Posted by: The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

180 responses to “Weekend Open Thread (2010-08-27)”

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  1. pfft

    By Kary L. Krismer @ 98:

    This wealth argument seems to be something that is just designed to prove the stimulus failed. Even unemployment benefits are seen as stimulus, and they don’t produce squat.

    the stimulus is highest for unemployment benefits because all the money is usually spent because the need is so great. putting food on the table or keeping the heat on is squat.

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  2. Scotsman

    RE: Kary L. Krismer @ 98

    Yeah, that’s it! If you don’t understand, blow it off. Your unemployment example is all the proof you need, but you don’t see it. How long can we continue to pay unemployment to an ever increasing percentage of the population that produces nothing? What happens when the government finally runs out of other people’s money because there is no productive capital left, all of it having been given to the unemployed?

    Stick with selling houses. ;-)

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  3. pfft

    By Scotsman @ 100:

    RE: pfft @ 95

    “your way would be reset. the only problem is your reset adds even more debt. $2.7 trillion more”

    I’m sorry, but your level of understanding is so low it’s not even worth trying to have a discussion with you. Do you know the difference between static and dynamic analysis? If so, move from static to dynamic. In a reset situation the deficit would not grow. . because the government would have to spend less, maybe even. . . only what it collects. That would be a zero deficit. Would it hurt for a while? You betcha, but it’s a reset, not a vacation. And whether you believe it or not, you will soon enough be living it.

    you couldn’t cut fast enough. the drop in demand caused by austerity would cause an austerity spiral. like what is happening in greece and ireland right now.

    doing nothing would have sunk gdp even more and hence revenue. this would mean more debt. you couldn’t cut fast enough. government debt would be $2.0 trillion in 2010, $700 billion higher than w/o all the measures.

    do you really think we could cut $2 trillion from the budget?

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  4. pfft

    By Scotsman @ 102:

    RE: Kary L. Krismer @ 98How long can we continue to pay unemployment to an ever increasing percentage of the population that produces nothing? What happens when the government finally runs out of other people’s money because there is no productive capital left, all of it having been given to the unemployed?

    Stick with selling houses. ;-)

    unemployment peaked awhile ago. the employment population ratio bottomed awhile ago.

    unemployment benefits weren’t that much. the last extension was less than $30 billion. that’s a rounding error on the national debt but vital for those who need it. unemployment benefits have a huge multiplier effect because the money is quickly spent.

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  5. pfft

    the gist from this blog post seems to be if you want to cut government spending by $2 trillion you need to cut more than that because the cuts lessen revenue.

    Now, a weaker economy means less revenue. Assume that every dollar up or down in GDP means $0.25 in revenue, which is conservative. Then the fiscal austerity reduces revenue by 0.35 percent of GDP; the true saving is only 0.65 percent.

    Now, the government has to borrow those funds; let’s say the real interest rate is 3 percent (it’s actually much lower now). Then the long run impact of the austerity on the fiscal position is to reduce real interest payments by 0.0195 percent of GDP.

    Self-defeating Austerity
    http://krugman.blogs.nytimes.com/2010/07/07/self-defeating-austerity/

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  6. Scotsman

    Robert Shiller, co-creator of the S&P/Case-Shiller price indexes, said that although he doesn’t forecast prices, “I think the scenario of declining home prices for years to come is underemphasized by people.”

    http://www.latimes.com/business/la-fi-petruno-20100828,0,4478303,full.column

    Historically, housing has led the way in recoveries. “But this is a case where housing is going to follow the economy, not lead it,” [said David Crowe, chief economist for the National Assn. of Home Builders].

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  7. Chris

    RE: pfft @ 75

    Since the pro-Krugman crowd refuses to answer the general question of whether using debt to create and then bail out a real estate bubble is a good idea, let’s look at the multiplier effect they think wins any argument:

    Instead of achieving its stated goal of 90% private-sector job creation, ARRA did the exact opposite. More than 95% of any jobs created have been in the government sector (fully outlined on Recovery.gov and confirmed by the Congressional Budget Office).

    http://www.minyanville.com/businessmarkets/articles/american-recovery-and-reinvestment-act-keynesian/8/26/2010/id/29807

    Responding to criticism, Office of Management & Budget Director Peter Orszag drafted a memo on December 18, 2009, explaining that the new definition of a job retained was “an existing position that is now funded by the Recovery Act.”

    From that point on, any notion of being able to classify a job “created or saved” by ARRA became meaningless, and Republican Congressman Darell Issa hit the roof. He sent a letter to the board in charge of Recovery.gov, and demanded they clarify “SAVED/CREATED,” now that a memo had just been circulated saying that existing jobs could be counted as “CREATED or SAVED” when they had been neither. Issa then brought Earl Devaney — the man in charge of overseeing compliance with ARRA reporting — in front of Congress to ask him about Recovery.gov. Issa specifically asked if it would be more honest for Recovery.gov to say “we don’t know how many jobs have been created or if recipients are reporting correctly,” instead of “jobs funded under the recovery act.” Devaney, the man most closely associated with the job-creation figures, said “I would agree with that statement.”

    http://www.minyanville.com/businessmarkets/articles/recovery-act-keynesian-economics-private-sector/8/27/2010/id/29808

    So Pfft, the stimulus is a failure by any measure – even by your own inadvertently cooked numbers (at least inadvertent by you). The “multiplier” of phony jobs turns out to be another cover for a government job patronage system that would make Boss Tweed proud. As soon as we stop going into debt to prop up government employment, things will either get a lot worse or will last a lot longer.

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  8. Macro Investor

    To those of you saying the stimulus worked, please explain specifically what outcome you believe was positive.

    First of all, the stimulus was not $700 billion. The ANNUAL deficit is more like $2 trillion, and there is no accounting of how much of that is just being printed by the fed vs “real” investors buying bonds. Nor is there any accounting of the $ trillions the fed continues to pump into banks, insurance companies, fannie/freddie or whom ever they want to. It’s all hidden from public view.

    Why does the stimulus go to banks who pay it out as multi-million $ bonuses, rather than to “more productive” things like fixing/enhancing the infrastructure, or renewable energy? Answer, gov is OWNED by special interests MAINLY the large banks. (PS, this is non partisan, I hate both parties). The banks will never be allowed to go under no matter how stupidly they behave, so unproven scare stories are put out that it would wreck the economy.

    I’ll grant you one positive. Without the trillions in stimulus EACH YEAR, there would be massive homelessness, hunger and untreated illness. Much like we read about the first depression. (Yes, I’m calling this a depression, but please let’s not get stuck on names). The “official” stats are around 10% unemployment. When you add those uncounted for various reasons and include under employment, it’s probably closer to 25%. 40 million are on food stamps. 20 million are direct gov employees who wouldn’t have a job if gov only spent what it took in from taxes. Millions are living rent free in homes that banks refuse to foreclose.

    If you took away that stimulus, all those people would be out in the street. Plus the negative multiplier effect would dump many of the rest of us out of work. The problem is how do we get off this speeding treadmill, where the gov has to borrow/print more and more just to keep half of us from being unemployed? I believe we would have been much better off if we let the banks go under and just sold off the debt to the highest bidders. The $10’s of trillions spent on infrastructure would have created tons of new productive businesses, much like building roads stimulates development in those areas. But again, that will never happen because the banks own both parties in DC.

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  9. Triger

    RE: Scotsman @ 106 – Scotsman – I think it would make sense if the govt could come up with the following business plan:
    – It spends x amount of dollars on sthg
    – The tax revenue exceeds x amount of dollars from the investment on sthg

    So you invest, give jobs and collect more tax revenue.

    This what EU did with countries like Ireland and it is doing so with 3rd world countries that joined EU such as Czech, Hungary or Poland. So it invests some money in infrastructure or innovations and then the economies grow and they contribute more to EU budget. So such a model is sustainable.

    I think Bernake and Obama did not explore this model as of yet. Right now they just keep throwing money at this problem.

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  10. Trigger

    RE: Trigger @ 108 – I think the main problem is that private sector in the US does not know what to invest in to make a lot of money so the govt may have a hard time cracking this problem. Maybe instead of just doing purely financial engineering they could rack their brains to really help the economy. If they do it people will be happy and they will be able to go for a hike to relax.

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  11. Kary L. Krismer

    By Scotsman @ 102:

    RE: Kary L. Krismer @ 98

    Yeah, that’s it! If you don’t understand, blow it off. Your unemployment example is all the proof you need, but you don’t see it. How long can we continue to pay unemployment to an ever increasing percentage of the population that produces nothing? What happens when the government finally runs out of other people’s money because there is no productive capital left, all of it having been given to the unemployed?

    Stick with selling houses. ;-)

    I disprove your assertion and you respond with insults? In any case I think welfare would be a better example for your assertion, but that has more to do with other matters than stimulus, because welfare is often not TEMPORARY.

    So, the first failure of your analysis is you think stimulus needs to for some reason create wealth. The second failure of your analysis is you don’t realize stimulus is temporary.

    The thing is, I’m sort of between you and pfft. I would analogize the stimulus 2008-2010 (which includes Bush) as being sort of like the Iraq war run under Rumsfeld. Something that could have worked, but isn’t run correctly. So you’re right that it’s a failure, and pfft is right that it could work.

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  12. Kary L. Krismer

    RE: Chris @ 107 – The lack of private sector jobs is part of the “Rumsfeld” factor I was talking about.

    If you want the private sector to provide jobs you do not threaten their owners with tax increases. If you want the private sector to provide jobs you do not create a health care plan affecting current and new employees that they don’t understand and which scares them. If you want the private sector to provide jobs you do not create a lynch mob situation with banks such that banks repay their TARP funds simply to get out from under any government control, instead of making the loans the funds were supposed to allow. Conversely, if you want the private sector to provide jobs you do something so that banks again loan to small businesses. Little or nothing had been done in that area.

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  13. Kary L. Krismer

    By Trigger @ 109:

    RE: Trigger @ 108 – I think the main problem is that private sector in the US does not know what to invest in to make a lot of money so the govt may have a hard time cracking this problem. Maybe instead of just doing purely financial engineering they could rack their brains to really help the economy. If they do it people will be happy and they will be able to go for a hike to relax.

    You really think that out of all the people in the U.S., that no one knows what to invest in to make money? That’s the beauty of capitalism over other economies. People will have plans. They might be the wrong plans (i.e. business failures), but they know what they want to invest in.

    The problem is no one wants to do it. The current administration is perceived as being anti-business, and personally I think that perception is correct..

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  14. Kary L. Krismer

    This is more of an editorial piece than a news story regarding private business not hiring, and I don’t agree with many of the assertions, but the point is made that the cash businesses are accruing dwarfs the stimulus. If that assertion is correct, that could be a good reason the stimulus is not working. BTW, the piece does mention taxes and health care as possible reasons for not hiring.

    http://seattletimes.nwsource.com/html/businesstechnology/2012735421_hiltzik29.html

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  15. Ira Sacharoff

    RE: Scotsman @ 102
    Scotsman actually makes a good point here FOR socialism.
    He’s right. Simply providing unemployment and then extending that to people who don’t produce anything except a little money to take care of their own food and shelter needs isn’t going to result in a robust economy. It’s not compassion. Ultimately, it’s suicide.
    But actually providing jobs? That’s a good idea, and it’s real, not just phantom money created out of debt.
    Back in the 1930’s, agencies like the CCC and WPA built bridges, buildings, hiking trails, and artwork that all endure today.
    Whether it’s worth it or not, I don’t know. But it actually produced stuff.
    Besides, nowadays it’s trendy among conservative historians to point out what a failure Franklin Roosevelt was. But the American public sure didn’t agree with that sentiment at the time. He was elected President four times.

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  16. Kary L. Krismer

    RE: Ira Sacharoff @ 114 – And on the public/private sector employment issue, a lot of the stimulus has gone to states to preserve state jobs. But for that, many/most of those people would be on unemployment. Presumably the state jobs have at least some benefit.

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  17. David Losh

    “But funneling corporate wealth to shareholders at the expense of the workers who create that wealth isn’t any smarter today than it was 10 years ago, when it got us into this economic fix, and it sure won’t lead us to a brighter tomorrow.”

    Where to begin….

    There is money in the system globally to meet any, and all demand for jobs, or economic growth. We don’t need the governments, except for over sight, and regulation. Regulation is something they should have been doing, and I blame government for allowing this growing mess.

    In Asia, including India, there are billions of consumers who need everything we have. In Africa they need health care, water, and transportation. South America needs cohesion, as does the United States, Canada, and Mexico.

    Europe is a problem that Europeans will never agree on. In my opinion this is where the financial problems started. Europe didn’t need to create a currency, but they did. We’re all still struggling with that, but that’s a topic for another time.

    The important thing is to stop giving money to banks, corporations, and the wealthy.

    We need to cut taxes below, including, or especially FICA, for wage earners below $50K, and all taxes for businesses less than a $1Million.

    Real people need real dollars. Huge multi national investment entities, adding to their cash reserves will do nothing. Giving tax credits, again, for capital expenditures will stimulate growth. Giving tax credits on dividend income will only add more to cash reserves.

    I’m going to make one point about Paul Allen suing for copyright infringement. This is the mentality we all have to put up with. This ignorant slob, like Bill, and Melinda Gates, are sitting on wealth with nothing better to do than play stupid games.

    It doesn’t take intelligence to create, or hold on to wealth, it’s only a fear level.

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  18. 2kt

    Oh, Gees, you caught me, but we don’t want credit worthy borrowers, we want banks to default. I personally want banks out of business, because it has proved to go nowhere.

    You betcha banks have reserves. Banks have fat reserves that are only getting fatter on the backs of credit worthy borrowers.

    Let the banks default. Let governments default

    ___________________________________________________

    I think the above roughly sums up what you stand for. Sorry to remind you, this road has been travelled before.

    .We want no condescending saviors
    To rule us from their judgment hall,
    We workers ask not for their favors
    Let us consult for all:
    To make the thief disgorge his booty
    To free the spirit from its cell,
    We must ourselves decide our duty,
    We must decide, and do it well.
    ‘Tis the final conflict,
    Let each stand in his place.
    The international soviet
    Shall be the human race
    ‘Tis the final conflict,
    Let each stand in his place.
    The international working class
    Shall be the human race

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  19. Blurtman

    RE: pfft @ 94 – Correct, but let’s see where we are longer term. The employment population ratio from 2008 to 2010 dropped like a stone. GDP was ostensibly increasing 2009-2010. Wages and benefits are decreasing. So less people are working, and the standard of living is decreasing, while GDP is increasing. Bravo.

    To all of this analysis should be applied a nominal versus real analysis. If the rate of unemployment is decreasing and perhaps stabilizng, but the average employed wages and benefits are decreasing, that is still a big FAIL..

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  20. Yaj

    “Austerity Spiral”

    Fascinating. I’d like to know more about this process. Tell me more. Per your understanding, do wages and prices remain fixed while demand spirals down to zero? Please explain the intertemporal dynamics of the “Austerity Spiral,” with regards to wages and prices.

    Once you’ve accomplished that, coming up with a Keynesian argument against paying people to destroy farmland should be a snap.

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  21. pfft

    By Chris @ 107:

    RE: pfft @ 75

    Since the pro-Krugman crowd refuses to answer the general question of whether using debt to create and then bail out a real estate bubble is a good idea, let’s look at the multiplier effect they think wins any argument:

    Instead of achieving its stated goal of 90% private-sector job creation, ARRA did the exact opposite. More than 95% of any jobs created have been in the government sector (fully outlined on Recovery.gov and confirmed by the Congressional Budget Office).

    http://www.minyanville.com/businessmarkets/articles/american-recovery-and-reinvestment-act-keynesian/8/26/2010/id/29807

    Responding to criticism, Office of Management & Budget Director Peter Orszag drafted a memo on December 18, 2009, explaining that the new definition of a job retained was �an existing position that is now funded by the Recovery Act.�

    From that point on, any notion of being able to classify a job â��created or savedâ�� by ARRA became meaningless, and Republican Congressman Darell Issa hit the roof. He sent a letter to the board in charge of Recovery.gov, and demanded they clarify â��SAVED/CREATED,â�� now that a memo had just been circulated saying that existing jobs could be counted as â��CREATED or SAVEDâ�� when they had been neither. Issa then brought Earl Devaney — the man in charge of overseeing compliance with ARRA reporting — in front of Congress to ask him about Recovery.gov. Issa specifically asked if it would be more honest for Recovery.gov to say â��we donâ��t know how many jobs have been created or if recipients are reporting correctly,â�� instead of â��jobs funded under the recovery act.â�� Devaney, the man most closely associated with the job-creation figures, said â��I would agree with that statement.â��

    http://www.minyanville.com/businessmarkets/articles/recovery-act-keynesian-economics-private-sector/8/27/2010/id/29808

    So Pfft, the stimulus is a failure by any measure – even by your own inadvertently cooked numbers (at least inadvertent by you). The “multiplier” of phony jobs turns out to be another cover for a government job patronage system that would make Boss Tweed proud. As soon as we stop going into debt to prop up government employment, things will either get a lot worse or will last a lot longer.

    the stimulus is not a failure and has worked all around the world.

    mccain’s own economic advisor was for stimulus and his study showed it worked.

    EDIT: the multiplier is not about measuring jobs it’s about measuring GDP.

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  22. Ben

    Lots of enjoyable comments since I left Friday. I’m new to posting here – mainly lurk and read the real estate information. I’m glad to take note of some enlightened folks I could share a virtual beer with (“pfft” excepted).

    I think it is helpful to know that by history of economic thought dating, the multiplier has been formally debunked since at least 1850 with Bastiat’s telling of the broken window fallacy. This is why I may offend some people when I call it believing in “something for nothing”, “magical thinking”, “a free lunch” or “Santa Claus”.

    http://bastiat.org/en/twisatwins.html

    That Which is Seen, and That Which is Not Seen
    by Frederic Bastiat, 1850

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  23. David Losh

    RE: 2kt @ 117

    Making debt slaves to enrich a small, very small segment of the population, is essentially the same as communism. Expecting the ruling wealthy class, to take care of the working class, is the same as communism, and feudalism, neither works.

    A strong working class, In my opinion, in smaller business form, has the velocity, and multiplier effects that are constantly discussed here.

    The recovery has to be in the small business sector, creating living wages.

    A buddy of mine who I see from time to time Jack Fletcher, he owned Farrel’s Ice Cream, has a book, or poem, about letting go. I’ll look for it later. Essentially, we are going to have to let go of this idea that government, and the banks, financial system will take care of us.

    We need to let go, rebuild, and follow a much more basic business model. Cash is King.

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  24. pfft

    By Ira Sacharoff @ 114:

    RE: Scotsman @ 102
    Scotsman actually makes a good point here FOR socialism.
    He’s right. Simply providing unemployment and then extending that to people who don’t produce anything except a little money to take care of their own food and shelter needs isn’t going to result in a robust economy. It’s not compassion. Ultimately, it’s suicide.
    But actually providing jobs? That’s a good idea, and it’s real, not just phantom money created out of debt.
    Back in the 1930’s, agencies like the CCC and WPA built bridges, buildings, hiking trails, and artwork that all endure today.
    Whether it’s worth it or not, I don’t know. But it actually produced stuff.
    Besides, nowadays it’s trendy among conservative historians to point out what a failure Franklin Roosevelt was. But the American public sure didn’t agree with that sentiment at the time. He was elected President four times.

    back then they those same conservatives were calling him worse. things don’t change.

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  25. pfft

    By Yaj @ 119:

    “Austerity Spiral”

    Fascinating. I’d like to know more about this process. Tell me more. Per your understanding, do wages and prices remain fixed while demand spirals down to zero? Please explain the intertemporal dynamics of the “Austerity Spiral,” with regards to wages and prices.

    Once you’ve accomplished that, coming up with a Keynesian argument against paying people to destroy farmland should be a snap.

    you are so obsessed with your cropland scenario and I never talked about demand spiraling to zero. nobody would do that and it’s not deficit spending. it’s keeping cops on the beat or rebuilding our worn infrastructure. stuff we need to do anyway. it’s not the same as destroying cropland.

    read here about the austerity spiral.

    Now, a weaker economy means less revenue. Assume that every dollar up or down in GDP means $0.25 in revenue, which is conservative. Then the fiscal austerity reduces revenue by 0.35 percent of GDP; the true saving is only 0.65 percent.

    Self-defeating Austerity
    http://krugman.blogs.nytimes.com/2010/07/07/self-defeating-austerity/

    this seems to be exactly what is happening in greece and ireland right now. have you seen the bond yields there? it’s not a pretty picture.

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  26. pfft

    By Ben @ 121:

    Lots of enjoyable comments since I left Friday. I’m new to posting here – mainly lurk and read the real estate information. I’m glad to take note of some enlightened folks I could share a virtual beer with (“pfft” excepted).

    I think it is helpful to know that by history of economic thought dating, the multiplier has been formally debunked since at least 1850 with Bastiat’s telling of the broken window fallacy. This is why I may offend some people when I call it believing in “something for nothing”, “magical thinking”, “a free lunch” or “Santa Claus”.

    http://bastiat.org/en/twisatwins.html

    That Which is Seen, and That Which is Not Seen
    by Frederic Bastiat, 1850

    it’s not a broken window situation. we aren’t breaking windows we keeping teachers employed. nobody is forced to buy bonds, they are willingly doing it which is depressing the economy.

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  27. Ben

    RE: pfft @ 125

    You make no sense whatsoever. Besides, I try not to argue with children or morons if I can help it (not always successful – it is a weakness of mine), so I’ll wish you well in your endeavors today.

    My posts are for those who are curious and want to learn.

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  28. Scotsman

    RE: pfft @ 125

    “nobody is forced to buy bonds, they are willingly doing it which is depressing the economy.”

    What?!? I thought you just said those ever lower interest rates were a sign of a healthy bond market?! And of course you realize that lower rates facilitate the stimulus you have so much faith in? But now they’re bad?

    Give it up. You clearly have no idea how all these inter-related pieces fit together to make an economy. And like everyone else, you just ignore the costs and revenue side of the equation. The irony is we will get a nasty downward spiral here soon, facilitated in large part by the very efforts pumped to prevent it.

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  29. Ben

    RE: Scotsman @ 127

    “The irony is we will get a nasty downward spiral here soon, facilitated in large part by the very efforts pumped to prevent it.”

    Game, Set, Match……Amen brother.

    What’s pathetic is that they will always rationalize their failure by claiming the stimulus efforts were “too small”, no matter how ruinously large they may be and NEVER, ever admit that their policies caused the mess in the first place.

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  30. The Kid

    RE: David Losh @ 122

    While I am not advocating it by any stretch of the imagination, feudalism does actually work, and worked for centuries.

    The key with feudalism is that there is a mandate for the ruling class to provide protection and fair treatment for the serfs, lest your serfs and land got poached by a competing lord. I’m simplifying it greatly, of course. There were a dozen other checks and balances, in the feudalistic system, usually resulting in the grisly demise of anyone who threatened the power of the ruling class, even if it was a member of the ruling class. It wasn’t until the rise of the merchant class that feudalism began to decline.

    We’re attempting to apply a form of neo-feudalism, where all the money and power is concentrated in the hands of an elite few, who are nigh immune from the laws everyone else has to follow, without a social contract demanding a code of behavior for the ruling class. However, anytime in history the ruling class has ceased to acknowledge their part of the social contract it has ended badly. Usually in pitchforks.

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  31. karl

    Market uncertainty and volitility force people into bonds also. Was funny friday to her the “day traders” cry foul on the black box traders who can buy and sell their entire portfolio 11 times in 22 seconds. 10 years ago the day traders were the head leaches in the pond.

    Battle of the parasites

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  32. Macro Investor

    RE: Macro Investor @ 108

    Tim, something’s wrong with your site. I sent this noonish on the 29th, not at 5:07 AM. Why would the comments be out of order like this?

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  33. David Losh

    “It wasn’t until the rise of the merchant class that feudalism began to decline.”

    I’m going to, once again, use the super market in Peru as an example. There is also a store called, I think, Super Max for building materials, and equipment, like a Home Depot, which is another example.

    We could, in my opinion, trace back economic problems to the concentration of the merchant class. Super markets taking over the local market system. Goods traded over seas, out of area, with profits sent off shore. It cuts the velocity, and multiplier effects.

    In the feudal system of old it was all concentrated within a community to hold off outside influences.

    All of which is fine in a shrinking global economy, but credit is a whole different scheme that got way out of control.

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  34. David Losh

    RE: Macro Investor @ 108

    Well, my point exactly.

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  35. Scotsman

    A brief refresher on why stimulus is destined to fail, presented as a picture so all can understand:

    http://www.swarmusa.com/vb4/attachment.php?attachmentid=116&d=1269115914

    “The latest U.S. Treasury Z1 Flow of Funds report was released on March 11, 2010, bringing the data current through the end of 2009. What follows is the most important chart of your lifetime. It relegates almost all modern economists and economic theory to the dustbin of history. Any economic theory, formula, or relationship that does not consider this non-linear relationship of DEBT and phase transition is destined to fail.”

    http://www.swarmusa.com/vb4/content.php/282-THE-Most-Important-Chart-of-the-CENTURY

    Macroeconomic DEBT SATURATION occurred causing a phase transition with our debt relationship. This is because total income can no longer support total debt. In the third quarter of 2009 each dollar of debt added produced NEGATIVE 15 cents of productivity, and at the end of 2009, each dollar of new debt now SUBTRACTS 45 cents from GDP!

    This is mathematical PROOF that debt saturation has occurred. Continuing to add debt into a saturated system, where all money is debt, leads only to future defaults and to higher unemployment.

    This is the dilemma created by our top down debt backed money structure. Because all money is backed by a liability, and carries interest, it guarantees mathematically that there will be losers and that the system will eventually reach the natural limits, the ability of incomes to service debt.

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  36. Macro Investor

    RE: Scotsman @ 135

    Your chart backs up what I’ve believed for many years. We have overcapacity in every business that doesn’t have a monopoly protecting it. That overcapacity has driven down profits to nearly nothing. It is no longer worthwhile to start businesses. All risk and no return. Just ask yourself what business would be worth starting now. Okay… pawn shop and bankruptcy attorney.

    Debt is only worth taking on if you can earn more profit than the interest payment. Instead we have debt chasing 0% returns. Or in the case of consumers, debt pulling forward a lifetime of work and savings into “today”.

    I’m afraid times are going to be tough for 10 or more years. This could all be worked off quickly if uncle sam would let banks fail, instead of bailing them out. But gov won’t do that because gov the banks own the politicians.

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  37. Blurtman

    Why We Need a Second Stimulus
    by Laura Tyson, PhD

    http://www.nytimes.com/2010/08/29/opinion/29tyson.html

    I am not sure if this is actually correct: “The supply of college graduates is not keeping pace with demand.”

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  38. Blurtman

    RE: Scotsman @ 135 – Time for The National Debt Jubilee!

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  39. pfft

    By Ben @ 127:

    RE: pfft @ 125

    You make no sense whatsoever. Besides, I try not to argue with children or morons if I can help it (not always successful – it is a weakness of mine), so I’ll wish you well in your endeavors today.

    My posts are for those who are curious and want to learn.

    I am glad you know I don’t want to learn. I learned about broken window from Economics in One Lesson and mises.org. this is not that situation. nobody broke a window. the government issued bonds to stimulate the economy and people bought them of their own free will. they weren’t forced. in the broken window scenario people had money diverted unnecessarily from savings or from purchasing something else. this is not the case.

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  40. pfft

    By Scotsman @ 128:

    RE: pfft @ 125

    “nobody is forced to buy bonds, they are willingly doing it which is depressing the economy.”

    What?!? I thought you just said those ever lower interest rates were a sign of a healthy bond market?! And of course you realize that lower rates facilitate the stimulus you have so much faith in? But now they’re bad?

    Give it up. You clearly have no idea how all these inter-related pieces fit together to make an economy. And like everyone else, you just ignore the costs and revenue side of the equation. The irony is we will get a nasty downward spiral here soon, facilitated in large part by the very efforts pumped to prevent it.

    only what, 3 1/2 months or so till your massive downturn?

    I don’t really know what point you are trying to make but mine is this. people are saving which has caused a recession. the government is simply borrowing that money and spending it. that’s the stimulus simplified.

    “And like everyone else, you just ignore the costs and revenue side of the equation.”

    no I haven’t, I posted all of that above. you are the one making vague notions of ever-increasing spiraling interest payments and whatnot.

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  41. pfft

    By Ben @ 129:

    RE: Scotsman @ 127

    “The irony is we will get a nasty downward spiral here soon, facilitated in large part by the very efforts pumped to prevent it.”

    Game, Set, Match……Amen brother.

    What’s pathetic is that they will always rationalize their failure by claiming the stimulus efforts were “too small”, no matter how ruinously large they may be and NEVER, ever admit that their policies caused the mess in the first place.

    not doing anything would have made the deficits $2.7 trillion dollars higher over 2010-2012.

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  42. pfft

    By Scotsman @ 135:

    A brief refresher on why stimulus is destined to fail, presented as a picture so all can understand:

    http://www.swarmusa.com/vb4/attachment.php?attachmentid=116&d=1269115914

    “The latest U.S. Treasury Z1 Flow of Funds report was released on March 11, 2010, bringing the data current through the end of 2009. What follows is the most important chart of your lifetime. It relegates almost all modern economists and economic theory to the dustbin of history. Any economic theory, formula, or relationship that does not consider this non-linear relationship of DEBT and phase transition is destined to fail.”

    http://www.swarmusa.com/vb4/content.php/282-THE-Most-Important-Chart-of-the-CENTURY

    Macroeconomic DEBT SATURATION occurred causing a phase transition with our debt relationship. This is because total income can no longer support total debt. In the third quarter of 2009 each dollar of debt added produced NEGATIVE 15 cents of productivity, and at the end of 2009, each dollar of new debt now SUBTRACTS 45 cents from GDP!

    This is mathematical PROOF that debt saturation has occurred. Continuing to add debt into a saturated system, where all money is debt, leads only to future defaults and to higher unemployment.

    This is the dilemma created by our top down debt backed money structure. Because all money is backed by a liability, and carries interest, it guarantees mathematically that there will be losers and that the system will eventually reach the natural limits, the ability of incomes to service debt.

    there are no hints of any of that being true. lots of people are still paying of their debt. if ti were true bond yields would be sky-rocketing and you’d be telling everyone about it.

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  43. Cheap South

    Is there any way to know the public school attendance in the region for the new year (student gain and loss per school/county)? Are the numbers out already?

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  44. Ben

    RE: Scotsman @ 135

    You nailed it!

    Moron Keynesians totally ignore the level debt in the system and will happily recommend spending the country into national bankruptcy, completely oblivious to the fact that stimulus only *appears* to work until the debt level is too high to be serviced.

    Formula to make a Keynesian: add broken window with a dose of Ponzi. Shake well.

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  45. corncob

    By Ben @ 144:

    Moron Keynesians totally ignore the level debt in the system and will happily recommend spending the country into national bankruptcy, completely oblivious to the fact that stimulus only *appears* to work until the debt level is too high to be serviced.

    Do you honestly believe we are even anywhere close to that point? Other advanced economies have shown that we are not, Japan has much higher debt and is still able to sell it for extremely low rates. Our rates continue to fall despite ever higher borrowing. Our deficit is a very easy problem to solve if our country really felt like doing so, the problem is not the deficit or borrowing it is that politicians and most voters don’t want to actually fix the issue. The “third rail” in the budget is not social security, it is our bloated military spending. We need some submarines and our nuclear missile stash and really not much else, the other $900B is a total waste. Since you believe government spending has no stimulus effect, we should be able to cut it immediately with only minimal consequence. Raise a few taxes and our new, enormous deficit is solved. If the economy happens to start growing again, which is inevitable due to technological advancement, we will be paying down the accumulated debt. Problem solved.

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  46. Macro Investor

    RE: Ben @ 144

    The Keynesians are right. You do want to stimulate a slow economy. However, the stimulus is SUPPOSED to be paid back when the economy (and tax revenues) recovers again. It’s the politicians and their special interests (both parties) that screw that up. They wanted to spend, spend, spend throughout good and bad times, because it buys votes — and that’s all they care about. It is wrong to blame the economic theory, when that theory was totally perverted for personal and corrupt gains.

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  47. Macro Investor

    RE: corncob @ 145

    “Since you believe government spending has no stimulus effect, we should be able to cut it immediately with only minimal consequence.”

    Please read what I posted in 108. It would be very bad for all of us if gov spending was cut immediately. However, we don’t have to spend it bailing out billionaire bankers. We COULD spend it productively, but that would take a political system that currently doesn’t exist.

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  48. Kary L. Krismer

    RE: Ben @ 144 – Here’s a tip: Making false claims about others, while simultaneously calling them morons, isn’t really a very good way to be convincing.

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  49. Ben

    RE: Kary L. Krismer @ 148

    There are many that believe Krugman is an economic moron in the field of economics. This is not news. What I find interesting is that so many have such a religious devotion to his dangerous dogma.

    The following Google search yields about 84,000 results:

    http://www.google.com/search?sourceid=ie7&q=krugman+is+a+moron

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  50. Ben

    RE: corncob @ 145

    I agree this country has not reached the event horizon YET. Every day our “leaders” choose to kick the can down the road makes the inevitable choices that much more painful.

    More people need to see through the baloney they are being fed and demand accountablility for the damages. How many have gone to jail thus far for the banking and mortgage fraud?

    There is still time to fix the system IF there is the political will. I haven’t seen that yet.

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  51. pfft

    By Ben @ 144:

    RE: Scotsman @ 135

    You nailed it!

    Moron Keynesians totally ignore the level debt in the system and will happily recommend spending the country into national bankruptcy, completely oblivious to the fact that stimulus only *appears* to work until the debt level is too high to be serviced.

    Formula to make a Keynesian: add broken window with a dose of Ponzi. Shake well.

    so why aren’t bond yields sky-rocketing? where has austerity worked? greece? ireland?

    doing nothing would mean $2.7 trillion more in debt.

    “Moron Keynesians totally ignore the level debt in the system and will happily recommend spending the country into national bankruptcy”

    actually no they don’t. revenue gained through stimulus is more than the debt incurred. it’s posted above in sef-defeating austerity.

    Now, a weaker economy means less revenue. Assume that every dollar up or down in GDP means $0.25 in revenue, which is conservative. Then the fiscal austerity reduces revenue by 0.35 percent of GDP; the true saving is only 0.65 percent.

    Now, the government has to borrow those funds; let’s say the real interest rate is 3 percent (it’s actually much lower now). Then the long run impact of the austerity on the fiscal position is to reduce real interest payments by 0.0195 percent of GDP.

    for the 100th time, just how much in interest do you think we’re paying?

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  52. pfft

    By Ben @ 150:

    RE: corncob @ 145

    I agree this country has not reached the event horizon YET. Every day our “leaders” choose to kick the can down the road makes the inevitable choices that much more painful.

    the bond market totally disagrees so for now you are wrong. very wrong.

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  53. pfft

    By Scotsman @ 71:

    RE: Yaj @ 68

    Exactly.

    The debate is misrepresented- it’s not so much “do stimulus dollars end up in the economy, supporting jobs and GDP?” as it is “does the multiplier effect really work, is it taking hold under the current conditions?”

    Are the dollars spent real? Yes. Do they temporarily boost the economy? Yes, of course. Do they boost the economy out of proportion to the burden/cost of the debt that funded them? Unknown at this time, but it doesn’t look good.

    I should point out that you said the stimulus does work accept you don’t know if debt servicing costs more than the increased benefit in tax revenue.

    just how much in interest do you think we are paying? interest rates range between 0% and 5%. you can’t be saying stimulus only boosts tax revenue by less than 3%.

    Now, a weaker economy means less revenue. Assume that every dollar up or down in GDP means $0.25 in revenue, which is conservative.

    http://krugman.blogs.nytimes.com/2010/07/07/self-defeating-austerity/

    sounds like we’ve resolved that.

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  54. Macro Investor

    RE: Kary L. Krismer @ 148

    “Making false claims about others, while simultaneously calling them morons, isn’t really a very good way to be convincing.”

    Thanks for trying to keep the thread on an adult level. I’d like to comment on what I believe is a growing trend. Outright fraud and shills are the oldest forms of deception. Notice sometime that whenever a discussion turns to politics or corporate misdeeds, “new” contributors will come and change the subject. They’ll turn the conversation to democrats vs. republicans, young vs. old, race/religion vs. race/religion, name calling, etc… It’s divide and conquer.

    There is no way to prove who has what agenda, but the main stream media is all owned by a half dozen large corporations and you’ve got to believe they don’t like losing their power to a bunch of bloggers. They hate blogs and would like nothing more than portraying them in a poor light. The political parties and large corporations have huge PR budgets and lots of that has to be directed at the internet.

    Ask the average person what they think of Ron Paul or Ralph Nader. I guarantee you 99% will say “crazy” without having one shred of evidence. It is all due to the attacks they took simply by daring to run against the 2 political parties.

    Here is an anecdote from the last election. I had a co-worker who was enthusiastically for Ron Paul. He came to me one day all excited because Paul took second place in a primary. I did an internet search to try to confirm that. It was hard to do. Several newspapers ran stories listing the winner and third place, but never mentioned Ron Paul’s name, nor who took second place. It was like he didn’t exist.

    I think we need to keep that in mind when we see a thread turn into name calling.

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  55. Scotsman

    RE: pfft @ 151

    “for the 100th time, just how much in interest do you think we’re paying?”

    Proof you don’t get it. It’s not how much we are paying, it’s “are we getting more back than we are paying out?” And the current answer, as shown in the chart I linked, is no. Not my numbers by the way, but treasury/OMB. It’s not theory, it’s fact, hard numbers from our own government. Deal with it, as you say.

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  56. Chris

    RE: pfft @ 121
    Pfft – Employment is part of the positive feedback loop the Keynesians see with stimulus spending.

    According the the White House the first thing notable about the ARRA is the use of the stimulus to supposedly increase employment:

    – The President signed the American Recovery and Reinvestment Act, which has been responsible for about 3 million American jobs and brought the economy back from the brink of another depression.
    http://www.whitehouse.gov/issues/economy

    The Speaker of the House also lists the top reason for the stimulus to be creating jobs:

    -The American Recovery and Reinvestment Act will: Create and save 3.5 million jobs, rebuilding America, making us more globally competitive and energy independent, and transforming our economy.
    http://www.speaker.gov/newsroom/legislation?id=0273

    In fact every pro-stimulus source touting the multiplier effect lists jobs at or near the top as a priority of the stimulus:

    Give us money, and we’ll give you jobs. That was the promise President Barack Obama made when he asked Congress for a $789 billion stimulus bill. The cash, he said, would create millions of jobs during the next two years. Without the stimulus, the administration warned in a January report by economic advisers Christina Romer and Jared Bernstein, unemployment by the end of 2010 would reach as high as 9 percent.

    http://reason.com/archives/2009/10/19/the-myth-of-the-multiplier#commentcontainer

    If the stimulus worked like a positive feedback loop is there any way private sector employment could remain stagnant when hundreds of billions are dropped into the economy in a few months? I doubt it and it is obvious if there really is a “multiplier” effect as contemplated by Keynes, the funds have been misapplied for political patronage. The more likely answer however is it doesn’t work. You have to create something of value and the government doesn’t do that.

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  57. pfft

    By Chris @ 156:

    RE: pfft @ 121
    Pfft – Employment is part of the positive feedback loop the Keynesians see with stimulus spending.

    According the the White House the first thing notable about the ARRA is the use of the stimulus to supposedly increase employment:

    – The President signed the American Recovery and Reinvestment Act, which has been responsible for about 3 million American jobs and brought the economy back from the brink of another depression.
    http://www.whitehouse.gov/issues/economy

    The Speaker of the House also lists the top reason for the stimulus to be creating jobs:

    -The American Recovery and Reinvestment Act will: Create and save 3.5 million jobs, rebuilding America, making us more globally competitive and energy independent, and transforming our economy.
    http://www.speaker.gov/newsroom/legislation?id=0273

    In fact every pro-stimulus source touting the multiplier effect lists jobs at or near the top as a priority of the stimulus:

    Give us money, and we�ll give you jobs. That was the promise President Barack Obama made when he asked Congress for a $789 billion stimulus bill. The cash, he said, would create millions of jobs during the next two years. Without the stimulus, the administration warned in a January report by economic advisers Christina Romer and Jared Bernstein, unemployment by the end of 2010 would reach as high as 9 percent.

    http://reason.com/archives/2009/10/19/the-myth-of-the-multiplier#commentcontainer

    If the stimulus worked like a positive feedback loop is there any way private sector employment could remain stagnant when hundreds of billions are dropped into the economy in a few months? I doubt it and it is obvious if there really is a “multiplier” effect as contemplated by Keynes, the funds have been misapplied for political patronage. The more likely answer however is it doesn’t work. You have to create something of value and the government doesn’t do that.

    revenue growth is also a part of the postives.

    “I doubt it and it is obvious if there really is a “multiplier” effect as contemplated by Keynes, the funds have been misapplied for political patronage. ”

    it’s funny you put the mulitiplier effect in quotes. it’s not some new economic theory. you learn it very early in economics. it’s economics 101. cops, road, firefighters and teachers all are of value.

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  58. David Losh

    RE: Macro Investor @ 136

    Services. Elder care, lawn care, maintaining property, cleaning, painting, power washing, cash business, all employment based, with equipment secondary to the cost of labor.

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  59. Scotsman

    RE: pfft @ 151

    “doing nothing would mean $2.7 trillion more in debt”

    You keep repeating this as though it’s some kind of hard fact. It’s not. It was a projection based on static analysis, and probably not much better than this one:

    http://michaelscomments.files.wordpress.com/2009/06/stimulus-vs-unemployment-may-corrected.gif

    If we are going to have this discussion, let’s at least agree to stick to hard numbers detailing past performance, not just b.s. projections. There’s plenty of real data out there.

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  60. Scotsman

    The way ahead- a new nuclear power tech? I say go for it!

    “There is no certain bet in nuclear physics but work by Nobel laureate Carlo Rubbia at CERN (European Organization for Nuclear Research) on the use of thorium as a cheap, clean and safe alternative to uranium in reactors may be the magic bullet we have all been hoping for”

    http://www.telegraph.co.uk/finance/comment/7970619/Obama-could-kill-fossil-fuels-overnight-with-a-nuclear-dash-for-thorium.html

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  61. Chris

    RE: pfft @ 157

    Pfft – I put “multiplier” in quotes because I considered it an ironic word to use when nothing was multiplied. The sources I quoted claimed the “stimulus” spending would stimulate the economy and raise employment in the private sector. When that didn’t work out they changed the definition of employment. Thus nothing (or very little) “multiplied” from going in debt.

    Of course multiplier is a concept in economics (quite a few multiplier theories) but to imply that Keynesian Multiplier Theory (and its offshoots) is gospel and above the use of ironic quotations does not fairly state basic economics (Economics 101 as you state it).

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  62. Chris

    RE: pfft @ 157
    And as to my complaints of the government not creating value you caught me on a bad night. I saw an open parking spot in Ballard and grabbed it at about 8pm on Friday. I came back out an hour later and the whole line of cars I parked with were ticketed (including mine). I walked up the street about 50 meters and saw an ambiguous no parking sign (I had parked off a turn). All the other drivers ticketed with me didn’t see it or didn’t understand it either. There was nothing inherently dangerous about the place we parked. If it was about safety the proactive ticket generating energy could be used for making unambiguous signs and placing them.

    When there are fines to be had against people who need to renew their licenses, the government springs from behind its counter and works all hours of the night. But if you want something from them you will have to wait in line during your working hours. Maybe tomorrow I can handle a talk about how the government adds value to my life.

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  63. Macro Investor

    RE: Scotsman @ 160

    “…cheap, clean and safe…”

    Where have we heard that before? Oh yeah. Everywhere, and for our entire lives. That is what the PR department of every special interest is selling. DDT was cheap, clean and safe. Food additives and coloring. Cigarettes at one point in time. GM plants. Oil and dispersants. The list goes on for an entire library.

    How long has the gov been trying to open a nuclear waste depository? I know the answer. Do you?

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  64. Macro Investor

    RE: Chris @ 162

    Perhaps it’s a policy to get people to take public transit. Often times it’s to reserve parking for residents or businesses on the street. Take the bus, walk or pay for parking. Whining is annoying.

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  65. Chris

    RE: Macro Investor @ 164 – As I said in the post, it looked like a legal parking spot (as did everyone ticketed). There is no street car service from downtown to Ballard.

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  66. David Losh

    RE: pfft @ 151

    We paid, I think $375 billion in interest this year. Seems like a lot to me.

    http://www.federalbudget.com/

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  67. Scotsman

    RE: Macro Investor @ 163

    “How long has the gov been trying to open a nuclear waste depository?”

    Don’t know. Did you read the article? Thorium actually absorbs and neutralizes conventional nuclear waste, as well as being relatively harmless in a natural state. Does that moderate your cynicism? Like Dear Leader says, “keep hope alive” or something.

    ;-)

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  68. Kary L. Krismer

    RE: Chris @ 156 – I will give you the point that government spending tends to be less productive than other spending, but to argue it’s not productive at all is difficult/impossible. That’s similar to trying to claim that the stimulus didn’t create any jobs. It’s impossible to spend billions of dollars without creating a job or something that was productive.

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  69. Matthew

    We should just keep interest rates low, have the Fed and Treasury buy all the assets in the U.S., keep an easy monetary policy at all times, and just have the Government our way even further in the hole, even during the good years, because obviously it’s works so well at creating prosperity!

    Why don’t we just expand the quadruple the Fed balance sheet, and double the national debt! Then Americans can be extra fabulous!

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  70. Matthew

    The G spending didn’t “create” any jobs. It may have helped “save” some jobs (disputable), but the unemployment rate is basically the same if not worse than when the stimulus spending began. And if you consider creating a “FED job” as a net positive for our economy, well, I can’t help you.

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  71. Kary L. Krismer

    RE: Matthew @ 170 – So tell me. If we gave you even $1M to spend (not invest), how would you spend it in a manner that wouldn’t create any jobs?

    Looking at the net number of employed does not give you the answer to how many jobs were created or saved. To know that with certainty you would have to go back in time, change some decisions on the stimulus, and then measure the number of employed today with those decisions.

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  72. Matthew

    I see it every day! Just because budgets go up and more money is thrown into the .gov coffers doesn’t mean that federal agencies or the private sector are employing more people. It is pretty obvious right now that corporate America is merely holding cash and padding their profit margins and not hiring more employees. Look at the current worker productivity numbers right now, the American employee is being asked to do more for less. Most companies are not hiring right now, and the ones that are, are not hiring many folks.

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  73. Kary L. Krismer

    RE: Matthew @ 172 – I’ve complained about the lack of private hiring in this very thread, blaming it on tax policy, health care policy and just the general anti-business attitude repeatedly expressed by the Obama administration. That doesn’t mean thought that the stimulus didn’t create jobs. The link I posted yesterday indicated that the amount of cash being sat on by private industry exceeds the stimulus. If you’d had the same anti-business government policies without the stimulus things would have been worse. If you’d not had those same anti-business policies, and no stimulus, things would be largely the same. If you’d not had those anti-business policies, and the stimulus, we would have been much better off than we are today.

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  74. softwarengineer

    RE: Macro Investor @ 108

    No Dust Bowl Today Either

    Meaning the extra food that would be trashed today, gets distributed through food banks [assuming they get enough diesel fuel donations], instead of thrown in the trash or didn’t exist anyway [Great Depression].

    There’s a limit though, if untrashed food isn’t selling in our grocery stores, the supply of throw away food for the food banks dries up. It just doesn’t magically appear.

    To say America could never get to that point is not being pragmatic, IMO.

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  75. softwarengineer

    RE: Trigger @ 110

    Nice Thought Trigger

    But except for the American Space and Military Development [which are being severely butcher axed], where’s the beef? Even money spent to keep government workers employed is short-term and failure moded without an industrial tax base.

    Green industries are a joke too IMO, low waged non-union and dinky job pool…..with massive outsourcing, slamdunk too.

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  76. softwarengineer

    Step One To America’s Rebuilding

    Stop calling real environmentalists for population controls “haters”.

    I’d add:

    Learn to live and be happy in this country with political differences [even significant political differences], and stop calling people “hateful names”, just because they aren’t your political clone.

    Once we get over this “thin skinned” neurosis to be politically correct, a lot of folks suffer from lately [and blame their political opponents for their neurosis, instead of looking in the mirror] and learn to agree to disagree….we’re on the road to unity and survival.

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  77. Chris

    RE: Kary L. Krismer @ 168
    Kary – I agree there are some things of value created by the government when viewed in isolation. However I would suggest looking at housing. The government got involved in housing ostensibly to help people get into house they otherwise wouldn’t be able to afford by making financing a purchase more affordable. They created a secondary market and created an insurance program that was self funding. That metastasized into a program to keep home prices artificially high (and go deeply in debt to do so) thus discouraging buying houses, making them more expensive and putting anyone who bough at greater risk of default (or at least being under water).

    With the military the government did a good job of defending us but then changed into a Keynesian spending program that gets into wars driving us deeply in debt. I still don’t understand what we were doing in Vietnam, Somalia and Iraq.

    Then at the city level the government went from protecting us from bad guys and making sure restaurants don’t poison us into a scam artist that raises money by working all hours of the night to ticket people who they know have a way of paying them back (ie they have a car). Here’s a video: http://www.youtube.com/watch?v=CnoGi_Vba1Q

    I don’t think anyone can explain the public safety reason these cars were ticketed.

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  78. Kary L. Krismer

    By Chris @ 177:

    <I still don't understand what we were doing in Vietnam, Somalia and Iraq..

    Not to justify or condemn it: (1) We were in Vietnam because we didn’t like the North’s politics; (2) We were in Iraq because we didn’t like their leader; and (3) I’m not sure we were ever really in Somalia, and probably whatever our involvement was there was close to humanitarian.

    I think Somalia may come back and bite us though because those millions in ship ransoms almost certainly are not going to good uses.

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  79. One Eyed Man

    RE: softwarengineer @ 176

    So SWE, for my personal edification and without openning the pandora’s box caused by uttering the “A” word, would you generally ascribe to being the world wide poster boy for planned parenthood? I think that just sounds better to the politically correct and the paranoid who rightly or wrongly might associate the term “population control” with genocide.”

    I know that your reasoning is broader than what is viewed as the mission of “planned parenthood” but I assume that the general methodologies you would promote are essentially the same.

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  80. softwarengineer

    RE: One Eyed Man @ 179

    We Agree

    I’m an old fashion Democrat from the mid-90s and older….I support giving the UN money for planned parenthood facillities all over the world, America too.

    You’re right though, countries like Japan got so densely populated, even one kid a family will take that country a couple centuries to get down to an environmental 20-30 million on that dinky island country. For America to get down to a sustainable 150 million [most of our country is desert, mountains or the world's food/farm/water requirements] or less will take quite a few decades too….but if we don’t start now, we can let disease, starvation and wars do it for us. That route is much more painful.

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