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January 12, 2018

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When you live in a shithole, the only way to make it shittier is to keep shitting:

https://www.business2community.com/government-politics/donald-trump-displaying-names-campaign-donors-state-union-fact-check-02003490

1) Retired people should not live in poverty;

Retired people, as a group, are now the wealthiest cohort in the country. Not the case when Social Security was set up.

...since some will be unable (not merely unwilling) to save adequately.

Regressive payroll taxes don't help any.

Regressive payroll taxes don't help any.

It seems pretty obvious that the cap on earnings which are taxed for Social Security should go.

And increase contributions sufficiently to fund that.

we've been paying into social security at a rate greater than outlays for 35 years.

President Trump is seeking to parlay his first State of the Union address on Tuesday into cash for his reelection campaign by offering supporters a chance to see their name flashed on the screen during a broadcast of the speech.

if you really give a lot you get to announce the POTUS' entrance, like darlene shiley in masterpiece theater

at least Trump isn't out there continually demeaning the Presidency like Obama was!

nope. Trump is every "conservative's" model President (as far as anyone can tell by their continued support of him).

CharlesWT: Retired people, as a group, are now the wealthiest cohort in the country.

Which age cohort SHOULD be the wealthiest?
Teenagers?
Forty-somethings?
Would people start getting poorer at 50 in Libertopia?

CharlesWT: Not the case when Social Security was set up.

Social Security was not set up just to annoy libertarians or conservatives. It was set up because the old way didn't work. It has been maintained because people have found it more convenient to pay the taxes than to take the old folks in to live with them.

wj: It seems pretty obvious that the cap on earnings which are taxed for Social Security should go.

Let's get something straight: is the SSA a part of the government? or a stand-alone insurance company that must finance itself?

If it's a part of the government then the "entitlement" is indeed a piece of government spending, just like the Air Force budget. But in that case it is silly, if not disingenuous, to harp on which tax dollars pay for which service. The separate SS tax is just a scam to reduce the progressivity of income taxation.

If it's a stand-alone insurance company -- which has been the biggest lender to the federal government all my working life -- then the "entitlement" is an insurance claim, not a dirty word.

I know, I know: Charles will point out that SS is not voluntary; wj will point out that either way SS is going broke "in the long run". These points have to be coming from opposite perspectives on the nature of the SSA, so I can't wait to see them argue it out:)

--TP

Entitlement is an insurance claim. When you get a bill that says it pays for SS and Medicare then that's what it's for.

Congressio al conniving does not change that.

Entitlement is not what those are, they are bills due.

they are bills due

yep.

we paid it in, SS lent it to the feds, they spent it, and now they don't want to pay it back.

..., and now they don't want to pay it back.

We're getting closer to the day that they can't pay it back.

The Federal Reserve has painted itself into a corner. If it doesn't raise interest rates, the economy could overheat and go bust again. If they do raise interest rates, cost of servicing the federal debt will skyrocket.

where does the feds money come from?

Retired people, as a group, are now the wealthiest cohort in the country.

Standard glibertarian agitprop. Obviously, that factoid is not the whole story.

Speaking of "not the whole story," this:

https://www.wired.com/story/release-the-memo-nunes-fisa-702/

The confusion over FISA has allowed Nunes and fellow Republicans to tell the public that intelligence officials abuse the law, while at the same time moving to expand its powers. Nunes, as well as Gaetz and King, all voted in favor of expanding surveillance authorities authorized under Section 702 of FISA earlier this month. They cast their votes while at the same time telling the public that FISA is terribly abused by the FBI and the Justice Department. So what’s really going on? Let’s start with Nunes’ memo.

With regard to bobbyp's link, I like that Dean Baker addresses one of my objections to the more common poverty level calculations by including government non-cash benefits and cost of living differences in his calculations. He may be right that there's not that much difference in wealth levels across different age groups.

But that doesn't change the fact that a lot of relatively poor young people are paying regressive payroll taxes, along with all of the other taxes, during what should be their wealth-building years. Plus a great many SS recipients likely consider the payments their vacation fund.

I hope this happens:

https://www.dailykos.com/stories/2018/1/30/1737256/-Republican-Congressman-demands-Capitol-Police-arrest-deport-DREAMers-invited-to-State-of-the-Union

Dreamers must become armed.

This future SS recipient will be using those payments to buy food and pay utilities because that's all the income I'm going to have. Thank dog my house is paid for. Hope nothing goes wrong with it before I die.

We're getting closer to the day that they can't pay it back.

The Pain Caucus has been making this claim for decades, and they have been repeatedly wrong on this.

What's important is the the % of annual public debt payment to GNP and the direction of change of this variable.

But pointing this out is like talking to the wind.

The Federal Reserve has painted itself into a corner.

At the zero bound, perhaps. See Krugman. There are, however fiscal tools that can be implimented.

If it doesn't raise interest rates, the economy could overheat and go bust again.

It may. It may not. You don't know.

If they do raise interest rates, cost of servicing the federal debt will skyrocket.

So will fed interest rebates to the Treasury. See also taxes, increasing them.

"Plus a great many SS recipients likely consider the payments their vacation fund."

Might be.

But means-testing SS away from better off recipients will result in conservative and libertarian politicians, along with their media and demagogue tanks in the very next breath campaigning for further cuts to the program using videos of the majority of SS recipients, who need the program to meet day-to-day living expenses, buying the thick cut pork chops and the occasional bag of frozen shrimp at the grocery checkout counter.

"Why do THOSE people get something for nothing when we don't?", the fucking Kochs will say.

Most likely the folks doing their shopping in the videos will be black and Latino, cause that's how the republican party rolls.

No doubt those yelling the loudest about these freeloaders will be the poor and lower middle class white conservative retired free loaders who depend on their SS checks each month, but if the mp/republican party points at the niggers and wetbacks, the former will jump to their typical racist conclusions about THOSE people and their pathological dependencies.

Next up will work requirements for all SS recipients, regardless of the fact that they contributed to the program all their lives.

We've seen this over and over the last 40 years.

We know how conservative bullshit works.

Take the vacations and say thank you. Or give the money to charity.

Or fuck off.

What do glibertarians want? Like most other political actors, they want it all and are willing to discard some so-called central principles to get it.

But you know, it's ONLY the Left and JOE STALIN who insist the ends justify the means.

He, Trump is eligible for SS. Being a money-grubber, He is probably collecting. If so, it is the smallest of His offenses against decency.

Make America Decent Again. ITMFA.

--TP

Many economists, left and right, believe that government debt higher than 90% percent of a country's GDP becomes a significant drag on its economy. US debt has been as high as 118% in recent years.

The US may have greater leeway due to the dollar being a reserve currency. Plus GDP isn't a particularly good measure of an economy. But there has to be a limit somewhere.

Charles ...

I think Japan is the canary in the coal mine w/r/t how much debt relative to GDP an advanced economy can carry. They are up to 250%

They don't have a reserve currency, but they do have a high private savings rate.

How they pay this all back with a below replacement rate domestic reproduction and an extreme aversion to immigration is beyond me.

FWIW, it's a shame that we aren't cutting into the budget during the current expansion. I was semi-OK with QE to the extent that it was essentially a shift from private debt to public debt, but we're out of the woods and should be paying down that public debt now.

Overseas holdings of Japanese debt are only around 7% of the total though, so they are very different from any other economy. Not the best canary.

This is a great long read story on Manafort:
https://www.theatlantic.com/magazine/archive/2018/03/paul-manafort-american-hustler/550925/

Interestingly, he seems largely tangential to Trump. Two separate scandals which briefly intersected...

Many economists, left and right, believe that government debt higher than 90% percent of a country's GDP becomes a significant drag on its economy. US debt has been as high as 118% in recent years.

"Some people say"...always the clincher in any discussion, just ask David Brooks!

But there has to be a limit somewhere.

The constraints are the actual physical resources available to the economy (labor, capital equipment, natural resources, etc.), not public debt.

a lot of relatively poor young people are paying regressive payroll taxes, along with all of the other taxes, during what should be their wealth-building years.

when I was young and relatively poor, about 35 years ago, I paid a highly regressive payroll tax in excess of what it cost to fund the at-that-time current SS payees.

And I continued paying that same highly regressive tax, during good times and bad, right up until now, when I'm relatively old and not really poor anymore.

The deal was that we would all pay in extra for our entire working lives, so that when the no good very bad horrible demographic bulge represented by the baby boomers hit retirement age, there'd be a surplus to draw down.

Now, we're drawing it down, and the folks who want to 86 the program are shrieking about how it's paying out faster than it's taking in.

No shit, sherlock. That was the point of us all paying in extra for the last 35 years.

The issue is that the money didn't just sit in a big can in the back yard, it was lent to the federal operating budget. Who spent it, because operating budget. No worries there.

But now nobody wants to come up with the $$$ to pay it back.

We want tax cuts. Yay, Joe Middle Class and his family of four are gonna get $1000. This year.

And then Joe Middle Class and his lovely bride are gonna get bugger-all when they finally retire, because creeps like Ryan are going to chisel away at SS until it's gone.

We made a deal, we paid in per the deal that was made. And if the (R)'s can find a way to screw all of us out of it, they will.

McConnell doesn't want to touch it now because 2018 mid-terms. Wait until after November.

Nigel-

Not a perfect analogy, but still illustrative.

High domestic holdings of Japan's public debt make it very unlikely that they will default as compared to some idiot like Trump thinking it would be a good idea to default on China's holdings. Unfortunately the population for the traditional purchaser of Japan's public debt is shrinking.

At some point, Japan will need to raise interest rates to attract purchasers of that debt and I'd expect a real risk of an inflation that could devalue the savings of Japan's large number of retirees.

That could get ugly.

In the end, interest rate spikes leading to excess inflation is the most likely/immediate concern for any country carrying high levels of public debt. That's true for both the US and Japan.

The whole debt/gnp ratio is simply a canard. There is no direct relationship, and it's also important that the currency is a fiat one with a freely floating foreign exchange rate.

Again-the important variable is the cost of servicing the debt to the size of the economy and the direction of change in that variable....if you want to be a soothsayer.

Look at this table and divine for me the relationship as between this ratio and economic performance.

As for Japan...they hold almost as much of our federal debt as China does.....(over a trillion)...some canary!

bobby ...

Direct relationship between what? Debt and GDP? I don't think anyone is saying that.

You don't think that at some point high national debt can increase inflation?

If inflation and interest rates go up, won't that increase the cost of servicing the debt?

If inflation and interest rates go up, won't that increase the cost of servicing the debt?

Nominally, at least.

Direct relationship between what? Debt and GDP? I don't think anyone is saying that.

The claim is that "too much" debt dampens economic performance since we would have to save (reduce output) to pay down the debt.

The other scenario is too much debt in relation to economic output will somehow create inflation...i.e., the government will sell a whole bunch of bonds for pieces of currency they can print at will and then spend.

Correct?

You don't think that at some point high national debt can increase inflation?

If true, then you should be able to tell me what "that point" is and the operational mechanism whereby the level of debt, in and of itself, directly "causes" inflation.

Your typical debt fear monger (not necessarily you) uses a lot of hand waving and scare tactics (look at those big scary numbers!!!! Ayiee!!) to convince people that we have to reduce the public debt (usually be cutting public spending) in order to have "room" to increase it in the future when needed or to ward off the terrible inflation monster that is somehow always, and under any/all circumstances, right around the corner.

The answer is, "It depends."

Simply put, the central government can either spend less or raise taxes to reduce debt levels. Either has contractionry economic effects.

Foregoing economic output today does not "save" those real goods and services for the future. It kisses that output goodbye.

The central bank can raise interest rates or reserve requirements to dampen lending, but such policies by themselves do not give us the ability to "spend more" at some point in the future. We can always spend whatever we decide in the future. Perhaps we would be better off letting those folks who will be living then make that decision.

bobby-

If I could tell you the exactly what "that point" is, I'd be in line for a Nobel Prize.

I'm not a fear monger, but I do worry about what happens when the central bank begins to lose the ability to control inflation due to too much public debt. Retirees can get screwed in that scenario.

I appreciate that good Keynesians want to add up their current output and play with multiplier effects and in the long run we all are dead anyway, but I have a hard time accepting left wing dismissiveness about increasing debt.

I appreciate that good Keynesians want to add up their current output and play with multiplier effects and in the long run we all are dead anyway, but I have a hard time accepting left wing dismissiveness about increasing debt.

Although I agree with bobbyp, or with some version of his viewpoint, I don't mind playing the "debt is bad" game as long as people are consistent about the rules. They most definitely aren't. The Tax Cuts! people are the "drown the government" people, but are also the "let's get rich from Halliburton's wars" people, as well as the "infrastructure-wall-building" cash-out of that people.

Let's get rid of Republican scammers. The US doesn't spend much money on its people's welfare compared to what Republicans do when they focus on pillaging the Treasury. If we want to pretend that the US needs to watch its pennies, let's watch the pennies get sucked out of the investment accounts of the 1%. And that's not because I hate rich people; it's just that they're the ones who can afford it.

And russell is right about Social Security. Both the history of its having been stolen, and the fact that the Rethugs are planning to end it.

Something needs to be done about these people. Instead of philosophizing about policy, as though we still had a country where policy matters, we need to be planning to overthrow this coup.

Many economists, left and right, believe that government debt higher than 90% percent of a country's GDP becomes a significant drag on its economy...

Well, many economists believed that until someone checked Reinhart and Rogoff's calculations.

I’m far more concerned about where spending goes and where revenue comes from than I am about whatever debt results from one being greater than the other.

I’m far more concerned about where spending goes and where revenue comes from than I am about whatever debt results from one being greater than the other.

I hope that your concerns win the day on November 6, 2018. If voters keep them in mind as they vote, and if voting is free and fair, we may prevail.

Sadly, the era of liberal democracy (and your concerns) may be over. Fascism doesn't really care about your concerns.

If I could tell you the exactly what "that point" is, I'd be in line for a Nobel Prize.

Indeed. But I only ask for a little more in the way of backup for the assertion. A little more thought is called for here. For example, what if the government put on a big sale of Treasuries, took the money and just burned it? Would we have higher interest rates leading to an outbreak of inflation? The "left" is not dismissive of debt, we are dismissive of the rhetorical bullying based on the concept of public debt being exactly comparable to family/private debt. It is an utterly wrong frame that waves off analysis of the disposition of real resources.

Going along with this frame also plays right into the Pain Caucus political message, and you are left with weak arguments along these lines, "Well, I agree with you for the most part, but there are differences". No. The differences are in kind, not degree. For example, we blew off trillions in fruitless war in the ME, took on tons of debt, and got little in return. Nobody appears to have batted an eye. Being "dismissive" of debt strikes me as rather situational.

The Left needs to utterly reject the "crushing debt" frame (see Sapient above). We need to discuss what can and should be done, not what we fear, where REAL resources go or should go, not worry about an item that can be produced at the click of a mouse by the Fed Reserve Open Market Committee.

Resistance:

https://www.newyorker.com/magazine/2018/02/05/your-grandma-was-a-chain-migrant

The next Democratic President, should thieving republicans with help from foreign shithole dwellers not steal every future American election as well, should order the INS and Department of Justice to investigate the genealogy and immigration status of every conservative republican in the country to be sure their scum ancestors dotted every "i" and crossed every "t" as they stole into the country, bringing their filthy political habits with them.

The records are there.

Sic ICE on them and their children. Many of these less than human interlopers posing as real muricans are here in OUR country under false pretenses and they and their forbears brought little merit to the American project, unless we count standing on other peoples' necks the kit in the kaboodle.

All of them are somebody else's infiltrating babies issued from the wombs of foreign undesirables who talked funny well into their overstayed welcome and broke our laws.

I would also make it a requirement of employment with INS and ICE that job applicants for those positions must possess a minimum of 10% Native American blood, or can trace their ancestry to the victims of the American slave trade.

Americans love inflation when it is their personal assets or income that are inflated beyond all reason, ie equities, house prices, CEO compensation.

It's when some schmuck, the other guy, gets a $2 an hour wage increase that the inflation jitters set in and talk of the punch bowl being taken away begins in earnest.

A falling dollar can cause inflation. Wars and open-ended military spending can cause inflation.

Who has been loving those two things lately?

Jobs! We need jobs! Hold on, the last guy or gal who was unemployed just found a job. And they want a wage increase.

Who are the rest of us going to beat on now?

Republicans express utter contempt for education and expertise, both in the sciences (hoaxers) and the humanities (useless and unproductive), and yet they want to limit immigration to those who are educated and possess expertise.

Republicans express utter contempt for education and expertise, both in the sciences (hoaxers) and the humanities (useless and unproductive), and yet they want to limit immigration to those who are educated and possess expertise.

So perfect. How can I Countme-a-Demon how perfect.

bobbyp-

"For example, what if the government put on a big sale of Treasuries, took the money and just burned it? Would we have higher interest rates leading to an outbreak of inflation?"

Were these treasuries purchased with US dollars or foreign currency? If purchased with dollars, then it seems that you'd have a short term reduction in M2 which would, all else constant, raise interest rates and then cause lower demand and lower inflation.

"The "left" is not dismissive of debt, we are dismissive of the rhetorical bullying based on the concept of public debt being exactly comparable to family/private debt. It is an utterly wrong frame that waves off analysis of the disposition of real resources."

Some on the left are dismissive. I never compared public debt to private debt. I've been talking about inflationary effects.

"Nobody appears to have batted an eye."

I certainly did.

I've been talking about inflationary effects.

You have repeatedly tied the total amount of public debt to economic output and asserted that "beyond some point" when D/output >"something" there would be some terrible effect (i.e., inflation).

Recent history, you know-the numbers, argues against this hypothesis as explanatory under current circumstances.

I certainly did.

Your concern appears to have been expended in vain.

Worse, when the Dem message becomes one of "we can manage the debt problem better than the other guys," it becomes a recipe for abject political defeat.

Tell me what good that does.

People who think the federal budget deficit and not the national trade deficit is what hurts a country are barking up the wrong tree.

The Nation is a people, not a government. When We The People import more stuff than We export, We are trading with Other People, not any Government. Economists call it a current-account deficit, but there's no actual deficit involved: the Other People get full value for the stuff they send Us, by taking the difference out in capital ownership.

If we MUST engage in homely analogies, a Nation with an annual trade deficit is a household that's taking out a bigger home equity loan every year.

--TP

Late to this, and tired, and out of the loop (I deliberately avoided the SOU address and the memo and all), but I wanted to comment on this:

What got really silly was that from San Francisco it cost several times as much to fly to Reno as to Los Angeles -- and that's less than a quarter the distance. But across a state line.

In an alternate (antipodean) universe, back in the 1980s it was sometimes cheaper to fly from Canberra to Sydney (150 miles) via New Zealand - 5000 miles or so - than direct, because the former was international, and hence open to competition, and the latter was domestic, and subject to the duopoly of two (non-)competing Australian airlines. In theory the two competed, but they flew to the same places every day at about the same time (roughly ten minutes apart) and charged exactly the same exorbitant prices.

I don't want to bust PdM here and y'all know I don't do economics, so take this with the requisite salts, but when you mention Japan, Krugman had this column

https://www.nytimes.com/2014/10/31/opinion/paul-krugman-apologizing-to-japan.html

Admittedly, the apology allowed Krugman to make criticism of Western policies that seem to be increasing the divide between the haves and have nots.

Don't mean to spank anyone with a Forbes article (unless you want me to) but there was this

https://www.forbes.com/sites/mwakatabe/2014/11/13/should-paul-krugman-apologize-to-japan-2/#34b9da0215ab

A bigger issue though, is that Mr. Krugman has somehow underestimated human misery and suffering of the Japanese people. This comes down to the core of his "apology". He thought the Japanese workers have experienced less human misery than their Western counterparts, so in that sense Japan managed the crisis better than the Western countries--a point that he has repeated it on other occasions too.

But in fact suicide rate stayed high for more than 10 years in Japan. It started from an abrupt jump in 1997-1998 from below 20 per 100,000 people to higher than 30 per 100,000 people (the actual number was 30,000), when the unemployment rate increased from 3.5% to 4.7%. It was only in recent years that suicide rate started to come down because of rising employment rates. The Japanese may not have protested loudly, but as the high suicide rate suggested, their suffering has been tremendous.

There are some interesting points about suicide stats in Japan, but there are more family suicides like this one that are painful to read about, so Krugman may be underestimating the level of human suffering these decades of no growth have brought.

But (and if I'm making the wrong assumption, Pollo de Muerte can correct me here) when people who are not living in Japan and perhaps might not have any Japan experience take to citing Japan as an example of the problems, it seems more like finding a convenient blunt instrument to make an argument with. This is not to claim that Japan is the be all end all, and there are a lot of things that are pushed under the carpet, but honestly, if the US were more like Japan, I'd feel much better about the future.

lj-

I think some folks here are looking for a target to bludgeon. I'm not some austerity focused budget hawk. I worry about deficits in terms of "at some point" they will lead to an inability of central banks to control inflation and will erode the wealth of retirees which are an ever increasing percentage of most western economies. So when you talk about "finding a convenient blunt instrument to make an argument with", you have a point, but not the point I think you intended.

I pointed to Japan as an example of a limit on debt. Japan is carrying 2.5 times the debt/GDP ratio of the US and the market has not pushed back very much. If you use a glass is half full analysis, that means that the US has lots of headroom to add more debt.

I don't mean to claim I'm an expert on Japanese economy, but Japanese insurance markets were the focus of my grad school work. I was steeped in that area back in early 90s, so I may be influenced by that emerging bubble economy time when we all were talking about a lost decade instead of lost generations.

bobbyp-

"You have repeatedly tied the total amount of public debt to economic output"

I don't think I have; that's one potential factor leading to inflation, but not the only one.

"and asserted that "beyond some point" when D/output >"something" there would be some terrible effect (i.e., inflation)."

I don't think I posited that formulation. I'm only saying that demand for public debt (even public debt denominated in a reserve currency) is not infinite. At some point, interest rates will start to go up as the market determines that the level of debt is unsustainable and the market forecasts either lower output or increased money supply growth to service the debt. Either lower output or increased money supply growth can lead to excess inflation.

"Recent history, you know-the numbers, argues against this hypothesis as explanatory under current circumstances."

I never argued otherwise. I start off by saying that Japan illustrates that we could carry much higher debt levels.

If you want to talk economics that's fine. I have a pet peeve when it comes to misstating my positions.

I think we can't ignore deficits. At some point the debt will bite us in the ass and lead to inflation which is horrible for retirees. You might agree but feel that point is so far off that we don't need to worry about it now. That's not much of a difference between our positions.

Or you might feel that it will never matter and we can just keep printing money. On that we disagree and it seems we won't persuade each other otherwise.

Tony P-

Are you saying that there is no relationship between public budget deficits and trade deficits? I'm not saying that you are, but I'm curious as to your answer.

On trade deficits, I think there is a peril related to trade when a country has a global reserve currency. Economics 101 would say that trade deficits would lead to a weaker currency and raise the price imports and lower the price of exports eventually working to fix the trade imbalance. Due to the fact that global demand for dollars and treasuries has not waned regardless of the twin deficits, the US dollar has been resistant to the normal laws of gravity w/r/t a floating currency (I think that's true even accounting for currency manipulation).

Trump is dabbling with tariffs, but I don't know if he will risk true protectionist policies. I think it's just window dressing to appease the alt right and his blue collar workers.

What would you support in terms of measures to address trade imbalances?

Notwithstanding having dissed Rogoff, I broadly agree with Pdm about the general undesirability of growing government debt. It's ok to increase the debt to meet an immediate need, but foolish to do it as a routine part of the budget. Because whatever the level of debt which is unsustainable, you will get to it in the end.

Trade deficits are not quite the same thing. A country should a long-term strategy for how it's going to pay its way in the world. Protectionism should not be part of it.

Trump is dabbling with tariffs, but I don't know if he will risk true protectionist policies.

What you are really saying is that you don't think that Trump's ultra wealthy advisors will let him go there. It's not like he has a clue (or the least interest) when it comes to the actual impact of doing something. If he is persuaded that his fans want it, he'll do it.

That's sort of what I'm saying, wj.

Trump has an eye and an ear for optics and messaging w/r/t his blue collar base.

He won't actually go against the real moneyed interests IMO.

PB-

"Trade deficits are not quite the same thing. A country should a long-term strategy for how it's going to pay its way in the world. Protectionism should not be part of it."

Do you have a strategy in mind?

Or you might feel that it will never matter and we can just keep printing money.

What I would say, and I imagine bobbyp would, too, is that if you print money to obtain real resources to the point of scarcity, you will cause inflation. The focus should be on the availability of resources, not money.

Further, I would say that spending should create value. Let's imagine the money we spent to kill people and destroy things on the other side of the world was spent on expanding broadband service, early-childhood education, environmental restoration, mass transit, scientific research and such.

I would gladly take on debt to do those things, because they are the things that will actually pay for themselves in the long run. Instead, we juice the stock market and reduce services to make our people sicker and less educated.

MAGA? We will not be able to compete in the global market for very long with the kind of debt-reduction proposals being put forth these days. But the oligarchs will still be able to fly off to some other place that isn't a shithole if things get bad enough.

Since I mentioned blowing things up and killing people, I should add to the list of things more worthy of spending on foreign aid and diplomacy. Yeah...

hsh-

You won't get any argument from me on the stupid things we spend money on (wars, juicing the market).

Can you give me an example of the resource constraint that you have in mind?

bobbyp: What do glibertarians want? Like most other political actors, they want it all and are willing to discard some so-called central principles to get it.

A counter argument:

"In sum, Chait is wrong to tar libertarians, as a group, for supposedly being thoroughgoing supporters of Trump. But it would also be wrong for libertarians to become complacent about either Trump, or the more general threat to liberty posed by the kind of nationalism he exemplifies."
No, Libertarians Have Not Thrown in With Trump: Jonathan Chait's accusations to the contrary ignore a great deal of the actual libertarian reaction to the president's policies. But some libertarians are indeed too soft on both Trump and right-wing nationalism generally.

Too many libertarians get focused on economic freedom and are willing to look the other way on police state issues, human rights issues, corporatist issues, etc.

As someone who basically starts from a libertarian position as a rebuttable presumption, I've given up calling myself one out of embarrassment.

Can you give me an example of the resource constraint that you have in mind?

I don't know. What if the federal government was buying gasoline as fast as it could be refined? It's hard to come up with one thing that's realistic and that would affect the economy broadly enough to cause generalized inflation.

Think of the sort of rationing that happened during WWII. What would have happened to prices had that not been as well implemented? We were still on the gold standard then, but still.

Why can't we all just get along? What do I have to do, besides serving as my own fluffer by applauding myself as I speak, to make that happen?

https://www.eschatonblog.com/2018/01/bets-on-how-many-people-he-kills.html

Bankrupt of all values, ethics, and decency. Filth, the entire conservative edifice:

https://finance.yahoo.com/news/trump-cdc-director-steps-down-150319235.html

Not going to the doctor can prevent over-utilization of a deliberately scarce resource and prevent inflation:

https://www.dailykos.com/stories/2018/1/31/1737502/-America-where-you-still-have-to-win-the-lottery-to-go-to-the-doctor

hsh-

Since I didn't take you as a gold standard nut, I was wondering.

I think you've described my issue with relying on a resource constraint.

I keep backing into the need to (at some point) exercise fiscal restraint because in a service economy which enjoys having a reserve currency at its disposal, I don't think we'll see the tipping point for runaway inflation until it's in the rearview mirror.

Pdm: Are you saying that there is no relationship between public budget deficits and trade deficits?

I think I am. The US trade deficit with China, for example and as far as I know, does not come from the US government buying more stuff from the Chinese government than vice versa. WalMart is not (yet) the US government. Its Chinese suppliers may be government-owned for all I know, but that's not my concern.

A couple of important notes:
1) The trade deficit vis a vis any particular country is not the point. It's the whole world that matters.
2) Currency exchange rates figure into trade deficits, but money is the bookkeeping device, not the underlying commodity.

Pdm: What would you support in terms of measures to address trade imbalances?

Not protectionism, for sure. And, even though I consider inter-national trade deficits more important than intra-national government deficits, I don't consider trade deficits per se to be necessarily worth addressing.

To me, a Nation (again: The People, not The Government) increases its economic well-being by becoming more "productive" whether or not it trades with other Nations. To the extent that education (broadly speaking) increases "productivity", I don't care if it increases "competitiveness". Same for infrastructure.

BTW: consider what it means for a Nation to run a trade surplus with the entire rest of the world. It means The Nation lives less well (currently, as measured by consumption of goods and services) than its "productivity" would justify. So I'm not advocating for a net trade surplus, either.

--TP

List of countries by current account balance

Pdm: Are you saying that there is no relationship between public budget deficits and trade deficits?

I think I am. The US trade deficit with China, for example and as far as I know, does not come from the US government buying more stuff from the Chinese government than vice versa.

The budget deficit/surplus over a given period must be equal to net private saving/investment plus the trade deficit/surplus over that same period.

G – T) = (S – I) – NX

which is

(State sector balance) = (Private sector balance) – External sector balance

where G is government spending, T is taxes, S is savings, I is investment and NX is net exports (or X-M, where X is exports and M is imports).

Since I didn't take you as a gold standard nut, I was wondering.

If there is an exact opposite to a gold bug, I'm that, or at least darned close to it.

Gold is useful for contacts in electronics. I'll give it that.

it's handy for laundering drug money, too.

I've been on a mailing list for years where prominent economists answer survey questions.

Related to this discussion:

A typical country can increase its citizens’ welfare by enacting policies that would increase its trade surplus (or decrease its trade deficit).

https://www.igmchicago.org/surveys/trade-balances

If the US reduced its fiscal deficit, then its trade deficit would also shrink.

https://www.igmchicago.org/surveys/deficits

Even in a world populated by two-armed economists, these two questions had lower consensus than usual.

What I would say, and I imagine bobbyp would, too, is that if you print money to obtain real resources to the point of scarcity, you will cause inflation. The focus should be on the availability of resources, not money.

Exactly. Thanks, HSH.

The concern expressed by conservatives is a political weapon (cf Peterson Institute, attacks on Social Security, Deficit Hawkery). Look at what they do when in office (Iraq War, Trump Tax Cut).

The willingness of libruls to go along with this meme (even to say they don't agree with conservatives, but express "concern" about this possibility that could possibly happen at some time, but we can't say when, therefore we have to worry about it in a serious manner) is not only mostly wrong on the merits, but is simply committing political hari-kari.

Just stop. Please.

A typical country can increase its citizens’ welfare by enacting policies that would increase its trade surplus (or decrease its trade deficit).

To give them credit at least the number of "strongly agree" to this proposition was zero.

There may be hope.

it's handy for laundering drug money, too.

Like Bitcoin!

Krugman has a column on this today.

See also this.

Finally, we get pravda from someone:

https://www.rawstory.com/2018/01/trump-russian-tv-host-celebrates-white-house-refuses-enforce-new-sanctions/

While we settle for bullshit in America:

https://www.rawstory.com/2018/01/kellyanne-conway-rants-wildly-attack-fact-checkers-americans-fact-checkers/

https://digbysblog.blogspot.com/2018/01/all-that-frightens-by-tristero.html

To what extent are mp's refusal to apply Congressionally approved sanctions, by nearly a unanimous vote, to Russia, and the as yet unannounced firing of Rosenstien (Mueller will be fired the same night as nuclear explosions hit North Korea) a ploy to buy Russia's pledge to not incinerate the United States in response to our unilateral nuclear attack on North Korea and making nuclear weapons the go-to weapon in all future war theaters?

Check your own facts, fools.

PdM, thanks for your reply and I appreciate you not taking my comments too personally. I also appreciate the fact that you have some knowledge of the Japanese insurance system and aren't just using the example of Japan in the way I described.

As I've said, the economics talk goes way over my head, but when you say
I think some folks here are looking for a target to bludgeon.
I have to say that the way the US economy is run makes it a target-rich environment, so anytime someone says 'wait a minute, we might turn into Japan', I say 'and then...?' More about that later, if I have time. But again, thanks.

Do you have a strategy in mind?

I dream of a world in which wise politicians spend time thinking about how to make the country a better place in 10 or 20 years, after their retirement, rather than trying to claim credit or deflect blame for short-term fluctuations which they have no control over.

https://www.theamericanconservative.com/larison/americans-need-to-take-the-possibility-of-an-attack-on-north-korea-seriously/

Yeah, the possibility that this pack of criminally stupid morons ( this apparently includes Trumps advisors) might actually attack North Korea puts everything else in the shade. ( No nuclear winter references intended. I don’t think NK has enough to do that, even if you accept the theory.)

If only we had a Constitution which vested the authority to attack other countries in the Congress, where there are arguably some sane people even in the Republican Party, at least on war and peace issues.

the possibility that this pack of criminally stupid morons ( this apparently includes Trumps advisors) might actually attack North Korea puts everything else in the shade.

If there is a 'bloody nose' strike (and Larison makes a strong argument that Victor Cha's resignation and op-ed mean that it _is_ being considered), it will probably turn off Asians towards the US for the next 100 years, not because they have any great love for NK, but because it will solidify the notion that the US does not give two sh*ts about Asian lives. I'm sure if you told the circus in the WH that this would happen, they would probably count it as a plus. Idiots.

I may be doing them an injustice. But I have a suspicion that the possibility of North Korea responding to a US attack be launching nuke at us is considered a plus. Because it is likely that the main target would be all those non-whites/Democrats in Hawaii. Or, at most, those illegal Hispanics/Democrats along the West Coast.

Of course, from the missles they have demonstrated so far, North Korea should be able to hit anywhere in the US. But fact-based reasoning is rather out of favor with Trump and his boys.

The gummint is just a grifting family business:

https://www.motherjones.com/kevin-drum/2018/01/ben-carson-keeps-it-all-in-the-family/

Sicilians should have it so good.

In 2018 America, populated by assholes and jagoffs, you CAN make this stuff up and be believed.

As Conalltheway stipulates, real Americans, the aforementioned assholes and jagoffs, are their own fact-checkers.

There ARE facts. They have others.

Maybe the Russian news media can clarify what really happened with this accident in time for the 2018 midterms.

Regarding this specific and developing right wing meme, all I can think is "If only", and "Why was it so poorly carried out?"

Link to previous comment:

https://www.salon.com/2018/01/31/alex-jones-gop-amtrak-train-crash-kamikaze-attack/

Since left-wing media is so bereft of ruthless imagination, here's a theory.

Republicans are jumping ship and retiring in droves.

Why? Maybe they see the mp writing on the wall, in fact, maybe they fear being personally implicated in the most colossal many-faceted incidence of espionage, obstruction of justice, and corruption in western political history.

But maybe, on the other hand, they've done what they came to Washington D.C. to do. Bankrupt the government. Drown that baby. Cut their own personal taxes and the taxes of their corporate crime-family benefactors to such as extent that they have theirs now and fuck the country.

The CBO is already warning Congress that tax receipts are plunging and borrowing is skyrocketing.

The departing vermin republican murderers can now vote to NOT extend the debt ceiling with impunity as they will not face the voters again.

mp launches nukes from submarines in the Northwest Pacific. He fires Mueller as the mushroom clouds veil his actions.

He declares a national emergency replete with wartime rationing, which takes the form of drastic Medicaid cuts and the absolute gutting of the domestic budget, and the end of the sequester on de(of-)fense spending.

Ryan introduces the bleeding out of Social Security and Medicare to an enthralled political base fully entertained and surfeited by reality show suffering and loss brought directly to them.

All resistance is met with martial force from the conservative movement's now-beloved smaller but ruthlessly autocratic gummint as they hold the corpse of the now dead baby for ransom.

There's plenty of available space in those private prisons Sessions was bought off to build.

Guantanamo is now open for business with no sunsetting.

Conservative vermin abhor a vacuum.

whoda figured?

https://www.politico.com/story/2018/01/31/government-shutdown-republicans-congress-380576

Cyber threats? Nuke away:

https://www.theamericanconservative.com/articles/trump-nuke-plan-resets-the-doomsday-clock/

Last night I was trying to figure out what exactly it is that I find most offensive about POTUS Trump. It finally came to me.

He's like a bad lounge act POTUS. Only not as satire.

GftNC ...

If you visit Orlando, this is not a bad guide:

https://www.nytimes.com/interactive/2018/02/01/travel/what-to-do-36-hours-in-orlando-florida.html?smid=fb-share

Thanks Pollo, have bookmarked and will send to interested parties.

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