# Something for the Keynsians to chew on.



## P.T. (Aug 12, 2010)

http://www.bloomberg.com/news/2010-...en-know-commentary-by-laurence-kotlikoff.html


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## Nick Batzdorf (Aug 12, 2010)

All bullshit and conservative hype.

We do have a long-term debt problem, and the main thing necessary to get it under control is to lower healthcare costs. But that's long term. In the short term we have an unemployment problem caused by lack of demand - people aren't spending enough money.

So Keynes has it right for the short term.


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## George Caplan (Aug 13, 2010)

its not bs. its actually making some good points and this has been a known factor that makes up part of the US economic problems fro some time. sovereign debt being part of that and the massive debt owed to china is one example.
the US will never lower healthcare costs under a democrat government.
if the US will changes the government in just over 2 years the type of cuts there will be in the same order as what the UK is going to be doing in november only obviously exponentially greater.
people stopped spending money in the UK when they cut the base interest rates down to 0.5% some time ago.
why? because the older generation get no interest on their saving deposits and simply stopped spending and the younger generation that had been responsible for most of the debt in the first place through reckless borrowing for trivial pursuits literally couldnt borrow any more to spend. ergo you have a stalemate.
to lump the US in the same boat as Greece is slightly more than scare mongering because the reporter of the above article well knows that the US internal domestic market can virtually support itself on times of trouble albeit on a lesser scale. Greece and Spain for example cannot.


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## chimuelo (Aug 13, 2010)

http://www.google.com/url?sa=t&source=w ... F_Ie-E0YSA

I grow weary of the various " experts " and their pathetic scare tactics for political gain. At the end of the day the Fed decides our future. 
If this document is too boring to read, that's becasue they really don't want most people to read it. Thankfully the law requires its public release. 
So if anyone has an investment in real estate or Blue Chips, this is a good read.
Otherwise, copy/pasting bloggers is strictly political seeings how we are in an election cycle.
That fact is, Keynesian economics saved us, and when the recovery starts taking place, more fiscally sound policies will need to be used as it becomes necessary. No fixed policy, but a fluid understanding of the markets ups and downs.
I doubt many here listened to CSPAN on August 3rd.
But the fact these Parrots in DC gave these people their ears shows they are at least concerned about the economy and managed to get along for a couple of hours.

http://www.google.com/url?sa=t&source=w ... _Dm0DKydIg

You'll notice that no ratings are given to these proceedings like cable news or bloggers get.
So their motivations are genuine.


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## Nick Batzdorf (Aug 13, 2010)

> the US will never lower healthcare costs under a democrat government



I say it is bullshit, George, because we are NOT facing a sovereign debt crisis. Debt becomes a crisis when a country can't manage it, and we are nowhere near that point. Our payments on debt are a very low percentage of our GDP, and if anyone doubted that then our government wouldn't be able to borrow money at incredibly low rates.

And the truth is that people on fixed incomes are going to suffer more than other people (people with incomes at all, that is) when the economy is weak no matter what. The Fed has to lower interest rates under the current situation.

Meanwhile we need much more Keynesian spending to get out of this mess. It's the only way, and alarmist hype about our debt is doing the country a disservice by spreading irrational fear.

Meanwhile, why do you say that healthcare costs won't be lowered under a Democratic government? Or really what I mean is why you think they're more likely to be lowered under a Republican one?

If you're talking about not offering care to people who haven't been able to afford it before now, then sure - I agree that Republicans suck. But the bill that passed doesn't increase costs; what will decrease them more than anything else is preventative care.


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## Mike Connelly (Aug 13, 2010)

George Caplan @ Fri Aug 13 said:


> the US will never lower healthcare costs under a democrat government.



When is the last time the US lowered healthcare costs under a republic government? (did I get the name of the party right?)


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## George Caplan (Aug 14, 2010)

i didnt say healthcare would go up under the dems either. certainly under a republican administration they would almost certainly go up. whats your party political point? hey dont get into parties with me because im not interested in any of that.

sovereign debt is a part of it. do you work in this field? i do. while we are AAA rated theres no issue but we deal in what ifs. whether it be sovereign or any kind of debt including simply personal debt it will always be a problem. regarding scare mongering i thought i made that point clear previously.

quantitative easing was talked about again last week. they pump money in in the form of bonds. thats fine but it also causes problems like inflation if it goes wrong. will QE get the 10% unemployment rate down?

you think?


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## Nick Batzdorf (Aug 14, 2010)

Sovereign debt is NOT a part of what's going on in the US right now. You're wrong, regardless of what field you work in. Sorry. It's a long-term problem, not the problem we're facing at the moment.

Will more QE reduce unemployment? Right now we're facing deflation, not inflation, so that's not a worry. I don't know how much it, targeted tax cuts, or anything other than stimulus will help. The problem we're facing is demand, and stimulus is the answer to that.


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## chimuelo (Aug 14, 2010)

CM Dess.
I liked the first post. Excellent..
How about the link where you copied it from, I would love to read more.


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## chimuelo (Aug 14, 2010)

Very good speed typing and spell checking then.........4 minutes.
If it was origanl its very fresh and has validity I don't see in most forum cacklings.
Hats Off.........Skills like these shpuld be transferred to other art forms.


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## Nick Batzdorf (Aug 14, 2010)

> The "United" States of America was not bankrupted



Note that the US is NOT bankrupt and is in no danger of becoming so.

I like your spiritual approach and overall attitude, even if I'm not sure I buy every detail 100%.


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## Nick Batzdorf (Aug 14, 2010)

http://robertreich.org/post/953941192/f ... e-long-big

(excerpt)


What to do? First, don’t listen to Wall Street and the right.

Forget the Neo-Hoover deficit hawks who say we have to cut government spending and trim upcoming deficits. We didn’t get into this mess and aren’t remaining in it because of budget deficits. In fact, the only way to reduce long-term deficits is to restore jobs and growth so government revenues rise and expenses like unemployment insurance drop.

Ignore the government haters who say we have to void or delay upcoming regulations of Wall Street and big business. We got here because Wall Street went bonkers, the housing bubble burst, and the middle class couldn’t continue to spend becuase their health-care bills were soaring and their pay was stagnating. New regulations of Wall Street and big business are necessary to avoid a repeat.

And don’t believe the supply-siders who say we have to extend the Bush tax cuts for the wealthy. Because the wealthy save rather than spend most of their incomes, extending their tax cut won’t do squat. And restoring their marginal tax rate to what it was under Bill Clinton won’t harm the economy. The Clinton years had the best sustained economy in American history. 

The central problem is lack of demand — and that’s what has to be tackled. 

Three of the four sources of demand have stopped working. (1) Consumers can’t and won’t buy because they’re still under a huge debt load, can’t get more credit, are afraid of losing their jobs (or already have), depend on two wage earners at least one of whom is working part-time and pulling in less, or have to save. (2) Businesses won’t invest and spend on creating more jobs if they don’t see consumers willing to buy more. (3) Exports are stalled because the dollar is so high they cost too much, much of the rest of the world is still struggling with recession, and American firms can make things for sale abroad more cheaply abroad.

That leaves only one remaining source of demand — government. We need a giant jobs program to hire people and put money in their pockets that they’ll spend and thereby create more jobs. Put ideology aside and recognize this fact. If it makes you more comfortable call it the National Defense Jobs Act. Call it the WPA. Call it Chopped Liver. Whatever, we have to get the great army of the unemployed and underemployed working again. 

Also: Put more money in consumer’s wallets by eliminating payroll taxes on the first $20K of income (and make it up by applying payroll taxes to incomes over $250K.)

Also: Get more hiring by giving the states and locales interest-free loans — so they can rehire all the teachers, fire fighters, police officers, and sanitation workers they’ve fired — to be repaid when their state employment rates hit 5 percent or below.

Also: Get more credit by having the Fed return to “quantitative easing” — expanding the money supply by purchasing mortgage-backed and other types of securities.

If we let the deficit hawks and government haters dominate this debate, as they have, the Big Dipper will continue for years. The Great Depression lasted twelve.


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## P.T. (Aug 15, 2010)

The problem with looking at the job problem as needing fixing through gov't spending is that any new jobs created will be created in Asia or India or some other low wage place.

Globalism in it's current incarnation (I say current because we have always had global trade) is that it is a scam designed to enrich the upper classes and large corporations at the expense of the american people.

Low cost foreign goods won't do you much good if you don't have a job or if you have a low paying job because all of the good jobs have been sent overseas so that the job provider can make a larger profit.

Economies have to be balanced based on relative costs of living and cost of production.
That is what duties and import fees are for.

Most countries have duties and import fees, including China. They do not have an open market.
They pay $5- $10 a day in wages. Our idiot gov't tells us we need to learn to compete.
How many of you think you can live on $5-$10 a day?
When they lower the cost of living in america so that people can live on $5-$10 a day then they can tell us to learn to compete. 
Until then, people are fools to keep voting these idiots into office.

And I blame gov't more than I blame business. It is the gov't that makes the rules and the regulations.

I also fail to see how going deeper and deeper into debt every year in an attempt to live beyond our means can end well. It's fairlytale economics. 

I agree with the above post about the endless wars and their expense. But that won't be ended by either political party. They are both completely committed to the Military-Industrial complex. This is about ravaging the taxpayers to enrich the industrial sector, and, of course, the politicians the enable it.
We were warned about it by Eisenhower back in the '50's and it has only gotten continually worse over the years. He said it would eventually destroy us.


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## George Caplan (Aug 16, 2010)

Nick Batzdorf @ Sun Aug 15 said:


> But what you're saying is opinion, George. And I say it's incorrect: debt is not at the top of the agenda in the US.



no. debt is completely at the top of the agenda and thats a fact. youre just going to have to take my word on that.


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## Nick Batzdorf (Aug 16, 2010)

You're just going to have to take my word for the fact that it's not, George. Well, it's at the top of the Republican agenda, but not because it's an imminent problem but because they don't like spending for the public good.

P.T., I'm in favor of a more targeted stimulus this time that among other things won't allow the jobs to go overseas (not that all of it did the first time the way you're saying). If the government hires people to do useful things here, the money won't go overseas.


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## Mike Connelly (Aug 16, 2010)

I don't even think the republicans are talking about the debt because they want to spend less. They're talking about it now but last time they were in power they increased the debt more than it had ever gone up before. They're only talking about it now to try and win elections. And when they do get back in power I'm doubtful they'll do much if anything to reduce the debt. Really, neither party is much interested in reducing the debt, and that's because if they do the public will punish them for it (whether it's cutting popular programs or raising taxes, both are probably required).


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## Nick Batzdorf (Aug 16, 2010)

Right now is not the time even to think about reducing the debt. This is the time to pump money into the economy to alleviate the incredible unemployment we have.


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## George Caplan (Aug 16, 2010)

boy you are seriously stubborn Nick :lol: :D 

i would enjoy having you aboard for a couple of days in the city and the environment. you would change your views rapidly. forget political parties. this is not about political parties. this about debt meltdown all over the world.

there are of course different points of view from economists that write about it. generally those economists have a political stance. if we were to buy and sell on the back of writers we would go broke.


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## Mike Connelly (Aug 16, 2010)

How would you reduce debt without making unemployment worse?


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## Nick Batzdorf (Aug 16, 2010)

George, we are not facing a debt crisis in the US. Period. I'm not being stubborn, I'm insisting upon a fact. In the long term we have to make adjustments, sure, but it is NOT an immediate crisis.

For example:

http://krugman.blogs.nytimes.com/2010/0 ... rief-note/


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## Nick Batzdorf (Aug 16, 2010)

And yes, Paul Krugman unabashedly has a political stance. He also happens to be right.


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## George Caplan (Aug 16, 2010)

Nick Batzdorf @ Mon Aug 16 said:


> George, we are not facing a debt crisis in the US. Period. I'm not being stubborn, I'm insisting upon a fact. In the long term we have to make adjustments, sure, but it is NOT an immediate crisis.
> 
> For example:
> 
> http://krugman.blogs.nytimes.com/2010/0 ... rief-note/



Nick what i love about this article is the line 'the obama administration predicts..." :lol: 

the british prime minister and his head of the fed guy predicted growth of 3.75% and actually went into a recession 3 months later. that was even funnier. spread betting on the ftse never looked so good at that moment.

even funnier from krugman. "The numbers aren’t that bad; if we go wrong, the fault will lie not in our debt, but in ourselves." huh? what does that mean? :o (i love these little icons)

we have a debt problem in the US. accept it.


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## Nick Batzdorf (Aug 16, 2010)

Bear in mind that this is just one link; without taking a lot of time, I tried to find one that had some figures to back it up.

And if you don't understand what he's saying, how can you say it's even funnier? I'll tell you: what he means is that if we cut back on spending now we will create a much larger debt over time. That would be pound foolish. Keynes.

Disagree with that if you want (even though you'll be dead wrong), but don't just laugh it off as if you know everything and the other side of the debate knows nothing. This happens to be the biggest policy debate going on right now throughout the world.


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## George Caplan (Aug 16, 2010)

i made 10.5 million dollars last year and paid my taxes. how much do economic writers make?

one side of the debate will be wrong.

we will see which one over time.


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## chimuelo (Aug 16, 2010)

Hey George,
Can you spot me a few large for my quarterly taxes.....?


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## Nick Batzdorf (Aug 16, 2010)

I made 105 billion dollars last year and didn't pay mine. How big is your penis?


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## madbulk (Aug 16, 2010)

Check, please!


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## snowleopard (Aug 17, 2010)

Along those lines, as someone who is currently dealing with Medicare and Medicaid for my ailing father, we're in for an interesting future due to health care cost and the structure of the system. 

Quite simply put, without a dramatic change to the current system, we are going to continue to hemorrhage money paying for health care the way we do. 

Just as example - if we took the commonly implied route and cut Medicare and Medicaid costs as needed(which means coverage to the elderly and infirm) to balance the budget, nursing homes, care centers and such would shut down or drastically be cut back, leaving not just poor people, but working people bankrupt. Or these people would be kicked out onto the street. 

You would be surprised to find out just how many people are in this position, not just the lazy and poor. My father worked at a skilled job for over 30 years, has a pension and SS, and supplemental insurance. It all was very quickly drained and absorbed once he got very sick. 

So unless we're prepared to kick people like him out of nursing homes and into the street - because that's what it's going to take if we're going to drastically cut spending - then we need to look at ways to completely overhaul the system.


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## George Caplan (Aug 17, 2010)

chimuelo @ Mon Aug 16 said:


> Hey George,
> Can you spot me a few large for my quarterly taxes.....?



of course. just name the amount. :lol: :D



Nick Batzdorf @ Mon Aug 16 said:


> I made 105 billion dollars last year and didn't pay mine. How big is your penis?



a lot bigger than yours. o-[][]-o 


but seriously folks. what is the point of you reading all this crap in financial journals and endlessly quoting these guys who actually have no interest in you or anyone else. is it a hobby? what is it you get from this stuff. the only point i can see in reading endless daily print thats gotten to do with economics is if youre going to act on it. that is to say make money from any knowledge that you think youve learnt.

do you think the writers of these blogs and reports make serious money from their points of view? what other reason apart from their paycheck do you think they have for writing economic journals?
if they were any good at predicting they wouldnt be writing for journals.


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## Nick Batzdorf (Aug 17, 2010)

I read Paul Krugman's blog on NYTimes.com because I learn a lot from it. To me being informed about public affairs is important, but at the very least I find it very interesting.

The NY Times is not an academic journal, and Paul Krugman does happen to have a Nobel Prize in economics. He's one of the leading political/economic (the two are inseparable) commentators in the country.

I should add that he's been very good at predicting!


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