igloo Posted November 26 Report Share Posted November 26 Originally posted by hitsquad Heres an intriguing way to look at a lot of the problems facing america's economy today--- Economics is driven largely by politics. The nature of politics is short term and this mirrors itself in the economic policy under taken by many administrations.An article written by Paul Krugman in the NYT a few months ago explains the policy standpoints of liberal and conservative economic ideals with a striking bluntness. He discusses the "naiively optimistic" supply siders who hope to reducse taxes on the wealthiest margin in order to stimulate economic growth to a point where government spending will not need to be cut, as nothing but a political campaign that supports an extremely conservative party base more interested in starving the size and strength of the central government.Again the fact that politics reflection on economic policy creates an atmosphere of concern within the short-term these recent numbers can have a huge impact on GW's chance of reelection in 04 without the fact that these cuts and raging deficit are going to create a long term situation where either spending on new deal and great society programs are going to be severly cut back or the governemtn is going to look to pay back the deficit through the bond market. The politics and policies of GW that may look good in the short term with numbers like 8.3% GDP growth may be nothing but hype. What kind of effect is this going to have on our future generations pocketbook;s??? Paul Krugman is as anti-Bush as they come....And to those who were falsely blaming Bush for a poor economy, is not using the "What kind of effect is this going to have on our future generations pocketbook;s??? " line nothing more than a political stance in the face of effective Bush policies that achieved its target goals : stimulating the economy. Or perhaps Bush should have done nothing, so those oppossed to him could continue to say "It's the economy stupid" , pin an inherited train wreck economy on him, and take glee in a dismal US economy to win back the WHite House.Oh well, lost opportunity to those who root for failure. Of course, now they turn their attention to Iraq and root for failure there.BTW--There are politics on both sides....recognize that. ANd for every Paul Krugman, there is an economist who disagrees with him. Quote Link to comment Share on other sites More sharing options...
jamiroguy1 Posted November 26 Report Share Posted November 26 Paul Krugman is as anti-Bush as they come.... It's ok to be Anti bush. Bush is an asshole. Quote Link to comment Share on other sites More sharing options...
PinkFloyd40 Posted November 26 Report Share Posted November 26 Originally posted by ChiefSlapahoe Get off the condascension high horse. Thanks. You missed my point. I'm not suggesting everyone is expecting 8% growth per quarter. What I am driving at is that while things look rosy in the very near term, the U.S. economy has a dismal outlook for a number of reasons (1) Consumer spending has been force-fed for 2 years and no more bullets left (2) no decline or even slowdown in consumer spending in over a decade (3) debt ratios thru the roof everywhere--mortgage debt, installment debt, corporate debt, new upsurge in margin debt (4) massive budget deficits at all levels of government (5) huge trade deficit which is sinking the dollar and will trigger foreign selling (6) another frenzy of stock market speculation (the PEs of many stocks are far out of whack with historical PEs (7) ditto for the bubble in home prices (8)heavy deflationary pressure from China and Mexico (goods) and India (services). Bottom line, don't get too hopped up on near term economic numbers. You can't look at economic numbers in a vacuum. Response, point by point...(1) force fed? because of some tax cuts? its liberals like yourself, presumably, that have scorned the tax cuts b/c they say the amounts gained by the lower classes (also those you say will spend it most) are minimal, which would logically lead a reasonable person to conclude that the effect of the subsequent spending by the lower and middle classes as a result of the cuts on overall consumption would be trivial; furthermore, liberals have claimed up and down that the rich are the only ones benefiting from the tax cuts and that since they need it least they will spend little of it as a result of being given more back... well by that logic the tax cuts can't be the primary driver of increases in consumer spending b/c the rich are getting it all and they dont' spend it b/c they already have so much... the relevant point regarding consumer spending is not that there are no more bullets (debateable) but that we dont' need anymore bullets... initiatives to increase consumer spending aren't necessary in a growing economy, they're necessary in recession... we dont' need more stimulus, the economy is returning to healthy growth...(2) what is your point here? you just criticized the fact that we (apparently) have no more measures to implement to stimulate consumer spending, yet here illustrate the main point in my prior argument (1) that consumer spending only needs stimulus during recessions, not expansions... thus said, i really dont' feel the need to expound anymore on this....(3) Of course debt levels are at their highest in years, we've had and continue to have some of the lowest interest rates in years! Its completely rational that we should see increased debt loads on corporations and individuals b/c they have greater capacity to pay interest... just look at coverage ratios across the board... w/ interest rates as low as they were, dramatic increases in debt capacity were feasible across the board... as regards mortgage debt specifically, who cares, its secured! mortgage debt has increasingly become a larger component of overall debt in this country which is a fantastic thing... it allows families to build equity and thus a more secure financial future... they are invested in an appreciating asset w/ home ownership....(4) budget deficits are not massive at all... i'm sorry, i don't know how many damn times i need to say it, but you need to consider the debt levels IN RELATION TO TOTAL OUPUT... absolute levels of doubt are completely insignificant in any analysis... our budget deficits are in the 4.0-4.3% range, not including the tremednous surge in output we've seen this quarter as well as future expected growth... much stronger growth will only further diminish the deficit... regardless, deficits are almost universally considered A GOOD THING during a recession... they helped to stabilize the economy and stimulate greater expansion.. however, worth further note here is that our budget deficit, as much as liberals would love to purport, is no where near the relative levels of the reagon administration, which were upwards of 6-7% of gdp... we clearly have the ability to borrow as we currently are and are no where near overburdening the economy this debt load, or pushing up long term rates as a result of deteriorating US credit quality *laugh*(6) Your economist article states that the stock market has been sliding of late... now you're complaining that valuations are too high.. which is it? if you think valuations are too high and arent' truly reflecting the future earnings power and growth of US companies, then a move down in the market would be good... but then you're article is calling the slide in the markets a negative b/c that is indicative of market sentiment on the economy... well? can't have it both ways... you can't complain of valuations being too high or implicating a potential repeat of the bubble, then use an economist article which talks of weakening stock prices as pointing toward economic weakness...(7) there is no home price bubble.. get over it... people like you have been calling it a bubble for over 2 years now and yet it continues to expand and appreciate... ever think its just the average american becoming privy to all the positives from owning a home? more buyers, higher price... greater debt load in the a more illiquid but appreciating asset... sounds good to me, and in fact generally all economist (you'd be hard pressed to find one in opposition) agree that increasing debt in mortgages is a great thing for the consumer (albeit coupled with decreasing other outstanding credit)(8) deflationary pressure from China and other low cost countries... its real simple to blame China and complain that they're ruining our economic livliehood isnt' it? the fact is that we benefit far more than we lose as a result of competition in china... the fact is that w/o that deflationary pressure we'd be running more inefficient manufacturing ops here w/ fat cost structures that hurt the american consumer more... instead we utilize low cost chinese producers and are able to increase purchasing power for american consumers... 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PinkFloyd40 Posted November 26 Report Share Posted November 26 Originally posted by igloo Paul Krugman is as anti-Bush as they come....And to those who were falsely blaming Bush for a poor economy, is not using the "What kind of effect is this going to have on our future generations pocketbook;s??? " line nothing more than a political stance in the face of effective Bush policies that achieved its target goals : stimulating the economy. Or perhaps Bush should have done nothing, so those oppossed to him could continue to say "It's the economy stupid" , pin an inherited train wreck economy on him, and take glee in a dismal US economy to win back the WHite House.Oh well, lost opportunity to those who root for failure. Of course, now they turn their attention to Iraq and root for failure there.BTW--There are politics on both sides....recognize that. ANd for every Paul Krugman, there is an economist who disagrees with him. krugman is the most agenda driven biased economist i've ever read... Quote Link to comment Share on other sites More sharing options...
xpyrate Posted November 27 Report Share Posted November 27 Originally posted by jamiroguy1 I know thanks to bush's tax cuts, I'm able to buy 3 extra 40's a year. Drink up everyone... Hoooorrray!!! OMG!!! :laugh: Quote Link to comment Share on other sites More sharing options...
mr mahs Posted November 29 Author Report Share Posted November 29 Originally posted by ChiefSlapahoe Get off the condascension high horse. Thanks. You missed my point. I'm not suggesting everyone is expecting 8% growth per quarter. What I am driving at is that while things look rosy in the very near term, the U.S. economy has a dismal outlook for a number of reasons (1) Consumer spending has been force-fed for 2 years and no more bullets left (2) no decline or even slowdown in consumer spending in over a decade (3) debt ratios thru the roof everywhere--mortgage debt, installment debt, corporate debt, new upsurge in margin debt (4) massive budget deficits at all levels of government (5) huge trade deficit which is sinking the dollar and will trigger foreign selling (6) another frenzy of stock market speculation (the PEs of many stocks are far out of whack with historical PEs (7) ditto for the bubble in home prices (8)heavy deflationary pressure from China and Mexico (goods) and India (services). Bottom line, don't get too hopped up on near term economic numbers. You can't look at economic numbers in a vacuum. Just a couple of points..The GDP is made up of - consumer spending- govt expenditures- capital spending.It's the latter that needed to improve and that's exactly what is occuring with the latest numbers ie.. beige book, corporate profits & durable goods..Consumer sentiment is over 90, another indicator the cunsumer isn't letting up and with a strong 4th quarter which trickel into equity prices. That rise should also reinforce the consumer's positive assesment of the future with an increased wealth factor.. Quote Link to comment Share on other sites More sharing options...
normalnoises Posted November 30 Report Share Posted November 30 Originally posted by mr mahs Just a couple of points..The GDP is made up of - consumer spending- govt expenditures- capital spending.It's the latter that needed to improve and that's exactly what is occuring with the latest numbers ie.. beige book, corporate profits & durable goods..Consumer sentiment is over 90, another indicator the cunsumer isn't letting up and with a strong 4th quarter which trickel into equity prices. That rise should also reinforce the consumer's positive assesment of the future with an increased wealth factor.. Quote Link to comment Share on other sites More sharing options...
mr mahs Posted December 2 Author Report Share Posted December 2 Originally posted by normalnoises You laugh because you are clueless..... Quote Link to comment Share on other sites More sharing options...
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