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Greek debt default timebomb set to explode mid July?


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I'm not sure the relationship between "corruption" and the level of taxation.
There isn't one. That was exactly my point.

 

Re. "Obamacare", as you well know, I would have preferred to see a single payer system, but no way that was happening politically. I think it's ironic that we've basically got what used to be a Republican plan. Watching Romney split hairs during this election cycle may provide for some light entertainment. As for the bailouts, a part of me accepts the argument that it would be naive to think we could have let them sink without catastrophic consequences (but I am not an economist, so I don't know), another part of me has been outraged since the beginning that we made Wall Street whole, on the taxpayers' backs, as opposed to giving relief to homeowners (which, in shear dollar terms, could have been had for something like 1/38 the outlay), and then to see what has become (or not) of the money since then........ Not that I'm against the "de-leveraging" of the housing market, which in the long run will probably be healthy. We wouldn't have had that if we just threw the money into bad mortgages. But the whole "socialization of risk / privatization of gain" dynamic at work here, and how our own tax dollars seem to have been used to exacerbate the widening economic gap instead of reducing it leaves me very bitter. If anything, the economic crisis should have been an opportunity to right the wrongs that got us there in the first place. Instead, it seems as if that opportunity is going to be entirely wasted. On that point, I am in agreement with you and roadtrip.

 

I liked the Donald Duck clip. At least they knew how they were paying for their wars back in those days.

Edited by retro-man
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The corruption index measures these factors:

 

Broadly speaking, the surveys and assessments used to compile the index include questions relating to bribery of public officials, kickbacks in public procurement, embezzlement of public funds, and questions that probe the strength and effectiveness of public sector anti-corruption efforts.

 

That is an entirely different set of criteria than, for whatever reason, simply not paying taxes on the full amount owed, which is what is really happening in Greece. It doesn't appear as though Greeks are bribing government officials to look the other way when they don't report income or assets (which would show up on that index).

 

For that matter, not paying taxes is not necessarily synonomous with corruption. A person can avoid paying taxes by using completely legal loopholes or tax shelters in that nation's tax code. The corruption index is not necessarily indicative as to why the Greeks are not paying taxes.

 

This is what happened in the U.S. during the heyday of 90+ percent top rates for the federal income tax. Most people did not pay those rates, because of entirely legal loopholes and tax shelters. Since 1962 (when John F. Kennedy, Sr., was president), we've reduced the top rate while closing various loopholes. The result is that, today, upper income wage earners pay a higher percentage of total taxes collected than they did during the 1950s, when the top rates were 90+ percent.

 

A big overlooked problem in Greece is the recent increase in government spending. Tax revenues have remained relatively constant in recent years, consuming nearly 40 percent of Greece's gross domestic product. The burden of government spending, by contrast, has jumped significantly and now exceeds 50 percent of the nation's economic output.

 

Even the economists at the Paris-based Organization for Economic Cooperation and Development (OECD) admit that tax evasion is driven by high tax rates. The OECD is not an offshot of the Heritage Foundation - it is the international bureaucracy pushing for global tax rules to undermine tax competition and reduce fiscal sovereignty.

 

And here is what the economist quoted in The New York Times said in another article:

 

Macroeconomic and microeconomic modeling studies based on data for several countries suggest that the major driving forces behind the size and growth of the shadow economy are an increasing burden of tax and social security payments… The bigger the difference between the total cost of labor in the official economy and the after-tax earnings from work, the greater the incentive for employers and employees to avoid this difference and participate in the shadow economy. Several studies have found strong evidence that the tax regime influences the shadow economy. …In Austria, the burden of direct taxes (including social security payments) has been the biggest influence on the growth of the shadow economy… Other studies show similar results for the Scandinavian countries, Germany, and the United States. (emphasis added) In the United States, analysis shows that as the marginal federal personal income tax rate increases by one percentage point, other things being equal, the shadow economy grows by 1.4 percentage points. …A study of Quebec City in Canada shows that people are highly mobile between the official and the shadow economy, and that as net wages in the official economy go up, they work less in the shadow economy. This study also emphasizes that where people perceive the tax rate as too high, an increase in the (marginal) tax rate will lead to a decrease in tax revenue.

 

The simple fact is that higher rates encourage more evasion. The threshold at which evasion occurs undoubtedly differs in various nations - what seems high to an American may seem reasonable to a Swede. But that doesn't mean that the relationship between high taxes and tax evasion rates does not exist.

Edited by grbeck
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Re. "Obamacare", as you well know, I would have preferred to see a single payer system, but no way that was happening politically. I think it's ironic that we've basically got what used to be a Republican plan. Watching Romney split hairs during this election cycle may provide for some light entertainment.

For a Federalist like me it's easily explained as Romneycare=State-level and Obamacare=Federal-level. What works (or doesn't, depending upon your point of view) for Massachusetts doesn't necessarily work in Arizona, and shouldn't be expected to. Is that "splitting hairs"?

 

As for the bailouts, a part of me accepts the argument that it would be naive to think we could have let them sink without catastrophic consequences (but I am not an economist, so I don't know), another part of me has been outraged since the beginning that we made Wall Street whole, on the taxpayers' backs, as opposed to giving relief to homeowners (which, in shear dollar terms, could have been had for something like 1/38 the outlay), and then to see what has become (or not) of the money since then

When you think "relief for homeowners", what exactly are you referring to? Something like this? (from The Atlantic)

 

Although the government's efforts to stop foreclosures have had lackluster results, another new program hopes to do better. The Department of Housing and Urban Development's new Emergency Homeowners Loan Program offers interest-free loans of up to $50,000 that can be forgiven entirely in certain circumstances.

Giving people who are underwater on their mortgages a "free" $50,000 is a good idea? Who's getting bailed out, the homeowner, or the mortgage company?

........ Not that I'm against the "de-leveraging" of the housing market, which in the long run will probably be healthy. We wouldn't have had that if we just threw the money into bad mortgages. But the whole "socialization of risk / privatization of gain" dynamic at work here, and how our own tax dollars seem to have been used to exacerbate the widening economic gap instead of reducing it leaves me very bitter. If anything, the economic crisis should have been an opportunity to right the wrongs that got us there in the first place. Instead, it seems as if that opportunity is going to be entirely wasted. On that point, I am in agreement with you and roadtrip.

I think you may be approaching that agreement from a completely different angle. I don't see this as an opportunity to become a European-socialist model, but an example of how government influence can have negative, albeit unintended, consequences.

Edited by RangerM
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Giving people who are underwater on their mortgages a "free" $50,000 is a good idea? Who's getting bailed out, the homeowner, or the mortgage company?

 

Good question, and if all the money that was given to the banks instead went towards creating jobs and hiring the unemployed ?

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No, Mark had it right: Rampant tax avoidance is the result of an endemic culture of corruption LINK, not of too high tax rates. Look at Sweden. Think things through man, before you give out what passes for analysis on Fox News. Greece scored 4.6 (0 being absolutely corrupt, 10 being no corruption whatsover), Sweden scored 9.3, the US scored 7.2 (new record low, despite the Bush tax cuts - must be "the new entitlement" e.g. "mine mine mine" kicking in). Canada scored 8.7, Australia scored 8.8, the UK scored 8.6 (and they all have higher taxes than we do, as you well know). There are multiple different studies for this, and they all give roughly the same result.

 

Here: LINK This chart gives tax revenues (aggregate from all sources, Federal, State, and Local, income, sales, VAT, tarrifs - whatever) as a percent of GDP. As you can see, the US is much lower on the list than the average for OEDC, at about 28% - not the half that Fox News has been putting in your head (information from The Tax Foundation - conservative anti-tax watchdog group - agrees with this figure). Mind you, if we were taxing what the government is spending, we'd be at about 32% or so, with no deficit; still considerably lower than the 36% average for OEDC. The much less corrupt Scandinavian countries are taxed much more heavily than us - all the way up to roughly 50% (Fox News territory!) for Denmark.

 

"Starving the Beast" since 1980. Yay, we're going all the way back to the days of the Founding Fathers! Dont worry, we'll fit 'ya with some wooden choppers when your teeth go, and this time the slaves will be called "human resources".

 

No, Mark had it wrong. Had you read the entirety of my post, you would have seen that I posited that, at least part of the problem of tax avoidance resides in the ability of taxpayers to avoid paying taxes courtesy of the complexities and loopholes of the U.S. tax code. And as grbeck pointed out, this type of tax avoidance is perfectly legal, rather than a consequence of corruption.

 

Moreover, what you failed to grasp in my post is the fact that federal tax revenues have remained relatively constant in the 65-year period from 1946-2010, regardless of top marginal tax rates during that period. My source? The Obama White House's Office of Management and Budget Web site:

 

http://www.whitehouse.gov/omb/budget/Historicals (Table 1.2, an .xls file.)

 

Running the formulas, I found that average federal tax receipts from 1946 to 2010 were 17.75 percent of GDP, with a standard deviation of 1.23 percentage points. In the glory years from 1951 to 1960 (when top marginal tax rates were the highest in history, and before JFK lowered them), federal tax revenues averaged a mere 17.5 percent of GDP.

 

Perhaps more importantly, using that roughly 18 percent of tax revenue figure as a percent of GDP, it's worth noting that during Reagan's term of office, the U.S. GDP grew by 84 percent. Given the near constant rate of taxation as a percent of GDP, that equates to almost doubling the amount of annual tax revenues that the federal government collected from when Reagan first took office to the end of his term. U.S. GDP growth under Bill Clinton: 57 percent. George W. Bush: 47 percent. Given the awesome economic growth that occurred during the Reagan Administration, along with the resultant increase in federal tax receipts, one would think that liberals -- for whom tax revenues are so dear to their hearts -- would hold Ronald Reagan in higher esteem. Well, one would think. . . .

 

Perhaps MOST importantly, it's worth noting that the U.S. -- in spite of lower taxation, relative to the rest of the OEDC countries -- is the leading economic powerhouse in the world, with 25 percent of the world's GDP and with only 4 percent of the world's population. One would think that the "economic ministers" of the rest of the OEDC countries would sit up and take notice. (Actually, some of them have. See Chile, Colombia, and South Korea.)

 

Finally, it's not useful to compare the U.S. to European countries. We don't want to be like them. If you don't understand why, then maybe a refresher course in American history is in order.

Edited by Roadtrip
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Finally, it's not useful to compare the U.S. to European countries. We don't want to be like them. If you don't understand why, then maybe a refresher course in American history is in order.

 

Your all Obama leftie commies now in the USA.

 

UK is far right under Cameron..

 

George W Bush had 47% GDP whats it under Obama at the moment Roadtrip? (I know he got handed down a fooked up economy by Bushie just interested though).

 

Loved Ronnie we put a statue up in London on Independence Day as a tribute to peace he created during the cold war with the USSR he would have been 100 years old this year. Only thing l did not like about Reagan was he started a "bring the work back to the USA" campaign that boosted your GDP by 84% at the time, we lost all our Boeing 747 RB211 cowls & engine strut work at the time at BAC Weybridge, still it did not do Boeng any good they could not close tolerance taper ream to save their lives on the strut they cocked them up when they got them back Stateside.

 

If good ole Ronald Reagan was around today he would get the likes of Michael Dell & Steve Jobs types of this world around a table bang their heads together & tell them to bring work back from China for American hands to build with maybe a light threat to tax the $100's of billions cash mountains they sitting on the sidelines doing nothing with.

Edited by Ford Jellymoulds
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Good question, and if all the money that was given to the banks instead went towards creating jobs and hiring the unemployed ?

Problem is, government doesn't generate income. It can only spend what it takes from others, and taking from others prevents them from creating jobs and hiring the unemployed. And once the money government takes is spent, it can only take more, since it doesn't generate wealth through creativity.

 

Also iirc, most of the bank bailout money has been paid back (with a few notable exceptions). Not a justification, but an observation. The "stimulus" certainly didn't yield anywhere near the same return in terms of jobs or revenues.

Edited by RangerM
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Problem is, government doesn't generate income.

Depends. Here in Ontario, Canada, for example, hydro-electric power is publicly owned, and generates lots of income every month as people pay their bills.

 

Building the hydro-electric system in the early 20th century, the government generated an explosive development and resultant income in central Ontario.

 

Later, in the 1950's, the government (along with the US government) finished the St. Lawrence Seaway, which also generated income, allowing cargo ships easier access to the Great Lakes.

 

 

 

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Depends. Here in Ontario, Canada, for example, hydro-electric power is publicly owned, and generates lots of income every month as people pay their bills.

 

Building the hydro-electric system in the early 20th century, the government generated an explosive development and resultant income in central Ontario.

 

Later, in the 1950's, the government (along with the US government) finished the St. Lawrence Seaway, which also generated income, allowing cargo ships easier access to the Great Lakes.

 

Wow, talk about taking things out of context. In that case, a communist government must generate the most income of all, huh? :finger:

Lets socialise all natural production, then you can say the government makes money logging and fishing too! :banghead:

 

How about the liquor boards in every province except Alberta? They are "government run" and make huge profits...oh wait..those huge profits are initially TAX DOLLARS!

 

 

The government makes money.....yeah ok :confused:

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Depends. Here in Ontario, Canada, for example, hydro-electric power is publicly owned, and generates lots of income every month as people pay their bills.

 

Building the hydro-electric system in the early 20th century, the government generated an explosive development and resultant income in central Ontario.

 

Later, in the 1950's, the government (along with the US government) finished the St. Lawrence Seaway, which also generated income, allowing cargo ships easier access to the Great Lakes.

Using your example of the hydro-electric power facility, I see it slightly differently, although I can agree that government can be "visionary". (albeit usually myopic, unfortunately)

 

True, the government is utilizing a resource to siphon revenue (generating income for the government), but is it being creative? Without creativity, can new income truly be generated? I'd say no. Government has little (or no) incentive to become more efficient. (the key to that is the "new income", which to me is what really matters, if you want a growth economy)

 

The same would be true of an established, privately-operated hydro company, IF they did not strive for greater efficiency. Both would simply be cash cows. A good thing, but not a long-term strategy for a growing economy.

 

There are cases where such facilities are government-owned, but privately-operated, that can exhibit a "best of both worlds", but they are (from what I've seen) the exception.

 

I'll also agree that through power generation (or interstate highways--anything that promotes commerce) can facilitate wealth generation, but I would submit that upon reaching maturity they by themselves don't create anything. An interstate highway (or bridge, if you prefer) to nowhere is a waste because there is no demand for it, and no creative spark will be directed toward it. In such cases, and if the government's goal is to put money in people's pockets, you might as well build highways and dams with shovels or spoons.

Edited by RangerM
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No, Mark had it wrong. Had you read the entirety of my post, you would have seen that I posited that, at least part of the problem of tax avoidance resides in the ability of taxpayers to avoid paying taxes courtesy of the complexities and loopholes of the U.S. tax code. And as grbeck pointed out, this type of tax avoidance is perfectly legal, rather than a consequence of corruption.

 

Moreover, what you failed to grasp in my post is the fact that federal tax revenues have remained relatively constant in the 65-year period from 1946-2010, regardless of top marginal tax rates during that period. My source? The Obama White House's Office of Management and Budget Web site:

 

http://www.whitehouse.gov/omb/budget/Historicals (Table 1.2, an .xls file.)

 

Running the formulas, I found that average federal tax receipts from 1946 to 2010 were 17.75 percent of GDP, with a standard deviation of 1.23 percentage points. In the glory years from 1951 to 1960 (when top marginal tax rates were the highest in history, and before JFK lowered them), federal tax revenues averaged a mere 17.5 percent of GDP.

 

Perhaps more importantly, using that roughly 18 percent of tax revenue figure as a percent of GDP, it's worth noting that during Reagan's term of office, the U.S. GDP grew by 84 percent. Given the near constant rate of taxation as a percent of GDP, that equates to almost doubling the amount of annual tax revenues that the federal government collected from when Reagan first took office to the end of his term. U.S. GDP growth under Bill Clinton: 57 percent. George W. Bush: 47 percent. Given the awesome economic growth that occurred during the Reagan Administration, along with the resultant increase in federal tax receipts, one would think that liberals -- for whom tax revenues are so dear to their hearts -- would hold Ronald Reagan in higher esteem. Well, one would think. . . .

 

Perhaps MOST importantly, it's worth noting that the U.S. -- in spite of lower taxation, relative to the rest of the OEDC countries -- is the leading economic powerhouse in the world, with 25 percent of the world's GDP and with only 4 percent of the world's population. One would think that the "economic ministers" of the rest of the OEDC countries would sit up and take notice. (Actually, some of them have. See Chile, Colombia, and South Korea.)

 

Finally, it's not useful to compare the U.S. to European countries. We don't want to be like them. If you don't understand why, then maybe a refresher course in American history is in order.

roadtrip, my response was a bit knee-jerk - in response to the old "if you don't lower our taxes we'll all turn into criminals" blackmail. I was merely pointing out that corruption (be it government, or widespread in the population - I get the distinction - is more a cultural force than anything). If we followed that logic with everything, marijuana would have been legalized years ago (which may not be a bad thing.....).

 

You are correct about taxes - they have remained relatively constant as a share of GDP for about 50 years. Perhaps I was putting words into your mouth when I suggested you were one of those who believe they are paying "half" their income in taxes of one sort or another. If so, I apologize. I was unaware of the federal figure of around 18%. But the total aggregate of federal, state, and local of every type that can be accounted for, I know has been constant at about 28% for the past 50 years or so. But to listen to some, taxes have been exploding out of control during our lifetimes. Not so. (Now expenditures - and hence the deficit - that's another story. But back to that Donald Duck clip.........)

 

I might dispute your characterization of us as an economic powerhouse. The one area in which we lead the world hands down is current account deficit. One reason we are an economic powerhouse is because the accumulated wealth of the past 3 or 4 generations is flooding out of this country and into the hands of foreigners. We've been doing great things for China! Ourselves? Not so much. Most expert analysis don't see this trend reversing, and in fact see very troubling possibilities ahead with retiring baby-boomers and unchecked medical inflation. We're on a crash course, and we didn't have to be. It is the result of bad policy choices, and a blind faith in capital markets who don't care about you or me. Economist David Korten characterized "capital" as an alien life-force that is colonizing us, and exists not to serve us, but solely for the purpose of replicating itself. (Korten's take on "financialization" - see link above) I happen to agree with that view. The only thing speedy is our decline. CIA world factbook currently lists our per capita GDP as 12th in the world. Heavily "Socialist" Sweden, Denmark, and Norway, and 8 other countries are all higher. I have a feeling that ranking was different 40 years ago.

Edited by retro-man
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Your all Obama leftie commies now in the USA.

 

NOT!

 

UK is far right under Cameron..

 

Probably not.

 

George W Bush had 47% GDP whats it under Obama at the moment Roadtrip? (I know he got handed down a fooked up economy by Bushie just interested though).

 

For the 2009 and 2010 fiscal years (from the White House OMB Web site), the U.S. economy grew by 0.793 percent. It's an unfair comparison, though, since I was giving figures for the three most-recent two-term presidents, who served eight years each, while Obama has only served about 30 months. However, the recession officially ended as of Q2 2009 (according to the National Bureau of Economic Reseach, which is the official arbiter of such things), and when recessions end -- as history demonstrates -- the economy is supposed to see a large bounce in economic growth. That hasn't happened. No, the recovery is anemic, and there's a good reason why.

 

Loved Ronnie we put a statue up in London on Independence Day as a tribute to peace he created during the cold war with the USSR he would have been 100 years old this year.

 

I think that's terrific that you guys erected a statue of Reagan in London. Just awesome! It's kind of ironic that the Brits would dedicate it on Independence Day, but then again, maybe it's a testament to the fact that our countries are such strong allies.

 

I read somewhere (can't back it up) that there are several capital cities in former Soviet Bloc countries that have also erected statues of Ronald Reagan.

 

I don't know of a Reagan statue in the U.S. (other than at the Reagan National Library). But we did name an airport after him. And we dedicated a pretty impressive piece of military hardware to him -- CVN-76 (aka the U.S.S. Ronald Reagan):

 

uss-ronald-reagan.jpg

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NOT!

 

 

 

Probably not.

 

 

 

For the 2009 and 2010 fiscal years (from the White House OMB Web site), the U.S. economy grew by 0.793 percent. It's an unfair comparison, though, since I was giving figures for the three most-recent two-term presidents, who served eight years each, while Obama has only served about 30 months. However, the recession officially ended as of Q2 2009 (according to the National Bureau of Economic Reseach, which is the official arbiter of such things), and when recessions end -- as history demonstrates -- the economy is supposed to see a large bounce in economic growth. That hasn't happened. No, the recovery is anemic, and there's a good reason why.

 

 

 

I think that's terrific that you guys erected a statue of Reagan in London. Just awesome! It's kind of ironic that the Brits would dedicate it on Independence Day, but then again, maybe it's a testament to the fact that our countries are such strong allies.

 

I read somewhere (can't back it up) that there are several capital cities in former Soviet Bloc countries that have also erected statues of Ronald Reagan.

 

I don't know of a Reagan statue in the U.S. (other than at the Reagan National Library). But we did name an airport after him. And we dedicated a pretty impressive piece of military hardware to him -- CVN-76 (aka the U.S.S. Ronald Reagan):

 

uss-ronald-reagan.jpg

 

Thanks for that Roadtrip

 

I was only teasing you with the first two. Most Brits are tickled by the fact you think we are all commies, maybe the EU is but the UK is definitely not, l was just doing a reverse take on things.

 

USS Ronald Reagan is one awesome ship. l had a look at USS George HW Bush when it was in the Solent the size is just huge, it could not come into our navy dockyard in Portsmouth the Nimitz carriers are to big for our harbours.

 

We are just cutting up all our carriers up at the moment, we are buying two new carriers but can't afford to buy any aircraft to put on them due to the austerity cutbacks here, so one will be used by the French who will use them to fly their aircraft off the decks, the other will be used with helicopters only.

Edited by Ford Jellymoulds
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I liked the Donald Duck clip. At least they knew how they were paying for their wars back in those days.

Know what you get if you plant a "victory garden" in today's economy? A misdemeanor charge, including possible jail time.

 

Keep in mind, she planted the garden after the city ripped up her yard to replace a sewar line.

 

Damn, Ranger, your so much more articulate than I am.

Nice explanation, clear and concise.

Thanks.

 

In other news, U.S. Payrolls Rise 18,000; Jobless Rate Climbs to 9.2%

U.S. employers added 18,000 workers in June, the fewest in nine months, and the unemployment rate unexpectedly climbed, indicating a struggling labor market.

 

The increase in payrolls followed a 25,000 gain that was less than half the rise initially estimated, Labor Department data showed today in Washington. The median estimate in a Bloomberg News survey called for a June gain of 105,000. The unemployment rate rose to 9.2 percent, the highest level this year. Hiring by companies, which excludes government agencies, was the weakest since May 2010.

How many times does something unexpected have to happen before it becomes expected? If something continues to be unexpected, what does that say about the people doing the projections?

Edited by RangerM
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Nothing we didn't already know about them by October of 2008.

They also had to revise May down by 25,000, and April has been revised down by 19,000.

 

Perhaps it's time to get a new set of figurers.

 

About the only thing we seem to be able to expect is things are (or will be) worse than projected.

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I projected all of this, as early as 2000. (By which time I had read David Korten's 1998 book "when corporations rule the world", and got a clear vision that Wall Street was a house of cards, and that we were no longer creating real, material, wealth in this country. At least not in proportion to the way we were consuming it.) I'm sorry it had to really get rolling under 'W's watch, but that didn't really shock me either. I am disappointed not that Obama hasn't managed in 30 months to turn around the culmination of 30 years of bad policy, but rather that he is wasting a perfectly good crisis by being too willing to compromise. But I'm sure he has to walk a tightrope as far as public perception goes. I'm unwilling to 2nd guess his handling of that, but there's a lot to be said for just doing the right thing sometimes.

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.....that he is wasting a perfectly good crisis by being too willing to compromise.

 

So what should he have done? America has had ups and (far lower) downs in the past. Are the wisest decisions the ones made under duress?

 

What, in your opinion, would mean that Obama didn't let this "perfectly good crisis" go to waste?

 

And don't forget, the election of 2010 is a direct result of NOT "being too willing to compromise". People simply don't want the full Democrat-Socialist America. If you want to believe that 2010 is merely the result of disinformation propaganda, we can stop our conversation here, because it means we're too far apart to discuss.

Edited by RangerM
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We have had ups and downs before. Remember what swept Reagan into office? Well, maybe you don't. I was already married and working during the last years of the "Carter Malaise". I also remember the Nixon oil shock. I'm a bit too young to remember the 1959 recession. The one thing that all of these had in common - including the one that resulted in the "Reagan Revolution" (digest that phrase for a moment - because that's what it really was - it transformed our political dialogue, attitudes about government and economy ever since that point - it has often been pointed out that even Clinton, with his NAFTA and welfare reform, was to the right of Nixon so, sorry, I'm not buying the "full Democrat-Socialist" meme) - the one thing that all those economic downturns had in common is that none of them were compared in the press at the time to The Great Depression. None of them bore comparison. The situation that Obama walked into, "the worst economic downturn in 80 years", does. First, let's get that distinction clear. It is clear enough to me what policies and trends led up to the current mess. I'm not sure why there is even disagreement on it.

 

Unfortunately, "disinformation propaganda" constitutes much of politics nowadays. We can point fingers to certain authors of strategies that have entered political mainstream in the past 30 years - like "carpet bombing" the media with disinformation until it gains credence simply by becoming part of the dialogue. Are you going to tell me that that strategy is not used, and used often in modern politics - both overtly, and covertly (i.e. through "astroturf" campaigns)? Yes, there is room for different interpretations of history - none of us, certainly not me, is smart enough to make room in our heads for every knowable fact and factor, and come up with a balanced view of reality (whatever that is). The point of political discourse in a Democracy is perhaps a faith (maybe unfounded) that collectively we can come a bit closer to that omniscience than we can individually. Any strategy that relies on dishonest, rather than honest, dialogue (i.e. strategies focused on victory and force of will as opposed to force of reason) can only polarize and have the opposite effect - making us collectively stupider. As with the economy, I have my own view of who led us down that path too.

Edited by retro-man
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p.s. In answer to your first question, I think he should have swaggered through with his agenda, critics be damned, confident that he was doing the right thing (perhaps because God told him to before breakfast) and that history would judge him kindly. That's what real leadership is about.

Edited by retro-man
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p.s. In answer to your first question, I think he should have swaggered through with his agenda, critics be damned, confident that he was doing the right thing (perhaps because God told him to before breakfast) and that history would judge him kindly. That's what real leadership is about.

You mean he didn't? Given he had both houses of Congress on his side, it seems to me he got exactly what he asked for: Closing Gitmo, stimulus, auto bailouts, Obamacare, etc. You might disagree with regard to Obamacare, but he told Pelosi/Reid to get it done, and that's exactly what they did. You may not like the result, but that is between you and him. As for the others, the results speak for themselves.

 

As far as "swaggering", you must have admired the way W took to the job, even if you didn't like the agenda.

We have had ups and downs before. Remember what swept Reagan into office? Well, maybe you don't. I was already married and working during the last years of the "Carter Malaise". I also remember the Nixon oil shock. I'm a bit too young to remember the 1959 recession. The one thing that all of these had in common - including the one that resulted in the "Reagan Revolution" (digest that phrase for a moment - because that's what it really was - it transformed our political dialogue, attitudes about government and economy ever since that point - it has often been pointed out that even Clinton, with his NAFTA and welfare reform, was to the right of Nixon so, sorry, I'm not buying the "full Democrat-Socialist" meme) - the one thing that all those economic downturns had in common is that none of them were compared in the press at the time to The Great Depression. None of them bore comparison. The situation that Obama walked into, "the worst economic downturn in 80 years", does. First, let's get that distinction clear. It is clear enough to me what policies and trends led up to the current mess. I'm not sure why there is even disagreement on it.

As bad as things are Retro, I'd assert we aren't (and never were) in as poor a position as during the Great Depression. Also recall that even after the crash of 1929, the unemployment rate was going down, just before FDR's "fixes". Then it went to hell. I don't suggest things are going to get as bad today as then, but given the tepidity of this "recovery", and the direction things are going as a result of uncertainties (caused by this administration), can you see the parallel?

 

If Obama isn't reelected, it's on him. (just as it was on Carter).

Unfortunately, "disinformation propaganda" constitutes much of politics nowadays. We can point fingers to certain authors of strategies that have entered political mainstream in the past 30 years - like "carpet bombing" the media with disinformation until it gains credence simply by becoming part of the dialogue. Are you going to tell me that that strategy is not used, and used often in modern politics - both overtly, and covertly (i.e. through "astroturf" campaigns)? Yes, there is room for different interpretations of history - none of us, certainly not me, is smart enough to make room in our heads for every knowable fact and factor, and come up with a balanced view of reality (whatever that is). The point of political discourse in a Democracy is perhaps a faith (maybe unfounded) that collectively we can come a bit closer to that omniscience than we can individually. Any strategy that relies on dishonest, rather than honest, dialogue (i.e. strategies focused on victory and force of will as opposed to force of reason) can only polarize and have the opposite effect - making us collectively stupider. As with the economy, I have my own view of who led us down that path too.

Credit the "win at all cost" mentality that pervades modern politics. Supposedly, Obama will have a billion dollars at his disposal for his reelection campaign. Is that worth it, even to a Democrat? For a party of the middle class, he sure isn't playing with middle class money. You can bet a significant portion of it will be directed to negative campaigning, as well (Yes, the Republicans will too). All in an effort to portray the other side's motives as evil (see Paul Ryan throw grandma off the cliff). If you truly believe that Paul Ryan's motivations are to kill people, it's easy to justify, and promote as truth.

 

The single, most shameful travesty hoisted upon the American people is (IMO) that Government is the solution to all our ills. I heard somewhere that the size/importance of the people lessens as the size of Government increases. I believe that to be true, and a "collectively stupider" populace is exactly what you get as a result. Perhaps you're familiar with the cheating scandal in Atlanta schools?

 

.Award-winning gains by Atlanta students were based on widespread cheating by 178 named teachers and principals, said Georgia Gov. Nathan Deal on Tuesday. His office released a report from the Georgia Bureau of Investigation that names 178 teachers and principals – 82 of whom confessed – in what's likely the biggest cheating scandal in US history.

 

This appears to be the largest of dozens of major cheating scandals, unearthed across the country. The allegations point an ongoing problem for US education, which has developed an ever-increasing dependence on standardized tests.

 

The report on the Atlanta Public Schools, released Tuesday, indicates a "widespread" conspiracy by teachers, principals and administrators to fix answers on the Criterion-Referenced Competency Test (CRCT), punish whistle-blowers, and hide improprieties.

 

It "confirms our worst fears," says Mayor Kasim Reed. "There is no doubt that systemic cheating occurred on a widespread basis in the school system." The news is “absolutely devastating," said Brenda Muhammad, chairwoman of the Atlanta school board. "It’s our children. You just don’t cheat children.”

 

On its face, the investigation tarnishes the 12-year tenure of Superintendent Beverly Hall, who was named US Superintendent of the Year in 2009 largely because of the school system's reported gains – especially in inner-city schools. She has not been directly implicated, but investigators said she likely knew, or should have known, what was going on. In her farewell address to teachers in June, Hall for the first time acknowledged wrongdoing in the district, but blamed other administrators.

 

The Atlanta cheating scandal also offers the first most comprehensive view yet into a growing number of teacher-cheating allegations across the US, reports of which reached a rate of two to three a week in June, says Robert Schaeffer, a spokesman for the National Center for Fair & Open Testing, which advocates against high-stakes testing.

 

It's also a tacit indictment, critics say, of politicians putting all bets for improving education onto high-stakes tests that punish and reward students, teachers, and principals for test scores.

 

"When test scores are all that matter, some educators feel pressured to get the scores they need by hook or by crook," says Mr. Schaeffer. "The higher the stakes, the greater the incentive to manipulate, to cheat."

So, "No Child Left Behind" made them cheat. No doubt they did it for the children (and not to maintain their status quo). I'm not the smartest person in the world, but I'm not stupid enough to believe that.

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You mean he didn't? Given he had both houses of Congress on his side, it seems to me he got exactly what he asked for: Closing Gitmo, stimulus, auto bailouts, Obamacare, etc. You might disagree with regard to Obamacare, but he told Pelosi/Reid to get it done, and that's exactly what they did. You may not like the result, but that is between you and him. As for the others, the results speak for themselves.

True, he did gitter done as far as he could on Health Care reform - "as far as he could" being warmed-over Republican ideas, which all of a sudden raised the howls of the damned from previous proponents of the very same ideas (I am aware of the difference between a national plan and a state plan, and appreciate your position on that - except that I think the Republicans brought the same thing up as a national plan back during the Clinton administration when Hillary got engaged in the debate - correct me if I'm wrong on that point).

 

As far as "swaggering", you must have admired the way W took to the job, even if you didn't like the agenda.
Your sarcasm meter's broken. I hope it's still under warranty.

 

As bad as things are Retro, I'd assert we aren't (and never were) in as poor a position as during the Great Depression.
I hear that a lot, and I would assert that that is entirely thanks to policies that were put in place under the administration of FDR (who all of a sudden is become the Republican antichrist - Hitler and Stalin all rolled up into one) like social security and unemployment insurance - programs that some on the right would like to eliminate in their entirety, throwing us back to some pre-civil war American idyll.
Also recall that even after the crash of 1929, the unemployment rate was going down, just before FDR's "fixes". Then it went to hell.
Well, I'll have to apologize for getting my education on the period back during the 60s, when it was still taught by people who actually remembered it, and I just don't recall hearing any of this. I know what my parents and grandparents thought of Roosevelt - but of course my parents and grandparents weren't clever enough to author studies for the Heritage Foundation or the Cato Institute. Neither were my history teachers obviously. None of which directly refutes your allegations. I'm just sayin', that's all.
I don't suggest things are going to get as bad today as then, but given the tepidity of this "recovery", and the direction things are going as a result of uncertainties (caused by this administration), can you see the parallel?
Personally I think the "uncertainties" which are often mentioned, not just by you, but in parts of the business press - parts - are overplayed, and are the preoccupation of people who are focused on maximizing short term profits rather than building a sustainable economy or a lasting business. If they lose short term, they lose, period. They're not in it for the long term, they're not focused on any greater good. At my level at least, the survival of my business is not dependent on minutia of tax or regulatory policy, or even on a 5% or so swing in my costs of doing business. That's not going to make me or break me. But I am a professional - I am in this for the work, and I need enough to cover my expenses and to live on. I don't have to answer to a contingent of people who insist that their profits be maximized (well, except for my clients - but even most of them take a longer term view). I will quote Costco Jim Sinegal again - in response to criticism from "Wall Street" that he is too generous to his employees: "You have to recognize -- and I don't mean this in an acrimonious sense -- that the people in that business are trying to make money between now and next Thursday. We're trying to build a company that's going to be here 50 and 60 years from now." I doubt if he is one of those - in fact I know he isn't - who are holding his corner of the economy hostage to deregulation and tax cuts.

 

If Obama isn't reelected, it's on him. (just as it was on Carter).
Funny you should mention Carter. I always thought - still do - that he was a great human being, very intelligent, and not that bad of a President (nor was Ford, or Bush I). I suppose Reagan did something that the country needed done, but we should have taken a few of those pills then put the bottle back in the medicine cabinet for another day. Instead we took the whole damn bottle, then went back and robbed the drug store. We went on a 30 year bender of smashing unions, deregulating and privatizing, and demonizing public employees. Now we've got the consequences.

 

Credit the "win at all cost" mentality that pervades modern politics. Supposedly, Obama will have a billion dollars at his disposal for his reelection campaign. Is that worth it, even to a Democrat? For a party of the middle class, he sure isn't playing with middle class money. You can bet a significant portion of it will be directed to negative campaigning, as well (Yes, the Republicans will too). All in an effort to portray the other side's motives as evil (see Paul Ryan throw grandma off the cliff). If you truly believe that Paul Ryan's motivations are to kill people, it's easy to justify, and promote as truth.
Just taking the debt ceiling discussion as a case in point, the Democrats have at this point agreed to some trillions of dollars of spending cuts - that will have real consequences - cuts that will eliminate roughly half the deficit - in other words, they have met the Republicans half way. The response from the Republicans has been that they will not address the revenue side. Period. My way or the highway. There are those of us to whom it seems that the Republican leadership actually desires to see conditions get worse - no, let me rephrase that, if you believe that they would not like to see conditions get worse, I've got a bridge I'd like to sell you. They have absolutely no interest in seeing conditions improve under a Democratic administration - the reason for which is that their only interest is in gaining power. Oh, they'll do the best they can once they get it - so that they can keep it - and we saw what "the best they can" was between 2000 and 2008. I am in complete favor of campaign finance reform, however we seem to be moving in the opposite direction, as exemplified by the Citizens United decision - the granting of "personhood" to Corporations (and unions, but they're half dead at this point), a decision mostly lauded by Conservatives.

 

The single, most shameful travesty hoisted upon the American people is (IMO) that Government is the solution to all our ills. I heard somewhere that the size/importance of the people lessens as the size of Government increases. I believe that to be true, and a "collectively stupider" populace is exactly what you get as a result. Perhaps you're familiar with the cheating scandal in Atlanta schools?

 

 

So, "No Child Left Behind" made them cheat. No doubt they did it for the children (and not to maintain their status quo). I'm not the smartest person in the world, but I'm not stupid enough to believe that.

Our opinion differs on the travesty issue. In my opinion (and this goes back to my view of "the Reagan revolution" as a watershed moment in American politics) the single most shameful travesty foisted on the American people is the demonization of the public sector. There is no room left for any kind of balance - and people who use roads, utilities, police and military protection, parks, people who enjoy clean air and water, who don't have to worry about finding the finger of a 12 year old in their can of spam, people who enjoy every advantage, who won't end up in the gutter the week after they lose their jobs, so many of these people are completely and hypocritically oblivious to where all that came from, and to the history - as old as this country - of the long-term focus of the public sector and the short term focus and efficiency of the private sector complementing and working in harmony with each other. I think that's the single most shameful travesty. Roosevelt told us 80 years ago that the government would help when America needed it. Reagan told us 30 years ago that those were the scariest words in the English language - and the revisionist historians of his political machine's think tanks have been working assiduously to close the deal ever since then. I disagree with your assessment about which of those philosophies has held sway in public opinion during the period leading up to this mess. I have watched the transformation. I remember the way it was before. I know which direction the needle has moved. You do remember, after all, why (even if you didn't agree with it) - and with what margins - Obama won the 2008 election, correct? Edited by retro-man
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True, he did gitter done as far as he could on Health Care reform - "as far as he could" being warmed-over Republican ideas, which all of a sudden raised the howls of the damned from previous proponents of the very same ideas (I am aware of the difference between a national plan and a state plan, and appreciate your position on that - except that I think the Republicans brought the same thing up as a national plan back during the Clinton administration when Hillary got engaged in the debate - correct me if I'm wrong on that point).

While I don't know all the specifics of the Clinton proposal or Bob Dole's proposal, I believe similar (to Obamacare) objections were made then (mandates being unConstitutional, costs to implement the program leading to inevitable rationing, etc)

Your sarcasm meter's broken. I hope it's still under warranty.

It must be broken, because many criticisms during W's time revolved around his swagger. It was an honest statement.

I hear that a lot, and I would assert that that is entirely thanks to policies that were put in place under the administration of FDR (who all of a sudden is become the Republican antichrist - Hitler and Stalin all rolled up into one) like social security and unemployment insurance - programs that some on the right would like to eliminate in their entirety, throwing us back to some pre-civil war American idyll. Well, I'll have to apologize for getting my education on the period back during the 60s, when it was still taught by people who actually remembered it, and I just don't recall hearing any of this. I know what my parents and grandparents thought of Roosevelt - but of course my parents and grandparents weren't clever enough to author studies for the Heritage Foundation or the Cato Institute. Neither were my history teachers obviously. None of which directly refutes your allegations. I'm just sayin', that's all.

Other than the stories from people of my grandparents demographic ("The Great Depression wasn't so bad, if you had a job"), I will have to defer to Thomas Sowell {donning flame suit}....

 

Two months after the stock market crash in October 1929, unemployment rose and peaked at 9 percent, after which it began a generally downward movement over the next several months and subsided to a level of 6.3 percent by June 1930. Although these levels of unemployment were higher than those before the stock market crash, and were a legitimate cause for concern, they were not even half of the unemployment rate that would begin, and persist for years, after major federal interventions in the economy.

 

The first of these major interventions began in June 1930, when Congress passed the Smoot-Hawley tariffs, the highest in more than a century, in an effort to reduce imports and thus preserve American jobs by having the formerly imported goods produced in the United States instead. A public appeal signed by a thousand economists from leading universities warned against the consequences of the Smoot-Hawley tariffs, but these warnings were ignored, just as the many warnings about the risky housing markets were ignored in our times. As already noted, unemployment stood at 6.3 percent at this time. In November of 1930—five months after the Smoot-Hawley tariffs—unemployment reached double digits for the first time in the decade, at 11.6 percent.

 

In other words, unemployment had not yet reached double digits until more than a year after the stock market crash. In the meantime, there were the Smoot-Hawley tariffs and unemployment rose to double digits just five months after those tariffs that were supposed to reduce unemployment. Moreover, while the initial rise in unemployment after the stock market crash began to subside after peaking two months later, the double digit unemployment that began after the Smoot-Hawley tariffs continued for every month throughout the entire remainder of the decade of the 1930s.

 

Not all of this was due to the Smoot-Hawley tariffs alone. These tariffs, passed during the Hoover administration, were only the first in a series of major federal interventions in the market that continued under FDR throughout the remainder of the decade. The biggest of the New Deal interventions was the National Industrial Recovery Act of 1933, which controlled prices and wages in industry. The Agricultural Adjustment Act of 1933 established federal control over prices and output in agriculture. The National Labor Relations Act of 1935 made it mandatory for employers to negotiate wages and working conditions with labor unions. FDR also took the country off the gold standard and issued thousands of executive orders—more than all the subsequent Presidents of the United States in the twentieth century combined.

 

The New Deal administration not only set up policies to deal with existing economic problems of the 1930s, it set up enduring institutions to change the way the American economy operated. Thus we are, in the twenty-first century, paying agricultural subsidies to millionaires and billionaires because of a program created during the Great Depression to help small farmers who were having a hard time. Again, once you have opened the floodgates you cannot tell the water where to go. Programs set up to help one constituency deal with a current problem acquire new constituencies and take new directions. Even if the original problem gets solved, that does not mean that the program will end, or even that it will not continue to expand.

 

Personally I think the "uncertainties" which are often mentioned, not just by you, but in parts of the business press - parts - are overplayed......

Even Obama is using it now. What he doesn't realize is uncertainty isn't something that just started in the last few months. The bank I refinanced with won't consider you unless you have a specific credit score or higher. I have clients who are only now beginning to spend money on capital investment (because they have to, not because they want to), since they don't know what to expect in the next 12-24 months. That's just the first observations I could think of.

Funny you should mention Carter. I always thought - still do - that he was a great human being, very intelligent, and not that bad of a President (nor was Ford, or Bush I). I suppose Reagan did something that the country needed done, but we should have taken a few of those pills then put the bottle back in the medicine cabinet for another day. Instead we took the whole damn bottle, then went back and robbed the drug store. We went on a 30 year bender of smashing unions, deregulating and privatizing, and demonizing public employees. Now we've got the consequences.

Carter was a smart (and nice) man, but he wasn't what the country needed. The country (at that time) agreed.

Just taking the debt ceiling discussion as a case in point, the Democrats have at this point agreed to some trillions of dollars of spending cuts - that will have real consequences - cuts that will eliminate roughly half the deficit - in other words, they have met the Republicans half way. The response from the Republicans has been that they will not address the revenue side. Period. My way or the highway.

Cuts HAVE to happen. It is unavoidable. The Republicans have agreed to alterations on the revenue side. The Dems are insisting upon tax (rate) hikes.

 

As far as the debt ceiling, I'll let Obama do the talking........

http://www.youtube.com/watch?v=8mZ39Zet97Q

There are those of us to whom it seems that the Republican leadership actually desires to see conditions get worse - no, let me rephrase that, if you believe that they would not like to see conditions get worse, I've got a bridge I'd like to sell you.

And the ones that do, likely won't get the nomination or the Presidency.

They have absolutely no interest in seeing conditions improve under a Democratic administration.

You're projecting (or using Rush Limbaugh as the archetype for all Republicans). It was no different when Bush was President and the Dems couldn't talk down the economy enough. 2000 to 2008 saw a number of things occur outside the control of the Bush administration (no need to remind) Some things were good, some bad.

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