# The Debt Ceiling: This is getting ridiculous

Discussion in 'Politics' started by Xelor, Sep 7, 2017.

1. ### XelorRegistered Senior Member

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To say that is to reject one of the core assumptions of economics: that people/entities/nations when making economic decision, exhibit, as best they can, rational utility-maximizing behavior.

No. What my remarks reflect is a careful read of your assertion and a rigorous refutation of its legitimacy.

Seriously? I presented you with empirical research (I even provided hyperlinks to the document) that shows that some of them are and some of them are not, and for those that are not, that there is no material impact on the growth/productivity of the affected economy. Your assertion that gave rise to my doing so is that natural disasters have impact, an "overwhelmingly" positive one.

Last edited: Sep 9, 2017

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???

5. ### joepistoleDeacon BluesValued Senior Member

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If the risk approaches 100% then it's no longer insurance, and that's when government steps in with subsidies. That's the traditional approach. That's what has happened in the healthcare industry. As the cost spiral and the product becomes unaffordable; government steps in with subsidies. It's cost shifting. It has already occurred in the home ownership arena, e.g. flood insurance. Most of these insurers are publicly traded companies. So we can see their financials. We can see their losses, beginning next month when they report for this quarter. Insurance companies have money reserved for these losses based on a set of actuarial data. So it's not like insurers have been blind sided. They've known for a long time this day was coming, and they have been preparing for it.

Longer term this issue of sea rising sea levels will be an even bigger issue. The water will not drain away. It will be permanent. We will then need to decide how it will be handled. Do we abandon the land to the sea or do we build defensive structures. I don't see how we can build a defensive structure around most of our coastline.

7. ### joepistoleDeacon BluesValued Senior Member

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And I presented you with a paper from the Federal Reserve. Did you understand your reference? I previously addressed you paper.

Nothing has changed.

8. ### XelorRegistered Senior Member

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Indeed, you did. You also completely ignored the introductory sentence in the prior paragraph that set the context for the one you shared. What does that sentence say?

The critical part of it that you ignored: the word "temporary."

The two paragraphs together:

"Temporary increases" accruing from the rebuilding efforts do not militate for one construing that, as you assert, "loss[es] from a natural disaster would be overwhelmed by the billions of dollars spent in reconstruction..." Moreover, Kliesen presented no quantification of the "temporary increases" nor of the "before and after" outputs and productivity. That quantification and the analysis of it is precisely what is found in the papers, 21st century ones, I referenced and described, and the quantification does not support the emboldened assertion shown above.

That the essay you cited is from the late 20th century is relevant. The late twentieth century was the heyday whereby talented and facile theorists set the intellectual agenda. Their very facility enabled them to build models with virtually any implication, which meant that policy makers could pick and choose at their convenience. Theory turned out to be too malleable, in other words, to provide reliable guidance for policy. In contrast, the 21st century has become the age wherein information processing advances (mostly computations per second increases) have given empiricists sway and economic conclusions and advice are grounded in concrete observation of markets and their inhabitants' actual behavior. Work in economics, including the abstract model building in which theorists engage, has become guided more powerful by the resulting real-world observation.
Simply put, the notions Kliesen posited in The Economics of Natural Disasters have been empirically tested by the researchers whose work I cited. Their work shows that while the ideas Kliesen expressed are applicable, they are not applicable to the extent you've overstated them by writing "loss[es] from a natural disaster would be overwhelmed by the billions of dollars spent in reconstruction..."

9. ### Quantum QuackLife's a tease...Valued Senior Member

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A couple of things,

It is not so much rising sea levels that I am talking about, as this is longer term. It is more to do with regular and frequent >Cat5 Hurricane events that are trending to occur every year with an accompanying damages bill in excess of many billions, not to mention the regular need to evacuate.

Premised on the atmosphere water saturation( mass ) passing a threshhold due to increased levels of evaporation due to hotter oceans leading the observed trend of massive changes in climate dynamics.

and...

Has it occurred to you that the money being allocated to Houston's disaster relief and rebuilding could have been better spent on failing infrastructure, across the nation instead of fixing something a storm tore down?

To suggest that the climate disasters somehow continue to allow the money available to be utilized in a way that is most effective and efficient would be silly yes?
Basically this sort of uninsured storm damage is very costly to any nation and to think other wise is ridiculous.
Printing money doesn't solve the fundamental expense but only hides it... ( a bit like firing off a 2 million dollar missile in Iraq is money literally up in smoke - print it just to burn it sort of thingo)

Last edited: Sep 9, 2017
10. ### Quantum QuackLife's a tease...Valued Senior Member

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The point related to this thread is that the USA has to do a lot more than raise the debt ceiling and believe that life is going to go on as it has before. It wont and change (adaptation) is a must if the USA is to avoid the financial hemorrhaging that climate change events are causing and are going to increasingly cause.

11. ### joepistoleDeacon BluesValued Senior Member

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The money spent thus far is a pittance. It's big money for an individual, but for the country it's a pittance. A few billion to a 19 trillion dollar economy isn't much. Even if the cost exceeds a 100 billion dollars, it's still a pittance in the overall scope of things. The last disaster of this magnitude occurred in 2005.

12. ### joepistoleDeacon BluesValued Senior Member

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The US needs to be fiscally and ethically responsible. That's the bottom line, but that's a much bigger issue than just a few disasters. We have many big issues that need to be addressed e.g. our political system, wealth inequality. These natural disasters are the least of our problems. The misinformation, injected into our political system with the rise of the right-wing entertainment industry is a much, much bitter problem. It's why it is so difficult to raise the debt ceiling. It's why it's so difficult to act in a fiscally responsible manner. Just a few decades ago, before the rise of right-wing entertainment, we didn't have these problems. Now we have a right-wing cult controlling our government.

13. ### Quantum QuackLife's a tease...Valued Senior Member

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Maybe I am being a tad too hypothetical with the question, but it gets summed up by asking:
How many time s do you evacuate an area/region/city per year before you abandon it all together? ( rhetorical)
How many times a year do you evacuate Houston before you start to realize something....? ( rhetorical)

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15. ### joepistoleDeacon BluesValued Senior Member

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The current situation aside, I don't recall the last time we evacuated Houston. It doesn't happen that often. I don't think there is an answer to your question. When hurricane Katrina hit New Orleans some folks asked that question and doubted the wisdom of rebuilding a costal city which was already below sea level. But we rebuilt the city nonetheless. These people, the people who live in the affected states, believe climate change is a hoax. I guess we will find out. But how do you abandon an entire state?

16. ### iceauraValued Senior Member

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Irma and Jose are both Atlantic hurricanes - not Gulf or Carib.
The slope of the regression line appears to depend on one outlying year.
The hurricane count does not measure severity, which is the actual issue in climate change storm warnings.

17. ### Quantum QuackLife's a tease...Valued Senior Member

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I am not sure why you think frequency of hurricanes is an issue when size and strength is...
Also the data stops at 2012 which in climate change terms, given recent events, is 5 years obsolete. I would anticipate as the weather moves towards more and more extreme outcomes that frequency may decline even more so to accommodate or balance for the uptick in strength. Less frequent but considerably more damaging.

well pointed out...

this is my point about how money being pretty much impotent when we are talking about abandoning real estate.

Often people consider only rising sea levels but fail to consider that whole regions could be severely affected mainly due to weather severity.

If weather records continue to break then it is inevitable that entire regions may need to be abandoned... This is hellishly expensive...an expense that those suffering the uptick in monsoonal flooding in Asia are having to seriously consider....right now.

18. ### joepistoleDeacon BluesValued Senior Member

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Welcome to global warming. Global warming is an existential threat to the species. We are in the early stages. Theses events are relatively rare but are increasing in severity and frequency. We will do as we have always done. We will build stronger structures and build walls to protect low lying areas. We are already taking action to mitigate our carbon footprints but I fear it is too little, too late. We need to get more aggressive in our efforts to address global warming; whether we do or not remains to be seen.

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20. ### iceauraValued Senior Member

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So?
The Galveston hurricane became a hurricane in the Gulf, during what was probably its first encounter with very warm water (possibly because although AGW was definitely taking effect in 1900, it had not yet warmed the open Atlantic ocean as it has since) - although wind shear and other factors also figure in. Not only was it smaller and weaker than Irma, but it did not ramp up to hurricane strength over the open Atlantic as Irma did. It hit Antigua as a "very strong thunderstorm", for example. https://en.wikipedia.org/wiki/1900_Galveston_hurricane

That's how it surprised people, and killed so many - it blew up quickly, just before coming ashore.

Modern day, with modern weather forecasting and other governmental preparations, it surprises nobody - and kills about as many people as just got killed in the Keys by Irma, or Houston by Harvey, or Cuba by Gustav (actually, probably more than Gustav - different government).

Which brings us to the debt ceiling - the reductions in government spending proposed by the Party attempting to use that ceiling as leverage include defunding of current climate research as well as Federal aid and disaster preparations, building codes and advance infrastructure regulations, etc.

They have specifically referred to the Federal and State governance in place in 1900 in Galveston, Texas as a desirable goal or target.

21. ### Quantum QuackLife's a tease...Valued Senior Member

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Falling victim to the temptation to conflate, exaggerate and dramatize an issue is really easy to do with regards to such serious issues.

There is no doubt that the climate scientists have done their calculations over water evaporation rates etc as the oceans gain temperature. Like wise one can assume if not paranoid that those same scientists would inform the public if there was any predicted immediate, to short term threat detected. So far there appears none, so I ask myself "Why am I so concerned when the scientists appear not to be?"

So I apologize for raising the issue of potentials, perhaps prematurely, due to excessive speculation (paranoia) on my part.

It is concerning however that the main demonstrations of climate change denial is also evident in economic policy, I guess at all levels. A human condition thingo perhaps...

The estimated cost published recently of both Harvey and Irma runs into $290 Billion* and as some have suggested maybe just printing money and raising the debt ceiling will deal with the loss...this year but I wonder what happens if it is repeated more so this year and the next and so on... * src: https://www.accuweather.com/en/weat...ost-of-harvey-irma-to-be-290-billion/70002686 It has been estimated that Loyd's of London will suffer a loss of$200 Billion ( Harvey, Irma and Jose) and brings me to the point about what happens when insurers decide enough is enough and refuse to offer insurance due to an excessive predicted risk of loss. ( re: https://www.businessinsider.com.au/hurricanes-irma-and-harvey-to-cost-lloyds-of-london-insurers-150-billion-2017-9?r=US&IR=T )

22. ### sculptorValued Senior Member

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or:
1. The Great Havana Hurricane of 1846
Main article: Great Havana Hurricane of 1846
In October, a major hurricane, likely a Category 5, moved through the Caribbean Sea. This Great Havana Hurricane struck western Cuba on October 10. was the most intense tropical cyclone in recorded history for 78 years and the first known Category 5-strength hurricane to strike Cuba. Unusual in many aspects, the 1846 Havana hurricane was the most intense of its time. Though atmospheric pressure readings in Cuba reached as low as 916 mbar. Although no reliable wind measurements were available at the time, a separate study also estimated that it produced Category 5-strength winds. In Cuba, the storm caused hundreds of deaths, capsized dozens of ships, obliterated buildings, uprooted trees, and ruined crops. Many towns were wholly destroyed or flattened and never recovered, while others disappeared entirely.
It hit the Florida Keys on 11 October, destroying the old Key West lighthouse, the Sand Key Light, and Fort Zachary Taylor. In Key West, widespread destruction was noted, with 40 deaths, many vessels rendered unfit, and widespread structural damage, with all but eight of the 600 houses in Key West damaged or destroyed. Few supplies arrived in the following days and relief efforts were gradual, with few resources within the town's vicinity. The hurricane was so destructive that years afterward, greenery on the key was sparse, and little native vegetation existed. Signs of ecological damage remained even in the early 1880s. The hurricane then headed northward, and on October 13th and hit Tampa Bay as a major hurricane. As it approached, it sucked the water out of the bay, causing the Manatee River to be so low that people walked horses across it. The hurricane moved across Florida, and remained inland over Georgia, South Carolina, North Carolina. It moved up the Chesapeake Bay, causing extensive damage through Virginia, Maryland, Washington D.C., and Pennsylvania. It caused around 163 deaths and damage throughout the areas it affected

23. ### pjdude1219The biscuit has risenValued Senior Member

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do you have a point or are you just rambling for the sake of your own self aggrandizement?