Confusion about the deficit

[Mav88]

A little about Brad Delong. It's important since he influential among liberals, and Richter thinks his work is some sort of economic gospel.

Brad thinks we in the west owe the third world a living. He knows that it results in American jobs lost but his answer to that is obvious to a liberal, government run retraining programs. Say a 45 year old manufacturing engineer with 3 kids loses his job to an Indian, then he simply retrains for .... for... well Brad didn't exactly fill that in, probably a nurse or accountant eh?. Oh how I want us to outsource economists and make Brad retrain, but the point is he punts to government to make his liberal visions seem plausible. Details? oh the government will figure them out as we all know government is so good at that. There's a second little fact in all this, Brad knows that this results in lower american wages, they call it 'wage compression'. So not only do you have to retrain, you get lower pay as a result. Brad doesn't care about that, to him it's social justice.

I read a lot of his crap to find this out. One day I read one of his blogs and he stated something like "As my young son sits in front of me, I don't want to tell him when he grows up that we held India in poverty." I wish I had bookmarked it but I can't find it now. So Brad's primary motivation is to feel good about what he did for India to make his son proud, assuming his son cares. The American worker will just have accept a lower wage and depend on gov't retraining. Not only does Brad want to redistribute, he wants to redistribute to India. I say we compress Brad's wages immediately and send it over there.

Here's something from his blog that reinforces the point, that we are responsible for the third worlds poverty (the old zero sum game model, somhow you took something from them).

http://www.j-bradford-delong.net/movable_type/2004-2_archives/000262.html

note how much of a jerk he can be to others, note how he writes on and on about poor Indians but not one mention of displaced americans

On reflection, I owe Seth Stevenson an apology. He is not a moral imbecile. He is wrestling with the right questions. (Even though, from my perspective, he needs different intellectual tools to get the correct answers). What is below looks, in the cold light of the computer screen, a lot rougher than I intended it too.

I therefore apologize.

But I don't concede the point. I want to preserve it: First Worlders are more complicit in the continuation of Third World poverty when they don't buy products made by Third World labor than when they do. The big problem (which the government of Kerala and the CPI(M) are trying hard to solve) is the thin market/local politics monopsony of Mr. Shady Middleman. Debbie is doing a good thing (although not the best thing) for world development by raising demand for coir in India rather than sourcing her mats from some high-tech materials factory in North Carolina. It is important to think analytically. Et cetera...


....Demand for coir doormats drops through the floor. Cost Plus World Market stops selling them. Debbie's company transfers her to another job, managing a maquiladora in El Paso. Mr. Big Exporter goes bankrupt, and has to return to his ancestral village in Oudh. Mr. Shady Middleman loses his job too, and has to become a lower-paid janitor at the Luxury Beach Hotel where Seth Stevenson says. "Ha, ha! Serves them right!" you say. "Disgusting exploiters! They got what's coming to them." And you kick back and feel morally virtuous.

And next year, what do the tourists who leave Big Luxury Hotel and take a ride around Desperately Poor Village see? They look into huts. The huts are empty. The looms stand idle. Nobody is making coir mats anymore--Mr. Shady Middleman is no longer buying.

What are the people who used to sit in their huts and make coir mats doing instead? We don't know. But we do know one thing: Whatever they are doing, they would rather be making coir mats. Those who took up the option of making coir mats did so because it seemed to them to be the best available option. And we--by trying to preserve our moral purity by not becoming polluted by physical contact with the products of Third World labor--have stolen that option from them....

We have STOLEN their option to make mats by not buying! I am ceaslessly amazed at the logical sophistry of liberals. It all boils down to this, they simply hate that western civ is successful need to bring it down for emotional reasons, or they simply hate I don't know. I cannot explain this any other way.

So shouldn't we evaluate Seth Stevenson's plea for us not to buy coir mats as having the same moral value as loom-smashing, since it has the same effect on the people in Desperately Poor Village? By this way of thinking, Seth Stevenson is a thief. No, he is worse than your common-variety thief: a common-thief steals from the rich, while Stevenson steals their livelihood from the poor. Stevenson is a thief who steals the poor's livelihod. No, he is even worse--for he incites others to steal the poor's livelihood as well. And he is even worse than that: a thief--even the master of a gang of thieves--makes use of what he steals, while Stevenson simply destroys the looms (or, rather, urges us to destroy the looms' market value as a capital good.)

So now you are a THIEF if you don't buy Indian goods. What can I say, these people are sick, they are incurably hateful ass holes. These are the folks behind Ricter's plan. trust them?

 

[OccupyThis]

Nice work Mav!

 

[Tsing Tao]

I admit to not reading anything but the OP, but the OP is flawed because it assumes that spending in the government is at 100% efficiency and no more such efficiency can be obtained. This is, of course, horseshit and there are numerous places to cut funding without materially cutting services and output through simple redesign.

So it is possible to materially cut the deficit simply by creating synergies and efficiencies in current governmental programs. Of course, I'd like to take it a step further and actually cut programs that do not work or do not do what they were designed to do in the first place.

Keynesians will cry rivers over this, but that is to be expected, because Keynesian Theory is flawed.

 

[Lucrum]

Quote from Tsing Tao:

I admit to not reading anything but the OP, but the OP is flawed because it assumes that spending in the government is at 100% efficiency and no more such efficiency can be obtained. This is, of course, horseshit and there are numerous places to cut funding without materially cutting services and output through simple redesign.

So it is possible to materially cut the deficit simply by creating synergies and efficiencies in current governmental programs. Of course, I'd like to take it a step further and actually cut programs that do not work or do not do what they were designed to do in the first place.

Keynesians will cry rivers over this, but that is to be expected, because Keynesian Theory is flawed.

+ 15.75 Trillion and counting...

 

[CaptainObvious]

IMO you're wrong about the baby boomers, of which I am one. We're not paying for what boomers have. We're paying for what the previous generation already received. We're paying for their sweet pension plans. We're paying for all that free heath care insurance they received while employed. We're paying for the 500% increase in their property values they enjoyed. We're paying for the huge wage and benefit increases they had while working. It's the tab come due for all of that which is busting our balls.
Yes, the "greatest generation" saved the world during WW II, and yes they survived a depression as youngsters, and they were hard workers, but they were paid in spades and paid very, very well for their sacrifices.
This is not an argument about whether or not they deserved all those bennies. It is simply the facts.

Quote from jem:

This is a teachable moment.

The ridiculous spending causes massive inflation. Has our economy really grown in the last 20 years. Has any of this spending done anything useful since the fall of the berlin wall? Have standards of living decreased. Does it take two incomes to own a house in a good school district where one was once enough? All this govt spending and look what happens to our standard of living? We have crowded out entire sectors of the economy with a larger govt sector.


Essentially the baby boomers spending has been robbing from every generation to support their habit of never paying the piper.

They inflated out of their parents savings bonds.
They had the govt spend their asses off for the last 30 years.
They have saddled our children with some estimates of 900,000 dollars each of debt.

And now when it is time to tighten the belt... they say no no no spend more. Really screw our kids with massive debt and massive inflation.

As if our kids are not going to have it tough enough after these greedy bastards ship all our tech and jobs over sees so they could buy cheap shit at wall mart.

Balance the budget... have a recession.. build from a real base instead a from a base of fanancial tricks.

disclosure... I am a baby boomer.

 

[jem]

Quote from CaptainObvious:

IMO you're wrong about the baby boomers, of which I am one. We're not paying for what boomers have. We're paying for what the previous generation already received. We're paying for their sweet pension plans. We're paying for all that free heath care insurance they received while employed. We're paying for the 500% increase in their property values they enjoyed. We're paying for the huge wage and benefit increases they had while working. It's the tab come due for all of that which is busting our balls.
Yes, the "greatest generation" saved the world during WW II, and yes they survived a depression as youngsters, and they were hard workers, but they were paid in spades and paid very, very well for their sacrifices.
This is not an argument about whether or not they deserved all those bennies. It is simply the facts.

I will reconsider... you made some good points. Being in front of the early boom, sure worked for my dad. He made a lot of money trading in front of baby boomer trends... including housing. And my mom still collects her social security even though she does not need. She talks about earning it.

She taught school for 3 or 4 years. she probably put in less than a month or twos payment.

I think SS needs to be means tested.
I think govt workers should pay an extra 10% income tax until the budget is balanced and no raises.

 

[AAAintheBeltway]

I don't think there is anything necessarily wrong in the premise of the Tyson article. Deficits are not the end of the world, can stimulate growth and can be repaid from a grwoing economy. That is pretty much the premise of Reaganomics or supply side economics, both of which have been mocked by liberals for decades. Suddenly now that they need the money to throw a desperate Hail Mary pass to try to secure Obama's reelection, they are supply siders? It seems a bit fishy.

Of course, liberals like laura Tyson have no intention of running a supply side deficit. One in which lowered taxes and regulatory burdens goose the private sector. Oh no, they want to fund government "investments" in stuff like education, green energy and boondoggles like the highspeed train to Vegas, all built by unionized workers. In other words, more of what Obama has pissed away trilliions on already. More payoffs to unions and more Solyndras.

Voters instinctively know that thrrowing money away like that will not help the economy. If we know one thing, it is that government is no good at picking winners and losers and is wasteful. Take a look at the GSA scandal or TSA if you doubt it.

Also, like a lot of liberal arguments in favor of spending programs, her article implicitly assumes we aren't already running an almost unprecedented degree of stimulus. We are already borrowing a scary amount of the federal budget. They say we need to borrow even more. After all, rates will always be low, right?

We don;t need to look to Greece or Portugal to see where this ends up. We can look at California and Illinois, which have been pursuing the Obama economic plan for years. Now they want the rest of us to bail them out.

 

[AAAintheBeltway]

Quote from jem:

I will reconsider... you made some good points. Being in front of the early boom, sure worked for my dad. He made a lot of money trading in front of baby boomer trends... including housing. And my mom still collects her social security even though she does not need. She talks about earning it.

She taught school for 3 or 4 years. she probably put in less than a month or twos payment.

I think SS needs to be means tested.
I think govt workers should pay an extra 10% income tax until the budget is balanced and no raises.

I totally disagree with means testing social security. Any republican who supports it should be targeted for defeat.

There are two fundamental reasons for my position. One, people paid into social security their whole working lives on the lie that it was a retirement plan. Of course, it was a ponzi scheme, but any politician who made that claim found out what touching the third rail of Amercian politics felt like. But now, when the truth can't be hidden, they want to continue the lie a few more years by "means testing." Sorry, that wasn't the deal we made. if I paid into an insurance company annuity for 30 years, then when it was time to cash out they said, we have some cash flow problems and have decided to means test benefits, we'd be yelling for the SEC and Justice Department. Same principle.

Two, means testing is just a codeword for another tax increase on the upper middle class, ie the people who already pay 90 % of taxes. Even worse, it punishes the very behavior we should be encouraging, eg savings and financial responsibility. It
s just like Santelli's famous rant that started the Tea Party movement. You gonna bail out these people who took down mortgages they couldn't afford to speculate in houses? What about the people who saved and bought what they could afford? Who's bailing them out?

And once you start down that slippery slope, don't think it stops with social security. No way. It will be medicare, then IRAs and 401k plans. After all, why should you get to retain all your IRA if you don't "need" it? See, we're all in this together and have to share the sacrifices equitably. King Obama will decide how much you get to keep.

 

[CaptainObvious]

It's not a popular position to target the greatest generation, but it is what it is. We're all so hung up on who to blame, myself included, we can't focus on the solutions, all of which will be painful. The biggest problem as I see it is how do we distribute that pain fairly and not destroy the economy in the process. Blue collar will rightfully say, our belts are tight enough. The wealthy will rightfully say, we're paying enough, fix your spending problem. Somewhere, somebody has to do what's best for the country, and right now all we have is lip service and flag wavers. That won't get it done.

Quote from jem:

I will reconsider... you made some good points. Being in front of the early boom, sure worked for my dad. He made a lot of money trading in front of baby boomer trends... including housing. And my mom still collects her social security even though she does not need. She talks about earning it.

She taught school for 3 or 4 years. she probably put in less than a month or twos payment.

I think SS needs to be means tested.
I think govt workers should pay an extra 10% income tax until the budget is balanced and no raises.

 

[Ricter]

Quote from CaptainObvious:

The biggest problem as I see it is how do we distribute that pain fairly and not destroy the economy in the process. Blue collar will rightfully say, our belts are tight enough. The wealthy will rightfully say, we're paying enough, fix your spending problem...

Cap'n, why would the wealthy say that!? They ARE government.