I have deduced my own understanding about how economics and the markets work.

That you have nothing really intelligent to say is a reflection on you. And I can't respond with much to meaningless and moronic posts like yours. If you wan't an intelligent response, say something intelligent. I am begging you for one fucking intelligent comment.

 

[boedicca]

So, now I ask again, what is this mechanism that is the problem with the debt and deficit?

This has been asked and answered repeatedly.

Here's the problem: interest payments.

At some point the debt level generates an interest liability which the country cannot afford to pay without slashing all discretionary spending (and more).

The only reason we aren't at that point now is because the Feds are printing money and buying up a bunch of the debt.

This cannot go on forever, which anyone with even a modicum of Math Skillz should be able to grok.

 

[itfitzme]

"It had more do with the debt ceiling" means "It had more to do with the political dysfunction than it does with spending." *The statement says that political dysfunction is making it difficult to cut spending and raise taxes. *It doesn't just say "cut spending." *S&P doesn't care if the deficit is closed 100% by spending cuts or 100% by tax increases.

They do specifically say, "The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy."

That is debt ceiling.

Umm, no it isn't.

So your just being a dick, huh... cuz you posted

The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The tatutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

Yeah, you are either insane or a dick.

 

[itfitzme]

So, now I ask again, what is this mechanism that is the problem with the debt and deficit?

This has been asked and answered repeatedly.

Here's the problem: interest payments.

At some point the debt level generates an interest liability which the country cannot afford to pay without slashing all discretionary spending (and more).

The only reason we aren't at that point now is because the Feds are printing money and buying up a bunch of the debt.

This cannot go on forever, which anyone with even a modicum of Math Skillz should be able to grok.

And I have said, that at some point the interest payments equal the revenues. At that point, either revenues are increased or discretionary spending is cut off. I have said exactly that.

And, I apologize if you didn't say it in any post that I replied to. Not my problem that you didn't say it in a post I replied to. That is your problem.

So, that is exactly the same later as now.

So, what? That isn't some catastrophic issue. Anyone with a modicum of math skills gets that it is exactly the same then as it would be now if we reduce spending now. We reduce it later, we reduce it now. So what?

Oh, I know, because revenue can be increased and, as long as it is even and slow, it has no effect.

So, the real problem is that taxes haven't been raised to match the discretionary spending increases that have occurred for decades. The only two presidents that presided over a trend towards balance were BUSH Sr. and Clinton.

So what, the Federal Reserve did QE?

 

[itfitzme]

And the reality is, if you study econ and the money supply, the only problem is that of it just looks bad in the accounting.

They are just numbers.

Wow. For someone who claims to be so "credentialed", you really don't know much about it.

QE^Infinity - have you heard of it?

ZIRP - have you heard of it?

Not a problem? Tell that to retired people who are earning nothing on their retirement savings. Tell that to people who see food price rising 10-20% (the government's inflation statistics are not truthful). Have you checked gasoline prices lately? How do they compare to 2008?

We are being set up for a massive amount of stagflation. The only ways to deal with the debt are: dramatic increases in taxes, reductions in spending, and inflating away the debt. Our cowardly overlords are doing the latter. And tools like you fall for the spin that it doesn't matter.

You are a moron.

Well, see, there is your problem, assuming you know more than someone that has the education, experience and expertise. You are wrong and the only problem is that a) you cannot prove your points deductively or empirically and b) you aren't capable of grasping the solid deductive reasoning. Not given the emotional crap you spew.

Yeah, QE.... So what?

The reason that gas prices increased is because demand increased. Gasoline and fuel prices were flat up till China became a player in the global market. Then gasoline prices began to increase due to the demand. When the economy tanked, demand fell and gasoline priced fell. As the economy recovered, gasoline prices returned to pre-recession levels as demand returned. It is a free market.

The Federal Reserve has managed to lower the inflation rate to levels lower than previously done in history. They are pushing the 2% yearly rate, having held between 2.5-3% by my last examination. And, just in case you are not sure, it is a) devastating to maintain negative rate for to long b) impossible to maintain a zero rate and c) prudent to maintain a slight upward rate because increasing money supply stimulates growth.

That you believe that the BEA statistics are anything but accurate is just your own convenient bullshit. It is just damned convenient to fall back of "the data is wrong" "they are lying." If you are going to take that position, you are a fucking moron that has absolutely no clue about economics or the BEA. Someone smarter than you has to tell you, otherwise you don't learn. And if you are so sure, then prove it.

It isn't spin and we can match up science, business, and economics knowledge if you like. Better yet, prove that it is a problem?

What is the mechanism that you see which makes taxes such a problem, except for your delusion that somehow you have more spending power when your taxes are lower?

Is there a problem with savings rates? Yeah, but that's the markets, not the government. Do you understand how the money supply functions? Do you know who it is that creates the majority of the money supply in circulation? Cuz it ain't the Fed. All they do is attempt to manage it, for all that is worth.

And if you are insulted by my calling you a fucking moron, your the one that starts with insults every time someone doesn't agree with your perspective. You want to go back and look through the threads of your convos?

"tools that fall for spin".... well fuck you and the horse you rode in on because you are the one that has no clue how the economy functions. Have you downloaded the data from the BEA? From the BLS? Do you have population data so you can normalize economic data for both inflation and per capita? Tell me, how many graphs have you done? What actual personal analysis have you done?

I can guarantee not shit. Prove me wrong. Prove that you have actually downloaded flow of funds data. Cuz if your the typical tool that posts con-parroted bullshit, you haven't. And if you have, your smart enough to know why I bet you haven't.

What I bet is your panties are all in a bunch. Prove me wrong cuz I am dying for an intelligent convo with someone that has the modicum of intelligence to actually download and analyze real economic data.

 

[itfitzme]

The one thing everyone who is not named Krugman agrees upon is that our current debt is unsustainable, even Krugman agreed with it when Bush was president. We might be able to pretend we can handle the debt, but we cannot, and we need to start making plans based on the reality that we cannot, even if those plans mean increasing the debt now.

Of course the current debt is sustainable. What is questionable is whether the future debt is sustainable. If nominal GDP grows faster than future debt, then it is sustainable. If future debt grows faster than nominal GDP, then its questionable whether its sustainable.

We should assume that GDP is going to do wonderful things just so that we can offload the problem to someone else? How did that work out for Greece?

Greece isn't an independent economic country. It is part of the EU. It doesn't mean shit. That would be like asking about California.

Try getting real and use analogies that have a point to point relevance. Frankly, there are no analogies for the US Economy. It is rather unique. So how about we stick with reality. What, some problem with actually discussing the real thing?

Is the future debt sustainable? Yes, until it just fucking annoys people. It isn't a problem until the interest equals the revenues. And even then, if increased slowly, it isn't a problem. It is a problem way down the road.

I would love to have a discussion of what level the taxes and interest on the debt becomes a real, not illusionary problem. I haven't bothered to calculate it.

Last I looked, the deficit is shrinking, that is a good start. The rate of change is the problem, not the level. So, it isn't really a problem except way off.

And the point of the OP was that the debt ceiling crisis is just stupid. Try and stick within the parameters of the OP. Creating a crisis over the debt ceiling is stupid as the debt isn't a crisis.

The GDP better do wonderful things. That is the whole point. The focus absolutely must be on employment and production, consumption and efficiency. Making some big, nonsense deal over an imaginary problem that might happen at some unspecified level of debt and deficit while ignoring what an economy actually is..... well.....do you need me to say it?

 

[Toro]

If it was about the debt ceiling and political dysfunction why wasn't it dropped any of the previous 16 times the debt ceiling was used to force a government shutdown over policy issues?

Because S&P said it was about the debt ceiling. The inability to raise the debt ceiling is reflective of the political dysfunction in Washington.

It's not about shutting down the government. It's about making payments on time.

 

[Toro]

We should assume that GDP is going to do wonderful things just so that we can offload the problem to someone else? How did that work out for Greece?

It didn't work for Greece because the analogy isn't relevant. Greece's debt rose faster than economic growth and had a currency that they didn't control.

What matters isn't the level of debt. What matters is the ability to service that debt. If you take out a $100,000 mortgage, and your income rises from $50,000 to $75,000, your financial condition and ability to service the mortgage has improved, even if the absolute level of the mortgage does not change.

 

[Quantum Windbag]

The only reason you think it makes me look stupid is that you simply don't know how the money supply and the economy functions.

No, the reason it makes you look stupid is that I am saying that the current trajectory is unsustainable, and you are saying I have my head in the sand. That has zip to do with the money supply, the economy, or anything else outside your inability to understand metaphors.

I have yet to hear any specific explanation of how the debt level is a problem. I have asked this same question, over and over and over. And I get the same response, the same response you give, no actual deductive reasoning, no empirical evidence, just "you are stupid". But, just saying "you are stupid" doesn't make it true. And just because you are sure it must doesn't make is so. Your intuition based on your personal economics isn't relevant.

I've tried simply asking. I've tried saying your a fucking retard. I've tried every manner of reply to get a decent response. It doesn't matter. All you have is you don't like my response. So what? What does my response have to do with deductive reasoning and empirical evidence? Not shit.

And, I really don't care if you think I look stupid. Why, because you are not giving me anything intelligent to reply to. One fucking thing that makes me stop and think. I am begging you because I really enjoy learning new things and seeing solid evidence that yields it. I am frustrated from reading years of the same old and tired meaningless clap-trap. Yes, in my humble opinion, it is meaningless claptrap.

You would think that everyone would know graph of balance of funds. The government debt is exactly balanced by savings in the private sector. A government surplus is debt in the private sector. Have you not seen the graph? What, you are complaining because I didn't put it up? You haven't put up any real details, so you got nothing to complain about.

Okay, you are "crying wolf", "saying the sky is falling". What, you need me to say you are very pretty? You have some "rules" you made up? So what, deductive reasoning and empirical evidence doesn't require that I call you pretty in order for it to be presented.

Yes, it is really convenient for you to just say, "oh, you look stupid" or "oh, they are lying". That is typical of people that have been hospitalized for delusions and paranoia. It is really convenient.

You haven't even explained anything simple, let alone complex. Saying, "If you can't even get something that simple right" is just another bullshit sidestep from actually presenting some real explanation.

Look, if you present something that is actual evidence, deductive reasoning, I'd be all over it. I would be left just frustrated and the mind numbing posts.

Hey, if you have really presented something, in terms of deductive reasoning or empirical evidence, based on sound description of the flow of funds in the economy, I apologize for missing it. Try pulling it forward. But, I have yet to see it in a response to my posts.

The reality is that the only significant effect that taxes have is in a) the rate of change in rate and b) the relative difference from one income bracket to another or sector to another. Beyond that, they have absolutely no direct bearing on prices or standard of living.

The size of the debt and deficit has absolutely no significant mechanical difference. That you "feel it does" doesn't mean doo-squishy.

What really matters is the level of employment, the resources available, the efficiency of production, and the balance of types of goods. The money simply counts stuff, that is all. As long as the money flows, in a balanced manner, then it doesn't matter. And until this is the rock solid foundation of your perception of econ, there is no sense in discussing what "balanced" means.

The reality is, that when you and I pay taxes, everyone in our income bracket pays the exact same taxes. What counts in terms of pricing is the amount of spendable income we have. Production is production, then prices adjust to be a percentage of the total money supply (spendable, in circulation of actual buying stuff, not including what is flowing as taxes, not until it gets spent on goods.) If your taxes are lowered, so are mind and so is everyone else's. We can't buy more stuff because all the stuff being made is being made. Prices just go up to consume the available spendable funds.

That is the short of it.

The debt and deficit, as themselves, have absolutely no effect on the economic output except that they represent funds that are flowing. If taxes were increased, by 1% per year, for the next ten years, and it was done across the board, equally to all income brackets, that extra 10% would have no effect on the economic output or standard of living. Why? Because if everyone is working and producing, then the standard of living is determined by the amount of goods that are being produces. The prices adjust to the spendable income.

The only thing that those taxes represents is that the really big company that has a particular pricing scheme called taxes is producing some sort of service that is consumed and using resources in some manner. There are refined questions of crowding out, etc, but those are refined questions. The actual debt and deficit are just numbers in an accounting system. They don't represent anything except just numbers.

So, now I ask again, what is this mechanism that is the problem with the debt and deficit?

You haven't been paying attention, have you?

http://www.nytimes.com/2013/09/18/u...ustainable-debt.html?ref=federalbudgetus&_r=0

Want me to post it again?

CBO | The 2013 Long-Term Budget Outlook


See how stupid you feel now? Want to keep pretending you know more than every economist who isn't named Krugman?