. So I ask: as you support Obama over a third party candidate, do you plan to engage politically to prevent your candidate from promoting these policies even more, or are you basically ok with all that?There is no such thing as a third party candidate, just because more than two names will be appearing on the ballot in Election Day. (assuming of course birther madness doesn't take Obama's name off in your state.)
The question is irrelevant. It would only be relevant if third party candidates were actually a real choice. Fact of the matter is that we don't have one this time. One only has to look at what happened with Ralph Nader as an example. No third party has a real shot at the golden ring with out the building the base support for that run. Nader had support from some progressives and sympathy from a lot more who were in league with the causes he dedicated his life to. But most of those people still voted Democratic (or some Republican) when it came to the polls Election Night. If Nader himself could not build that needed bridge to get the numbers in, how would anyone else this year have a chance?
A third party has to build in for the long game, you can't short cut your way to the top office without building lots and lots of local presence. None of those third party candidates has built that presence in New Jersey. So none of them have ANY chance of getting New Jersey's Electoral Votes. That's the system we have, like it or lump it.
That was an attempt to put the question in the context of the topic at hand. The question can be rephrased with a sliver of imagination and it becomes very relevant indeed. Just remove the "third party" part of it. Or do you think these are irrelevant issues?
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The free market isn't magical. It is a tool. The free market has existed since man learned to walk upright, but efficient business has only existed since centralized governments were able to regulate trade.
That isn't a coincidence.
Actually the Free Market has never existed before. Hunter gathers evolved into tribal economies which then became autocratic.
When town economies developed as an evolution of the feudal period, tradesman created guilds to enforce price controls. When Laisezze-faire capitolism ruled the roost in the Industrial Revolution, the dominant companies quickly formed monopolies which took government regulation to break.
Lots of people talk about this magical thing called the "Free Market". It makes for interesting theoretical discussion, but I've yet to see evidence that any such ever existed in the wild for any appreciable length of time.
The Free Market always existed. It just isn't able to self sustain specifically because it always becomes autocratic because without regulation power consolidates.
Thinking a concept should work isn't the same thing as it actually working in practice.
He has gone back on virtually all of the ones that I care about and may vote for him had he kept. The promises that he has kept are either minor or just plain bad policies that will likely fail to make any kind of meaningful impact.
Just so we're on the same page, this list includes "virtually all" of the issues you care about? And this list includes virtually none of the issues you care about?
I'll be clear: that's a ridiculous thing to say and makes you look like sort of a terrible person for having such an arbitrary and inconsistent set of things that you care about. All the same, though, I want to hear you say it, so that you can hear how ridiculous it sounds.
If I could, I'd take every item from both of those lists, shuffle them together, remove the Promise Broken or Promise Kept ratings, sit you down, and make you rate how much you cared about each issue. The results, I predict, would be fascinating.
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Again.... give me an example. The United States has never had a free market in the classic example of the term. Before the era of government regulation, it was consolidated into monopolies.
IF the Free Market can't be shown to work in practice, it's time to stop invoking it in rhetoric.
This is my entire point.
Much like the Panda in modern times, it is a cute thing people love that can't exist on it's own.
You can't have a Free Market, because as soon as you remove regulation, power will seek to consolidate.
The only "Free" Market is a well regulated market that attempts to avoid picking "winners" and "losers" but prevents market consolitation and monopoly to encourage competition.
And that ain't the mythical "Free" market.
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I came in late to this game so I might be rehashing old ground...but here goes!
Voting for a third party is symbolic in the national elections in our country. It really only gives the voter the peace of mind to say, "I didn't vote for this bum." The reason...our constitution does not provide for a run-off election! So, as a person way back in the beginning of this thread said, do I vote for the one who most closely follows my was of thinking (beliefs, thought process, etc.)which might be a third partier, or do I hold my nose and vote for the lesser of two evils from the major parties?
Pragmatically, voting for a third party is wasting a vote at the federal level. Maybe at the state or local level, you could get somebody elected, but without major party affiliation, they're just not likely to advance.
It would take a amendment to the constitution to get run-off elections. So, if you want to see across-the-aisle cooperation between the Republicans and Democrats, write legislation that could break up their power bases and watch them line up to vote the measure down.
From an economic position, if the republicans win and pass their agenda, it will create jobs and increase the national debt. If the democrats win and pass their agenda, it will create jobs and increase the national debt. The differences are in who gets richer/more powerful under each regime. The social agendas of each party are vastly different, but the outcomes are not. The republicans no more want Roe v. Wade overturned than the Democrats want true social justice. They would lose the cudgel with which they clobber their opponents every second or fourth autumn.
Andy
From an economic position, if the republicans win and pass their agenda, it will create jobs and increase the national debt. If the democrats win and pass their agenda, it will create jobs and increase the national debt. The differences are in who gets richer/more powerful under each regime.
Yeah this is largely how I feel. The question you have to ask, between Obama and Romney, is do you want:
1)tax breaks for the super rich, increased military budget, and cuts to social programs
OR
2)tax breaks for the middle class, small cuts to military budget, and increased revenue to social programs.
Though I don't think the Republican party has shown that it has any idea how to create jobs or any real interest in doing so. Here's a hint: You don't start by firing lots of people.
No, the jobs part is what I didn't agree with.
If we're being honest, there's something to be said about their plan. Giving money to "job creators" could spur investment, which will lead to startups which will lead to (potentially temporary) jobs in a variety of fields. Its whether or not its a net gain in jobs, and the quality (and pay) of those jobs, that is the issue.
The problem I have is the social friction that is caused by upturning the public sector jobs cart. Let's say that their theory is right and that the amount of jobs created by just giving all our wealth to the very wealthy is greater than the jobs lost by massively cutting the public sector. Those workers are going to experience frictional unemployment for months, maybe even years, before finding a job that suits the skills their previous job trained them for. IF they find a replacement job. And they may be required to move.
In the end, the move towards infinite liquidity in labor leads to social problems like disenfranchisement and geographical/community displacement that are unnecessarily burdensome on said labor.
Nono, I understand. What I was trying to illustrate is that even if their theory holds true, that it spurs investment the way they say it will, it will still have unacceptable social consequences.
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Don't blame me. I voted for Kodos.
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Yeah this is largely how I feel. The question you have to ask, between Obama and Romney, is do you want:
1)tax breaks for the super rich, increased military budget, and cuts to social programs
OR
2)tax breaks for the middle class, small cuts to military budget, and increased revenue to social programs.
More specific than I was talking about but nevertheless true. In general, cutting marginal income tax rates coupled with some government spending increases employment and the national debt at the same time. That's what the Republican plan does. It has done so historically in both times of recession and when things are good. Increasing tax rates but increasing government spending more acts to increase employment and the national debt at the same time. They are really the same thing. Increase the amount of money in the pot (tax cut or gov't spending) increases employment and leaves the government with lower income and/or higher outlays.
The problem we face unless we want what Greece and Italy and Spain, etc are facing is we need to balance the budget somehow. Neither side will do it because it will cause them to lose the next election. Medicare and social Security will have to be done differently somehow. But those are sacred programs that no one has the "testicular fortitude" to mess with. The defense budget is similar up to a point. And those three programs together already have us into deficit spending.
A third party is one answer, but we need fundamental change to get there.
Andy
The housing bubble was created by bad loans.
The financial crisis was created by an over-leveraged derivatives market. Merril Lynch took a package of bad loans and leveraged it 50 times at the peak.
This is true. And why would banks make loans that were so high risk?
1. The Clinton administration threatened lawsuits against lenders if they didn't.
2. When banks know that they will get bailed out if the SHTF, hey, why not? Risk has been brought down to zero.
@Frogboy - When the world was completely free of government, individual landowners consolidated power by force to create monopolies of scale.
They were called Kings, and it was the Dark Ages, and it sucked.
The free market does not self regulate in the long run. The free market consolidates.
So Feudalism had a free market? Seriously?
Lehman collapses because they took risks that failed. It mattered because Lehman was allowed to become so large that their bankruptcy was untenable for the financial system as a whole.
We don't have a free market. Too big to fail is not a free market idea. In fact, these huge mega-corporations could not get as large as they've gotten without government coercion. Our market is very mixed and it's getting less and less "free" everyday. It's a sliding scale and we've gone way too far the wrong way. There's a reason that all of these storefronts are empty these days.
Again.... give me an example. The United States has never had a free market in the classic example of the term. Before the era of government regulation, it was consolidated into monopolies.
IF the Free Market can't be shown to work in practice, it's time to stop invoking it in rhetoric.
You're not going to find too many government wanting to give economic power back to the its citizens. There are places that you can look if you want to see how a free market functions.
The internet is a fine example. Everyone plays on an even field. Anyone with knowledge about web development can create a website and draw in traffic. Virtually anyone can start an e-commerce site and try to sell things to make a living (or even just to make some extra income). The internet brings us unparalleled consumer choice. If you can't find what you're looking for there, good luck finding it anywhere else. Yes, there are some websites that pretty much monopolize certain "industries". Facebook is a good example of this. They pretty much have the whole social networking gig wrapped up. But even as huge as they are, they aren't really a monopoly. Twitter is another choice that everyone knows about. MySpace is still out there although they haven't been very competitive is years. At one time though, MySpace had the choke-hold on social networking and lost it to Facebook so monopolies aren't permanent and are still subject to consumer approval. Only an efficiency monopoly can survive for any extended period of time. If Facebook screws it up too bad, don't be surprised to see Google+ take the torch.
Now, a free market isn't all rainbows and unicorns. There are indeed negative aspects to it as well. The internet is largely unregulated and that offers up an extra helping of risk. A heavily regulated internet would make it so that we wouldn't have to worry as much about getting a virus. These sites have all been verified by the government so chances are, they're clean. There are some [often times fake] businesses that will steal your money and not deliver the product you purchased. Usually there are warning signs that you have to ignore to fall for these but people still do it and they usually have no recourse. They're out that money. There are also people who want to trick you into giving them your personal information so that they can rip you off. You will also find a lot more websites out there that are of lower quality than what you'd see if government stepped in and regulated the crap out of it. It's less polished.
I believe that the benefits of a mostly unregulated internet far outweigh the negatives. A heavily regulated internet would still be good but I would not want to move to that. Having the government make decisions about what websites we are allowed or not allowed to go to would serious impact our choices and our freedom. It would also almost definitely make the cost of using and operating on the web more expensive for all of us.
Everyone seems to think that in a free market, companies consolidate until there is no competition left. And then said companies raise their prices to astronomic levels and we have no choice but to pay it. If you want to know how bogus this theory is, go to Chinatown. These places operate completely off the grid. They are, in fact, a small free market. No government regulations what so ever. Is there one mega-corporation that controls all of the commerce with prices jacked up to the moon? No. There are countless small businesses, many of which sell the exact same stuff, and they aggressively compete with each other. Yes, there's some shady stuff that goes on there. Intellectual property is not protected in the least. The restaurants you go to probably don't have a government stamp of approval so there's some risk there. They may even skirt child labor laws. I doubt even the most hardcore free market advocates would want to drop this much regulation ... regulation that protects people from fraud and exploitation. But the heavier the regulations are, the more impact it'll have on economic freedom. There's a balance but it's on the lower end of the scale.
I'll be clear: that's a ridiculous thing to say and makes you look like sort of a terrible person for having such an arbitrary and inconsistent set of things that you care about. All the same, though, I want to hear you say it, so that you can hear how ridiculous it sounds.
If I could, I'd take every item from both of those lists, shuffle them together, remove the Promise Broken or Promise Kept ratings, sit you down, and make you rate how much you cared about each issue. The results, I predict, would be fascinating.
Look how times the word "Expand", "Increase" or "Fully Fund" are used in his list of achievements. Now, I realize that I over-exaggerated when using the term "All". I do the same when I say "free market" as well. I believe in equality which literally means equal treatment by the government. Also, the government doesn't earn this money that it spends. It takes it from its citizens. Let people keep their money and spend it on the things they want. Will some people need help without government programs? Yes. You'd be surprised at how generous the American people can be. Now double their income. You'd also be surprise at how much more efficient most private charities are let alone compared to the monstrous government bureaucracy. Less people would need help and I don't believe that we would let the rest suffer. If we do then it's our own fault and we will have that weighing on our conscience. We won't have the government to blame and scapegoat when things aren't getting done.
I don't want big government. I don't want an authoritarian government. I don't want the things that Obama is pushing for or doing because I believe that free people can do it better.
Just like the free market, equality isn't all rainbows and unicorns either. Treating everyone the same sounds great until you realize that that means no special treatment for anyone. It's easy to champion equality when you recognize a person or group of people who are being denied the same rights as the rest of us. Gays and lesbians, like everyone else, should be treated equal. But when you get into special favors, perks and privileges to special interest groups, you've just killed equality. Now you're just re-branding inequality as equality and even if you're trying to do good with policies like this, there are always negative effects that occur. One of the biggest ones is that as soon as you open the government up to handing out special favors, the rich are going to collect and come out a lot further ahead than the poor ever will. Just take drugs as a small example. Compare and contrast the treatment of drug addicts that are very rich to those that are very poor. Inequality is a very dangerous thing.
Easy. Austrian economists have predicted 1000 of the last 1 economic collapses. In fact, your very next reply has a hilariously overblown reason.com article predicting hyperinflation.
Hey, when you have bad policies that are likely going to muck up the economy, some people are going to think the end of the world is coming. It doesn't mean that the bad policies are actually good. Many Austrians call these things too short. It's amazing how long the government can keep a bad thing going. But when you have the reach that they do, it's not exactly surprising either. It doesn't mean that it won't eventually happen, though. If the world moves away from the dollar and loses faith in it, there's a chance that this could happen although there are other options that are more likely to occur. Our dollar is propped up by force at the moment but that isn't going to last forever.
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The problem we face unless we want what Greece and Italy and Spain, etc are facing is we need to balance the budget somehow.No, the US doesn't. The US has control over its own currency, unlike those countries, and balanced budgets wouldn't have fixed anything, as Spain was running a surplus before the economic collapse.
Greece, Spain, Italy and Ireland all have problems selling bonds to finance their budget deficits (which at the end of the fiscal year get added to their national debts). These countries are part of the EU and use the Euro for currency. Could not one or all of them drop out of the EU, go back to their old currencies and print money to monetize the debt. They're still going to have trouble (if not more) selling bonds. The US is not there yet but the projected growth of our debt to GDP is going to continue to drive the value of our debt lower (investors will see it become more of a likelihood that the US government will be forced to decide whether or not pay for social security one month so they can pay on bonds that are coming due. I do not think monetization is a viable option. Were you suggesting something different?
Andy
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The US is not there yet but the projected growth of our debt to GDP is going to continue to drive the value of our debt lower (investors will see it become more of a likelihood that the US government will be forced to decide whether or not pay for social security one month so they can pay on bonds that are coming due. I do not think monetization is a viable option. Were you suggesting something different?The only reason that the US government could be forced to make that decision is because they were somehow prevented from deficit spending in Congress. That is what it means to have monetary sovereignty. The consequence of doing both without corresponding tax increases is inflation, but inflation is not a significant problem without the economy being fixed.
The value of US debt has less to do with inflation and more to do with economic stability. The US's economy isn't likely to crash, relative to China (where there is a lot of uncertainty due to a lack of transparency) and Europe (where the whole periphery crisis isn't fixed yet). Right now, the US isn't expected to crash, so US federal bonds...
Eventually, if we continue on the current path, the government will be forced to either 1) raise taxes to very high rates or 2) print more money, or 3) a combination of the two, in order to meet its obligations. I think we agree.
None of these options appeal to me. I would say that a better option is to get spending under control and raising some taxes thereby balancing the budget and then paying down the national debt. As the national debt is paid down, we take the money that would have gone towards the interest on that debt and start shoring up Social Security and Medicare. I don't think this is the only way to go, but it seems to me to be the best way. And for reasons stated earlier, neither party will do it because they would lose the next several elections (and lose big time). You may or may not agree here. That's cool either way.
If our debt to income ratios continue to rise as they are projected to, we will be faced with similar circumstances as these other countries are today. Since we don't belong to the EU or similar organization, they can't force austerity on us like they are doing to Greece. I understand that. But, we will have trouble with our sovereign debt or we'll have problems with our currency or we'll have crippling tax rates that will finally lead to problems across the economy in the form of super inflation or no liquidity of cash. More debt is not the answer. No debt is the answer (or at least very small amounts of short term debt).
Andy
It's fitting that you mention the Weimar Republic, because German fear of any inflation at all is a large part of what's driving the EU into a dead end. It's forcing the periphery nations to run their budgets like businesses or else, and it's only making the situation worse.
Besides what you mention, it just seems silly, when the value of all this money thing is just about relative value (vs. other currencies, atop of moneys use as relative valuator for different types of labor) and the main other currencies the Euro needs to worry about (US$, Yuan) have more inflation going on than in the Euro-zone (for the US, inflation of housing costs and war-linked government spending would be the 2 biggest causes, roughly estimating).
Further, what is the prime outcome of said ECB policy? A strong Euro. Germany has famously done OK with a strong Euro, although having a weaker one would have hardly 'hurt' Germany either: it probably would have just allowed a broader set of companies to prosper. A weaker Euro would have helped the Economies of France and Italy, and crucially of countries like Spain and Greece... A strong Euro is very effective at making Spanish and Greek industry un-competitive vs. imports from Magreb and Turkey, who incidentally have 'nice' trade agreements with the EU. And remember, the Euro was started at PARITY to the dollar, 1:1... And even dipped to 0.85 on the dollar at one point, until rising again to 1.5 or so. Merely printing Euros (possibly to pay off big banks that own Greek debt) would presumably lower the Euros value, but there's more than enough 'room' for it to return to it's 'natural' value, parity with the dollar (or not even that, but closer to it).
Regarding Greece, it is explicitly known that Germany was aware of 'problems' with Greece (read: not really being in compliance with financial rules for Euro accession) but made a 'deal' with Greece that Greece would support Turkey's beginning of EU accession process (along with nice trade deals), in 'exchange' for Germany giving the thumbs up for Greece entering the Euro. (note: no country needs permission to use the Euro, you can just start using it... Bosnia has been using the Euro for some time, Panama and Ecuador use the dollar, etc.)
So along with going along with 'nice stuff' for Turkey that ends up competing against their own (inflated value) Euro-denominated products, Greece is stuck in an arms race with Turkey, who refuses to acknowledge their territory and routinely 'buzzes' Greek islands with war-planes... How you can have 'accession talks' with such a country which apparently isn't even on the same page regarding what is their own territory and what is the territory of the countries (and EU) whom they are negotiating with, is beyond me.
Greece and Spain are definitely different cases though...
Spain really just had a very hard bubble burst with the real estate industry, but otherwise was doing OK, even being moderately successful in other industries. Given that the property bubble was obviously tied to German/British/other EU property buyers/tourists, it hardly seems to make sense to ostracise Spain to much over this... Some counter-cyclical government spending to smooth things out, and focus on developing things that can/do work is about all they need.
Greece has bigger problems, but besides the German complicity in the Euro accession, alot of big European companies and governments have been rather complicit in alot of the fraud that was a big part of the government running up so much debt in the first place... Germany refused to extradite some executives to Greece over some fraud cases, so they can hardly complain. Honestly, Greece just needed to do a 100% default from the beginning... That's what things are moving to more and more, but now they mostly owe other EU governments directly, rather than just to banks, which makes things more fraught. They apparently have some signifigant oil/gas fields in the Med/Aegean, so not all is dark clouds, although again Turkey is prone to making territorial claims (and playing nice with them is why Greece hasn't developed these fields to date... Cyprus has been more brave, which is why they have begun exploiting this area)
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I don't want big government. I don't want an authoritarian government. I don't want the things that Obama is pushing for or doing because I believe that free people can do it better.
That's the central myth of libertarianism, right there: that, given the opportunity, people will naturally provide for their society as a whole in a manner that is better than anything a government could do. That their self-interested pursuits somehow magically line up with collective pursuits in a way that is mutually beneficial, rather than often destructive. It's a rosy belief that doesn't hold up to reality, for a number of reasons. And, most critically, it is reckless and irresponsible to push policy changes based on such a belief. We gave the system you talked about a chance, and it nearly tanked our economy. And even that chance should never have been given, because we've given it that same chance dozens of times before, each time with similar results. No matter how many times we are forced to learn the lesson of what happens when cries of, "Shrink our government!" are actually listened to by otherwise sane people, we still come back to it after a few years.
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I've seen very clear historical data that's shown that military spending* is basically the prime cause of US debt... hardly a surprise... But the US' dedication to excercising global military superiority is a costly endeavor... And one that will have to paid for somehow, as Andy said. I think military spending is probably the least effective way to do deficit spending, since it's not really productive in the way other investments can be.
Of course, it should be heartening to know that the Obama DoD managed to find a way to bypass explicit Congressional measures de-funding US military operations in Iraq (i.e. the supposed way that Congress has to make sure that we aren't at war/occupying a foreign country), pulling money from 'slush funds' to enable 'Special Forces' and the like to continue cooperation with the human rights-violating military of the government we set up there in Iraq. Just in case you thought the Democratic party was, you know, more 'democratic' than their counterpart, they can bypass the intent of Congress just as easily as their own party delegates at the DNC, much less US citizens as a whole.
* You should even include non-DoD costs such as 'foreign aid', which VASTLY goes to Israel, then Egypt who is paid off to be Israel's b$@+@, and even Ethiopia gets vastly more aid than all other recipients... Ethiopia is kind of the US' lap-dog in the Horn of Africa, invading Somalia, fighting Eritrea, doesn't matter how many elections are suppressed as long as they are 'on the US' side'
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This is true. And why would banks make loans that were so high risk?1. The Clinton administration threatened lawsuits against lenders if they didn't.
2. When banks know that they will get bailed out if the SHTF, hey, why not? Risk has been brought down to zero.
Do you even know the process of how a mortgage was securitized?
Also, are you aware that the majority of toxic loans were refinances, not new home loans?
Because the answer to both of those questions blow your first point out of the water. As to your second, Wall Street didn't think that the government would bail them out. Heck, they didn't even think they were at risk. If you go back and look at what was being said by Wall Street and the Fed, they talked about how CDS's reduced risk, so that firms didn't need to keep as much cash on hand, so they could leverage their money even higher than they already were.
I'd recommend reading up on Roland Arnall. He was one of the more influential people in regards to mortgage lending practices. If you aren't thoroughly familiar with who he is and what he did, your understanding of the housing/financial crisis is incomplete.
Ron Paul is opposed to the Fed, but for completely the wrong reasons. Alan Greenspan was an Ayn Rand disciple (she's in the photo when Nixon gave him a job and he lists her as one of the two most influential women in his life, the other his mother). He specifically blocked states from regulating predatory lending in their states, because the loan companies were often headquartered out-of-state, making it interstate commerce. Multiple states tried to put the brakes on things like interest only loans, but they were stopped.
Give you a guess who owned the company that came up with most of the worst types of loans (like the balloon payments, interest only, loans for 100% of the house value, etc).
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If we continue on the current path with no changes, sure, but things are going to change. Chiefly, the US economy is already improving. While it could be doing better, the ship is still righting itself. To project short-term effects infinitely in the future is as silly as saying that you should never fill the tank in your car because pouring gasoline will eventually make a pool and burst into flames. Steep deficit spending is a temporary measure to fix a temporary problem.
I concede that a degree of deficit spending in certain situations works towards putting people to work. That is the Democratic party's answer to these situations and it works. And it increases the national debt. Every time. The temporary measure part does not exist in our recent history. Which is the problem. We've been deficit spending through good times and bad. Both democrat and republican.
Reducing spending won't balance the budget, though. Government budgets do not work like personal or business budgets. Reducing spending harms the economy and reduces tax income. It creates the austerity trap, where governments reduce spending, then reduce spending more in response to reduced tax income, then reduce spending more, etc. All the while, the economy crashes around everyone's ears.
If you want to balance the budget, you need to fix the economy. Deficit spending is part of doing that.
Reducing spending is a necessary step towards balancing the budget. So is raising taxes. And growing the economy too. I think everybody wants the economy to grow and I would love to see that be the driver here too. However, from 2002 to 2011 the federal budget grew from $1.8T to $3.8T (close to 10% per year) versus strong GDP growth being 3-5% (with under 2% being "sluggish"). In other words, the people we put in office do not run things the way that you say will work.
This is incorrect, because those other countries didn't get into the position they are today because of their debt:anything ratios. In particular, Spain was running a federal budget surplus.
Maybe we need to agree to disagree here. Spain had a real estate bubble burst that dumped them into a recession. We had a stock market bubble burst in the late '90s and a housing bubble burst in 2008. Where do the bubbles come from? In the US it was shaky monetary policy coupled with politicians being in bed with the large banks. Money was invested in things of little to no value. In Spain, I don't know. What I do know is that now Spain can't meet their obligations and nobody wants their paper. That did not happen overnight. Same with Greece. I see similarities here from a 5000 ft. elevation and you see differences from a more detailed, closer to the ground view. So be it.
Andy (I'm really ejoying this conversation and am learning a lot). Thank you, Mr. Man in Black
Greece, Spain, Italy and Ireland all have problems selling bonds to finance their budget deficits (which at the end of the fiscal year get added to their national debts). These countries are part of the EU and use the Euro for currency. Could not one or all of them drop out of the EU, go back to their old currencies and print money to monetize the debt. They're still going to have trouble (if not more) selling bonds. The US is not there yet but the projected growth of our debt to GDP is going to continue to drive the value of our debt lower (investors will see it become more of a likelihood that the US government will be forced to decide whether or not pay for social security one month so they can pay on bonds that are coming due. I do not think monetization is a viable option. Were you suggesting something different?
Andy
Nope, they can't. And it wouldn't resolve anything. Let's explain why :
First, there is no legal mechanism allowing a country to drop out of the euro. It was built from the start as a one-way trip. The only way left is to leave the EU altogether. Bad sign from the markets point of view.
Second, if those countries chose to go back to their previous currencies, presumably to devaluate it by printing money like mad, they would still have to pay back their debt in EUROS. Which would be even harder with their new, devaluated currency.
Third, they have/had trouble (it gets better) to borrow because of the defiance of private investors. Which wouldn't be alleviated if they were to exit the euro and quit the german/french umbrella. The Wall Street/City financial lords call those countries the PIGS (Portugal, Italy/Ireland depending on the one currently sinking, Greece and Spain). Gives you an idea of the kind of prejudice they have to run against.
Last, as MiB said, Spain only (and huge) problem comes from an overblown real estate sector, with absolutely reckless investment in useless infrastructures. This endangered their somewhat fragile banking sector, which in turn drove the whole spanish economy into a slump. But compared to Greece, they have got a solid economy, an efficient government, etc. Bundling them together can only be done from a very high altitude, indeed. Or from a stock exchange room.
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This is true. And why would banks make loans that were so high risk?1. The Clinton administration threatened lawsuits against lenders if they didn't.
2. When banks know that they will get bailed out if the SHTF, hey, why not? Risk has been brought down to zero.
Do you even know the process of how a mortgage was securitized?
Also, are you aware that the majority of toxic loans were refinances, not new home loans?
Because the answer to both of those questions blow your first point out of the water. As to your second, Wall Street didn't think that the government would bail them out. Heck, they didn't even think they were at risk. If you go back and look at what was being said by Wall Street and the Fed, they talked about how CDS's reduced risk, so that firms didn't need to keep as much cash on hand, so they could leverage their money even higher than they already were.
I'd recommend reading up on Roland Arnall. He was one of the more influential people in regards to mortgage lending practices. If you aren't thoroughly familiar with who he is and what he did, your understanding of the housing/financial crisis is incomplete.
Ron Paul is opposed to the Fed, but for completely the wrong reasons. Alan Greenspan was an Ayn Rand disciple (she's in the photo when Nixon gave him a job and he lists her as one of the two most influential women in his life, the other his mother). He specifically blocked states from regulating predatory lending in their states, because the loan companies were often headquartered out-of-state, making it interstate commerce. Multiple states tried to put the brakes on things like interest only loans, but they were stopped.
Give you a guess who owned the company that came up with most of the worst types of loans (like the balloon payments, interest only, loans for 100% of the house value, etc).
Hush now, the facts shouldn't stand in the way of a good narrative.
The magical hand fixes everything if you just leave it alone.
Second, if those countries chose to go back to their previous currencies, presumably to devaluate it by printing money like mad, they would still have to pay back their debt in EUROS. Which would be even harder with their new, devaluated currency.
These countries hold sovereign debt, meaning they can default any time they want to. 100% default has been the obvious necessary option for Greece for some time. If they choose/are bribed to pay back their debt somehow, if they choose to convert it to Drachmas/Pesetas is not really much different than 100% default... ???
Last, as MiB said, Spain only (and huge) problem comes from an overblown real estate sector, with absolutely reckless investment in useless infrastructures. This endangered their somewhat fragile banking...
Largely true, but I don't think the much publicized 'wasteful public infrastructure investments'* really played a big part, at least in regards to the debt aspect... Because as already mentioned, Spain was in surplus before the crisis hit and these projects were already being funded from the budget at that time. They perhaps indirectly contributed by attracting too much investment into companies involved in that sector, along with overly concentrating employment in those sectors (competing against other potential investors/employers, and thus growth in other sectors), but that is less certain. As I said, it's hardly all Spain's fault here: who are the tourists lining up to fill new resorts and vacation homes? Mostly foreigners, and mostly from other parts of the EU... Where was the criticism when Spain was responding to that demand? (other than purist complaints of growth spoiling how it was before, etc)
* unutilized new airports, etc... although it's often left unmentioned that alot of good, productive infrastructure was also built... Spain has a very high % of local renewable energy, along with high speed train lines, for example...
* You should even include non-DoD costs such as 'foreign aid', which VASTLY goes to Israel, then Egypt who is paid off to be Israel's b$!&%, and even Ethiopia gets vastly more aid than all other recipients... Ethiopia is kind of the US' lap-dog in the Horn of Africa, invading Somalia, fighting Eritrea, doesn't matter how many elections are suppressed as long as they are 'on the US' side'
Source, please.
In 2010, U.S. top 10 foreign aid recipients looked like this:
Afghanistan - $11.45 billion
Pakistan - $2.85 billion
Israel - $2.83 billion
Iraq - $2.09 billion
Egypt - $1.70 billion
Haiti - $1.41 billion
Ethiopia - $0.98 billion
Sudan - $0.98 billion
Colombia - $0.86 billion
Kenya - $0.82 billion
As you can see, foreign aid does not go "vastly" to Israel. It goes "vastly" to Afghanistan, and every other country is pretty much left in its shadow. Egypt is even further down on the list, and let's not pretend that $1.70 billion is enough to get it to do much of anything in terms of foreign policy - that's less than 1% of its GDP; it could live without it pretty easily. Ethiopia is nothing special in terms of Africa; Ethiopia, Sudan, and Kenya are all right next to each other, and they receive about the same amount of aid. On top of all the above, foreign aid in its entirety accounts for about one-third of one percent of the U.S. GDP.
Please stop spreading misinformation.
Sadly, votes for third party candidates do seem to be a waste of time, at least in the context of the current structure. I do not think they will be the impetus for change, at least not by themselves.
Source, please.
In 2010, U.S. top 10 foreign aid recipients looked like this:
Afghanistan - $11.45 billion
Pakistan - $2.85 billion
Israel - $2.83 billion
Iraq - $2.09 billion
Egypt - $1.70 billion
Haiti - $1.41 billion
Ethiopia - $0.98 billion
Sudan - $0.98 billion
Colombia - $0.86 billion
Kenya - $0.82 billionAs you can see, foreign aid does not go "vastly" to Israel. It goes "vastly" to Afghanistan, and every other country is pretty much left in its shadow. Egypt is even further down on the list, and let's not pretend that $1.70 billion is enough to get it to do much of anything in terms of foreign policy - that's less than 1% of its GDP;
Please stop spreading misinformation.
Well, I can't speak to Citizen Quandary's choice of words, but, up until the invasion of Iraq, Israel and Egypt were indeed the #1 and #2 recipients of at least US military aid, if not foreign aid. Israel is, according to wikipedia, the largest cumulative recipient of US aid in the existence of the republic.
As for how much $1.7 billion is: it might be only 1% of its GDP, but it's, like, a quarter of their military budget.
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sorry if i wasn't clear, i was discussing military aid when i mentioned those numbers...
...not with the idea that this aid is even a big part of deficit spending itself, but simply that as a tool of US global military policy, it seems relevant when discussing the size of US military spending, even if the military aid may be funded by non-DoD budgets (in other words, these should be counted as US military spending). so it was an aside to qualify total US military spending, which i mentioned is crucial in triggering actual debt growth (as opposed to other government expenditures).
israel gets almost half of this military aid. israelis themselves will say that thus US funds half of their military budget, although their nuclear weapons programs are certainly funded secretly and so may or may not be within their military budget.
US military sponsorship of egypt after carter facilitated them making peace with israel is well known... that's only in doubt now with them potentially not being as friendly to israel. egypt was armed so as to maintain some dignity and status (it was basically a militaqry dictatorship, right?) although with the aim to keep them 'below' israel's level.
ethiopia has been militarily backed by the US, invading Somalia and being supported by the US while they flaunt court judgements re: their conflict with Eritrea, while fighting internal ethnic groups. there was a certain period where it wqs obvious that the US/NATO was expecting a peaceful democratic transition in ethiopia, but when the same leader kept his grip on power, they shrugged their shoulders and kept ramping up military cooperation.
besides military aid, ethiopia along with kenya (US allies in the region) certainly receive a disproportionate amount of non-military aid compared to their population of poor people, which really only makes sense as a tool of military policy... same goes for the other countries you listed, like colombia and haiti and afghanistan... that the US is propping up governments it created or has nurtured as military allies, so that non-military aid is de facto a tool of US military alliances, and should be counted as such, is exactly my point in saying that these should be counted towards US military expenditures. again, not a large amount on their own, but something to add to the total US military budget... the US wouldn't be spending so much in afghanistan if it wasn't occupying and supporting their installed regime there.
EDIT: as the Comrade says, cumulative spending is the relevant point when the context is military/related spending contributing towards debt. how this spending has fluctuated between iraq/afghanistan/haiti/etc is irrelevant to that, given the us' role is changing governments in those countries. besides direct military aid, much of the us' non-military aid is vastly disproportinately targeted towards countries furthering the US' military power and alliances and 'global interests', rather than in an objective way targetted to alleviate poverty, etc... as such, i don't think its valid to treat it as an independent expenditure from the war apparatus, but as an adjunct to it.
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Cumulative spending isn't necessarily relevant. If spending on something is higher in times of greater government revenue, that has nothing to do with spending at times when revenue is lower.
Governments have a difficult time getting out of the "how does this affect me" mind set. Given that we vote for our leaders (I'll avoid 'democracy', because people want to argue dictionary terms*), if an elected official spends money that doesn't benefit the people, a challenger appears and say "hey, I'll spend that money to help you, the voters" and then takes over. We're constantly in a state of "what have you done for me lately" with our political leaders, so more than likely, foreign aid will always be spent on US interests, instead of spending it altruistically.
*which strikes me as the equivalent of walking up to a conversation, farting, and then claiming the other person is wrong.
Pork Barrel: Noun. Government money spent on programs that don't benefit me.
Cumulative spending isn't necessarily relevant. If spending on something is higher in times of greater government revenue, that has nothing to do with spending at times when revenue is lower.
this factor is exactly what i was discussing actually... i've read research demonstrating exactly that it IS military spending increases without matched revenue increases which lead debt creation, and non-military domestic spending is vice-versa NOT implicated in debt creation, which grows the most with increases in military spending. such that the conclusions were that the US debt is due to military spending to a much higher percentage, MORE than percentage of the US budget that the military spending absorbs. thanks for help clarifying my point.
foreign aid will always be spent on US interests, instead of spending it altruistically.
but 'US interests' as used to justify/motivate US military and strategic actions really have no bearing on the benefit to most US citizens.
*which strikes me as the equivalent of walking up to a conversation, farting, and then claiming the other person is wrong.
Now there is something we agree upon.
I largely agree, I'd rather see a significant portion of the military budget shifted to something like NASA. Doubling NASA's budget solely for the purposes of getting to Mars would have amazing effects on our economy in the long run. There are benefits to the military spending, but they're less than a lot of other things. Contracts with arms manufacturers create jobs, but the products themselves don't add to the economy much.
There's been a lot of money spent on the military to defend our economic interests. I think those interests are largely centered on the wealthy, but it has helped to make our country wealthier than other countries.
A fairly pragmatic view, we're spending money on our military like an Empire, but we aren't ruling the world like one. Rome spent a lot on it's military, but it also took a ton of wealth out of it's territories and brought it home. We want the power and influence, but in this day and age it's hard to justify doing things the way the Romans, Spanish or British did.
I want most of our military spending to go away too. I think our foreign policy record is atrocious. I'm surprised sometimes that all of Central America doesn't talk about us the way Hugo Chavez does (though I don't particularly like that man). We've killed leaders, supplied arms and training to death squads, all sorts of horrible stuff. Sometimes, just to get cheaper fruit in our supermarkets.
Using the stage theory of morality, governments/nations have a very hard time breaking out of stage 2 or 3. If we could get the majority of the world to operate at stage 4 (or higher) it would be an amazingly better place.
sorry if i wasn't clear, i was discussing military aid when i mentioned those numbers...
That doesn't make those numbers correct. They're still way off.
israel gets almost half of this military aid.
No it doesn't. In 2010, the United States spent $15 billion in military assistance foreign aid. $2.8 billion of that went to Israel. That's less than 20%.
israelis themselves will say that thus US funds half of their military budget,
Also false. The Israeli military budget is roughly $14.5 billion. Again, the United States provides about $2.8 billion in military assistance to Israel. In other words, the United States is only responsible for about 20% of Israel's military budget.
US military sponsorship of egypt after carter facilitated them making peace with israel is well known... that's only in doubt now with them potentially not being as friendly to israel. egypt was armed so as to maintain some dignity and status (it was basically a militaqry dictatorship, right?) although with the aim to keep them 'below' israel's level.
ethiopia has been militarily backed by the US, invading Somalia and being supported by the US while they flaunt court judgements re: their conflict with Eritrea, while fighting internal ethnic groups. there was a certain period where it wqs obvious that the US/NATO was expecting a peaceful democratic transition in ethiopia, but when the same leader kept his grip on power, they shrugged their shoulders and kept ramping up military cooperation.
All of this is true (more or less), but it doesn't mean that either of these nations is the sort of puppet regime you imagine them to be. Egypt is not America's lapdog in Africa, and neither is Ethiopia.
besides military aid, ethiopia along with kenya (US allies in the region) certainly receive a disproportionate amount of non-military aid compared to their population of poor people,
No, it doesn't. Per capita, each Ethiopian citizen receives about $11 in economic aid from the United States. Ethiopia is 7th in terms of overall aid receipts, but is 17th in terms of per capita economic assistance. So you're right that the economic aid they receive is disproportionate, but that's because it's disproportionately low, not disproportionately high.
I'm not sure where you're getting your information, but it's either flat-out wrong or uselessly outdated.
my only point was that these COULD be counted as military expenditure as well.
the details were to more concretely flesh out what that IS, but don't really matter what is ranked in what order.
if you feel that military aid isn't a military expenditure, because it's issued thru a different government branch, OK.
Between 2006 and 2008, the United States sent $908 million to the UN/AU peacekeeping force in Darfur (the State Department requested close to $209 million in the FY2009 budget). The United States has given over $150 million to the AU peacekeeping mission in Somalia, and in August 2009 U.S. Secretary of State Hillary Clinton vowed additional assistance.
http://www.fpif.org/blog/wikileaks_reveals_us_twisted_ethiopias_arm_to_inva de_somalia
but it doesn't matter... even if you don't count them at all, US military spending is and has been the prime debt creator.
that would likely be true of ANY country that is routinely embroiled in wars and high-end military spending...not a big surprise really, but still worthy to note why the debt and debt payments are increasing,
while other potential productive spending priorities are constrained for budgetary reasons.
here is an article referencing what i had read on one of those tangential details:
http://www.jpost.com/Headlines/Article.aspx?id=284637&R=R101
i would guess that the discrepancy in numbers is due to the reference to 'tax payer funding'
and that the difference may be made up for at least in part by israeli debt covering their military budget.
All of this is true (more or less), but it doesn't mean that either of these nations is the sort of puppet regime you imagine them to be.
What sort of puppet regime AM I imagining? Well, I never said that, did I?
The US gave military aid to the USSR during WWII and Stalin was definitely not a US puppet,yet those funds should definitely count towards US war expenditures IMHO.
Is that really so controversial?
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The main problem third party candidates deal with is that while Democrats and Republicans have their differences, they're in collusion when it comes to keeping third party candidates out of the Presidential race.
The main problem third party candidates deal with is that while Democrats and Republicans have their differences, they're in collusion when it comes to keeping third party candidates out of the Presidential race.
It's true. Another thing, though, is that the two parties tend to absorb at least some of the policies of third parties. Reform in 1994, some of the tea party/"liberty wing" in 2009, just as examples. There are plenty of "green" people, for example, in the Democratic party, they just aren't the majority. It's a party of plurality and, thus, pragmatism and compromise.
To be honest, though, I don't think I'd want some untested third partier as president. I would, however, like lots of greens (and maybe some libertarians) in other wings and other levels of government. Really! Why is it "president or bust" for third parties?
The main problem third party candidates deal with is that while Democrats and Republicans have their differences, they're in collusion when it comes to keeping third party candidates out of the Presidential race.
It's true. Another thing, though, is that the two parties tend to absorb at least some of the policies of third parties. Reform in 1994, some of the tea party/"liberty wing" in 2009, just as examples. There are plenty of "green" people, for example, in the Democratic party, they just aren't the majority. It's a party of plurality and, thus, pragmatism and compromise.
To be honest, though, I don't think I'd want some untested third partier as president. I would, however, like lots of greens (and maybe some libertarians) in other wings and other levels of government. Really! Why is it "president or bust" for third parties?
Not that the tea party established itself as an actual political party before being co-opted, but look at how effective they've been in local elections.
Edit: That's not an insult, I'm just saying that "tea party candidate" is a catchall term, without a standard party platform and whatnot.