Democrats versus Republicans

[craigimass]

I know at least 6 folks who attended tea party rallies. Not a single one is able to explain to me - using numbers - what they want to cut. They all have similar quotes (which I think they cut and paste) about excess spending.

Perhaps I am asking too much to want to know about percentages, cuts, etc.??

[sailaway21]

Originally Posted by craigimass

I know at least 6 folks who attended tea party rallies. Not a single one is able to explain to me - using numbers - what they want to cut. They all have similar quotes (which I think they cut and paste) about excess spending.

Perhaps I am asking too much to want to know about percentages, cuts, etc.??

Given your legendary listening skills, you'll forgive me if I take the above posting with more than a grain of salt.

[OsmundL]

Originally Posted by wind_magic

OsmundL,

I think we can skip right past the argument you are getting ready to make about good spending vs. bad spending and get right to the point - is devaluing the currency actually going to fix anything ? Spending, in all of its forms right now, is simply an attempt to re-inflate the currency and stop the deflation. The proof is obvious enough, they are doing quantitative easing by (in the United States) buying Treasuries using money created by the Fed (something we wrote about here months before they even announced it), and there is only one reason to ever attempt such madness.

Here is a post I made before our current President was even elected, I wonder if we knew what he was going to do before he even knew, I say that because it seemed to take him a few months in office to figure out where all the buttons were.

I wasn't getting ready to make any point, actually; this is not my fight I am thrilled you think I'm capable of anticipating the next move But you made some good points, so I'm glad I asked.

But I was seriously interested to hear the net spending figure, because everyone bandies about numbers. After all, any portion that is loans/equity is not spending at all. So I wondered what net numbers might be.

You raise an interesting issue about inflation/currency. One of the fascinating questions right now is the dollar, because it doesn't behave as it "should" when money is printed. Its position as a world trading vehicle means it hasn't dropped as a currency should in this situation. Kind of makes Reserve Bank steering awkward.

[sailaway21]

Originally Posted by OsmundL

I wasn't getting ready to make any point, actually; this is not my fight I am thrilled you think I'm capable of anticipating the next move But you made some good points, so I'm glad I asked.

But I was seriously interested to hear the net spending figure, because everyone bandies about numbers. After all, any portion that is loans/equity is not spending at all. So I wondered what net numbers might be.

You raise an interesting issue about inflation/currency. One of the fascinating questions right now is the dollar, because it doesn't behave as it "should" when money is printed. Its position as a world trading vehicle means it hasn't dropped as a currency should in this situation. Kind of makes Reserve Bank steering awkward.

It absolutely is spending, regardless whether it's a loan or not. Especially since the federal government is operating at a deficit. Every dollar spent by the government is a borrowed dollar and that's a dollar that is not available to private borrowers. Toss in the dollars printed and you've a recipe for inflation and, more than likely, hyper-inflation. I'll leave the desirability of government having an equity stake in business out of the discussion for brevity's sake.

[OsmundL]

Originally Posted by sailaway21

It absolutely is spending, regardless whether it's a loan or not. Especially since the federal government is operating at a deficit. Every dollar spent by the government is a borrowed dollar and that's a dollar that is not available to private borrowers. Toss in the dollars printed and you've a recipe for inflation and, more than likely, hyper-inflation. I'll leave the desirability of government having an equity stake in business out of the discussion for brevity's sake.

I am also not debating the desirability of either government stakes in business or lending to business - I think that's a matter for US residents to debate.

I am however interested in numbers and economic language, and you cannot use terms like "spending" loosely. Sure, government use of money crowds out private sector spending, and sure the inflation elements are there right now. What I wanted to hear more precisely, though, was how much government money is contractually a loan to or investment in e.g. banks, money that may/should come back to the government and tax payer in due course. I ask because our government needed to take over banks around 1990, and over the next years it sold itself out again. luckily without a net loss. The only real effect therefore, was a time shift where public borrowing increased at first and came down again. It happened to suit market conditions rather well.

[craigimass]

Everyone has become economic experts all of a sudden - when the money was flowing like wine AND the government was in debt at the same time...no one had any concern. Heck, if I was cynical I'd be thinking that folks are perhaps just lashing out at whatever they think might be causing their grief.

Most all dollars spent by consumers, BTW, are borrowed - see "Home Equity" "Credit Cards" "Mortgage" "Car Loan" and other such stuff. This crap started about 20 years ago...although people always had mortgages and car payment.

I'm waiting for the inflation and hyper-inflation. Meantime, reality is that we have deflation in most areas of the economy. Anyone who can predict what will happen in the future would have been able to tell us about this current crash and recession about 5 years (or more) ago. They'd also be so wealthy from their investment income that they probably would not spend time whining here. Based on that, I'll consider that most people here lost money or equity in the crash. If you didn't, chances are you didn't have much equity in the first place.

No one knows how the dollar "should" perform. It's all relative. It's mostly about "faith", something that most here can relate to. If we have faith in our future, the changes being made, the ability to repay, the ability to get better education and jobs, etc. etc. - then we are likely to prosper. If we whine and cry and find fault with everything....we will reap the results of that.

Economics is not physics. In fact, it is not even science. It is much closer to voodoo or religion.

[erps]

Hey Windy,

As a tea protester, are you only upset about war spending, or does the recent trend in record spending concern too?

OsmundL. My bad. I meant deficit spending.

[craigimass]

Originally Posted by sailaway21

hehe!
To get the credit card industry regulations they wanted, the Dem's had to agree to allow concealed weapons to be carried in national parks. They had to do it just to get Dem votes, too! Your NRA dollars at work. Things are never as bleak as they seem.

Yep, now all we need is the right to carry in airplanes, stadiums, hospitals and schools...and all things will be right.

[erps]

when the money was flowing like wine AND the government was in debt at the same time...no one had any concern.

That's not accurate. In this very thread there was considerable talk about Bush running up the deficit and Sck5 pointed out over and over again that Clinton had a balanced budget.

[erps]

Originally Posted by craigimass

Yep, now all we need is the right to carry in airplanes, stadiums, hospitals and schools...and all things will be right.

I'm glad to see that it's starting to sink in, that there is a case to be made that increased carry decreases violent crime. Look up John Lott's work.