Perfect, I didn't see that one, especially liked the Sweden, nanny state comparison, should make Rick happy when he sees it.

Radical conservative?

Any conservative who didn't feel the need to balance the budget when the economy was in an upswing.
Any conservative, well person who claimed to be conservative, but was willing to spend beyond revenues .
Any conservative who was willing to abandon the sacrifices of the previous generation who paid down the debts of WWII with high taxes and terrrific economic growth in return for tax breaks and a greater accumulated debt for the future generation. (started in 1980...)
Nice that you offered the "Cold War" dodge for Reagan Steve... Wasn't every president after 1945 involved in the Cold War? Didn't everyone of them run surpluses year after year dspite the burden of the cold war? What was so special about Reagan that he couldn't follow their lead?
What he offered was the radical, but not conservative, notion that somehow deficits don't matter....

Now Sweden may be a nanny state. But its fiscal house is in much better shape then the US. Its economy is in much better shape. Its debt to GDP much better. If a nanny state can manage that, by pursuing Keynesian policies through the 90's and 00's .... what does that say about Keynes?

Wow, you guys just can't find a way without increasing taxes,

Do you really think that the tax rates of 2000 were burdensome? They existed at a time of great growth. In fact much higher tax rates existed in the US's periods of greatest economic growth. (AS high as 90% in the fifties...) Pleasse demonstrate where taxe rates have any correlation to economic growth.

rickyp wrote:

The US spends $1 for every 60 cents it taxes. Doesn't that seem like Keynesian spending to you?

No.
In Keynes view you run surpluses and deficits. The surpluses in good time. Positive economic growth.
In bad times, you spend to stimulate the economy.

Actually, that's not an absolute. You don't need to run surpluses in the good times necessarily. A balanced budget with growth will see debt as a proportion of GDP fall.

As for Keynesian economics being politically bad, that may well be true. Problem is that Keynes wasn't a politician, he was an economist, and was interested in the economy.

Still cuts sound good on paper, but can also be politically disastrous at times. So can tax rises. Any political action on the economy can be a disaster politically. The important question is whether it's a good thing economically.

"Now Sweden may be a nanny state. But its fiscal house is in much better shape then the US. Its economy is in much better shape. Its debt to GDP much better. If a nanny state can manage that, by pursuing Keynesian policies through the 90's and 00's .... what does that say about Keynes? "

Number one, that's not who we are in the United States and secondly, really easy to break off Alaska and with their resource/population ratio, easy to look good. Lets see how good Sweden is when they are the size of the United States and a super power with which everybody looks to(and they too, look to us) for military defense if things go wrong. There is a cost in defense and they feed off of other because they really have none. You are trying to compare apples and oranges here. Same with Norway when they got their windfall find in the 60's with oil.

Ricky:

If a nanny state can manage that, by pursuing Keynesian policies through the 90's and 00's .... what does that say about Keynes?

Okay Ricky ... rev up the time machine ... we are going back to 1990 to change US fiscal policy.

But you still haven't answered my question, which is since we don't have a time machine and the US already has huge amounts of debt, and a huge annual deficit, are you arguing that we run an even greater deficit? If not, I don't see how any of this is helpful for a discussion on what the US should do now.

"Do you really think that the tax rates of 2000 were burdensome? They existed at a time of great growth. In fact much higher tax rates existed in the US's periods of greatest economic growth. (AS high as 90% in the fifties...) Pleasse demonstrate where taxe rates have any correlation to economic growth. "

And why did they come down, Rick? And yes, anytime somebody takes money out of my pocket, it is burdensome. The Federal gov't is too big, plain and simple, our forefather's warned us of a too strong central gov't, now you are seeing it in action. The states need to retain the majority of the power. Socialism has never succeeded in countries our size or for any duration of time, there is a reson for that. Rick I already showed you were lowering tax rates increase the economy, go back a couple pages and there is a link to the CATO institute, go read it.
NM here it is:

http://www.cato.org/pubs/pas/pa261.pdf

Ray Jay wrote:But you still haven't answered my question, which is since we don't have a time machine and the US already has huge amounts of debt, and a huge annual deficit, are you arguing that we run an even greater deficit? If not, I don't see how any of this is helpful for a discussion on what the US should do now.

How about the 1930s then?

The US had (for the time) a lot of debt and a deficit. Hooverians tried to cut to balance the budget after the 29 crash, and it didn't help. The Depression meant they were on a hiding to nothing. FDR comes in promising to balance the budget, but instead institutes more Keynesian policies. As recommended by Keynes. The economy starts to recover, but the government racks up more debt.

So, in the mid-30s, the politicians and many of the public panic about debt. Cuts are made, the budget is challenged and spending reduced. result? A second recession, meaning the whole of the 1930s was a dead loss, economically.

The Cato Institute article has a bit of a problem though. The Bush Tax cuts didn't do much to spur the economy really (and what happened after a few years? Consumer spending and housing boom both led to bubbles which popped), but mire importantly for fiscal hawks, the tax cuts didn't increase the tax take in line with growth, leading to a larger deficit (well, seeing as 2000/1 saw an almost balanced budget, it looks even worse).

Which should give you an idea of which side of Laffer's curve the USA is on.

And, crucially, using tax cuts as a stimulus appears to be a common tactic, but what tends to happen a few years later? In the 1980s - a crash. In the 2000s - a crash.

What's the point in spurring the economy with tax cuts if it leads to bubbles that cause another recession?

rickyp wrote:Radical conservative?

Any conservative who didn't feel the need to balance the budget when the economy was in an upswing.
Any conservative, well person who claimed to be conservative, but was willing to spend beyond revenues .

That's funny. Your definition of "radical conservative" fits just about every President we've had over the last 50 years. Go ahead, name the last one who claimed to be a "fiscal liberal."

Any conservative who was willing to abandon the sacrifices of the previous generation who paid down the debts of WWII with high taxes and terrrific economic growth in return for tax breaks and a greater accumulated debt for the future generation. (started in 1980...)

This is so much garbage. What are our two existential financial threats?

Social Security and Medicare. Together, we are looking at $100T in unfunded liabilities.

Who were the "radical conservative" Presidents who started these programs?

Nice that you offered the "Cold War" dodge for Reagan Steve... Wasn't every president after 1945 involved in the Cold War? Didn't everyone of them run surpluses year after year dspite the burden of the cold war? What was so special about Reagan that he couldn't follow their lead?

Simple: 1) Jimmy Carter driving the country into the Grand Canyon; 2) Soviet aggression in Afghanistan and elsewhere.

Again, liberals, I'll give you everything Democrats are demanding in terms of raising taxes on the middle class (sorry, a family making $250K and living in urban/suburban area is not rich), closing loopholes, and shutting off subsidies. Now, how much does that reduce the deficit? I would be shocked if it got us to $300B a year total--and it would have an economic impact no matter how many times our President says it won't. Look at our economy: does it look like he knows anything?

steve

Simple: 1) Jimmy Carter driving the country into the Grand Canyon; 2) Soviet aggression in Afghanistan and elsewhere.

Johnson ran surpluses and funded the VietNam War. Nixon too... There's always been the military threats since 1945. Reagan even invented a couple himself in Latin America and traded with iran to fund those.He had no special pressures or problems to deal with that his predecessors didn't also have... . The inherited recession from Carter? Compare it to the inherited mess from Bush and its piffling. How come for you, its an excuse for Reeagan but not for Obama?

Ray, I'm talking about going back in time to the 1980s to begin sorting things out. But since my Flux capacitor is on the fritz I'll stay in today and rescind the tax cuts on the wealthy. And I'd go through and cut a lot of programs and spending including about a third of the military budget getting the hell out of Iraq and soon Afghanistan... And bringing home some other troops if the local bases are not paid for by the hosts.
if you have to have austerity, and you should have some measure of austerity, it should be shared by all, including the wealthy.
If i were king I'd also bring in a single payer medicare system and start working on those base costs...But Obama ain't King, and you've seen how a solid rump can manage to control your system of governance.
Fact is, If I did get my flux capacitor working I would need only go back to go 2000 and made George listen to his secretary of the treasury and you'd be okay. He wouldn't have brought in tax increases, and if a couple of years surpluses had ocurred, and wiped out the debt as he worried, he'd have used subsequent surpluses them to shore up Social security and medicare. Instead ...you now have a hole to dig out of...
Ending the Bush tax cuts is just a way to stop digging the hole deeper.

rickyp wrote:steve

Simple: 1) Jimmy Carter driving the country into the Grand Canyon; 2) Soviet aggression in Afghanistan and elsewhere.

Johnson ran surpluses and funded the VietNam War. Nixon too... There's always been the military threats since 1945. Reagan even invented a couple himself in Latin America and traded with iran to fund those.He had no special pressures or problems to deal with that his predecessors didn't also have... . The inherited recession from Carter? Compare it to the inherited mess from Bush and its piffling. How come for you, its an excuse for Reeagan but not for Obama?

Notice I didn't say, "Carter drove us into an economic Grand Canyon." If I had, your point might have had some validity. Throw the recession, stagflation (interest rates were obscene), boycotting the Olympics, the Iranian hostage situation, Afghanistan . . . Carter put the country into a collective depression, psychologically speaking. Reagan's great success was in revitalizing the country, getting us to believe we were great instead of Carteresque.

Ray, I'm talking about going back in time to the 1980s to begin sorting things out. But since my Flux capacitor is on the fritz I'll stay in today and rescind the tax cuts on the wealthy. And I'd go through and cut a lot of programs and spending including about a third of the military budget getting the hell out of Iraq and soon Afghanistan...

Taxes on the wealthy--what do you consider "wealthy?" Also, how much revenue do you anticipate garnering that way?

Also, your man, Obama, could do all the things you're suggesting. What has he done instead? Started a new war.

Ending the Bush tax cuts is just a way to stop digging the hole deeper.

Yet, your Man, Obama, extended them in December.

Ricky:

Ray, I'm talking about going back in time to the 1980s to begin sorting things out. But since my Flux capacitor is on the fritz I'll stay in today and rescind the tax cuts on the wealthy. And I'd go through and cut a lot of programs and spending including about a third of the military budget getting the hell out of Iraq and soon Afghanistan... And bringing home some other troops if the local bases are not paid for by the hosts.
if you have to have austerity, and you should have some measure of austerity, it should be shared by all, including the wealthy.

I agree with all of that ... we can quibble with the definition of wealthy, and the complexity of getting out of Iraq and Afghanistan, but overall that's right.

Ricky:

Fact is, If I did get my flux capacitor working I would need only go back to go 2000 and made George listen to his secretary of the treasury and you'd be okay.

Try jiggling the dilithium crystals; sometimes that does the trick ... it may be easier to go back and talk to a few grandmothers in Florida about the correct way to fill out a ballot. Time travel creates parallel universes and we'll never know what that one looks like. We wouldn't have gotten into Iraq, and who knows about Afghanistan? We wouldn't have had the 2001 and 2003 tax cuts; would the economy be weaker or stronger. Would we have been less vigilant resulting in another terrorist attack? Would a Republican congress have held the line on spending by a Democratic President, as they do?

So let's see...

Debt limit raised.
Spending increasing next year, and on into the future
Trillions in projected new debt over the next ten years.

So...was something supposed to change when the Republicans took over the House? Which party is the one that supports out of control spending again? I forgot.

And for all the liberal pissing and moaning about the Tea Party, they predictably rolled over and voted for whatever the leadership told them to vote for. What radicals!

The letters behind their names change but the policies never do.

Lol...it's like the most predictable movie I've ever seen. It's funny to me to see people getting hot in the collar and whipped into a frenzy over one politician or another. Here is a prediction I'll put money on. In October of nxt year, debate will rage back and forth about whether candidate A or B will save this country, and why the other candidate will destroy it.

One will get elected, and nothing will change except for an increase in the federal government's intrusion in our lives and the debt they are burdening us with.

I mean, really...really...would the Federal debt situation be ANY different if Carter/Mondale/Dukakis/BushI/Dole/Gore/Kerry/McCain had won? I mean, it obviously makes no difference which party controls either House of congress. Every year spending goes up. Every year debt goes up.

What a joke.

I hope you guys are buying gold though...seriously.

Dan:

So, in the mid-30s, the politicians and many of the public panic about debt. Cuts are made, the budget is challenged and spending reduced. result? A second recession, meaning the whole of the 1930s was a dead loss, economically.

Economists still disagree on this. Some say that the spending prolonged the recession through the 30's; others agree with you. Why are you so confident in your position?

Danivon:

And, crucially, using tax cuts as a stimulus appears to be a common tactic, but what tends to happen a few years later? In the 1980s - a crash. In the 2000s - a crash.

What's the point in spurring the economy with tax cuts if it leads to bubbles that cause another recession?

I'm not sure what you mean re the 80's. We had a bad recession in the early 80's, but ultimately Reagan came out quite well and it was a very good decade. We took our medicine and he didn't panic. Re 2000, you may be right. Tax cuts are great in that they provide liquidity, and we certainly needed in after 9/11. But markets are also comforted by stable governments and stable government finances, and that's clearly a problem now.Clinton's tax increases worked pretty well. Maybe it's because the internet took off, or maybe it is because the bond market was pleased so that the financial markets could do their thing.

I think the ideologues on both sides of these discussions are more confident than they should be.

In the current case, I think the debt overhang is so great that deficit spending above and beyond the amount that is going on right now does no good at all. Any Keynesian benefit is offset by increased uncertainly on how we will ever pay it back.