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The Basement
2011 U.S. Budget Cut in Perspective
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<blockquote data-quote="John Roberts" data-source="post: 33856" data-attributes="member: 126"><p>Re: 2011 U.S. Budget Cut in Perspective</p><p></p><p></p><p>Not to quibble that is not quite the entire story. </p><p></p><p>Yes, after Lehman was allowed to fail, the quickly spreading international fear and uncertainty suggested a bail out was in everybody's interest. It is arguable that more pain could have been prevented by a cheaper bailout of Lehman, while one could alternately argue the merit of letting more of them fail. </p><p></p><p>I'm surprised that I need to remind you that the auto industry received a bunch of taxpayer love. </p><p></p><p>The attempts to "help" the people who purchased home(s) they couldn't afford to ever pay for (on a gamble they would keep going up), has only prevented that market from clearing, bottoming , and recovering. Unfortunately all the "help" will only prevent a small fraction of those who gambled unwisely on housing, from reality. One good friend of mine despite my repeated warnings, ended up losing his several years of real estate gains in a final short sale. "Trust me I know what I'm doing". If i was less of a friend I would rub that in. </p><p> </p><p>If look behind the curtain at the wall street bailout, and lot of taxpayer money went to european banks and financial institutions, so we've been in the same bed for a long time. </p><p></p><p>This is not unlike the 30's when everybody tries to beggar thy neighbor by making their currency cheaper to gain world trade. Part of this weeks fun news from Europe who had already started increasing interest rates (that "should" make their currency relatively stronger) just pulled an about face and reversed some increases. The Euro zone has a simpler one target inflation mandate for monetary policy (vs our inflation and employment0. However they are learning the perils of a single monetary policy with independent per country budget/debt discipline. </p><p></p><p>The real concern is will foreigners stop buying american debt and at the moment China would love too, but we're the least ugly girl at the prom so while they try to diversify we are still high on their dance card. </p><p></p><p>Trade is touchy subject, the congress still hasn't certified trade deals with Columbia, So, Korea, and (?) that were negotiated under the last administration. trade deals, mean more US jobs, but apparently this hasn't been much of a priority. </p><p></p><p>I did estimate roughly $1T to post 9/11 adventures, while the total military budget is more and there is much not immediately military spending, like aid to Pakistan that was "strategic" for the region. </p><p></p><p>I already argued that all of the military spending needs to be in the budget, but even turning more neutral that Switzerland would not balance our budget. </p><p></p><p>This is another oversimplification. No country maintains their personal standard of living by ignoring productivity enhancements and best use of capital. If we prevent companies like Boeing from expanding into more business friendly states, they will expand into more business friendly countries. We truly need to unleash the growth engine that was American small business. The current climate is doing the opposite. </p><p></p><p>Ironically there was just a news release about Hon Hai (remember them? the huge CM in China that builds Apple and Sony poop). They report that they are going to buy 1 million robots... to reduce manufacturing cost. hmmmm <img src="https://cdn.jsdelivr.net/joypixels/assets/8.0/png/unicode/64/1f642.png" class="smilie smilie--emoji" loading="lazy" width="64" height="64" alt=":-)" title="Smile :-)" data-smilie="1"data-shortname=":-)" /></p><p></p><p>New agencies are just the tip of the iceberg showing above water. The larger damage is from their friction and damping effect on business activity and economic growth. </p><p></p><p>We need to make the existing agencies work better. I believe the oversight of trading on wall street is still a little too friendly to computer flash traders and hedge funds, not friendly enough to small investors, who are bled dry by a thousand cuts. </p><p></p><p>This is another one of those problems we could solve in an afternoon if we really wanted to. there are partisan interests on both sides of this preventing a honest resolution. I am more concerned about mexico turning into a narco state. and we are more than a little complicit (as a customer) for the drugs, and as supplier of the fire power used by the cartels. </p><p></p><p>This is nothing new, and we have prospered (so far) despite this... a good start is approving Columbian and S. Korea FT agreements. </p><p></p><p>Some well parsed stats, (lies, damn lies, and statistics). I see your rant and reply, hell yes big companies need to pay more taxes. i will accept your numbers for this discussion. The reality is nominal US corporate tax rates are still too high, so what we need to do is start eliminating all the many loopholes used by the large and powerful that have outlived their benefit to the economy, so we can reduce nominal tax rates while getting even more revenue. As it sits right now, small business is getting hosed again because they actually pay the high tax rates. Big business is not evil, they are just better capable of working the system. Fix the damn system that makes it so easy for them to game the taxes. All this green job nonsense is creating new different recipients of government (taxpayer) love. </p><p></p><p>world peace? </p><p></p><p>This is a good start...</p></blockquote><p></p>
[QUOTE="John Roberts, post: 33856, member: 126"] Re: 2011 U.S. Budget Cut in Perspective Not to quibble that is not quite the entire story. Yes, after Lehman was allowed to fail, the quickly spreading international fear and uncertainty suggested a bail out was in everybody's interest. It is arguable that more pain could have been prevented by a cheaper bailout of Lehman, while one could alternately argue the merit of letting more of them fail. I'm surprised that I need to remind you that the auto industry received a bunch of taxpayer love. The attempts to "help" the people who purchased home(s) they couldn't afford to ever pay for (on a gamble they would keep going up), has only prevented that market from clearing, bottoming , and recovering. Unfortunately all the "help" will only prevent a small fraction of those who gambled unwisely on housing, from reality. One good friend of mine despite my repeated warnings, ended up losing his several years of real estate gains in a final short sale. "Trust me I know what I'm doing". If i was less of a friend I would rub that in. If look behind the curtain at the wall street bailout, and lot of taxpayer money went to european banks and financial institutions, so we've been in the same bed for a long time. This is not unlike the 30's when everybody tries to beggar thy neighbor by making their currency cheaper to gain world trade. Part of this weeks fun news from Europe who had already started increasing interest rates (that "should" make their currency relatively stronger) just pulled an about face and reversed some increases. The Euro zone has a simpler one target inflation mandate for monetary policy (vs our inflation and employment0. However they are learning the perils of a single monetary policy with independent per country budget/debt discipline. The real concern is will foreigners stop buying american debt and at the moment China would love too, but we're the least ugly girl at the prom so while they try to diversify we are still high on their dance card. Trade is touchy subject, the congress still hasn't certified trade deals with Columbia, So, Korea, and (?) that were negotiated under the last administration. trade deals, mean more US jobs, but apparently this hasn't been much of a priority. I did estimate roughly $1T to post 9/11 adventures, while the total military budget is more and there is much not immediately military spending, like aid to Pakistan that was "strategic" for the region. I already argued that all of the military spending needs to be in the budget, but even turning more neutral that Switzerland would not balance our budget. This is another oversimplification. No country maintains their personal standard of living by ignoring productivity enhancements and best use of capital. If we prevent companies like Boeing from expanding into more business friendly states, they will expand into more business friendly countries. We truly need to unleash the growth engine that was American small business. The current climate is doing the opposite. Ironically there was just a news release about Hon Hai (remember them? the huge CM in China that builds Apple and Sony poop). They report that they are going to buy 1 million robots... to reduce manufacturing cost. hmmmm :-) New agencies are just the tip of the iceberg showing above water. The larger damage is from their friction and damping effect on business activity and economic growth. We need to make the existing agencies work better. I believe the oversight of trading on wall street is still a little too friendly to computer flash traders and hedge funds, not friendly enough to small investors, who are bled dry by a thousand cuts. This is another one of those problems we could solve in an afternoon if we really wanted to. there are partisan interests on both sides of this preventing a honest resolution. I am more concerned about mexico turning into a narco state. and we are more than a little complicit (as a customer) for the drugs, and as supplier of the fire power used by the cartels. This is nothing new, and we have prospered (so far) despite this... a good start is approving Columbian and S. Korea FT agreements. Some well parsed stats, (lies, damn lies, and statistics). I see your rant and reply, hell yes big companies need to pay more taxes. i will accept your numbers for this discussion. The reality is nominal US corporate tax rates are still too high, so what we need to do is start eliminating all the many loopholes used by the large and powerful that have outlived their benefit to the economy, so we can reduce nominal tax rates while getting even more revenue. As it sits right now, small business is getting hosed again because they actually pay the high tax rates. Big business is not evil, they are just better capable of working the system. Fix the damn system that makes it so easy for them to game the taxes. All this green job nonsense is creating new different recipients of government (taxpayer) love. world peace? This is a good start... [/QUOTE]
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