I’ve seen panic. I traded through panic in the late 90’s, as well as the late and early aughts. Panic isn’t a friend of mine but we sometimes see one another at the same parties. This sell-off is not panic. Not yet anyway, but we’re getting close.
Perhaps Obama should appoint Rick Perry as head of the SEC?
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#54
Bobbo,
Funny you should mention the French Revolution. Yes, during late 18th century in France, there was a vast disparity in wealth. However, that was true in almost every country in the world and yet they did not revolt. However, one thing France did that those other countries did not is to bankrupt itself by funding a distant war (America) in the hopes of hurting England. Granted, we benefited from it, but it also caused their government to collapse.
#55
Dallas,
The growing gap is the government HAS tried to restart the economy – through spending! Yes, it’s a proven way. This time, instead of WWI or WWII, nobody wanted WWIII because we are already in WWIII with the evil towel heads.
*Sigh*. Spending to get out of a recession has been proven NOT TO WORK. It did not work for Roosevelt and it did not work now. We were still at 16% unemployment going into WWII. Only by drafting the unemployed (and everyone else we could) and sending them to war did we get out of the recession.
#58
Bobbo,
Completely wrong. Derek hit it right on the head: the government does not actually produce anything. In order for government to operate it has to take money out of people’s pockets via taxes. Some degree of this is absolutely necessary. However, the money it puts back into the economy is a fraction of the amount it took out. This is called the multiplier and is always less than one.
Keynesian economics is how economies work.
Keynes’ theories are 70 years old. You might as well be arguing Aristotle’s theories. We know *a lot* more about the consequences of Keynes theories than he did. Even in Keynes time, vast government spending on infrastructure projects over an extended period of time did not get us out of the Depression. His theories DID NOT WORK. We know a lot more about *why* they did not work and we have more tools at our disposal than Keynes did (specifically on the supply side). Keynes’s theories have come to be a tool to justify fiscally unsound spending just as eugenics was a theory to justify racism.
Thomas–I think we agree on most of the details, then fail to agree as we add them up?
Yes, everything is multi-factorial. You didn’t provide the full quote: the TeabagPukes DID CAUSE THE S&P DOWNGRADE==no other explanation for it. It was indeed the only “new” variable and months of pure anti-American party based partisan bickering brought the vultures to the party including the S&P. I suspect the business interests behind S&P threatened this action to the TeabaggingPukes for months before the inadequate compromise was reached and in order for their threats to carry in weight in the future, S*P had to go ahead and act.
The years of mismanagement that went on was NOT THE CAUSE OF THE DOWNGRADE. Reasonable people can disagree and apply different emphasis but only a fool will argue it was/is all one or the other and actually required both.
Keynes is the proven reality we live in. It is shown everyday by its violation and the collapse that follows those violations. Life/economics is multi-factorial, complex, impossible to prove. But a theory that has proven itself over a 70 year period does not become suspect by simply being 70 years old. It is only part of the analysis, not the whole kit and kaboodle. You want to add more factors? That is totally appropriate and those additional factors do not invalidate the Keynesian recognition: governments should spend in downturns and save in upturns to moderate the wild swings inherent in free market competition.
Only an idiot will disagree……….
#61
WHAT in the constitution needs to be restored?
I don’t know about Derek, but I can think of a few. How about “all powers not explicitly enumerated in the Constitution belong to the States”? How about returning the original meaning of “commerce” to mean “trade” and not “anything where money is involved”? How about requiring the Federal government to have a balanced budget? How about explicitly stating that corporations and unions are not individuals and cannot contribute to campaigns? How about clarifying that sending more than 1000 soldiers into an area or using military equipment like bombs or missiles constitutes a war and must be voted on by Congress? How about the Federal government has no authority to regulate a farm or garden where nothing leaves its host State?
#69
Bobbo
The years of mismanagement that went on was NOT THE CAUSE OF THE DOWNGRADE
Completely disagree. It is absolutely the reason for the downgrade. If our debt was 10% of GDP instead of 100% of GDP, there is no downgrade regardless of whether they increase the debt ceiling or not. The result of mismanagement is the years of spending more than we make (the debt) and when someone finally puts their foot down and says “Enough!”, you want to blame it on them.
Keynes is the proven reality we live in. It is shown everyday by its violation and the collapse that follows those violations.
This statement is of course based on a fairy tale. Keynes theories have not been “proven” over 70 years other than to be proven false. The systemic problem with Keynes theory is that it presumes that there is no opportunity cost to racking up debt in the hopes of a short term alleviation of a recession. That cost is far higher than Keynes knew. Further, his theory requires that politicians not spend during boom years which is akin to asking crack addicts to put down their pipes on their own.
governments should spend in downturns and save in upturns to moderate the wild swings inherent in free market competition.
The problem is that the evidence shows that did not work even in Keynes time. Roosevelt went through massive spending increases, far more than now, over eight years instead of three and we still had 16%+ unemployment. Another fundamental flaw with Keynes is that it presumes that the government can out think the market. It presumes the government knows where exactly to put those resources it takes out of the people’s pockets. If economics has taught us anything, it is that governments are inept at manipulating markets and thus it is better in the long run if they don’t try.
Thomas–you want only simple bumper stickers slogans to cover your unwillingness to deal with ambiguity.
The fact that governments will spend during good times demonstrates the accuracy of Keynes–not its failure. Amusing you site a theory’s very proof as its failure. No dissonance at all?
Can I make a proper analogy? How about this: if you want happy healthy kids, you have to feed them. History: you don’t fee their kids and they die of starvation. You conclude: feeding kiddies to make them happy and healthy is proven wrong.
Beyond stupid. I can think of 50 arguments against Keynes and THAT isn’t one of them. Now–opportunity costs is an interesting subject but your ABJECT FAILURE as demonstrated leaves anything you have to say on such issues entirely in doubt.
Sad really. You know, when I walk into town that is proof you don’t need horses. Yes, definitive proof horses are no good at all.
Thomas–and to your restore constitutional issues==they all fail as I warned against: the S Ct has addressed all those issues you raise. Neither you or I like most of those results: in the main the over application of the commerce clause, but what are we to do? The Constitution MEANS what the S Ct says it means===not what you or I think it means.
Hurts don’t it?
To #44, #48, #65
From S&P’s press release
titled “United States of America Long-Term Rating Lowered To ‘AA+’ Due To Political Risks, Rising Debt Burden; Outlook Negative”
“… we have changed our view of the difficulties in bridging the
gulf between the political parties over fiscal policy
…
the downgrade reflects our view that the effectiveness,
stability, and predictability of American policymaking and political
institutions have weakened at a time of ongoing fiscal and economic
challenges …”
Especially notice the “effectiveness, stability, and predictability” part. The debt ceiling debate should have been a non-issue. Unless you’ve not noticed the US has the best deal on access to debt markets of anyone in the world. That is a source of huge national power. Only a group of idiots would try to mess that up for a momentary(2-year) personal poltical advantage. What exactly do we gain by refusing to pay our bills when we can easily do so? Please tell me this.
#62 LibertyLover
OK, let me see if I can clarify.
Government revenues are at their lowest since 1950 as a percent of GDP. You are not arguing that point. GDP is what it is, a percentage is what it is… if GDP is low, and percentage is the same, then yes, revenue will be low.
But we have unfunded mandates that need to be paid for.
From your own document link:
“Since September 2001, lawmakers have provided a total of nearly $1.1 trillion in budget authority for operations in Iraq and Afghanistan and related activities.
Of the nearly $1.1 trillion in budget authority provided between 2001 and 2010, funding for military operations and related defense activities totals $973 billion, most of which has gone to the Department of Defense (DoD).”
This is expenditures aside from the normal DOD funding.
Add to this another trillion in trying to salvage the economy from completely going down the toilet at the end of 2008 (most expenditures being allocated by the outgoing Bush), and the reduction in revenue of about 4 trillion that resulted from the Bush tax cuts to wealthy individuals and corporations.
So how do we pay for that 6 trillion extraordinary expense without raising revenues above historical low percentage levels that they are at?
The simple fact is that the government needs more revenue to pay back what we spent, plus maintain operations and services for existing obligations.
Some say that revenue can rise if business can be allowed to flourish by cutting back on government… but the heath and wealth of a country depends directly on the health and wealth of the government. Name one country where a crappy government with low revenues results in a better business environment and a population with a better standard of life. The best countries are those where the government is funded at a high level as a percent of GPD, up to the point where the government becomes a den of thieves, then the curve starts to go down. Sweden, Norway, New Zealand and Germany have very high revenue to GDP percentages (in the 40% range) yet the quality of life is exemplary. Of course they don’t pay for a military that is six times as expensive as the rest of the world combined.
#24
“A main premise of the debate is that we should not leave all this debt to our children…We overspent while not properly funding the expenditures…We allowed a financial system based on voodoo economics to take hold”
and so we need to:
“So here is the solution. We take responsibility for our actions and immediately cancel Social Security, Medicare and all other social services for those above 25 years old. Underfunded government pensions are cancelled.”
I agree with the diagnosis, but not the cure. If, as you say, the Boomers decided to under-tax themselves why not make up that difference now, or through more stringent estate-tax demands later? Yours seems more like ‘let them eat catfood.’
#75
“This is expenditures aside from the normal DOD funding.”
Which was also higher by about 100bn/year in real dollars versus historically. Another 1T.
#7
“The plunge is courtesy of the Teabagger rookie Congress. They wanted to play Russian Roulette by holding hostage the faith and credit of the US Government credit rating on the debt ceiling – which had NOTHING to do with balancing the deficit not new spending.
The rest of the world watched the political brinksmanship with amazement. My hope is Teabaggers and the GOP lost their ass on wall street and hopefully their sheeple constituents woke from their hangover.”
Brilliant!
Of course this was unpredictable… not!
http://www.rawstory.com/rawreplay/2011/08/jon-stewart-debt-deal-the-democrats-got-hosed/
#72
The fact that governments will spend during good times demonstrates the accuracy of Keynes–not its failure. Amusing you site a theory’s very proof as its failure. No dissonance at all?
ROFL. Name me one country that used Keynes theories that has its debt under control. Name me one country that spent its way out of a recession AND controlled its debt afterwards. Wasn’t Roosevelt. Spend like mad for eight years with unemployment at 16%. We then went into the war and ended with debt being 120% of GDP. Most of the pay down after that was to pay off the war debt not the Roosevelt’s debt. We never paid that off. Then a couple of Presidents later we went back into mass debt thanks to LBJ. Wasn’t Reagan. He started this mass deficit cycle to combat the Russians and we still haven’t paid off that debt. Wasn’t Clinton who robbed Social Security and other trusts to make it appear as if he was paying down the public debt even though the overall debt went up. So, who in your mind actually used Keynes theory and hasn’t ended up to their eyeballs in debt?
History: you don’t fee their kids and they die of starvation. You conclude: feeding kiddies to make them happy and healthy is proven wrong.
Counter analogy: times are tough so you do balance transfers against your credit card to pay a few bills and take a vacation. A couple of years late another downturn happens and you do it again. Year after year, you keep spending 7-10% more than you make. By your logic, you can just keep doing that.
#73
Thomas–and to your restore constitutional issues==they all fail as I warned against: the S Ct has addressed all those issues you raise.
You ignored your own request. You asked what we would CHANGE about the Constitution. Those are items I would want changed specifically to trump the SC interpretations which watered down the intent of the Founders.
#75,
Government revenues are at their lowest since 1950 as a percent of GDP. You are not arguing that point. GDP is what it is, a percentage is what it is… if GDP is low, and percentage is the same, then yes, revenue will be low.
Revenue as a percentage of GDP is looking lower because GDP is artificially higher than it should have been. Without TARP, the GDP would be lower and thus the percentage of revenue would be higher.
So how do we pay for that 6 trillion extraordinary expense without raising revenues above historical low percentage levels that they are at?
OBJECTION! You’re leading the witness.
I just showed you the percentage is artificially low.
So how do we pay for that 6 trillion extraordinary expense?
So, because a bunch of assholes in congress didn’t want to cut their favorite projects AND add a couple of more, it’s my fault?
Tell your damned congressman and senators to shove it and cut out the rest of their projects.
They do not get a free pass with my wallet because they assed up.
very high revenue to GDP percentages (in the 40% range)
Our range is pretty close to that, too. Shall I do that math to prove it?
Of course they don’t pay for a military that is six times as expensive as the rest of the world combined.
BINGO! Quite spending so much!
I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
— Winston Churchill
Classic death spiral. One of two choices. Screw over the old baby boomers or screw over youth.
# 47 Taxed Enough Already Dude said:
“Perry would be better than the progressive perverts who watched porn while the markets melted.”
Dude, google “Perry Bilderberg”
He’s poison.
# 42 chris
Well actually the CEO of Standard & Poor’s is directly responsible for the downgrade if you want to be technical about it. But yes we are in a global economic depression and the only reason it doesn’t look like the 1930’s in America is only due to the sheer volume and momentum of the global economy and not it’s health. We will start seeing more and more signs of the Great Depression of the 2000’s as time goes on.
# 50 ECA
I agree.. we gave up our manufacturing base for a service economy and now that’s evaporating as well. The only growing job sectors relate to Medical, huge food producers, spammers, idiot government bureaucrats/politicians and smart phone programmers. =/
# 54 bobbo
Do we learn from history? You are right.. No. People look at me funny when I say that history is important. They are Lemmings of course.
# 56 Derek
You are correct on your analysis sir. I agree and the history books agree. You do not help an economy by growing government, but rather by growing the private
sector. The US government and multinational corps have done nothing but either destroy the private sector.. or consolidate small and medium businesses into multinational corps that only pay an average of 2% taxes. There’s where a lot of our tax revenues went.
#59 Dallas
Well I am glad to hear that I’m trainable. I am not trainable by the Mass Media however which I suspect is why we disagree on a few points.
First I would like to point out that I am not part of the Tea-Party, although I do agree with many of their ideas. I do not claim to be a Republican or a Democrat because both parties are jokes for the most part. I do not like Obama, Bushie, or Clinton because ultimately they all did things that led to the demise of our republic. If anything.. you can call me a Constitutionalist if you must. I just wanted to get that straight.
As far as blaming the Tea-Party for ‘everything’ or as a convenient scapegoat, why aren’t you blaming the CEO of S&P for the US credit downgrade? He is the one that approved this while the other rating agencies held back right? Also, you are expecting many of the same people that have caused the dire emergency regarding the economy in the last decade or two… to fix the economy?
This is like having someone rob your business and then you turn around and hire them as a security guard for your business. When your business gets robbed again he will say you need TWO security guards and that he has a buddy that would love to apply for the job. Then you get robbed even more! What do you expect will
happen? Then the Mass Media is praising the robber/security guards for doing such a ‘stand up’ job
and anyone pointing out that they are the ones that are robbing us blind through: reckless spending,
repeal of the Glass Stegal Act, giving our jobs away to other countries, endless wars, stealing tax money
for ‘off the books’ projects, only regulating those that are ‘NOT part of the elite a-hole club’ and
expanding the federal government to enormous proportions… will be labeled as a ‘terrorist’. You see how this works?
The people that you think will fix the economy are following the ‘problem-reaction-solution’ formula which may fix economic problems in the short term, but ultimately spell our doom in the long term. America prospered with Liberty and having a true free market (not the fake favoritism free market that we’ve had for decades now) for the private sector to grow in the past. Why is that plan invalid now?
America is falling into a pattern going from ‘Failing Republic’ leading into ‘Total Police State’ where YOUR saviors will be America’s dictators, enforcers, torturers and executioners with no protections under the Constitution and Bill of Rights as they will be declared as dead documents by the tyrants. The Tea-Party, Libertarians and Constitutionalists don’t look so bad in comparison do they?
#67 Dude, you just proved my point! War did get us out the recession then. Good grief, you’re worse than Pedro!
#86 Alphie, now you’re for Ron Paul?
What happened to Jindel, O’Donnell, Palin, Trump, Newt,.. did I miss any teabagger?
Is Ron Paul the new shiney object? I thought you would be for a Rick Perry since he sucks ass like no other.
#89
War
did get uswas the only thing that got us out of the recession. There I fixed that for you.Money spend building bridges, dams or roads did not get us out of the recession; only drafting every able bodied person and going into a total war got us out of the Depression. I think we both aren’t recommending that as a course of action this time.
Of course he’s for Ron Paul. He’s for anyone unelectable that helps with his street cred as a pseudo libertarian.
Mitt is already being lined up as the Republican candidate. The last thing the GOP wants is a Tea Party leaning lightweight carrying the party flag. Perry has got way too much baggage to compete at a national level.
#92
Agreed on Paul. Completely unelectable. Has more experience than Obama did but still not a lot of executive experience. Mitt is pretty much the guy to beat unless the Republicans commit an victoryectomy and choose Palin.
IMO, Perry is pretty much Huckabee-light.
I’m going to tell you guys what 2012 and beyond have in store. Ready?
The dollar is probably going to crash like never before in US history. I’m sorry to say this but, if you look at all of the financial numbers – and you look at the total control that the banks have over the US economy, it is almost inevitable. Yes it is going to suck real bad and the Tea-Party won’t have a damn thing to do with it, except to point out facts that others are in denial over.
Fuel, Electricity, Natural Gas and Food prices are going to soar in the next two years. We are already seeing this trend. This economic crunch will cause much civil unrest, but hey.. we conveniently have the ‘anti-terror’ security apparatus in place to deal with the the rowdy domestic public. (since ‘real’ terrorists are actually about as common as Leprechauns… and most of them are deceived patsies). It’s a pretty nasty plan, decades in the making.
The global elite are a bit concerned about a diverse liberty movement that has grown exponentially with the help of an open and free internet. In response, the paid off pawns in Congress have introduced a raft of bills over the last few years designed to take down the internet and blunt its impact as a medium for alternative news and information. On April 1, 2009, the Senate introduced two bills, endangering a free and open internet: S. 773: “Cybersecurity Act of 2009” and S. 778 to establish a White House cybersecurity czar. In addition, on September 20, 2010, S. 3804: “Combating Online Infringement and Counterfeits Act” (COICA) was introduced. “Entitled Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act” of 2011, PROTECT IP for short, this legislation would use copyright infringement as a smoke screen to take down web domains and institute rolling censorship. They wish the internet never existed and are doing what they can to shut parts of it down.
Finally, the Global Elite will work on deceiving an already economically besieged American public into further fantastic debt producing even more bankster bailouts, including Greece, Ireland, Portugal, and other member EU nations sliding toward bankruptcy and social disruption on a monumental scale. When the economy in the US bottoms out, look for the keyword “North American Union” or something similar in the news as a solution to our economic woes in 2013.
Many of these plans exist to take down national AND personal sovereignty (and freedom), impose drastic ‘austerity’ (we are poor as hell and need to shut up and like it) measures, hold fire sales on national assets, consolidate wealth and power, and use an endless economic crisis as an excuse to usher in world government, a one-world currency, and a sprawling global high-tech police state. Most of the world Elite are eugenicist, it is essentially their religion and they believe that 90% or more of us just need to go away and die so they can have more resources and control. The other 9% that survive will be the ‘slave class’. This is evident in the Club of Rome documents and many notes from the CFR and Trilateral Commission. If anyone thinks this is funny, consider this… John Holdren – Obama’s Science Adviser is a known eugenicist and even has published books (Like ‘Ecoscience’) on the subject of forced abortion and sterilization… and other ways to get rid of humans on this Earth. Welcome to the grid, slave.
http://amazon.com/Ecoscience-Population-Environment-Paul-Ehrlich/dp/0716700298
Or, of course people can do something weird.. like get a clue and work against all of these Elitist goals in a million different ways. There is still room for hope. It’s going to be an interesting decade.
Boy lust and anal fixation. At least you’re consistent.
(Nothing but net….)
Actually , and as I said before, Ron Paul looks good on paper but has unrealistic views. If Pat Buchanan endorses him, well that’s the kiss of death right there and if sucks up to the Christian Taliban he will also lose a third of the voting public, albeit secure the 25% loon vote.
I believe Mitt Romney has the chameleon personality to win the Teapublican vote but then get slapped down by the Obama juggernaut.
#99, You really need to keep up on current affairs.
The Tea Party hates Romney because of Romneycare. He is too much like Obama. I’m surprised you aren’t more in favor of him because of that.
But you guessed right about Perry. The religious fanatics are going to come out in droves for him. Unfortunately, there are a lot of Christian fanatics who identify with the Tea Party and it’s giving it a bad name.
Actually , and as I said before, Ron Paul looks good on paper but has unrealistic views.
Then why not just vote your conscious instead of hanging out with popular guys smoking in the bathroom? If you truly believe he is right then stand up for what you believe in. Don’t follow the rest of the heard.
#100, um . . . heard = herd.