Fiscal Cliff

[madanthonywayne]

What counts as leadership, then?

A willingness to address the actual problems that confront our nation, rather than simply attending to his pet projects and constituenties as our nation heads for a massive economic crisis if not a complete collapse.

The "fiscal cliff" is a massive failure of presidential leadership. The tedious and technical negotiations are but a subplot in a larger drama. Government can no longer fulfill all the promises it has made to various constituencies. Some promises will be reduced or disavowed. Which ones? Why? Only the president can pose these questions in a way that starts a national conversation over the choices to be made, but doing so requires the president to tell people things they don't want to hear. That's his job: to help Americans face unavoidable, if unpleasant, realities. Barack Obama has refused to play this role.

Instead, he has cast the long-term budget problem as a question of whether the richest 1 percent or 2 percent of the population should pay more in taxes. Not only that, but he has insisted that the higher taxes be paid by raising rates, as opposed to reducing various tax breaks (deductions, exemptions, preferential rates) enjoyed heavily by upscale Americans. The obsession with rates is bad policy (higher rates may threaten risk-taking, work effort and hiring) but qualifies as good politics: It signals Obama's macho; he's tough on the rich, who are implicitly blamed for the nation's budget and economic woes.

Whatever one thinks about raising taxes at the top (and I have no objection to it as part of comprehensive budget package), it's not the crux of the problem. The crux of our problem -- the problem being the bipartisan and untenable promises made to most Americans of both high government benefits and low taxes -- arises from an aging population and high health costs, which cause rapid increases in spending on Social Security, Medicare and Medicaid. Let me repeat some statistics I've often cited. In 2012, Social Security, Medicare and Medicaid accounted for 44 percent of non-interest federal spending. As for taxes, the richest 5 percent paid almost 40 percent of federal taxes in 2009 (and within that, the richest 1 percent paid 22 percent of taxes).

The nonpartisan Congressional Budget Office puts it this way:

"With the population aging and health care costs per person likely to keep growing faster than the economy [gross domestic product], the United States cannot sustain the federal spending programs that are now in place with the federal taxes (as a share of GDP) that it has been accustomed to paying."

Until Obama conspicuously and consistently acknowledges these realities in straightforward and unmistakable language -- something he hasn't done and shows no signs of doing -- he cannot be said to be dealing honestly with the budget or with the American people. The main reason that we keep having these destructive and inconclusive budget confrontations is not simply that many Republicans have been intransigent on taxes. The larger cause is that Obama refuses to concede that Social Security, Medicare and Medicaid are driving future spending and deficits. So when Republicans make concessions on taxes (as they have), they get little in return. Naturally, this poisons the negotiating climate.

Consider the highly technical proposal to shift from the standard consumer price index (CPI) to a "chained" CPI to adjust Social Security benefits. From 2013 to 2022, this change is estimated to reduce Social Security spending by $100 billion. Over that decade, total Social Security benefits are estimated at $10.588 trillion; the cut would be less than 1 percent. Yet, many Democrats reacted in horror, as if hordes of elderly would be impoverished.

Obama's abdication of responsibility may be in his political self-interest, but it is profoundly hostile to the national interest.
http://www.realclearpolitics.com/articles/2013/01/01/obamas_leadership_failure_116559.html

Clinton reformed welfare, Nixon went to China, in a similiar fashion Obama is well situated to be the guy who brings our entitlement crisis under control. Instead, he choses to demagogue and demonize the opposition while pushing thru a largely symbollic tax increase that does essentially nothing to address the ongoing budget crisis.

Because financing it with newly printed money has always led to run-away inflation. When investor buy bounds with pre-existing money that does not lead to inflation. Now the FED has an unlimited (if unemployment remains greater than 6.5%) policy of buying with printed paper 85billion per month. The Fed is already a greater holder of US debt than China and buying more than a trillion dollars more each year with thin air money.

China has already started to reduce its holding of US paper promises. How many years of Fed buying more than 1 trillion do you think it will be before ONLY the FED is buying at non-economy-crushing rates? I.e. FED holding interest low but making "run-away inflation" like Germany or Zimbabwe had is the result of printing new money to pay your debts, year after year.

Exactly. Obama refuses to do anything about this problem. He is still pushing for even more spending! He is either living in some fantasy land in which he can spend as much as he likes so long as he raises the tax rates on the top 2%; or he is intentionally trying to destroy our nation.

 

[Repo Man]

MAW, the fact that you listen to him is just further proof that I do not need to listen to you. Seriously, when have either of you ever been right about anything?

 

[joepistole]

I see nothing in Dodd-Frank that contradicts my post. Could you be specific? The provision of Dodd-Frank that restores the Glass-Steagal separation of investment banking from mortgage lending, for example.
Or something showing that banks are smaller now, and present less risk of being too big to fail.
The Fed always had that power. The Comptroller of the Currency always had that power. Now they have to do more paperwork while not doing the job, is all.

Your assertions were the following:
1. The financial industry had not been materially reregulated.
2. The Federal Reserve always had responsibility for managing systemic financial risk.

And as I pointed out you were wrong on all points. I suspect the Title XI material didn’t mean anything to you because you don’t have a working understanding of accounting or finance. Just because banks are just as big today as they were a few years ago, it doesn’t mean that they are just as if not more risky today than they were before the Great Recession. Because that is clearly not the case, American banks have been recapitalized and reregulated. We didn’t reinstate Glass-Steagall Act. But that doesn’t mean there has not been a substantial and material reregulation of the banking industry.

When you reference the Glass-Steagall Act, I assume you mean the Banking Act of 1933 which put a wall between the banking industry and speculative businesses. That is one way to solve a problem but not the only way. Dodd-Frank makes disclosure of speculative activities mandatory for banks and it charges the Federal Reserve with monitoring those speculative activities and setting rules to preserve the financial integrity and stability of banks engaged in speculative activities. Prior to Dodd-Frank there was no reporting of the kind of speculative investments that caused the fiscal crisis that resulted in The Great Recession of 2007 – 2009 nor was there any regulation of those activities. That has now changed and that is a material change. Banks are now required to report speculative investments and the Fed is now mandated to monitor and regulate those activities. Dodd-Frank gives the Federal Reserve some far reaching and powerful tools to ensure that financial institutions remain solvent. And you have failed to recognize to recognize these regulatory changes and the new duties and powers given to the Federal Reserve to reregulate the industry. Prior to Dodd-Frank most of the speculative stuff was carried as “off balance sheet” that means it was not reported. That means that no one including the banks knew the scope or the magnitude of the risk they held. So the risk was not managed. Due to reregulation that is no longer the case.

Additionally, bank size is irrelevant. Bank size was not restricted by the Banking Act of 1933. Dodd-Frank set out a process for the orderly closing of large financial institutions should they become financially insolvent or become a risk to the banking industry. A process for the orderly shutdown of major financial institutions did not exist prior to Dodd-Frank. Now we have such a process thanks to Dodd-Frank and the new powers and responsibilities it gives to the Federal Reserve.

 

[joepistole]

Because financing it with newly printed money has always led to run-away inflation. When investor buy bounds with pre-existing money that does not lead to inflation. Now the FED has an unlimited (if unemployment remains greater than 6.5%) policy of buying with printed paper 85billion per month. The Fed is already a greater holder of US debt than China and buying more than a trillion dollars more each year with thin air money.

China has already started to reduce its holding of US paper promises. How many years of Fed buying more than 1 trillion do you think it will be before ONLY the FED is buying at non-economy-crushing rates? I.e. FED holding interest low but making "run-away inflation" like Germany or Zimbabwe had is the result of printing new money to pay your debts, year after year.

No, financing debt with newly printed money has not always led to runaway inflation; we have been financing our debt in part with newly printed money for a very long time without runaway inflation. Runaway inflation can result if things get out of hand. That is true. But there is no indication of that. And as pointed out, it’s a two way street. The Fed can constrict the money supply just as easily as it can expand it. So the comparisons to the Weimar Republic or to Zimbabwe are not apropos.

One more point, that 85 billion includes recycled investment. Each month a number of Treasuries held by the Fed mature and the Fed recycles that investment into new Treasuries and it purchases those Treasuries on the secondary market.

And frankly China is irrelevant. The relevant point is there is ample demand for US debt but that could change if the Republican numb nuts in the Congress cause the nation to intentionally and unnecessarily default on our national debt.

 

[iceaura]

A willingness to address the actual problems that confront our nation, rather than simply attending to his pet projects and constituenties as our nation heads for a massive economic crisis if not a complete collapse.

The obstacle there is Republican Congressional behavior. The Executive branch has done reasonably well in that regard, after being handed a collapse already in progress and barely managing to stall it.

The "fiscal cliff" is a massive failure of presidential leadership. The tedious and technical negotiations are but a subplot in a larger drama.

At some point, failure to overcome such well funded and destructively shortsighted Congressional Republican and partisan conservative opposition is not the President's fault. He's not Superman - we've seen Republican Senate leadership filibustering everything from minor administrative appointments to its very own bills. That's a difficult environment to get anything done in, and he gets some credit for as much as he has.

Yes, we had hopes that Obama would be able to drive over the speed bump crowd in Congress, and his failure to do so is disappointing. But when your complaint about a President is that he fails to stop your own Reps and agenda from trashing the country, and is slow to clean up the horrible stinking mess you guys made of decent government in the US, the matter of whom to blame is something I would think you would be a bit shy about.

Your assertions were the following:
1. The financial industry had not been materially reregulated.
2. The Federal Reserve always had responsibility for managing systemic financial risk

No, my assertions were these:

Nothing equivalent to Glass-Steagal has made it through Congress, for example. The Commodity Futures Modernization Act is still unreformed (http://en.wikipedia.org/wiki/Commodi...on_Act_of_2000 ). The Gramm-Leach-Bliley act remains the law of the land. The banks are actually bigger than they were, and less amenable to oversight.

and

The Fed always had that power. The Comptroller of the Currency always had that power.

Just because banks are just as big today as they were a few years ago, it doesn’t mean that they are just as if not more risky today than they were before the Great Recession. Because that is clearly not the case, American banks have been recapitalized and reregulated. We didn’t reinstate Glass-Steagall Act. But that doesn’t mean there has not been a substantial and material reregulation of the banking industry.

I find the fact that things are not quite as bad as they were in the wake of the Reaganomic deregulations and under W's malfeasance less than reassuring, is all.

The basic conflict of interest between investment and consumer banking remains, the problem of banks too big to be allowed to fail, effectively holding a blank check drawn on the American taxpayer and a near complete insulation of management from much of the risk they undertake, remains, and so forth. You are impressed with Dodd-Frank, I am not. The financiers got what they wanted, at the price of some extra paperwork, and they seem to be back at the old bench.

 

[joepistole]

The obstacle there is Republican Congressional behavior. The Executive branch has done reasonably well in that regard, after being handed a collapse already in progress and barely managing to stall it.
At some point, failure to overcome such well funded and destructively shortsighted Congressional Republican and partisan conservative opposition is not the President's fault. He's not Superman - we've seen Republican Senate leadership filibustering everything from minor administrative appointments to its very own bills. That's a difficult environment to get anything done in, and he gets some credit for as much as he has.

Yes, we had hopes that Obama would be able to drive over the speed bump crowd in Congress, and his failure to do so is disappointing. But when your complaint about a President is that he fails to stop your own Reps and agenda from trashing the country, and is slow to clean up the horrible stinking mess you guys made of decent government in the US, the matter of whom to blame is something I would think you would be a bit shy about.

No, my assertions were these: and

I find the fact that things are not quite as bad as they were in the wake of the Reaganomic deregulations and under W's malfeasance less than reassuring, is all.

The basic conflict of interest between investment and consumer banking remains, the problem of banks too big to be allowed to fail, effectively holding a blank check drawn on the American taxpayer and a near complete insulation of management from much of the risk they undertake, remains, and so forth. You are impressed with Dodd-Frank, I am not. The financiers got what they wanted, at the price of some extra paperwork, and they seem to be back at the old bench.

I think you are doing a little bit of selective revisionism. But the facts remain; we have reregulated the banking industry and given the Federal Reserve new responsibilities and new powers – responsibilities and powers they did not have before Dodd-Frank. You seem to be stuck on issues that have been resolved (e.g. too big to fail) with Dodd-Frank.

The “conflict of interest” you see between banking and speculative investments are now kept in check with new reporting, regulation and oversight by the Federal Reserve.

 

[billvon]

LOL, so now you are talking gibberish in a vain attempt to rationalize your error. The bottom line here is that the stock market is a widely recognized leading indicator of economic performance.

?? I have agreed with that. I have also pointed out that it is often profoundly, completely wrong. A cursory inspection of stock market trends before recessions and depressions reveals this.

The stock market reacts well to good news and poorly to bad news and is a leading indicator of economic performance. Investors, business leaders and academics are a lot more knowledgeable and skilled than you are, and they don’t react well to “poison pills” or any other bad economic news.

Yep. I recall that investors, business leaders and academics were nearly unanimous in their belief that mortgage based securities were rock-solid investments as well - and this was reflected in the stock market. Until the crash, of course.

Investment managers do what the people who employ them want them to do. And most people want to make money in the short to medium term. The effect of this on the market doesn't require a PhD to puzzle out. Consider what you yourself would do if you had an expectation that the market would boom for six months then tank in four years. Would you pull all your money out before the boom? Or would you keep it in and take it out before the bust?

Why do you think the nation needs to ever pay down its debt? In our more than 200 years of existence we have rarely paid down the nation’s debt.

We do not need to pay it off. We need it to stop rising as quickly as it is.

And finally fully sovereign nations, like the United States, do not go bankrupt unless one day they wake up and decide they are not going to pay their bills (e.g. in the case of the US, fail to raise the debt ceiling). Sovereign countries can always pay their bills if they have the will to do so. They can print money – if you had been paying attention you would have known this in part because I have written about umpteen times including a few in this thread.

Yes they can. Do you honestly think that that is sustainable in the long run?

What Keynesian economic policy really says is that in times of slack economic demand the government should be the buyer of last resort, taking up the slack demand in the economy with spending.

Yes. To make this work there needs to be a corollary - in booming economic times the government needs to recover. To put it in blunt terms, it must be a drain on the economy by increasing taxes - and it must reduce its stimulus to the economy by spending less. This generates the buffer needed to sustain the economy through hard times.

No one wants to do this, though. Increased spending and decreased taxes is what gets politicians re-elected. That was the one good thing about the fiscal cliff - it might have forced politicians to make unpopular but necessary decisions by mandating dire consequences for inaction. Instead they have made the popular decision (reduce taxes, or more accurately not allow the planned increase to happen for most people) and punted on the unpopular decision. Given the pressure on them to make this decision - and their lack of said decision - I have no doubt they will punt again and again and again, taking the easy and popular route of reducing taxes and maintaining spending while blaming each other for the mounting debt.

And contrary to your statement there are ways to spend less and not impact the current economy.

No, there's not. People seem to think that most government spending is waste, that it just gets burned in a big stove or something. Government spending employs people - both directly, in government positions, and indirectly, via contractors, their suppliers and the service industries that support them. And that's even true when you build that "bridge to nowhere" (or the space probe that will never return, or the 9/11 memorial.) Even if the result is not an economic enabler, the money spent goes almost directly into the economy. Which, of course, is why Keynesian stabilization works at all.

There are of course ways to impact the economy _less_ when you reduce spending. But any politician who tells you "we can cut X and not affect the economy one bit" is lying.

Yeah really, and your numbers are off. You have not been paying attention.

Then let's see yours. How much revenue do you think the recently passed bill will add?

We have solved more than 20% of the problem.

Again, let's see the numbers.

 

[Tiassa]

Rovian Jovian

MAW, the fact that you listen to him ....

I saw the article when it posted at ... The Washington Post, I think. One could almost set their watch by its arrival at Sciforums.

Anyway, there are a couple things going on in Samuelson's rant:

• Rovian assignation of weakness.

• Conservative complaint about not getting everything they want.​

The latter is the most apparent; Republicans didn't get every last thing they wanted.

But the assignation of weakness? We saw Sen. McConnell filibuster his own bill in a PR stunt gone awry, and Speaker Boehner forced to pull his own bill in a PR stunt gone awry.

What stands out from this period is, depending on how you define it, a lack of leadership in the GOP, or profoundly misguided leadership. The Speaker of the House cannot get his caucus to function; the Senate Minority Leader cannot be trusted on good faith.

Thus, by the Rovian theory of giving your weakness to your opponent, the obvious attack is to complain about President Obama's lack of leadership.

Samuelson has followed the template exactly.

The idea that we need to get our finances and policies in order? No question.

The idea that we should do it now, and let everything else go to hell while Republicans hold out for every last item on their wish list? Now that would be a lack of leadership on the president's part.

But for Republicans, the idea that they, upon losing an election, don't get everything they want, or that compromise has two parts being Republican will and everyone else's complicity, is obvious. That the president won't compromise by giving over everything the GOP claims it wants is about what we expect from the Republican Party.

 

[joepistole]

?? I have agreed with that. I have also pointed out that it is often profoundly, completely wrong. A cursory inspection of stock market trends before recessions and depressions reveals this.

Did you? It’s hard to tell with all of your contradictory statements; in one sentence you agree, in the next you disagree. The stock market either is or is not a reliable indicator of future economic performance. And the answer is, the stock market is a reliable indicator of future economic performance. That is why it is used by professionals and academics as a reliable leading economic indicator.

And no you have not pointed out that the stock market is, “I have also pointed out that it is often profoundly, completely wrong.” Even if we accept your proof, two alleged incidents over the course of 14 years is not by any stretch of the imagination “frequent”.

The “Tech Bubble” was not the market; it was a subset of the market. And the economy did thrive during the “Tech Bubble”. The stock market accurately predicted the economy. In your second example, the Great Recession of 2007 – 2009 the market did reflect the downturn in the economy. There is a six month lead time. The stock market is usually ahead of the actual economy by about six months. So the bottom line here is your “examples” are rubbish.

Yep. I recall that investors, business leaders and academics were nearly unanimous in their belief that mortgage based securities were rock-solid investments as well - and this was reflected in the stock market. Until the crash, of course.

Well if they were what they were represented to be, they would have been. But that of course has nothing to do with the issue at hand. You seem to think that you with your inconsistent commentary and obvious lack of knowledge know much more than business professionals and academics.

Investment managers do what the people who employ them want them to do. And most people want to make money in the short to medium term. The effect of this on the market doesn't require a PhD to puzzle out. Consider what you yourself would do if you had an expectation that the market would boom for six months then tank in four years. Would you pull all your money out before the boom? Or would you keep it in and take it out before the bust?

I don’t understand how this is relevant to the issues at hand in this discussion (i.e. the value of the stock market as a leading economic indicator or the nation’s debt).

We do not need to pay it off. We need it to stop rising as quickly as it is.

This is what you originally wrote, “You are correct; running a deficit is, in and of itself, is not a bad thing. Running an unsustainable level of debt is. That's where we are now, and the recent bill passed by the House will make things much, much worse.”

At current levels, US debt is sustainable. The huge trillion dollar deficit we are currently racking up every year is not sustainable over the long term. Low levels of deficit spending are tolerable. But when you are borrowing one out of every three dollars spent, that level of deficit spending is unsustainable without causing unacceptable levels of inflation.

Yes they can. Do you honestly think that that is sustainable in the long run?

No, fully sovereign nations cannot go bankrupt. Do you know what bankruptcy means? How would a fully sovereign nation go bankrupt exactly?

Let’s get back to my original question to you. What makes you think that the debt would not be sustainable?

Yes. To make this work there needs to be a corollary - in booming economic times the government needs to recover. To put it in blunt terms, it must be a drain on the economy by increasing taxes - and it must reduce its stimulus to the economy by spending less. This generates the buffer needed to sustain the economy through hard times.

No one wants to do this, though. Increased spending and decreased taxes is what gets politicians re-elected. That was the one good thing about the fiscal cliff - it might have forced politicians to make unpopular but necessary decisions by mandating dire consequences for inaction. Instead they have made the popular decision (reduce taxes, or more accurately not allow the planned increase to happen for most people) and punted on the unpopular decision. Given the pressure on them to make this decision - and their lack of said decision - I have no doubt they will punt again and again and again, taking the easy and popular route of reducing taxes and maintaining spending while blaming each other for the mounting debt.

There is nothing good about holding the nation hostage to outrageous demands. And that is what Republicans are now doing. For the whole of the last century, we were able to manage Keynesian policy, making the “hard decisions”. It is only with the advent of the Republican entertainment media that things have gotten way out of line.

No, there's not. People seem to think that most government spending is waste, that it just gets burned in a big stove or something. Government spending employs people - both directly, in government positions, and indirectly, via contractors, their suppliers and the service industries that support them. And that's even true when you build that "bridge to nowhere" (or the space probe that will never return, or the 9/11 memorial.) Even if the result is not an economic enabler, the money spent goes almost directly into the economy. Which, of course, is why Keynesian stabilization works at all.

There are of course ways to impact the economy _less_ when you reduce spending. But any politician who tells you "we can cut X and not affect the economy one bit" is lying.

You are cherry picking here. If you read what I wrote, I said no one is talking about the government spending less money. Under the Democratic plan or Republican plan the government will spend more next year than they will next year. What is under discussion is the not the level of government spending. As I pointed out to in my last response, the issue under discussion is reducing the unfunded portion of the budget (i.e. deficit) over the course of 10 years. You seem to have trouble understanding the difference between now and the 10 year period under discussion. Now the economy is growing, but we still have not achieved full unemployment. Within a year or two, we should be there, assuming Republicans in Congress don’t screw it up.

Then let's see yours. How much revenue do you think the recently passed bill will add?



Again, let's see the numbers.

I already told you. Last year 1.2 trillion was cut from the 10 year deficit during the debt ceiling crisis. With the legislation passed last evening that number rises to 1.8 trillion.

 

[Billy T]

No, financing debt with newly printed money has not always led to runaway inflation; we have been financing our debt in SMALL part with newly printed money for a very long time without runaway inflation. ...

To make your statement correct I added one word in bold. Yes a growing economy and population MUST be constantly making more currency - roughly at this growth rate as the US did for decades, until last few years.

When the FED is already the largest buyer (with thin air money) and rapidly growing its "assets" At least 8 times faster than the economy + population growth (i.e. much faster than the sustainable healthy growth), then you are headed for the disaster of run-away inflation if nothing changes - but something is changing - I.e. the rate of FED´s assets buying with thin air money is ACCELERATING!

Fed´s holding will double in less than four years - our population and GDP not any way near that rate.
I.e. we are in the early stages of repeating German/ Zimbabwe´s history.

 

[joepistole]

A willingness to address the actual problems that confront our nation, rather than simply attending to his pet projects and constituenties as our nation heads for a massive economic crisis if not a complete collapse.

Yes it is high time Republicans began addressing the real problems that face the nation rather than pushing their pet projects and being mindless lackeys to special interest groups and the Republican entertainment industry.

Yes President Obama should lie down and let Republicans do whatever the Hell they want to do, just like George II did. NOT! Hell Republicans can’t even figure out what they are for except to be against anything Democrats are for.

Let me remind you again, it was the Democrats and it was President Obama’s leadership that led the nation back from the deepest economic abyss the nation has seen since The Great Depression. It was President Obama that tried to get the big budget deal, the 3 trillion dollar spending reduction, passed last year. And it was Speaker Boehner (Republican) in the House who withdrew at the last moment causing the nation to settle for the smaller 1.2 trillion dollar deal. It was the Republicans who demanded the Fiscal Cliff, and it was the Republicans who left the Fiscal Cliff negotiating table. And it was the House Republicans who went on vacation more than once rather than address the Fiscal Cliff and in the end it was the Republicans who tossed it over to the Senate in exasperation and told the Senate to do their work for them.

Yes it would be so much easier for Republicans if President Obama and the Democrats betrayed the people who elected them to office (i.e. most Americans) and did whatever Republicans want them to do. But that only eliminates part of the problem. Republican officials seem to have great deal of difficulty figuring out exactly what it is they want to do. They couldn’t even agree amongst themselves on the recently passed Fiscal Cliff legislation. You would think after more than a year and a half Republicans in the Senate and Republicans in the House would know what they wanted and what they could agree on with the Democrats. Were it not for the Democrats bailing out Republican ass on the Fiscal Cliff, the nation and the world would be in deep trouble right about now.

Clinton reformed welfare, Nixon went to China, in a similiar fashion Obama is well situated to be the guy who brings our entitlement crisis under control. Instead, he choses to demagogue and demonize the opposition while pushing thru a largely symbollic tax increase that does essentially nothing to address the ongoing budget crisis.

And President Obama for the first time in American history was able to get universal healthcare passed, something no prior American president was able to do for more than a century. Not even the famous and most popular 3 term president, FDR was able to get his comprehensive universal healthcare legislation through Congress. More recently President Clinton tried to pass universal healthcare reform and failed. President Obama has already accomplished what no other president has been able to do in more than a hundred years. Now that is an accomplishment!

http://www.pnhp.org/facts/a-brief-history-universal-health-care-efforts-in-the-us


Additionally, we don’t have an “entitlement crisis”. That is a nice effort to rebrand the real issue. The real issue is the nation’s deficits, not entitlements. The real issue is the profligate spending spree and deregulation spree and resulting great recession of the Republican president and Republican Congress that preceded President Obama.

Exactly. Obama refuses to do anything about this problem. He is still pushing for even more spending! He is either living in some fantasy land in which he can spend as much as he likes so long as he raises the tax rates on the top 2%; or he is intentionally trying to destroy our nation.

That is not true either. President Obama signed into law 1.2 trillion dollars of spending reductions last year. President Obama signed into law the “sequester”, the automatic spending cuts that were supposed to force Congress into negotiations and agreement on spending reductions.

President Obama has asked Congress for small increases in funding for critical investments (e.g. infrastructure) but those increases were offset with even more spending reductions. So at the very least your statement is grossly misleading.

President Obama is certainly not trying to destroy the nation. Your post here is just more Republican demagoguery and fear & hate mongering which Republicans have come to rely on. Obama has led the nation away from the absolute mess he inherited from the previous Republican president and Congress.

Under President Obama’s leadership the nation has seen an 11% increase in economic growth. Under President Obama’s leadership we instead of losing almost a million jobs a month and more with each passing month, we are now adding between 100k and 200k jobs to the nation’s economy each and every month and have been doing so now for 3 years. Under President Obama’s leadership we have successfully ended one war and will end another next year. Under President Obama’s leadership we have reduced the deficit by several hundred billion dollars and we will see further reductions in the coming years.

 

[Tiassa]

Something about leadership ....

Yes it would be so much easier for Republicans if President Obama and the Democrats betrayed the people who elected them to office (i.e. most Americans) and did whatever Republicans want them to do. But that only eliminates part of the problem. Republican officials seem to have great deal of difficulty figuring out exactly what it is they want to do. They couldn’t even agree amongst themselves on the recently passed Fiscal Cliff legislation. Were it not for the Democrats bailing out Republican ass on the Fiscal Cliff, the nation and the world would be in deep trouble right about now.

Something about leadership? In today, from Steve Benen:

A curious thing happened on the House floor this morning. No work was scheduled, but the House nevertheless went back into session at 11 a.m. -- just one hour before the new Congress is required to begin. It wasn't clear why.

Maybe GOP leaders changed their mind on Hurricane Sandy relief and planned a vote literally at the 11th hour? Alas, no. It turns out the House never got around to agreeing to a "formal adjournment resolution that both chambers signed off on." This morning's session was making the end of the 112th Congress official.

As Roll Call put it, "What a perfect coda for the most contentious, fired-up, hard-to-please Congress in recent memory. They couldn't even formally agree on when to end things."​

And yet, Speaker Boehner won another go at "leading" the House of Representatives, exceeding is threshold by all of six votes; he needed 214, had 233 Republicans in the chamber, and got 220. And on that point, Benen notes:

Given that the Speaker has already taken some steps to consolidate power and enforce more party discipline, the folks who crossed him in this afternoon's vote probably shouldn't seek any favors from the leadership anytime soon.​

The opposition was demonstrative, with votes cast for Cantor, West, Jordan, Walker, Labrador, and Amash.

To the one, yes, it is true that Boehner pulled committee assignments from some troublesome members of the caucus, but we can expect the GOP to stand united as they aim to force the nation to default on its debts.

And, well ... er ... something about leadership.

You know?
____________________

Notes:

Benen, Steve. "Don't go away mad, 112th Congress, just go away". The Maddow Blog. January 3, 2012. MaddowBlog.MSNBC.com. January 3, 2012. http://maddowblog.msnbc.com/_news/2013/01/03/16326972-dont-go-away-mad-112th-congress-just-go-away

—————. "Boehner re-elected as House Speaker -- but not by much". The Maddow Blog. January 3, 2012. MaddowBlog.MSNBC.com. January 3, 2012. http://maddowblog.msnbc.com/_news/2...r-re-elected-as-house-speaker-but-not-by-much

 

[joepistole]

That was funny and sad at the same time.

 

[iceaura]

You seem to be stuck on issues that have been resolved (e.g. too big to fail) with Dodd-Frank.

Dodd-Frank does not address that issue. The big banks got bigger, and are still permitted to do investment banking and Federally insured consumer lending under the same roof.

The “conflict of interest” you see between banking and speculative investments are now kept in check with new reporting, regulation and oversight by the Federal Reserve.

What you are hoping is kept in check by some paperwork filed with the Fed (which has no specific criteria for evaluating it) was a criminal and regulatory violation under Glass-Steagal. That is a fair example of how far this is from a restoration of former order and regulatory oversight.

 

[joepistole]

Dodd-Frank does not address that issue. The big banks got bigger, and are still permitted to do investment banking and Federally insured consumer lending under the same roof.

Dodd-Frank does address the issue of too big to fail as has been repeatedly pointed out to you. Under Title XI banks are allowed to fail and Dodd-Franks lays out the process for failing and dismantling the bank.

If they can fail, which due to Dodd-Frank is now the case, then there is no longer anything that is too big to fail.

What you are hoping is kept in check by some paperwork filed with the Fed (which has no specific criteria for evaluating it) was a criminal and regulatory violation under Glass-Steagal. That is a fair example of how far this is from a restoration of former order and regulatory oversight.

Again as has been repeatedly pointed out to you and ignored by you, it is more than just paper work. It requires bank disclosure of all “off balance sheet” transactions, the kinds of transactions that have always been the root of fiscal fiascos. These “off balance sheet” items were previously not reported.

Two, it requires the Federal Reserve to review and assess the risk these transactions present to the bank and the entire banking system. Again something that was not done prior to Dodd-Frank. And it gives the Fed the power to regulate those “off balance sheet” items, set up standards and ensure compliance.

Three, it gives the Federal Reserve the power to shut the banks down if in the view of the Fed they present a risk to the banking system. Again a power the Fed did not have prior to Dodd-Frank.

One of the things that you are failing to understand is that there is more than one way to skin the cat. Just because everything is not as it once was, it doesn’t mean that the new regulation is not material. The world is not as it was 80 years ago, and certainly the banking system and the systems of commerce are dramatically different today than they were 80 years ago. Things change, and just because they change it does not follow that the new is worse than the older. In fact, the new is often better than the older versions. It has something to do with evolution.

 

[Gorlitz]

Wow that poll looks a bit closer than when I voted, I think everyone must have been hit with a wave of optimism. I must admit though I did think they would actually resolve more than they did, it seems that most of the big were just shelved for later so they could get the deal done, possibly not the best way to run a Government imho.

 

[Billy T]

To Joepistole:
More on my post 119 - the Fed understands even if you do not that there is a limit to how much thin air money they can create with out turning the US into run-away (eventually Zimbabwe like) inflation and is reversing their recently announced policy to buy 85 billion per month until unemployment drops below 6.5%:

Federal Reserve Bank of Richmond President Jeffrey Lacker said further monetary stimulus is unlikely to boost growth and will “test the limits” of the U.S. central bank’s credibility.
The Federal Open Market Committee last month tied its outlook for borrowing costs to the jobless rate and inflation while boosting its monthly purchases of long-term assets to $85 billion a month. The central bank’s balance sheet will grow further from its current size of $2.92 trillion.

“At some point, we will need to withdraw stimulus by raising interest rates and reducing the size of our balance sheet, and the larger our balance sheet, the more vulnerable we will be to seemingly minor miscalibrations in policy,” Lacker said.

The minutes also said that “several” members of the FOMC said it would “probably be appropriate to slow or stop purchases well before the end of 2013.”

Fed will not be happy with watching US economy sink into recession due to interest rate doubling but that is better than causing a run on the dollar with trillion dollar annual expansion of the balance sheet. - I.e. doubling it with thin air money buying treasury bonds for only three years.

I will also defend my post 119 statement Fed´s expansion of the balance sheet is at a rate at least 8 times greater than the sustainable rate of increase, which is basicaly the larger of rate of GDP or the population growth:

Doubling in only three years is an interest or growth rate of 72/3 = 24% and 1/8 of that is 3% which is more than the SUM of GDP growth plus population growth. You have been wise to ignore post 119, as your POV against it and this post is entirely wrong. Fed´s earlier announced 85 billion per month buying of treasury bonds is the path to run-away inflation as I stated there.

 

[joepistole]

To Joepistoe:
More on my post 119 - the Fed understands even if you do not that there is a limit to how much thin air money they can create with out turning the US into run-away imflation and is reversing their recently announced policy to buy 85 billion per month until unemployment drops below 6.5%:

On your post, your alleged correction of my post is in error. You made the blanket and unqualified claim that monetization always leads to hyperinflation and that is clearly wrong. I pointed out the US has been monetizing it’s debt for almost a century and without the hyperinflation you claimed. My post is correct; unless you want revise your original unqualified statement on monetization of the debt.

Two, I never said that there is no limit to how much debt can be monetized without causing unacceptable levels of inflation. That is you Bill T either not understanding the argument or creating a straw man. I have said on multiple occasions that currently levels of inflation are quite modest.

[Fed will not be happy with watching US economy sink into recession due to interest rate doubling but that is better than causing a run on the dollar with trillion dollar annual epansion of the balance sheet. - I.e. doubling it with thin air money buying treasury bonds for only three years.

We have been down this road before. I just don’t share your apocalyptic visions, unless this government becomes totally incapable of governing. We certainly have the knowledge and ability to solve our problems. We can control our monetary supply. The monetization can be reversed if needed. It is not a one way street as you seem to think and it doesn’t need to be permanent. The Fed can expand the money supply as it has done and it can shrink it just as easily. And the current Fed has done a fantastic job of managing the money supply and the recent fiscal crisis.

The only problem that might be catastrophic for the nation is the conservative movement (i.e. Republicans) who are now vexing the nation (e.g. a Republican controlled House holding the full faith and credit of the nation hostage) with economic Armageddon if they don’t get what they want whenever they want it. Unfortunately what Republicans want is a return to irrational fiscal policy. I didn’t think I would ever say this about an American political party, but the Republican Party along with its media arm have become a very clear and present danger to the union.

 

[Michael]

Joe doesn't see the inflation, really? Sorry Joe, there's no free lunch.

It used to be that a husband could start a family of 3 to 5 kids and support a wife he married at 20 and afford all the luxuries of the middle class. Fast forward 80 years and we have had HUGE gains in productivity. So much so this same husband should be working 1/10th as much to maintain the same standard of living. But, that's not the case. Most men will not marry and start a family (of 1 maybe 2) until in their 30s or 40s. IF ever. Many will just never be able to afford a family, If they do, they require their wives working fulltime as well to achieve anywhere near middle class.

In the future I think the children equation will turn arouind, once its recogizned that to make ends meet their children will be required to work as well. Just like in 3rd world nations, only instead of in the rice paddies large families will be in working McDonalds or Wallmart to afford the small cardboard box everyone lives in as they rotate in and out of the van mom and dad sleeps in. There, in this future America, will be Joe saying "SEE! Monetizing the debt didn't bring in hyperinflation AND the unemployment is under control too!" He simply doesn't see the horrendous drop in the standard of living because Americans have sacrificed their ability to reproduce and provide a warm healthy family environment in an effort to maintain a middle class lifestyle. BUT, soon the government debts will be so high, the FED will raise interest rates into the teens or higher and then you'll see children being forced to work. He'll, people will probably blame the children's for being so insolent.

 

[billvon]

It used to be that a husband could start a family of 3 to 5 kids and support a wife he married at 20 and afford all the luxuries of the middle class. Fast forward 80 years and we have had HUGE gains in productivity. So much so this same husband should be working 1/10th as much to maintain the same standard of living.

He can easily work less and maintain the same standard of living. But if their family wants to live the HIGHER standard of living many people now enjoy he has to work even more.

However, if he is happy with life in the 1940's (no car, basic food, no cable, no Internet, no charge cards, no TV, no fast food, tiny house if he's lucky, small apartment if not) he can live quite comfortably today on a single salary while supporting a family and 4 kids.

But, that's not the case. Most men will not marry and start a family (of 1 maybe 2) until in their 30s or 40s. IF ever. Many will just never be able to afford a family, If they do, they require their wives working fulltime as well to achieve anywhere near middle class.

Sure. Or they can live quite comfortably with less. Their choice.

In the future I think the children equation will turn arouind, once its recogizned that to make ends meet their children will be required to work as well. Just like in 3rd world nations, only instead of in the rice paddies large families will be in working McDonalds or Wallmart to afford the small cardboard box everyone lives in as they rotate in and out of the van mom and dad sleeps in.

Study up a bit on what life was like in the 1940's. People weren't living in vans. They also weren't living in McMansions. Yes, if you want a huge McMansion, fast food for breakfast, lunch and dinner, disposable diapers, cigarettes, liquor etc it will cost you. Or you could forego those things and live on one salary. Their choice.