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  #1  
Old 07-20-2011, 11:27 PM
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The economy, theories and how we got here. What is your view?

To me, the trouble with arguing economic theory is that none of them have been fully tested in real life. I'll give my views so you can flame me all to Hell.

Marxism/communism: It has a fundimental flaw, it teaches that there is no religion. The concept "of from of his ability to each according to his need" without a moral basis does not work. Human nature takes over. Everyone tries to have less ability and more need. We have seen this in the early Soviet Union, early Communist China and Cambodia under Pol Pot. The result is the creation of a ruling elite who decides that there are groups holding out their abilities or production. The elite order the deaths of millions of people accused of resisting communism. With a religious basis, communism works pretty well. The Amish ask no help from others and help each other to the best of their abilities. Their society works better than most.

Capitalism: Without a strong government it might work. It worked for a few years in colonial America, for a few years in early America, early Austrailia, every prison, and every country with a black market in the last century. It is a system where each party to a transaction receives the full benefit of their transaction. As De' Tocqueville pointed out, the US system will collapse when the government can take money from one group and give it to another. When the government can be bought, capitalism no longer exists. We have not seen pure capitalism/free enterprise in the US for 200 years.

Keynesian economics: If only. The basic principle is solid. In times of economic downturn, allow a Federal debt to boost the economy and the increase in revenue will produce a future surplus. The problem is that the programs created to boost the economy didn't go away when the economy recoverd, instead they grew like Topsy. If the economy boosting programs went away, there would be a budget surplus. Instead, the government had no huevos to cut budgets and racked up deficits in boom times.

Friedman economics: If only. The basic principle is solid. Let the free market determine values. The government can't let it happen. It has to have its finger in the pot. Without Fannie Mae and Freddie Mae providing guarantees for sub-prime loaners, would we have suffered a housing bubble? Barney Frank boosted the bubble and GB2 rode his pony. Both parties are to blame for the housing collapse.

Socialism: government ownership of factories and farms. Exemplified by the post-Lenin Soviet Union. Exemplified by shoddy manufacturing and food shortages.

The trouble now is that we really need to follow Keynesian economics and increase the deficit, but we have called wolf too many times in the past for this to work. Instead, China and our other creditors want us to reduce the deficit.

As much as the Libertarian me is against government spending and taxes, I have to say it is time for the government to spend and enact a tax increase for those above $100,000 income and elimination of all overseas corporate deductions.

Secondary question. Where would we be if instead of giving the TARP banks their bailout, for the same price we gave person in the US $3000? I think it would be boom times for the average citizen and hard times for the people that caused the problems.
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Old 07-21-2011, 05:43 AM
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I like your last idea!

Why do they think it is ok to let the middle class collapse? We need a bail out!
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Old 07-21-2011, 06:30 AM
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All of them are systems. So, it is the implimentation of the system, that is in question. Or those who implement the system. Also, another flaw of capitalism, is that competition devoures the competition. The result is monopolies, which result in less or no competition.
Tom
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Old 07-21-2011, 07:10 AM
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Back in the early 2000's there was some sort of a rebate thing that the gov used to stimulate consumer spending. It is just as dumb an idea now as it was then.

Why raises taxes on those over $100K income, why not $99K or 101K? I'm betting it's just a convenient number with no rational argument supporting its selection.
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Old 07-21-2011, 09:26 AM
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I never studied those different schools of thought, so I can't comment about why one is any better than the others. Even if I could make an argument for one system in favor of another, our politics are too messy to be expected to follow any single coherent theory. In trying to figure out my preference for which direction the country should go, I try to determine who is lying to us (Paul Ryan), whose arguments make no sense (Eric Cantor), who seems to be trying to get to a solution (Obama), and that sort of practical thing.

At the moment, I think they are all blowing it by insisting on immediate spending cuts. That's the last thing the economy needs now, IMHO. It's just that Obama is blowing it less than the GOP.

EDIT: Speaking of Cantor - http://www.washingtonmonthly.com/political-animal/2011_07/putting_cantors_talking_points031007.php

Last edited by Honus; 07-21-2011 at 09:40 AM.
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Old 07-21-2011, 10:14 AM
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Bush and the GOP drove the car into the ditch. Obama and the Democrats are shoveling dirt onto it. And we taxpayers are expected to pull it out without the benefit of a tow truck.
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Old 07-21-2011, 10:15 AM
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The path leading up to the financial crisis; the granting sub prime loans, the property speculators, the banksters, the derivatives, etc.; is a story of human nature.
Everyone wants to get their paycheck at the end of the day & no one thinks they will be left holding the bag or did they feel they did anything wrong.
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Old 07-21-2011, 10:20 AM
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HONUS,
Since you credit Obama with "trying to get a solution", can you tell me what is HIS plan? His budget submission was soundly defeated; almost unanimously.
He, and the dems criticize every repub plan, but have yet to actually offer a specific plan.
Still waiting for any democrat to offer a plan.
I also heard a dem speaker say that some repubs actually want default. That is a lie, pure and simple. I know of no repub advocating default. I know of many who are against raising the debt ceiling, but that only results in default, if the executive branch decides to do that. The executive has the responsibility to decide which bills to pay. We have enough funds coming in each month to pay the debt service, SS and the military. It would require a stand up person to take charge in that situation and make tough choices, but there is no reason to actually default on our debt. n That is pure political demagoging--I though Obama promised "no more politics as usual". Yet the current democratic talking points have been heard many times before. Nothing new this time.
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Old 07-21-2011, 10:57 AM
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Quote:
Originally Posted by MS Fowler View Post
HONUS,
Since you credit Obama with "trying to get a solution", can you tell me what is HIS plan?...
I said that he seems to be trying to get to a solution. It's hard to know for sure. I do not know the specifics of what he has proposed, but people familiar with the negotiations suggest that he has moved quite a bit in their direction. They oppose everything Obama proposes, even when he proposes things they have proposed in the past.
Quote:
His budget submission was soundly defeated; almost unanimously.
I didn't understand that. There must be some procedural explanation for that vote. The vote came and went and people acted like it was no big deal.
Quote:
...I also heard a dem speaker say that some repubs actually want default. That is a lie, pure and simple. I know of no repub advocating default...
It took me about 10 seconds to find these: http://thinkprogress.org/politics/2011/05/19/167868/nunes-calls-for-default/ http://bloggingblue.com/2011/05/18/paul-ryan-wall-street-will-be-okay-with-debt-default-for-a-few-days/ Ryan says he doesn't want a default, but he also says that it would not be a big deal. I have heard a number of GOP people express that view, on TV and in private.
Quote:
I know of many who are against raising the debt ceiling, but that only results in default, if the executive branch decides to do that. The executive has the responsibility to decide which bills to pay. We have enough funds coming in each month to pay the debt service, SS and the military. It would require a stand up person to take charge in that situation and make tough choices, but there is no reason to actually default on our debt.
The math doesn't work on that.
Quote:
That is pure political demagoging--I though Obama promised "no more politics as usual". Yet the current democratic talking points have been heard many times before. Nothing new this time.
I will tell you what's new. What's new is a GOP willing to run the country into a huge hole for no good reason. This is all optional.
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Old 07-21-2011, 11:14 AM
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Just got Robert Reich's Aftershock. From a brief perusal of the opening pages, I'd say his view is that the basic problem is an accumulation of incredible wealth at the very top at the expense of the middle class who would spend the money differently than the wealthy if it were in their pockets.
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Old 07-21-2011, 11:42 AM
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Originally Posted by kerry View Post
Just got Robert Reich's Aftershock. From a brief perusal of the opening pages, I'd say his view is that the basic problem is an accumulation of incredible wealth at the very top at the expense of the middle class who would spend the money differently than the wealthy if it were in their pockets.
The concentration of wealth is a symptom of a serious disease in our capitalist system. Whoever can figure out the cause of the disease and figure out how to cure it will belong on Mount Rushmore.
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Old 07-21-2011, 11:44 AM
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Amish works not becuase of the religious side but because they are small economies with much less diversity and fast reaction times. If they were truly a part of a huge lumbering economy, the chinks would soon become major holes.

In the same way as we march toward a single world economy, it is going to be even less freindly to localized areas, which before was maybe a city, then a state, now whole countries and soon entire hemisphers

our world economy has become a 1000 head dog each biting the others ears and all who want to go a different way
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Old 07-21-2011, 12:45 PM
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Quote:
Originally Posted by Honus View Post
I said that he seems to be trying to get to a solution. It's hard to know for sure. I do not know the specifics of what he has proposed, but people familiar with the negotiations suggest that he has moved quite a bit in their direction. They oppose everything Obama proposes, even when he proposes things they have proposed in the past.I didn't understand that. There must be some procedural explanation for that vote. The vote came and went and people acted like it was no big deal.It took me about 10 seconds to find these: http://thinkprogress.org/politics/2011/05/19/167868/nunes-calls-for-default/ http://bloggingblue.com/2011/05/18/paul-ryan-wall-street-will-be-okay-with-debt-default-for-a-few-days/ Ryan says he doesn't want a default, but he also says that it would not be a big deal. I have heard a number of GOP people express that view, on TV and in private.The math doesn't work on that.I will tell you what's new. What's new is a GOP willing to run the country into a huge hole for no good reason. This is all optional.
The GOP surely has a hand in the willingness to run the country into a huge hole. But, then so does the democrat party. There is blame all around. How can either party not live within a budget? ANY budget? Which party rammed national health care down our throats without a true accounting of the costs? We still cannot afford that trillion dollar boondogle, either.
Also, the dems have failed to pass a budget for something over 800 days---even back to when they help commanding pluralities in both houses AND controlled the WH. THAT is a failure of leadership.

As for the numbers not working, I disagree. We get something around $200B a month into the treasury. The spending ( in case of no extension of the debt limit) would need to be prioritized. If servicing the debt is important, ( and it is),pay that first. Pay SS and military pay checks second. Of course there would be difficult choices, and people would suffer, but it is possible. I won't even say it's desirable, but the gov can pay what it deems most important. Not paying SS would be unconscionable.

Saying the default might not be as catastrophic as some say, is not the same as saying, " lets go into default". And who knows how bad it might be--the warnings are all over the place.

I am still waiting for a democrat plan.
Wasn't this supposed to be the most open and transparent administration in our history? Why all the closed-door stuff? ( I know the answer is that the promise of transparency was just campaigning for office, and no one really expected him to deliver on that promise---business as usual).
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Old 07-21-2011, 01:16 PM
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Quote:
Originally Posted by MS Fowler View Post
...But, then so does the democrat party...
There is no such thing as "the democrat party." It is the Democratic party.
Quote:
... Which party rammed national health care down our throats without a true accounting of the costs? We still cannot afford that trillion dollar boondogle, either...
You mean the one that reduces the deficit? That boondoggle? http://www.reuters.com/article/2010/03/18/us-usa-healthcare-idUSTRE61O4NV20100318
Quote:
... As for the numbers not working, I disagree. We get something around $200B a month into the treasury. The spending ( in case of no extension of the debt limit) would need to be prioritized. If servicing the debt is important, ( and it is),pay that first. Pay SS and military pay checks second. Of course there would be difficult choices, and people would suffer, but it is possible. I won't even say it's desirable, but the gov can pay what it deems most important. Not paying SS would be unconscionable...
Do you have any evidence that approach would save money? For example, how much will we lose by canceling and then re-starting contracts for projects already underway? How much money will we lose when agricultural operations shutdown because of a lack of health inspectors? Or, if they don't shut down, how much will we lose when people get sick because of a lack of health inspectors?
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Old 07-21-2011, 01:21 PM
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Who was in charge?

We got here by spending money that we haven't got. We got here believing that we can spread democracy everywhere, by force if necessary. We got here by believing less tax will increase revenue. We go here by trickling down economy. We got here because we need to let the 'Job Creaters' go scotch free.

I don't major in Economic or Business but I believe every theories proposed by the Politicians are bogus. There is ONLY one way to stop the bleeding, in govt or in your own household - increase revenue and decrease spending.

This graph shows the National Debt over the years. See who was President between 1980-1992 and 2000-2008 where the steepest increase happened. Both were GOP but the Dem are just as guilty. We mortgage our future to generations to come. I feel sorry for them but I won't be around to see.

http://en.wikipedia.org/wiki/File:US_Debt_Trend.svg
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