Puzzling Polls
I don’t understand my fellow US citizens. Many commenters will note that they told me that I didn’t since I don’t live in the USA, but I didn’t when I lived there.
After the jump I try and fail to make sense of the latest NBC/WSJ poll.
The nickel summary is that I thought that Obama should propose stimulus based on tax cuts not spending increases, because spending won’t be increased, high spending is unpopular, and there is no point paying a political price for a proposal which congress will reject anyway. Then the people say they want more spending (and lower deficits).
OK so look at Q34 what should the jobs proposal include.
The second most popular option (after the Georgia like program of subsidize hiring of long term unemployed for 8 weeks) is infrastructure spending with a 47% saying its a good idea and only 26% saying its a bad idea. Continuing to cut the payroll tax rate gets 40 vs 20. Yes only 40 % of US adults think it is a good idea to cut their taxes !?!
Strange. But what is much stranger is comparing Q34 in which a huge majority support hiring subsidies and a plurality support all the other deficit increasing proposals and responses to Q28
Which of the following two statements comes closer to your point of view? (ROTATE STATEMENTS)
Statement A: The president and the Congress should worry more about boosting the economy even though it may mean larger budget deficits now and in the future.
38%
Statement B: The president and the Congress should worry more about keeping the budget deficit down, even though it may mean it will take longer for the economy to recover.
56%
Now the question does suggest that stimulus increases budget deficits — this is only true if the balanced budget multiplier is zero which no one but Robert Lucas asserts (one of the few ways to fail my intro macro course is to assert that one can stimulate with spending increases or tax cuts but not with spending increases financed by tax increases). It also adds “in the future,” which is true only if one assumes that spending is increased not just pulled forward (accelerating maintanance which will be needed sooner or later) or that there is no long lasting effect of unemployment on the unemployed (hysteresis). That’s an “or” but the first is a simple point and everyone believes in hysteresis (even if very few know what the word means). But on the other hand, the question asserts (correctly but controversially) that austerity will slow recovery.
Why do people hate deficits so much ? They do even if they are told that deficits are good for the economy (which they are only during the rare periods when the economy is in a liquidity trap). Why do they advocate focusing on the deficit and policies designed to increase the deficit ?
Before going on, there is no majority American. Most people gave consistent answers but enough flipped to change a solid majority for austerity into a plurality for every kind of stimulus under consideration. What might they be thinking ?
I think part of what is going on is that Government spending is unpopular in the abstract but popular in the concrete (and asphalt) . One way to reconcile the answers of those who flipped is that they want to cut foreign aid by 20% of the Federal budget and increase infrastructure spending by 5% of the Federal budget. It is hard to understand the policy proposals of people who don’t know what current policy is (foreign aid is about 0.7% of the budget).
Another is that they really really want to soak the rich — to stimulate without adding to the deficit by paying for it with higher taxes on the rich. Then if told this won’t happen (it won’t) they don’t want stimulus at all. I think the best policy would be to stimulate a lot and soak the rich, so I hope I have company (although I think that deficit financed stimulus is almost as good). But I doubt it.
Also the voters blame Republicans yet generic Republican is ahead of Obama and the Republicans are ahead on the generic congressional ballot. It is just weird.
But again, the penny summary is that I was totally wrong about the most politically effective jobs speech. Obama should call for infrastructure spending. He was right and I was wrong (he has more pollsters than I do).
I don’t find it puzzling in a society that lives for the next emotional fix, simultaneously living with the real fear of no emotional fix coming.
I have no problem with taxing where the money is, and doing it big. But, yes then spend it in the most broad manor such that the money enters the economy via the bottom and not the top.
We do live in crazy times, so is it crazy to have a trickle up instead of trickle down economy? We do know trickle down does not work. We also know we can’t collect taxes where there is no money so we must go to where the money is, at the top, where they sit on money not knowing what to do with it. The experts do tell us they are not investing, are not creating jobs, even though they are being called job creators. Deficits are bad for future generations, so we are being told, but if we leave a dilapidated nation behind for future generations is that any better?
Time for Obama to take some big steps in the right direction, right of center is not the middle, he and the nation will be in limbo, more to the right is hell.
I am not an economist but what I see and hear is not good.
Robert,
First everyone wants a free lunch, even though there is no such thing. This explains the bulk of your confusion with the polls.
Second, people are very concerned with the size and scope of the Federal government. The tax issue is almost a surragate for that concern. When the Dept of Education has its own SWAT team and you need a license for a lemonade stand – government has become to big. How many Czars are there now and why do we suddenly need them? YMMV.
Third, I have seen no proposals on this blog or much of any anywhere else that soaks the rich. What they do is soak high-incomes. No one is going after the wealthy, just people who want to become wealthy. No one is touching Gates or Soro’s billions. There is a big difference in the two groups. So there needs to be some way to seperate ‘soak high-incomes’ and ‘soak wealth’. Only soaking high incomes tends to freeze the wealthy elite in place – well even more than they currently are. And there are so many ways around the estate tax that its not even funny – I would bet big bucks that if Gates and his wife died today that less than 10% of the estate would ever been seen by the US Gov., if any.
Fourth, Everyone saw the Obama administration handle the $800B stimulous. It just plain didn’t work and the optics behind it seemed like Obama picked supporters (unions/public employees/select companies) to get the money and a lot of it went to state/local governments to prop up their overspending for a year. That may not be a fair accounting but that’s what I can gleen from the US media and blogs – including lefty ones. You can say it wasn’t enough etc, but it looks like we through the money down a rat-hole with no lasting improvement – how many miles of pavement laid? How many bridges built or repaired? etc. And don’t get me started on the HSR boondoggles.
Lastly, the size of the debt, its rapid increase these last 3 years, and the current administrations lack of any plan to actually come even close to balancing the budget in the next decade (even using their own rosey economic projections) should concern us all. Unfortuanately both parties have a ‘deficits don’t matter’ attitude when in office – but Obama has taken it to a new level. (As an aside Obama has also effectively killed any idea that the Dems are the party of fiscal restraint.) Yes, I understand the concept behind negative real interest rates, but if your not worried when the US Federal Government is borrowing a third of its operating expenses, well I have some beach front property to sell you in Montana.
The combination of it all, along with a leadership-skills-lacking President, gets you the totally confusing polls.(On top of the usual bad polling crap we see all the time).
YMMV as always…
Islam will change
Fair point Buffpilot, so tax net assets. Let’s see nearly $60 billion in household net worth, top 10% holds $40 trillion. Peg tax rate to wherever Federal Reserve sets Fed Funds / Interest on Reserve rate– 0.25% presently. It’d raise $100 billion this year (would more than replace estate tax revenue if that was abolished at same time).
As Jamie Galbraith has pointed out, the CBO’s 10 year budget model isn’t very realistic (and yet binds government policy), it projects short-term rates will be at 4.5% from 2016 to the end of days. Just using 2011 GDP numbers, that’d raise $1.7 trillion a year in tax revenue. I doubt Fed Funds rate is ever going up in any event, but the CBO will be the last to figure that out. In the meantime, use a net asset tax to “pay for” Medicare for All and middle class tax cuts.
Robert
as someone who has confessed to being hard to persuade… except on technical matters, you ought to have some sympathy for the American voter.
The short answer to your question is that polls measure the effectiveness of advertising, not of understanding. so when people can give an answer that rhymes with what they have been told again and again and again… they will give it. Break it down into concrete common sense (not advertising jingle common) and they will give you answers that correspond more to their daily experience, which they know something about. Even if they don’t understand the macroeconomics and are, indeed, wrong.
On the other hand if they don’t want the payroll tax cut, maybe they have been listening to their grandmothers. Something you obviously haven’t.
Stimulus isn’t everything.
The good thing about all this “deficits are bad” talk is that it exposes nearly everyone’s misunderstanding/ignorance of our monetary system.
Deficits provide the only “permanent” money in the economy, i.e. the aggregate number of dollars listed as cash or liquidity on balance sheets with no offsetting liability. If the government didn’t deficit spend this cash wouldn’t exist. The private sector would be in debt in the aggregate instead of now holding $9.6 Trillion.
Riddle me this. In 1946 the total amount of money that existed in the economy as cash or cash-equivalents was about $250 Billion. Since then the government has “borrowed” $14.4 Trillion.
Where did the $14.4 Trillion come from?
Hint; can you borrow your neighbor’s lawnmower if he doesn’t have one?
Robert,
The problem, as usual is, it is a False Choice!
In Statement B:
“The president and the Congress should worry more about keeping the budget deficit down, even though it may mean it will take longer for the economy to recover.”
Keeping the deficit down has nothing to do with how long it takes to recover back to the trend line. The American people understand that Democrats refuse to cut any spending, and that Democratic policies are anti-growth for the Private Sector and Pro-Growth in the Public Sector. They would rather wait out Obama and the Democrats, then allow them to tank the system for their Command and Control Utopian Pipe Dream.
In Statement A:
“The president and the Congress should worry more about boosting the economy even though it may mean larger budget deficits now and in the future.”
That statement gets a low percentage because the American people understand that Democrats have no real plan other than to grow the public sector, and play favor to their Ideological allies. If one understood why American business is sitting on their hands or running to a different country to hide, then they would understand these polls….What does that say about your understanding?
the poll results arent too hard to explain: krugman doesnt reach as many americans as these guys:
http://www.talkers.com/category/top-talk-audiences/
Buff
I have never been much of a fan of “soaking the rich” either in their assets or in their incomes. Doesn’t mean i don’t think we need to raise their taxes about 10% for the duration of the deficit emergency.
Thing about taxing assets is that it is too much like theft. Taxing incomes just adds another factor to the wage or deal bargain. If you are willing to do the job for 80k without taxes, you ought to be willing to do it for 100k with 20k to pay in taxes. Funny thing is, though, that most people scream at the latter and would jump at the former.
incomes are a lot easier to count than assets. for one thing income involves two parties, one of whom is anxious to claim “expenses.”
lys
deficits are bad for future generations so we better not borrow to fix the roof in case, you know, we die and leave them a debt to pay off.
Paul,
So What…..your comment has nothing to do with the value of the dollar. If the value of the dollar was higher, it would take less actual money in the system.
What is a dollar worth? A dollar’s intrinsic value is nothing ($0.03 cost to manufacture). But I can go out tomorrow and buy stuff with the ones I have and I’ve always been able to do so with no problems.
You didn’t answer the riddle though…
Coberly,
Deficits only matter when the economy is not growing to keep up. Our economy is not growing to keep up, so therefore deficits are a major factor. There is no reasonable person that belelives that the mess the Democrats and Obama are going to leave after this next election is going to be quickly fixed with a growing economy. Yes…..the economy and business will take a deep breath of relief, but it will be sometime before the economy will be growing again at a rate that solves the deficit problem, not to mention the time it will take to unravel the ObamaCare mess and fix the tax code.
In the meantime we run the risk of running out of avenues to borrow money, devaluation the dollar into the abyss, and crowding out effects.
These are the issues, and they are real. Your snark leaves out these facts.
So right, RJS. I personally think this current round of deficit hysteria is a straw man designed to scare people and erode support for anything centrist-left.
Paul,
“But I can go out tomorrow and buy stuff with the ones I have and I’ve always been able to do so with no problems.”
No…….It takes more dollars to buy the same value than in the past. Your position is that printing money has no consequence…that is incorrect.
Judy,
Nonsense…..how do you explain this then:
What cost $100 in 1968 would cost $619.63 in 2010.
What cost $100 in 1978 would cost $330.44 in 2010.
What cost $100 in 1988 would cost $181.89 in 2010
What cost $100 in 1998 would cost $133.09 in 2010.
What cost $100 in 2007 would cost $105.04 in 2010.
I suspect you are a supply sider, fan of Milton Friedman and Ron Reagan.
If you recall Milton said inflation is “always” a result of money supply policy, I saw him say it on PBS in the ’80’s. Which in turn policy drives interest rates. That is the fed loosens money to lower rates and start up demand which over heats and the extra money chases product which cuases inflation.
He then implied when inflation heats up the fed will tighten rates and lower demand cutting down inflation until it can lower rates again.
That ideology sold Greenspan, and the rest for the housing bubble and blowing up M3 to $63T. China slave labor kept inflation under wraps during the oughties.
Deficits matter when interest rates are high and rising. Which is not the case during this supply side depression.
What you said is deficits matter when the economy is not growing needs some explaining.
Please explain from a supply side view.
Also you should know there is a view toward deficit neutral stimulus where taxes are raised immediately to fund the stimulus.
BTW, my view is Friedman was proven wrong over the years and supply side is the basis for GHW Bush’s appelation about voodoo economics during his run in the primaries in 1980.
Darren,
Since T-Bills interest rates are below the rates of inflation, does that not make the cost of debt near zero?
You are talking about the cost of real goods, not the cost of debt.
buff,
You parrot Ron Reagan, so late 70’s voodoo, and so not what Reagan did.
First: Reagan’s free lunchers were poor minorities driving caddies to the welfare office and little old lady (GS-3’s in federal service who are more productive and knowledgeable than the GS 15’s buying the severely flawed F-35 to name just one) in tennis shoes who raised me as a junior officer in the early 70’s.
Second: That was Ron’s second point from the 60’s, kept spelling it out until 90’s. Only use for gumint is war profiteering and eliminating reg Q so the street can accumulate at the expensive of the other 99%. Wall st is good while big gumint is bad, especially when wall st made Ron a wealthy, if a poor actor, man.
Third: fiction, but so far all you have is faith in supply side and Reagan.
Fourth: It could have been worse, and it occurred after the fed floated $1.3T in liquidity to keep the still insolvent banks from going all 1933 and needing a bank holiday and being nationalized like in Sweden. Then there is the 200B or so of the part that went to tax cuts. That supply side portion was about the same as the shovel ready work. Are you indicting supply side tax cuts? I think you should explain all the things that add up to the $800B stimulus.
Lastly: “Lastly, the size of the debt, its rapid increase these last 3 years, and the current administrations lack of any plan to actually come even close to balancing the budget in the next decade (even using their own rosey economic projections) should concern us all.”
My plan is to cut $4000B from the war machine over the next 10 years, that would leave about 3600B in war spending which is five times what China will spend trying to tilt with India.
And return to Eisenhower tax rates to pay off the wars and assuring a civilized society.
I didn’t say that printing money has no consequence. We have observed the consequences over the past 65 years. All I asked was where did the money come from?
What exactly are you trying to say?
Ilsm,
“That ideology sold Greenspan”
No Greenspan didn’t tighten Volker did. The Bernake hasn’t tighten either and inflation is rising. It is the pea-brain scheme of the Democrats to deal with the debt long term, and it won’t work.
“What you said is deficits matter when the economy is not growing needs some explaining.”
Once debt becomes a significant fraction of GDP, and its growth rate substantially exceeds that of GDP, the economy will suffer a recession even if the debt to GDP ratio merely stabilizes. As of right now we are at a 100% +/- Debt to GDP ratio, depending on how you define debt, and the growth rate of the debt is going to out pace GDP. A Liberal look could define it as low as 60%, assuming our entitlement structure is covered by tax revenue.
GT,
Yes…I am, but who will take on American debt with no motive? That’s the point, they can’t stay low forever…we only digging the hole depper, which will make it harder to get out of.
“who will take on American debt with no motive?”
Bond traders are falling all over themselves to buy T-Bils for negative yields. Why is that?
Did it ever occur to you that T-bills are bought using reserves created out of thin through banks?
The US Government finances it’s own debt. The government can’t borrow money that doesn’t exist yet – it has to create it first. The entire National Debt fantasy is like a child’s belief in Santa Claus.
The National Debt = private sector savings + money held by foreigners. Every penny was created out of thin air including the money in your wallet.
i guess i forgot to mention that there is nothing surprising about the contradictions in the polls. people do not actually think. they recite sound bites to themselves. and one bite has nothing to do with the next.
“Nonsense…..how do you explain this then:”
…
…
…
Maybe other countries competing for limited resources is driving prices up.
Darren
more or less “standard” economics and politics is to increase deficits exactly when the economy is not growing. it’s called “stimulus.” and it works. sometimes. i don’t think it is working this time because in the first place this is a managed recession, arising not from economic forces but from political forces. in the second place, the stimulus that has been tried has been giving money to people who already had it but were not spending it because of fear, or because of political reasons.
if you blame Obama for ‘the mess’ you’d be hard put to explain 2008. but i know that does not trouble you. no doubt there are issues, but i doubt the honest answers are in the script you read.
I would fix the roof before it rains and causes more damage. Maybe I can borrow enough to fix the roof but not enough to fix the roof and lots of water damage to boot, leaving a mess for my children and they would have to borrow even more money. It would have been more economical to repair when it was needed and the damage was minor. That is family economics.
Darren,
Debt is retired in times of rising GDP. Except during Reagan, and Bush II.
Deficits rise in times of stress such as wars and recessions. In the Bush II booms they rose contrary to sensibility, and the wars should have been paid with income taxes not payroll taxes and debt.
Taxes need to rise, and the empire be eliminated. All the faith based, supply side drivel will not deny that necessity.
To your points, I know, I endured the recession from Volker’s tightening, read my statement, Greenspan and helicopter Ben threw green out the windows to get Bush reelected and blew up the housing bubble.
Okay,so what is inflation today?
Do not include fuel or food which is why Volker over tighten and caused 11% unemployment in his recession. It is nearly zero because of two observations: first the psychological side and high levels of unemployment are erasing demand pull, and lack of money, with household debt destruction going on, is stifling cost push. But those arguments are contrary to supply side thinking.
It is possible that core inflation since Sep 2008 may slightly exceed 2% increase, but we can wait for the SS adminsitration on that.
Historically low inflation, it reached 18% in the late 70’s when Volker took action.
The “once debt……………………” statement is a faith statement. In 1945 debt was well over 100% of GDP and deficits for the wars were nearly 20% of GDP each budget cycle.
I find your last paragraph is interesting but it is unsubstantiated opinion, which is well funded by insolvent bankers but no more reasonable than the idea the earth is 6000 years old.
Paul,
Yes….we know that! So what are you saying, we owe nothing?
Coberly,
When your economic plan is a strategy to play a gotcha game with your political oppenent to get re-elected…it becomes very easy to pin this economy on Obama.
Darren
“inflation” seems to be the price we pay to keep the economy from strangling due to lack of “money.”
money is only a “means of exchange”, it has no intrinsic value. as long as the inflation is slow enough and everybody keeps up, it is not a problem.
it does mean, i guess, that if you want to ‘save’ money, you need to invest it or deposit it with people who do. generally this is considered good for the economy… as it makes “money” available to fund new enterprise.
no doubt problems arise, but just comparing the cost of something in 1988 to the cost of the “same thing” (if you can find “the same thing”) in 2011 does not describe a problem. And reporting inflation to five significant digits suggest you don’t have much actual understanding of numbers.
“Yes….we know that! So what are you saying, we owe nothing?”
Bingo.
it also overlooks some facts of real life:
what is a loaf of bread baked in 1989 worth in 2011?
if i buy a pickup truck in 1989 for five times the cost of a wheel chair
what have i lost if i have to pay one fourth of the cost of a pickup for the wheel chair i need in 2011?
here is a hint for you… find a 1989 pickup in 2011 in mint condition, what is its price?
or buy the wheel chair in 1989 and keep it in the closet until you need it in 2011.
money is worth exactly what you can buy with it at the time you buy it. comparisons across time, for different objects, for different people may be interesting for some purposes, but they don’t mean anything in an absolute moral sense, which is what you seem to think.
Not to go all conspiracy theory on it, but isn’t a small amount of inflation a good way to make people invest? You are guaranteed to lose money if you don’t.
Darren
I guess the “explanation” for “this” is that “inflation” has been about 4.4% since 1968.
Now, explain this: what the hell does this have to do with Judy’s comment?
Buff
Nice work.
coberly
I know a lot of contractors who want to just pay cash. It’s cheaper for them to pay income taxes then it is for them to pay the workmans comp, SS security, and state and federal unemployment as well.
I must have saw a thousand pot plants today from the passenger seat of a truck driving through the foot hills of the Yolla Bolly Mountains. My county allows you to grow 99 plants if your property is big enough, or if you form a coop. Two pounds a plant x $1000 a pound and your talking some real money. Trust me none of these guys are anxious to claim an expense.
Darren,
“Nonsense…..how do you explain this then”:
No nonsense here just the easy button.
Voodoo economics, and supply side whackage.
They “picked the numbers” to sell Milton Friedman’s disproved ideology masquerading as economics. Same as your inflation stats.
In 2008, the last time SS was raised it rose by the 5%, you show that for 2007 to now. Good picking 2007 as a point to measure, but there have been no price level changes since 2008!!!
The rest of your “inflation” is from: monetarism and supply side deficits supported mainly by Greenspan and Bernanke, the fed keeping the bankrupt arbitraguers from going insolvent since Reagan.
All your inflation numbers are to be laid at the feet of Reagan, and Bush II’s handlers from wall st. The wreckage from voodoo economics and supply side theory that deficts do not matter when GDP is rising.
You pay down debt in good times!!!
That was a Joseph and the Pharo story, only the parts of Bible that help insolvent bankers matter.
The government borrows from me all the time, they owe me over 150,000. I am a US citizen and don’t expect that to EVER be paid back. But knowing they are spending it policies that will boost the economy like revived WPA/CCC type organizations would do me fine. I don’t need it back.
It is the wars and waste time for cylical transfer payments I am getting sick of tired of. Move the people off of them and into jobs. The private sector can’t do it. They will be down for years. The government needs to create a 150,000 jobs a month to just keep a floor on the labor market.
The fact is, if the government keeps ignoring us and trying to “deal with the deficit”, we will destroy this country. Aren’t the long bonds hints enough people. We are getting tired of it. Either spend on jobs or we will make sure it never comes back again.
Darren,
I suggest you look at the Truman, Eisenhower, Carter, Clinton expoeriences: US debt has been reduced.
It takes mix of taxes and effort, and bankrupting some of the insolvent banks. Maybe a policy to make US workers productive rather than off shoring everything.
We can see what happens in Spain and Italy……………………
Darren:
Where did you get the idea Greenspan and Bernnke never attempted to tighten the economy by rasing the Fed Rates?
Rising to ~ 6% in 1996 receding to 5.5% in 1997 and crashing to 1% in 2003. Greenspan misread the economy in the late nineties and failed to adjust in a timely manner. Bernanke did the same after the great maestro retired by continuing Greenspan’s trend of increases into 2006 to ~5% under the same belief the economy was overheating and retrested too late.
In each case the FED misread the economy.
Volcker was just before Greenspan. Volcker abandon the Fed support of optimal employment to kill inflation. Since then, the Fed has not ever again supported having optimal employment, neither has the government, nor has Wall Street.
Robert:
A reasonable explanation of debit to assets:
“Overall, America has more than $50 trillion in private household net worth, and $14.3 trillion in public debt, so the public debt to private equity ratio is below 30%. If we exclude debt owned by the government, US corporations, and US citizens, that number drops further. If this were a business, it would be a good figure. The problem is, the US government doesn’t really have that equity unless it taxes for it. The interest coverage ratio (federal income divided by interest expense) can be estimated to be between 10 and 20, depending on what time period I use. Currently, interest rates are low, but as they rise, the interest coverage ratio will shrink. Overall, an interest coverage ratio of above 10 would be very solid for a company. But we want interest as close to zero as possible for the federal government, because any positive interest means that a portion of our taxes, perhaps 5-10%, go to interest payments, which is deeply unsatisfying. Essentially, the US has a reasonable balance sheet as long as problems are fixed fairly quickly. If the trillion dollar deficits or even “only” multi-hundred-billion dollar deficits continue, a larger and larger chunk of our spending will be on interest until the situation becomes unsustainable.” http://dividendmonk.com/facts-about-the-us-debt-and-weekend-reading-7282011/ “Facts about the US Debt and Weekend Reading 7/28/2011″ Dividend Monk
But Darren, T-Bills ARE selling, so apparently MANY are willing to pay for our debt.
I know you are not a Keynes believer, but even Reagan was not afraid to incur debt through govt spending to stimulate the economy.
@run75441…
That’s a reasonable explanation but it’s wrong. The government creates money when it spends and destroys money when it taxes.
The difference between tspending and taxation is the deficit/surplus.
Deficits leave net money in the economy and surpluses remove net money from the economy.
Taxes don’t fund anything.
The government neither has money nor doesn’t have money. It creates money out of thin air when it spends and destroys it when necessary through taxation.
Government debt (T-bills) is an asset swap – it exchanges Treasury instruments (created out of thin air) for cash that was also created out of thin air. Treasuries are worth the same as cash (in many cases more) and can at any time be exchanged for cash if needed.
When you borrow money to buy a car you get the cash to pay for the car and are saddled with a liability that must be paid back. Treasuries do not create a liability anywhere.
Can you see the difference?
Krugman is somewhere about 9 hours ahead.
He is up early his new AM due to jet lag and reminds us that while inflation is good for debtors, deflation is opposite.
So, let’s all fight inflation, bring on deflation and see what happens.
Anyone have a deflationary episode which we can analyse?
your rigtht…..you don’t understand.
Darren
what you call my “snark” is actually better science than your “facts.” not that you will understand that, but i just wanted you to know i wasn’t trying to be mean to you.
lys
just in case you don’t understand me either, that was my point.
cursed
yes, i know about that. still, it’s generally easier to count income than to count assets.
Deficits only matter if the United States plans to die. People are born, grow up, take on debt for schooling, housing, starting businesses, but eventually, they pay off the debt, then they die, or perhaps they die first.
If people lived forever, it would often make sense for them to take on debt for further schooling, better housing or relocation, and starting new businesses at any given time. Some of this debt would finance higher earnings, some of it a better life style, but immortality would make borrowing sensible.
Corporations, government chartered immortals, often take on debt at various times as business conditions warrant. (Hell, some of them even take on debt to pay CEO bonuses.) No one says IBM shouldn’t borrow money to build a new blah blah blah facility as long as it stands a chance of making some money from all that blah blah blah. If we required corporations to liquidate after some fixed term, they would be more like mortals and they would age past the point at which debt could be justified.
Since some of us seem to believe the US will be an economic entity into the forseeable future, it makes perfect sense for it to run a deficit. If it were set to dissolve in 20 years, then it would make sense to balance the budget. I can only imagine that deficit hawks either anticipate our nation’s destruction or are working towards it, possibly both.
cursed,
Do they sell from farm stands?
The loyal opposition wants to destroy the president’s country.
Thanks cursed. Nice to hear from you!
Islam will change
sammy
actually you are rarely so clear about your delusions. it should be easy enough for even you to check out your own claims against reality.
i don’t know what Davis-Bacon wages are these days, but back when I worked construction, skilled trades were making 30 dollars per hour and they earned it. boy did they ever. and that was two decades ago.
and i’d bet most of them spent more on sammyburgers than on union bosses.
Darren
i was not going to bother to respond to this, but just in case you need to hear it: your logic is in your own head. even your grammar suggests you make cognitive leaps unsupported by any evidence beyond your desire to reach your one true conclusion.
Coberly, I think I understood you, I took it as snark, or sarcasm and my reply was more for Darren as I think your reply was indirectly too.
Sammy is one hundred percent correct. Congress should toss Davis Bacon.
Tax payers get shafted when they have to hire me at 46 bucks an hour, when any body else can have me at half that price. I should consider my self fortunate. I get paid more and work more then most construction workers in my area. There are lots of guys making half of what I do and consider themselves lucky to have a job.
What this economy needs is lots of jobs, not some jobs for the lucky and well connected. Besides what is usually the case is contractors paying prevailing wage bring in out of town specialists, and the locals usaully don’t get any of the work. The extra money often just goes to pay for gas and motels.
Thanks cursed.
Coberly, what is “delusional” about 100% more jobs and 33% more infrastructure per Federal spending?
lys
yep.
just not to confuse our faithful readers, js-kit so mixes things up that it is hard for you to tell that the snark referred to here is what Darren called snark, which wasn’t, not what Lysistrata called snark, which was.
sammy
that. for a start.
cursed,
not that the taxpayers understand it, but the “extra” money they pay to keep your employer from paying you “what the traffic will bear” is what creates the prosperity they enjoy.
you seem to be one of those people who would not change the oil in his Bently in order to save money.
Buff
I am not at all sure everyone wants a free lunch. You may be telling us more about you and your friends than you are telling us about everybody.
ilsm
Medical Marijuana gardens are supposed to be in a 6′ fenced area, and growers try to screen it from traffic, but pot is destinctively green, and if you look real carefully, and you know where to look, you can see it.
This time of year lots of growers start getting real paranoid. They worry about getting ripped off. Many resort to Meth so they can stay awake. Guys that do meth but don’t grow, need meth this time of year in order to stay awake so they can steal pot.
The power structure in this county is red neck/cowboy who hate pot smokers, so they will not let anyone form a coop to sell Medical marijuana. Also they structured the Medical Marijuana ordinace so that big land owners like them could grow lots of pot for lots of money, medium size land owners could grow some pot for personal use, and small landowners and renters have to either mooch it, steal it, or buy it illegally.
coberly,
Try to focus. I know that this is difficult because it involves logic, whereas you lean more to posturing and sanctimony.
1) If it is a JOBS PROGRAM, the goal should be to hire the maximum number of people possible. Because of Davis-Bacon, which artificially increases wages. LESS PEOPLE ARE HIRED than otherwise.
2) If is an INFRASTRUCTURE PROGRAM then the goals should be to build as much infrastructure as possible. Because of Davis-Bacon, fewer people get hired for a given budget, resulting in LESS INFRASTRUCTURE.
3) If is a UNION PAYOFF, then it will give fewer jobs but only to union members at higher wages to build less infrastructure.
So, based on the above, what does an Obama infrastructure program most resemble?
(BTW, did you catch where O previewed his “Infrastructue” policy? It was in a speech to union members, to robust applause.)
Coberly: “I have never been much of a fan of “soaking the rich” either in their assets or in their incomes. Doesn’t mean i don’t think we need to raise their taxes about 10% for the duration of the deficit emergency.”
I do wish that you would stop using the term “soak the rich” even with the additional explanation that you often include. Tell me when in this country the wealthy have ever been “soaked” as in “made to pay too much tax.” It isn’t happening now or in the past several decades. They get an enormous share of the total gross income of the economy so there is no place left to turn for tax receipts. The best legal tax avoidance scheme is to take less income, ie share the wealth. Cursed is complaining about some illusory worker earning three times the likely wage for most workers and you are talking about not wanting to soak the rich who have never been soaked. It’s beginning to look like Sammy is the only one making sense, though only from the point of view of his being consistent in his ideology, as wrong headed as it may be.
We need to stay on message. Approximately 95% of working America, those lucky enough to have a job still, are being f__ ked over by the top 2% with the other 3% assisting in the screwing, a la Sheriff of Nottingham attitudes and behavior. Until the message is clear to the electorate that they are electing corporatists to represent their economic and social interests they will continue to get the screwing that they may deserve for being so damned narrow minded and blind to political reality.
I’ll add my favorite historical political insight one more time. “When will the people be educated? When they have enough bread to eat, when the rich and the government stop bribing treacherous pens and tongues to deceive them. When will this be? Never.” M. Robespierre
Cursed you say Sammy is 100 percent because prevailing wages are too high. You conclude that prevailing wages are too high because you know some people earning far less who are pleased as punch not to be living in the park and eating from garbage cans. And Sammy thanks you for this defense. Do I have this about right?
It would seem that both of you have succumbed to the infectious race-to-the-bottom mentality that is all around us nowadays. I do not agree that prevailing wages are too high for the majority of working people–indeed, I believe the opposite. More importantly, I prefer not to see our country sink much less race to the bottom, which is where this mentality threatens to take it.
Jared Bernstein today addressed the problem that you raise (at http://jaredbernsteinblog.com/improving-job-quality-through-high-road-contracting/ ) and I also recommend the Osterman article to which he links (at http://www.nytimes.com/2011/09/06/opinion/yes-we-need-jobs-but-what-kind.html?ref=opinion ) In that article, the impressive job growth in the Texas Rio Grande Valley, and the depressing description of life there where the median wage is just over $8 per hour, is what you hope to replicate across the country. No thanks. There are better ways.
Darren: “Deficits only matter when the economy is not growing to keep up. Our economy is not growing to keep up, so therefore deficits are a major factor.”
Indeed. We need deficits to pump money into the economy so that it will grow.
wow, cursed
i might agree with you about obama, and i agree with you about government SNAFU, but in the long run government is our only hope. in the first place you can never have NO government. all you can hope for is a government that tries to be on your side. or you get a government that is on the side of the big money. when that happens, folks do worse. as you know, if you only understood that doing worse is a result of electing “small government conservatives” and other liars beholden to big money.
you need to read about Walter Reuther.
sammy
just between us, i studied logic in school before i shifted to human cognition. most of what most people call “logic” is mere word association. even when they try to be logical they always forget their unexamined premises. always.
but i don’t think much of obama. if it wasn’t for the insane right, no one would put up with him at all.
Jack
Steinbeck wore rose colored glassed when he described California’s central valley.
The per capita income for my county is less the 16,000 dollars. The unemployment rate is over 16 percent. Things are bleak.
Bacon Davis mandates that government funded jobs must hire union or pay non union workers, union scale wages, plus the costs of the union benifit package. There is no union to speak of in Califonia north of the Bay, so they pay guys like me 46 dollars an hour to work.
Workmans comp insurance says that a journey man in my area should be paid 26 dollars an hour otherwise the employee is not a journeymen and presumably more likely to get hurt. No contractor in my county is paying that. They juke you down in some way, and they can because there is so little work.
I do not mind the $1600 a week checks during the job and $450 a week unemployment the rest of the time. But it’s not fair. For a society to have any sense of cohesion there has to be a basic sense of fairness.
To put communities back to work its better to have two guys working for 23 bucks an hour, then one guy at 46. To get a project done it’s better to have a cohesive society and workforce with twice as many people working on the job.
cirsed
you won’t have two guys working at 23 bucks an hour. you’llhave one guy working for 12.
Jack
there is a difference between “soaking the rich” and “taxing the rich.”
the first is an attitude, a sign of mental disease.
the second is a reasonable policy response to the current needs of the country. about a 3% increase in the tax… to Pre Bush Tax Cut levels… would solve the deficit caused by the Bush tax cuts. about a 10% emergency surtax until the deficit is no longer a political factor would solve the deficit caused by the Bush recession.
but if it come out of an attitude of “soak the rich” don’t tax me i’m too poor… then it’s a mental disease and we deserve what we are going to get.
PJR,
I prefer not to see our country sink much less race to the bottom
When you don’t have a job at $0 per hour, you have hit bottom.
yes, sammy
but cutting the min wage is not going to get you a job. that is only your fantasy. and i don’t mean fantasy as what you call snark or ad hominem. it’s just an “idea” that is not borne out by the facts.
all cutting min wage, or prevailing wage, will do is get the same people jobs at survival wages or less, so that when they are out of a job they have nothing to carry them through to the next job.
then you’ll have one guy working for ten. then min wage. then sammy will say the min wage is too high.
Sammy I think slavery might be the bottom, but we can disagree about that.
Frankly before I believe that there are $46/hour jobs in any state that are worth only $23/hour I’d need to have referenced verification in any reasonable form of documentation. If it is true why are there not caravans headed towards northern Ca, which is where I think you said those jobs exist.
The rich and their sycophants will always make the case that any effort to have them contribute more to the tax receipts comes out of a soak the rich mentality. They will never concede that they are getting more benefits from the government that makes their economic advantage a reality via our legal structure. My point is that the very wealthy need no additional assistance in making such a point and they won’t bother to make the fine distinction between taxing and soaking. Any taxation of the wealthy is too much to bear. Ask them and they will readily admit that the only modification that would be justified in regards to their tax liability is a downward change.
Jack,
that is undoubtedly true, but when i hear advocates for the poor expressing a “soak the rich” attitude i have to try to tell them they are shooting themselves in the foot in their mouth.
Bernie Sanders et al have just introduced a measure to “fix” Social Security by taxing the rich, bragging that this will fix SS without increasing taxes on the “middle class.” This is ignorant to the point of suicidal.
Workers can “fix” Social Security by paying for their own longer life expectancy with a raise in the tax of 40 cents per week per year, Most workers would not see a one percent increase over a whole working lifetime.
Instead, good ol liberal defenders of Social Security want to walk up to Petersons machine gun nest and wave signs demanding they pay for Social Security.
meanwhile the workers have said they’d rather pay a one percent increase in the tax than take any benefit cuts or have their retirement age raised.
So here we have a “soak the rich” mentality destroying the best deal workers have ever had.
jack
people who work in air conditioned office with college degrees cannot imagine that a construction worker would be “worth” almost as much as they are.
having eyes, they do not see.
Jack
Medium and large size jobs that are funded by the federal government are mandated to pay union wages. But it’s not easy to get those job. I have not received prevailing wage for years. I’m fourty miles from a city, and I did not impress the contractor who got most of that type work in that city from the get go, and I got fired from the other big contractor in that city.
Next year a fed project will be built near by that will require guys like me. I probably won’t get any of the work because it will be an out of town contractor who gets the bid, and he will bring his company people.
I team up with a guy who gets all the work from one particular local contractor. Another local contractor gives me all of his work, which I in turn share with my partner. Between the two of us we pretty much monoplize the trade around here.
Workmans comp insurence for my trade is expensive. In Sacremento and the Bay area my fellow journey men could demand around 26 bucks and hour during the boom. Journeymen are significently less likely to get hurt acording to workmans comp insurence, so when a contractor hires an aprentice workmans comp jacks the contractors rates. To get the break on the rates the contractor must claim to have paid his employee 26 bucks an hour. A union worker of my ilk in the Queen of cities pay and benifit pakage cost a contractor 46 dollars an hour
I live in fly over country hours away from these metroplexes but the same workmans comp table applies to my area. This counties medium income ranks near last in the state. Wages are much lower then in the City by the bay. But because of Davis and Bacon after the Federal government breaks ground down the road from me people with my skills will recieve either 46 dollars an hour in direct pay or in combination of pay and benifits. This means the tax payers are having to pay roughly twice as much as every body else around here and as such are getting shafted.
Jack.
I’m big city born and raised. I did not move to a jerk water place to get wealthy – I moved here so I could wizz off my front poarch. I made my choice.
Personally I think 46 bucks an hour sucks, but here in yokelville it’s like winning the lotto.
I’m all for shifting some wealth to the working man, but I’m not for assuming additional public deft for a dubious project.
coberly, what if that extra few dollars paid into SS is just considered as “up for grabs” so that, in order to get a few billion more for general fund spending, benefits are reduced anyway (using some “crisis” language, as usual). When I “separate” the general fund cash flows from SS cash flows, I conclude that if we want to reduce or balance the general fund flows then it should be with with general fund sources. You are confusing the two issues of deficit and SS when you defend the rich against increased income tax and give payroll tax arguments as a reason. Don’t be part of the problem in the mixing up of the two cash flows.
To be honest, if I believed that raising the marginal rate on the top 5% to 50% would set America on the path to a new century of prosperity with rewards to all in the masses, I would support such a policy. Since it won’t achieve this, consideration of such a jump in income tax is “off my table”. But I do support expiration of the Bush tax cuts, first on those with the money and then, once the masses are back on their feet, on everyone else. Why? Because I believe that the government needs the revenues it takes to deliver what the people, when they vote, ask the government to deliver. Right now what they seem to want is jobs.
Anna
It ain’t me who mixes up the flows. It is the defenders of Social Security ™ who want to use general revenue and tax the rich to pay for Social Security, which will only turn Social Security into welfare as we knew it.
I’m all for raising taxes on the rich, and everyone else, right now. Just not for mixing it up with Social Security which MUST remain worker funded if it is going to remain Social Security at all.
Even rescinding the Bush tax cuts on “the masses” will not hurt the masses. Those who have jobs at all can afford a 3% or less raise in their taxes… without even noticing it… and the money will come back to them “tenfold”.
I am sorry my writing is so poor you think I am defending the rich against increased income taxes.
I tried so hard to be clear I was against the “soak the rich” attitude that means “don’t tax me,” tax the other guy… because that means no one will pay the taxes needed to restore this country to sanity.
The extra few dollars that SS needs would not be considered “up for grabs” if we lived in a sane country where at least the defenders of social security ™ knew what they were talking about.