[licence2kill]

Originally Posted by 2ffu

How long can we sustain being 40% over budget before people lose faith?

I already said no one knows the upper bound, but we do know that it's really, really, high.

[licence2kill]

Originally Posted by 2ffu

Didn't realize stagflation meant strongest economy in the world.

Japan has stagflation? They've had, literally, zero nominal growth since 1994...

[2ffu]

Originally Posted by dub CRISP

We won't suddenly wake up one day and find that we have to pay more interest on our debt than yesterday. When the government issues t-bills/bonds etc they have a face value that gets paid out when they come to maturity or a set coupon rate that gets paid out over the life of the bond. These do not fluctuate over the life of the bond, inflation and market interest rates have no effect on them.

Yes but if we are still having to barrow a trillion and a half a year to cover our budget, the average interest rate we pay will creep up.

Originally Posted by licence2kill

I already said no one knows the upper bound, but we do know that it's really, really, high.

At the volume we are borrowing we could reach 200% debt/GDP in a decade. What do we do then? If we can't balance a budget now, get spending under control now, how are we going to do it when we are twice as deep as we are now?

[dub CRISP]

Originally Posted by 2ffu

Yes but if we are still having to barrow a trillion and a half a year to cover our budget, the average interest rate we pay will creep up.



At the volume we are borrowing we could reach 200% debt/GDP in a decade. What do we do then? If we can't balance a budget now, get spending under control now, how are we going to do it when we are twice as deep as we are now?

When we're not recovering from a recession it's easier to keep debt under control, right now tax receipts are down and welfare payments are up because unemployment is so high.

[2ffu]

could one of the reasons that UE is so high is that there is a great deal on incentive not to work?

[dub CRISP]

no, the reason that unemployment is so high is that people face disincentives to lend. You don't seem to have a firm grasp of economic problems that we are facing right now. We have tons of people who want to work but credit is not available because banks are sitting on excess reserves and not lending because of uncertainty in the market place.
People can't hire people because they start businesses because they can't get a loan because banks won't lend because they don't trust people with their money after the sub-prime mortgage crisis.

People who are unemployed collecting a government check are mostly loathe to do so. They would much rather be working and making their own money but they can't.

Obviously though there are the exceptions but they are the minority.

[licence2kill]

Originally Posted by 2ffu

could one of the reasons that UE is so high is that there is a great deal on incentive not to work?

Unemploymeny among UI inelegible workers and UI eligible workers is virtually identical. If it was having a large effect we'd expect to see a large spread.

And the generosity of UI is endogeneous to the level of AD anyways. When demand rises and the economy recovers congress will set UI back to normal.

[2ffu]

Originally Posted by dub CRISP

You don't seem to have a firm grasp of economic problems that we are facing right now. We have tons of people who want to work but credit is not available because banks are sitting on excess reserves and not lending because of uncertainty in the market place.
People can't hire people because they start businesses because they can't get a loan because banks won't lend because they don't trust people with their money after the sub-prime mortgage crisis.

People who are unemployed collecting a government check are mostly loathe to do so. They would much rather be working and making their own money but they can't.

Banks were not lending in 08/09 due to massive margin calls ( that ate up cash because unwinding the position would be even more costly) to fixed income desks holding an unhealthy amount of cdo's, cmo, and other collateralized debt.

Banks were given a capital injection and most paid it back with interest. Banks started lending again but not as outlandishly as before.

If banks don't want to lend why did Wells fargo bring me in to interview for a business credit analyst position that evolves into a Business Relationship Manager? They are lending so much in my area they need more people to work in that department. I didn't take the job because after getting all the information it just wasn't what I was looking for.

There are a **** load of jobs out there, though most of them are being filled with HB-1's because people either don't have the skills or don't want to work.

A family friend of mine owns a comercial garage door installation company he has been trying to hire people for the past 18 months at $40 an hour. This same story is repeated across the country a plethora of times.

Why work when you can get:
99 weeks of UE ( then go on ssdi)
EBT/WIC
federal section 8 housing vouchers ( the section 8 buildings in seattle are straight up nice condos)
a free phone with 250 minutes and text messages
utility subsidies
free lunch for your kids at school
medicade

Not to mention donations from private charities

[dub CRISP]

There is a skills mismatch, there are plenty of jobs for people with the right skills, yes banks are starting to lend more and unemployment is declining but there are still lots of people who can't find jobs.

here is a graph of banks excess reserves, as you can see recently it has declined (banks are lending more) but it is still fare from where it was in 2007 (banks lending as much as they can)

[2ffu]

You won't see that come down untill fiscal & regulatory uncertainty is adressed.

[dub CRISP]

right which is not caused by high UI benefits and a "disincentive to work"

[2ffu]

Originally Posted by dub CRISP

banks won't lend

Originally Posted by dub CRISP

banks are starting to lend

so which is it ?

[2ffu]

Originally Posted by dub CRISP

right which is not caused by high UI benefits and a "disincentive to work"

You're right, it's created by the government who also help to build that disincentive.


Both issues exist
Both are hurting not helping the economy
Both problems were created by the government

[dub CRISP]

Originally Posted by 2ffu

so which is it ?

lending is increasing but not at the levels it needs to be at
I'm deeply sorry for exaggerating

[dub CRISP]

Originally Posted by 2ffu

You're right, it's created by the government who also help to build that disincentive.


Both issues exist
Both are hurting not helping the economy
Both problems were created by the government

thats debatable, unemployment benefits help keep people on their feet so that they are in a better position to get a new job.

How are transfer payments even harmful to the economy? They give people money to spend.

[2ffu]

Originally Posted by dub CRISP

thats debatable, unemployment benefits help keep people on their feet so that they are in a better position to get a new job.

How are transfer payments even harmful to the economy? They give people money to spend.

Look I think that we should in fact have a system to help people down on their luck but this whole idea is gone now and you have generations of families who's "job" it is to try to get every federal hand out possible.

"How are transfer payments even harmful to the economy? They give people money to spend"

Yeah but what about the people that get their money transfered away by uncle sam. Kind of eats away at the incentive to work hard and make money when you go to the store and see a kind with a fresh fitted had, clean paper white air jordans and a ****ing iphone buying redbull with an EBT card funded by those that bust their ****ing ***.

Again I think we should have a system to help people who our down on their luck. But people should not be able to subside off the backs of others like this.

[TheSilentAssassin]

Originally Posted by 2ffu

You're right, it's created by the government who also help to build that disincentive.

You're ignoring this:

Originally Posted by licence2kill

Unemploymeny among UI inelegible workers and UI eligible workers is virtually identical. If it was having a large effect we'd expect to see a large spread.

[dub CRISP]

Originally Posted by 2ffu

Look I think that we should in fact have a system to help people down on their luck but this whole idea is gone now and you have generations of families who's "job" it is to try to get every federal hand out possible.

"How are transfer payments even harmful to the economy? They give people money to spend"

Yeah but what about the people that get their money transfered away by uncle sam. Kind of eats away at the incentive to work hard and make money when you go to the store and see a kind with a fresh fitted had, clean paper white air jordans and a ****ing iphone buying redbull with an EBT card funded by those that bust their ****ing ***.

Again I think we should have a system to help people who our down on their luck. But people should not be able to subside off the backs of others like this.

this is dogma not economics

[TheSilentAssassin]

Originally Posted by dub CRISP

this is dogma not economics

All arguments for conservative fiscal policy tend to end in dogma around here.

[2ffu]

Why doesn't everyone just not work then? what the **** is the point **** it who cares. If you become succesful you are now evil in the eyes of the dems.

why would someone bust their *** for 40 hours a week to make $40K a year before taxes when you can have ALL your free time and get $30k worth of bennifits from uncle sam.

[Snake13]

Originally Posted by dub CRISP

this is dogma not economics

This is racism not dogma