Getting Closer to the Brink!

[Liberty]

Tentative deal?

 

http://www.bloomberg.com/news/2011-07-31/white-house-republicans-said-to-reach-tentative-deal-on-u-s-debt-ceiling.html

[seshnath]

Next few days will be interesting.

 

Agree.  Especially, looking at the big picture - near zero GDP growth and the two stimulus tools are not available any more with interest rates near zero and fiscal spending as a tool being shut-out voluntarily.

[Myth465]

Either way we hit the fan. We are doing exactly what Japan did and what Koo thinks we shouldnt do. Cutting spending will slow growth, its just Econ 101. Perhaps it needs to be done, but it doesnt help unemployment or GDP growth. Why arent simply ending both wars completely on the table.

 

At the end of the day Jimmy Rogers was right....

[gaf63]

Looks like there has been a compromise of sorts, altho it is only a baby step to deal with the real issues,

and the real work has been left to a later date, AND it still has to voted on by both houses of govt

if the trigger mechanism actually forces a compromise down the road between cuts and taxes it could work

Wont be holding my breath

 

http://ftalphaville.ft.com/

[Packer16]

Yes but the decline in spending will put us closer to a sustainable demand level.  Japan has tried to defer reaching that level with gov't spending to the point where it has squandered its citizens accumulated savings and it still does not know whether it has hit a sustainable demand level.  The other point is Bernanke can incease the money supply to the extent of the cuts.  It looks like Europe is doing the opposite reducing spending and constraining money growth via higher interest rates - this is where I think the most danger is.

 

Packer

[ubuy2wron]

Tentative deal?

 

http://www.bloomberg.com/news/2011-07-31/white-house-republicans-said-to-reach-tentative-deal-on-u-s-debt-ceiling.html

 

Is a deal even there, the Whitehouse and the Senate seems to be onside but I have no idea about the house. Ms Bachmann has already come out and said just say no. The mkts reaction has been pretty lacklustre are we still on the edge of a cliff. If we can assume that  a deal is done what about the other side of the deal what does the world look like. I just saw a 90000 jobs estimate for Fridays employment numbers is this 1937.

[Myth465]

I think Krugman has it right. I dont think spending is the key but its been shown that cuts simple slow the economy and reduce GDP. 2012 will be interesting...

 

http://feedproxy.google.com/~r/EconomistsView/~3/EqOuY9y4_SU/paul-krugman-the-president-surrenders.html

[biaggio]

I think Krugman has it right. I dont think spending is the key but its been shown that cuts simple slow the economy and reduce GDP. 2012 will be interesting...

 

http://feedproxy.google.com/~r/EconomistsView/~3/EqOuY9y4_SU/paul-krugman-the-president-surrenders.html

 

It looks like that is what the market is thinking. Down 140 at noon today. I thought it would bounce up with an agreement.

 

Better to focus on what bargains will be brought to us.

[ubuy2wron]

I think Krugman has it right. I dont think spending is the key but its been shown that cuts simple slow the economy and reduce GDP. 2012 will be interesting...

 

http://feedproxy.google.com/~r/EconomistsView/~3/EqOuY9y4_SU/paul-krugman-the-president-surrenders.html

 

It looks like that is what the market is thinking. Down 140 at noon today. I thought it would bounce up with an agreement.

 

Better to focus on what bargains will be brought to us.

[Parsad]

I think the deal will pass.  Hardcore democrats and republicans against, but you'll get enough from the rest to make it through the House.  Senate will probably pass it with little difficulty. 

 

They can't play games anymore...this is it!  Either they vote yes, or the rest of the world sees what bumbling idiots are running the country.  Cheers!

[SouthernYankee]

Glad to see the board could carry on a politics conversation without a "troll" being present!

 

One question: If the 2011 budget is 3.5 trillion, and the budget for 2012 is 3.6 trillion, but was supposed to be 3.7 trillion, does that mean that the politicians in DC cut the budget for 2012?

 

(My son (8 years old) said, "Dad, why are you asking me that question, you KNOW 3.6 is bigger than 3.5!")

[Liberty]

Glad to see the board could carry on a politics conversation without a "troll" being present!

 

One question: If the 2011 budget is 3.5 trillion, and the budget for 2012 is 3.6 trillion, but was supposed to be 3.7 trillion, does that mean that the politicians in DC cut the budget for 2012?

 

(My son (8 years old) said, "Dad, why are you asking me that question, you KNOW 3.6 is bigger than 3.5!")

 

That's why people accuse you of trolling. You don't say what you mean, you just keep trying to play these oversimplified political "gotcha" games in condescending tones. Cut the artifices and speak plainly and in good faith and you'll get a better reception here.

[Kraven]

I think that people need to remember the golden rule on chat boards.  Don't feed the trolls!

 

Look, at the end of the day, as far as I'm concerned anyone can say anything they want.  But this is supposed to be an investing board and it is a bit irritating for someone to come on and post solely about non-investment topics.  I am not sure how that furthers the purpose of the board.  But that's just me.  The definition of a troll is someone who posts solely to get a rise out of people and not with an intent to further the discussion.  Note that I am not commenting on the substance or lack thereof of the posts.  I would simply say to people to stop feeding.

[SouthernYankee]

Liberty,

I posed the question in that manner, a simple question with an answer we all know, to find some common ground. The answer, of course, is that 3.6 is bigger than 3.5, but the "leaders" in DC will call that a CUT because they had originally offered a 3.7 number. My point in all of these discussions, is to highlight the fact that no matter what policies you prefer, the money we are spending is a lot larger than what is being taken in. So when these politicians speak about cuts, it is all BS. The only members really speaking about cuts, or simple budget FREEZES, are those members of Congress who are characterized here (by some of you) and in the media, as those RADICAL, ANTI-GOV'T, let-it-all-crash TEA PARTY republicans.

IT IS NOT A GOTCHA QUESTION, it was a SIMPLE question by a SIMPLE man, who looks at numbers and words they use in the media and in print (TRILLIONS, for gosh-sakes) and my head spins! HOW MANY ZEROS, and that is not only for the total budget, but for the fiscal years DEFICIT as well!!

And to my dear Kraven, I do not post to simply get a rise out of others. I am trying very hard to see the other side of the issue, where continued deficit spending will actually be good for the United States, and where programs like Soc Security and Medicare will continue to take my money when I know it will not be there in 30 or so years. But all I keep getting is Bush this, Republicans that, Tea Party is crazy. Those are not answers to my simple questions, they are emotional responses to a problem that is not being solved by the usual LORD KEYNESIAN actions!

 

[SouthernYankee]

And I do apologize for not participating more when it comes to stocks and bond questions, I simply do not feel comfortable enough with the limited knowledge which I have. I can say, I have done pretty well with some issues, and find the conversation very stimulating. I will try to improve my questioning technique (maybe I should hit preview first!), but please give me the benefit of doubt and know that I am trying to see both sides of an issue. It simply helps me to know what is considered fact, and what is considered opinion, and to find that out, simple questions are asked.

Thanks.

[Liberty]

I said nothing about the content of your comment or whether I agree with it or not. I simply pointed out - and maybe you don't see it - that the form can be problematic on this forum. I have no interest in getting further into this, though, so I'll drop it.

[RRJ]

It seems to me that anyone who posts things out of consensus on any blog is usually labelled "a troll" and dismissed out of hand.  This strikes me as a form of confirmation bias and exclusion of anything other than the groupthink.  It can, on occasion, be seen as an ad hominem attack rather than a legitimate willingness to debate the points raised.  I could be wrong -- I'm certain there are trolls around.  I just don't think I've seen one posting here lately.  I don't see any ill will on either side here, just honest disagreement and a feeling of not being heard properly and struggling to get one's point across. 

 

If it's annoying posts you object to, aren't there always going to be those, depending on your position, and how to draw the line?  One man's annoyance is another man's confirmation that at least he is not alone in a world that stopped making much fiscal sense a long time ago.  My opinion. 

[roughlyright]

SouthernYankee,

 

  That is simply a great reply! you nailed it on the head.

 

  I see that people are more focused on giving a label to a position, than discussing the actual content of the issue being raised. As a private individual, I don't manage my personal financial affairs as badly as the government. I wish our government acted million times more prudently than I do. It needs to do so, because it has quadriplegics and seniors depending on them to cover their living expenses. It is horrible crime, in my view, to mismanage the country and solve a debt problem by adding more debt.  There are lot of soldiers loosing their arms and lives for this country, and the least we can do is to have a government that has the fiscal strength to pay their salaries. I wish Obama came up to the American people and apologized for spending like a drunken sailor, before asking for more money. If a drunken sailor spends $1.5 trillion dollars, I will be very kind to him because, he is spending his own money, unlike these thuggish politicians.

 

-Roughlyright

[Parsad]

I have to politely disagree with many of the complaints about Obama.  He's been dealt a cruddy hand ever since he won.  This mess wasn't of his making, and I think everyone would agree, that it is nothing short of a no-win proposition.  He's damned if he does, and he's damned if he doesn't. 

 

Right now, they've tabled an agreement that caters primarily to a conservative fiscal ideology that does nothing to equalize the disparity in income and wealth.  Yet, his own party members are throwing him under the bus.  Reid, McConnell and Boehner are also doing everything they can to get an agreement without causing a default, yet their respective party members are throwing them under the bus. 

 

The truth is, the inanity of this whole mess occurred because we have always had strong partisian biases, and now when something has to be done where people have to come to the middle, it's the stubborn left and right wings that are stirring the pot.

 

I was just watching CNN and I watched this representative from Missouri, Eldridge Cleaver, who called the agreement a "sugar-coated, Satan sandwich".  When Wolf Blitzer asked him which way he was voting, he said that the consequences of not voting for the agreement may be worse than voting for it, to which Blitzer replied, "I can't imagine the consequences of anything that could be worse than a sugar-coated Satan sandwich!"  I couldn't stop laughing!  It's this type of rhetoric, be it the Tea Partying nimrods, or the caustic left-wing Democrats who create this mess...Barney Frank comes to mind. 

 

You have a President who was as left-wing as they came before being elected, suddenly playing up the middle through this whole crisis and trying to channel Ronald Regan, and again you have everyone saying he's not playing ball and is irresponsible.  The truth is that even Ronald Regan would not have been elected by the present day Republican Party...he would be considered more moderate than Boehner!  Cheers! 

[SouthernYankee]

Parsad,

That is why I like to stick to SIMPLE questions at first, so that you start out agreeing with each other. The simple question for you is this: When does the duly-elected President of the United States become responsible for his actions?

 

Another question which I need you to answer: Which conservative fiscal ideology tries to equalize disparity in income and wealth?

 

 

[Liberty]

It seems to me that anyone who posts things out of consensus on any blog is usually labelled "a troll" and dismissed out of hand. 

 

Sometimes yes, sometimes no.

 

In my case, he could have said exactly the opposite of what he said but with the same tone and it would have bothered me just as much. Maybe it's just me, though, I can only speak for myself.

[Parsad]

Parsad,

That is why I like to stick to SIMPLE questions at first, so that you start out agreeing with each other. The simple question for you is this: When does the duly-elected President of the United States become responsible for his actions?

 

Big problems don't get fixed overnight.  Do you think that Clinton didn't benefit from the work of Regan & Bush Sr.?  Or that Bush Jr. didn't benefit from the balanced budgets and initiatives under Clinton?  This was a mess over ten years in the making and it isn't going to be fixed in 36 months by any President...living or dead!

 

Another question which I need you to answer: Which conservative fiscal ideology tries to equalize disparity in income and wealth?

 

Well, I certainly don't think disparities in income and wealth are going to be cured by hoardes of cash remaining stagnant and not distributed throughout the system.  No increase in tax revenues is a non-starter.  They have to be raised somewhere, and they should be raised from areas where the multiplier effect in the economy is benefitting the least.

 

For example, I think estate taxes for very large estates ($100M+) is a great start...and not a small tax...10%!  I think a temporary reduction in corporate tax rates for corporations with much of their assets offshore would also be a good idea.  Allow them to repatriate their assets and growth in assets with a temporary reduction and reduced penalty.  Those assets and their respective jobs should be here, not elsewhere!  Programs need to be overhauled and cost efficiencies implemented...be it Welfare, Education, Defense or Government.  Implement graduated tax rates on all citizens for income and property (including those on welfare), but reduce or eliminate regressive taxes such as sales...the luxury goods sales tax should remain in place and any environmental consumption taxes on gasoline, etc.  

 

I'm sure you can come up with many other ways, but the tax code needs to be changed and unfortunately people are going to have to pay to get the system in shape.  Cheers!

[Tim Eriksen]

I have to politely disagree with many of the complaints about Obama.  He's been dealt a cruddy hand ever since he won.  This mess wasn't of his making, and I think everyone would agree, that it is nothing short of a no-win proposition.  He's damned if he does, and he's damned if he doesn't. 

 

Right now, they've tabled an agreement that caters primarily to a conservative fiscal ideology that does nothing to equalize the disparity in income and wealth.  Yet, his own party members are throwing him under the bus.  Reid, McConnell and Boehner are also doing everything they can to get an agreement without causing a default, yet their respective party members are throwing them under the bus. 

 

The truth is, the inanity of this whole mess occurred because we have always had strong partisian biases, and now when something has to be done where people have to come to the middle, it's the stubborn left and right wings that are stirring the pot.

 

I was just watching CNN and I watched this representative from Missouri, Eldridge Cleaver, who called the agreement a "sugar-coated, Satan sandwich".  When Wolf Blitzer asked him which way he was voting, he said that the consequences of not voting for the agreement may be worse than voting for it, to which Blitzer replied, "I can't imagine the consequences of anything that could be worse than a sugar-coated Satan sandwich!"  I couldn't stop laughing!  It's this type of rhetoric, be it the Tea Partying nimrods, or the caustic left-wing Democrats who create this mess...Barney Frank comes to mind. 

 

You have a President who was as left-wing as they came before being elected, suddenly playing up the middle through this whole crisis and trying to channel Ronald Regan, and again you have everyone saying he's not playing ball and is irresponsible.  The truth is that even Ronald Regan would not have been elected by the present day Republican Party...he would be considered more moderate than Boehner!  Cheers!   

 

Parsad, I in turn must politely disagree.  To complain about the cruddy hand Obama has been dealt is to fail to realize that the cruddy hand is a big part of why he was elected.  America took a chance on someone who promised change.  Turns out they didn't like the change he implemented, so they reacted in 2010.  Is he in a no-win situation?  No, but that is not to say it is easy for him.  It isn't.  President's get too much blame and too much credit for the economy.  The problem is that most Americans don't want to hear that it will take time to work through the mess.  Politicians, like bad investors, cannot fight the urge to do something.  And that something means programs to achieve a noble goal.  

 

Obama is taking it from both sides, which many consider a sign of compromise and therefore success.  Progressives are ticked off that the growth in spending is being reduced.  Tea Partiers, while pleased that the "beast" is not being fed further, are hardly jubilant since they know that we are still on an unsustainable path, (planning on adding 7 to 8 trillion to the national debt over the next decade instead of 10 billion), only about $10 billion in cuts occur in the next two years, and spending is considerably higher as a % of GDP than it has been historically.  

 

Regarding "equalizing the disparity between income and wealth," which sounds a lot like equality of outcome.  It is not a goal that most Americans subscribe to.  The left does.  If you meant reduce, rather than equalize, that would gain more support, but is still not part of most Americans DNA.  It is about a land of opportunity, not result.  Bill Gates is not thought of as evil for become wealthy.  (Yes CEOs are overpaid, but that is an issue about shareholder rights and how board members are proposed and elected.  The fox is guarding the hen house.)

 

Lastly, the quote "The truth is that even Ronald Regan (sic) would not have been elected by the present day Republican Party...he would be considered more moderate than Boehner!" is beomcing a favorite liberal accusation but not accurate.  Reagan ran on reducing the size of government.  He wanted to kill off whole departments.  He compromised on that in order to win his tax cuts. He was the most conservative Republican nominee since Goldwater in '64.  McCain, both Bushes, and Dole were to the left of Reagan.  I doubt many political analysts would see Reagan as more moderate than Boehner.  

 

 

[ubuy2wron]

I have to politely disagree with many of the complaints about Obama.  He's been dealt a cruddy hand ever since he won.  This mess wasn't of his making, and I think everyone would agree, that it is nothing short of a no-win proposition.  He's damned if he does, and he's damned if he doesn't. 

 

Right now, they've tabled an agreement that caters primarily to a conservative fiscal ideology that does nothing to equalize the disparity in income and wealth.  Yet, his own party members are throwing him under the bus.  Reid, McConnell and Boehner are also doing everything they can to get an agreement without causing a default, yet their respective party members are throwing them under the bus. 

 

The truth is, the inanity of this whole mess occurred because we have always had strong partisian biases, and now when something has to be done where people have to come to the middle, it's the stubborn left and right wings that are stirring the pot.

 

I was just watching CNN and I watched this representative from Missouri, Eldridge Cleaver, who called the agreement a "sugar-coated, Satan sandwich".  When Wolf Blitzer asked him which way he was voting, he said that the consequences of not voting for the agreement may be worse than voting for it, to which Blitzer replied, "I can't imagine the consequences of anything that could be worse than a sugar-coated Satan sandwich!"  I couldn't stop laughing!  It's this type of rhetoric, be it the Tea Partying nimrods, or the caustic left-wing Democrats who create this mess...Barney Frank comes to mind. 

 

You have a President who was as left-wing as they came before being elected, suddenly playing up the middle through this whole crisis and trying to channel Ronald Regan, and again you have everyone saying he's not playing ball and is irresponsible.  The truth is that even Ronald Regan would not have been elected by the present day Republican Party...he would be considered more moderate than Boehner!  Cheers!   

 

Parsad, I in turn must politely disagree.  To complain about the cruddy hand Obama has been dealt is to fail to realize that the cruddy hand is a big part of why he was elected.  America took a chance on someone who promised change.  Turns out they didn't like the change he implemented, so they reacted in 2010.  Is he in a no-win situation?  No, but that is not to say it is easy for him.  It isn't.  President's get too much blame and too much credit for the economy.  The problem is that most Americans don't want to hear that it will take time to work through the mess.  Politicians, like bad investors, cannot fight the urge to do something.  And that something means programs to achieve a noble goal.  

 

Obama is taking it from both sides, which many consider a sign of compromise and therefore success.  Progressives are ticked off that the growth in spending is being reduced.  Tea Partiers, while pleased that the "beast" is not being fed further, are hardly jubilant since they know that we are still on an unsustainable path, (planning on adding 7 to 8 trillion to the national debt over the next decade instead of 10 billion), only about $10 billion in cuts occur in the next two years, and spending is considerably higher as a % of GDP than it has been historically.  

 

Regarding "equalizing the disparity between income and wealth," which sounds a lot like equality of outcome.  It is not a goal that most Americans subscribe to.  The left does.  If you meant reduce, rather than equalize, that would gain more support, but is still not part of most Americans DNA.  It is about a land of opportunity, not result.  Bill Gates is not thought of as evil for become wealthy.  (Yes CEOs are overpaid, but that is an issue about shareholder rights and how board members are proposed and elected.  The fox is guarding the hen house.)

 

Lastly, the quote "The truth is that even Ronald Regan (sic) would not have been elected by the present day Republican Party...he would be considered more moderate than Boehner!" is beomcing a favorite liberal accusation but not accurate.  Reagan ran on reducing the size of government.  He wanted to kill off whole departments.  He compromised on that in order to win his tax cuts. He was the most conservative Republican nominee since Goldwater in '64.  McCain, both Bushes, and Dole were to the left of Reagan.  I doubt many political analysts would see Reagan as more moderate than Boehner.  

 

 

I think Reagan was simply the most likeable Republican elected to office or heading the party.He compromised on many issues many times because he was in the end a pragmatist, read The Triumph of Politics.Obama has the same likeability and he certainly is pragmatic

[ubuy2wron]

You know Warrens father would have likely found a spiritual home in the tea party. He was a  complete despiser of Roosevelt and the New Deal economics. The same arguements were being made by the right then as now. I do not care about political positions I just want the pie to grow bigger I just happen to believe we will get more growth and jobs quicker if we tax the Wealth creators a little more and have govt spend the money that is being invested  by the private sector in lumps of shiny metal and social media startups in areas where it is difficult for the private sector to invest.