Bond Markets Say US Debt Doesn't Matter

[TheBlackRabbit]

Please address the facts, counter, rebut, but be a logical adult. All quotations C&P'd from link.

http://www.businessinsider.com/what-the-collapse-in-interest-means-2012-5

"Well, the fact of the matter is that the size of the U.S. debt or deficit just doesn't matter that much. Actually, it's never mattered at all."

I wonder if it would have helped if the Stimulus was over $1 trillion and Obama's original Jobs Act was passed. The one where he wanted to lower the payroll tax rate to 3.1% and give billions to businesses to boost hiring.

"A few things matter.
One of them is inflation. When people think that inflation is high (meaning that the value of their dollars will erode rapidly) they will want a high return from the government."

This is obvious...no commentary needed.

"Another factor that matters is growth.
Growth is critical because if you think that the economy is going to grow in a robust fashion, then you won't want to lock up your cash with the government. You'll want to invest in real things or at least stocks that might boom along with the economy."

Rephrase: The debt might matter more in the future, but only if the economy is booming enough to where it probably offsets the affect anyway.

"There's another factor that's mattered a lot lately: FEAR!
If you think that everything is going to collapse (for example Europe's economy completely imploding in a crisis that makes Lehman's aftermath look like child's play) all you'll want to do is give your money to the one entity that has unlimited (thanks to the printing press) power to pay the money back."

In other words, many of the wealthiest entities in the world trust the United States with their money over any other person, country, mattress, or vault in the world. Because we have a printing press


Not trying to be Obama's cheerleader, I think he betrayed his base by being little Bush Jr. in many ways, but can we look at the facts?

If you are going to argue the stimulus either shouldn't have been passed or you disagree with my statements, then please explain your detailed, superior proposal that you would have passed instead.

If you attack Obama's economic plan, explain what you or an alternative POTUS would have passed that was superior to Obama's Jobs Bill.

Were the Republicans correct in blocking key measures in Obama's Jobs Bill? Yes: Explaination or No: Explanation.

Feel free to address part or all of the post, just don't say "Obama Marxist No Good Economy Kenya" without addressing the Jobs Bill & Stimulus.

 

[LunarRay]

I think 3 trillion to be the best number and that focused in longer term projects like electric grids and solar, wind, green stuff, etc... other than that, I agree!

 

[werepossum]

If debt truly doesn't matter, why $3 trillion and not $30 trillion or $300 trillion? If our success consists of our having a printing press - something of whose uniqueness I was apparently sadly unaware - shouldn't we crank that sucker up and be really prosperous?

 

[Thump553]

It's not that debt doesn't matter-it's that the alternatives to US securities are a lot worst and a lot more risky. The entire of Europe is headed for a meltdown-even Germany is facing stagnation (at a minimum) if the Eurozone blows apart and there are multiple government bankruptcies-something that is clearly possible.

Red China and India are facing real growth pains-inflation, population expectations, bubbles and huge chunks of monies wasted on bridge to nowhere type projects, and both countries still have major corruption problems.

As for saying Obama should have done more-true in a perfect world, but remember he has been (and still is) blocked every step of the way by a gang concerned with their own party's welfare as paramount, the country's needs only given lip service (but plenty of that).


Debt DOES matter, but it is certainly not the most important thing short term. A properly done substantial stimulus could get us back on the growth path-then we address the debt problem. What we need to avoid is sugar rushes like the Bush tax cuts which did very little in the short run plus made the long term debt situation considerably worse.

 

[Jhhnn]

If debt truly doesn't matter, why $3 trillion and not $30 trillion or $300 trillion? If our success consists of our having a printing press - something of whose uniqueness I was apparently sadly unaware - shouldn't we crank that sucker up and be really prosperous?

Reductio ad Absurdum is not a valid argument.

The OP is obviously correct, given ultra low yields on US govt securities. The private sector, worldwide, is undergoing massive deleveraging in the face of low demand & poor growth prospects. There is a glut of savings & a liquidity trap. When govt deleverages as well, it just makes things worse. Well, unless you're among those who'd benefit from deflation, usually the ultra wealthy, who already have more than their share of benefits.

 

[TheBlackRabbit]

If debt truly doesn't matter, why $3 trillion and not $30 trillion or $300 trillion? If our success consists of our having a printing press - something of whose uniqueness I was apparently sadly unaware - shouldn't we crank that sucker up and be really prosperous?

Well, I googled it, and stumbled upon this:

http://square.concordcoalition.org/profiles/blogs/government-debt-why-it-doesnt.

"So the fear of rampant inflation and the subsequent tanking of markets is wrong. The U.S. would have to spend something to the tune of 30 trillion dollars in a single fiscal year to become the next Zimbabwe."

Not sure who he is, but he is certainly more educated than myself on this issue.

Take Note: He said to end up like Zimbabwe, hedidn't say spending 10 trillion in one fiscal year would be A-OK. He was using hyperbole to make a point, and I believe, considering the hysteria from both sides about how the deficit is the end-all-be-all issue, counter points almost have to use an equal amount of fact-based hysteria (even if it is usually a major hindrance to logical debate).

Some layman's analysis after my first 45 minutes or so of actual in-depth reading on the topic (other than flash card style talking points):

The US can issue more debt at better rates than ever before because of the weakness and uncertainty of virtually all other investments. These interest rates on the 10 year T-Bill says that many investors are preparing for an economic Armageddon, IMHO.

Over the last few years investor's confidence in the United States balance sheet relative to the rest of the world, grew dramatically. S&P's downgrade proved that no credit rating agency has real power over the US. Investors have rebuked S&P's rating and essentially christened the US with GTX680 Quad-SLI Credit (sorry, couldn't resist). It could probably be argued the US has more relative confidence compared to the rest of the world since right after World War 2. That is pretty astounding: with all the criticism of how the US is handling pretty much everything right now, the world is saying, "save us, protect us and our money".

"According to this total, the 'World' is in external debt to the tune of just under 60 trillion US dollars. Or 95% of the entire world’s GDP. Go back and read that again. How can this be? Is there an alien entity lending US dollars that I know nothing about?

Source for the 60 trillion figure: [CIA Factbook]
http://sturdyblog.wordpress.com/2011/04/08/to-whom-do-we-owe-this-money-exactly/

Who Holds Our debt?
U.S. Federal Government: 52%
Foreign Governments: 25% (China, Japan et al)
State & Local Governments: 5.5%
Individual Investors: 5%
Public and private pension funds: 3.8%
Mutual Funds: 2.9%
US saving account bondholders, insurance companies, and banks: 5.7%

Source: http://www.msnbc.msn.com/id/1742487.../just-who-owns-us-national-debt/#.T8oKLNXmO3t

Article is from 2007, but based on the various Fed programs, I'd speculate the figures are probably slightly more skewed towards the government. I'll find a 2010 or 2011 link on my next break (taking breaks periodically from research paper); it will be interesting to see how the percentages have shifted.

The world is too interdependent (I'd argue co-dependent) on the US to ever let us default: not only would their bonds be worthless, but their entire country and the stock exchanges around the world would be worthless. How Foolish for people to bring up Greece. If Greece's bondholder's are preparing to take a 74% haircut, what would they give the US? 95%? I'd say 100% with even less back and forth debate if that's what the US needed. What are the individual investors and banks going to demand out of their own creditor? The US could comfortable pass another trillion dollar stimulus tomorrow, and the Dow would be up 500-1000 points overnight.

 

[Jhhnn]

It's not that debt doesn't matter-it's that the alternatives to US securities are a lot worst and a lot more risky. The entire of Europe is headed for a meltdown-even Germany is facing stagnation (at a minimum) if the Eurozone blows apart and there are multiple government bankruptcies-something that is clearly possible.

Red China and India are facing real growth pains-inflation, population expectations, bubbles and huge chunks of monies wasted on bridge to nowhere type projects, and both countries still have major corruption problems.

As for saying Obama should have done more-true in a perfect world, but remember he has been (and still is) blocked every step of the way by a gang concerned with their own party's welfare as paramount, the country's needs only given lip service (but plenty of that).


Debt DOES matter, but it is certainly not the most important thing short term. A properly done substantial stimulus could get us back on the growth path-then we address the debt problem. What we need to avoid is sugar rushes like the Bush tax cuts which did very little in the short run plus made the long term debt situation considerably worse.

Just stop it- stop making sense.

The Bush tax cuts being enormously biased towards the wealthy created a surplus of investment funds, demand for securities, and Wall St responded with progressively shakier products until the whole thing collapsed. They did that by creating false demand for housing by qualifying everybody's dog for a negative amortization zero down ARM... Bush regulators cheered them on.

Repubs also ran large deficits in an expanding economy, adding fuel to the bubble. Now, of course, when the bubble is deflating, they think we should cut, cut, cut! our way to growth, as if that weren't an absurdity.

 

[mshan]

Bank Insolvency and ZIRP:

"Insolvent but liquid banks are the key to understanding Japanese interest rate policy. There are several prominent macroeconomists in America (led notably by Krugman but joined by Bernanke) who argue that the zero interest rate policy was insufficiently expansionary – and that monetary policy should have been eased until it induced inflation. In theory this could be done by flying a helicopter over Tokyo throwing out freshly printed 5 thousand yen notes. Indeed it was in a speech about Japan that Bernanke uttered the famous helicopter line.

The BOJ always thought this policy was “risky”. Krugman’s response was that it was less risky that the endless government deficits Japan ran. Krugman missed the point – the question was who was inflation risky for? My answer: the banks."

...

"Now suppose that (and this is a gross simplification) that the spread between deposit rates was 2%. But rates could either be 10 and 12 percent or 0 and 2 percent.

If the rates were 10% and 12% the 90 of funding would cost 9 per year. The 70 of “real” assets would yield 8.4 per year. The bank would be cash flow negative. Anything that is cash flow negative for long enough goes illiquid eventually. The insolvency problem would turn into a liquidity problem.

Now suppose the rates were 0% and 2%. The 90 in funding is free. The 70 in assets yields 1.4%. The same banks is cash flow positive in a low interest rate environment. If they are cash flow positive for 15 years the bank will fully recapitalise."

...

"I still have not worked out what side of the inflation/deflation divide I am. But the people that point to Japan as a likely outcome miss a point. Japan chose deflation because the alternative was nationalising the banks."



http://brontecapital.blogspot.com/2008/07/deflation-and-bank-bailouts-in-japan.html

Don't know how fair a comparison Germany is to Japan (don't know who holds most of the German debt, but Germans are supposed to be savers and renters, so they may be able to ride out a deflationary cash is king environment more comfortably than other Eurozone members) if cost to bailout profligate Eurozone members out is too high for them: http://www.testosteronepit.com/home/2011/9/21/how-long-can-japan-play-the-endgame.html

For the U. S., I think our debt load is a ticking time bomb, unless Congress acts and enacts some sort of Obama / Boehner Grand Bargain to get our debt load down to more reasonable levels before interest rates eventually rise (I think I remember viewing a Kyle Bass YouTube video where he said technical definition of insolvency is when interest payments exceed 10% of revenue taken in by government, and I think he said we are already getting close to that).

 

[TheBlackRabbit]

Jhhnn: Your post is using facts, but I can feel the rage. I know I will fail, but I am determined to focus on one thing: the policies that need to be implemented.

My outrage reaches around the entire world, consuming both parties and the elite across Europe. After careful thought, I now understand why people say voting 3rd party is worthless: without at least (just tossing some numbers) 50 million dollars with powerful media connections or $150-250 million without them in disposable funds, no one on this board is going to change anything by voting 3rd party...It's sad but true.

 

[nehalem256]

Just stop it- stop making sense.

The Bush tax cuts being enormously biased towards the wealthy created a surplus of investment funds, demand for securities, and Wall St responded with progressively shakier products until the whole thing collapsed. They did that by creating false demand for housing by qualifying everybody's dog for a negative amortization zero down ARM... Bush regulators cheered them on.

Repubs also ran large deficits in an expanding economy, adding fuel to the bubble. Now, of course, when the bubble is deflating, they think we should cut, cut, cut! our way to growth, as if that weren't an absurdity.

This is a lie. The top received tax benefits below the share they paid as I have posted before. Stop letting your bigotry against the rich color your world view.

 

[TheBlackRabbit]

For the U. S., I think our debt load is a ticking time bomb

It's irrelevant if it is a ticking time bomb because It is a set of plastic dinnerware compared to a double-dip US recession and global depression. China will go down in flames under the weight of this as well.

Obama / Boehner Grand Bargain to get our debt load down to more reasonable levels before interest rates eventually rise

How are interest rates going to rise during a global recession/depression? Does Kyle Bass factor in the worst worldwide economy in our lifetimes in his mathematical formula?

nehalem256: After digesting the recent news, I'd gladly trade an additional 7% reduction in the top bracket and 5% drop in capital gains taxes permanentlyfor a one time trillion dollar stimulus with a growth trigger for a second stimulus if targets aren't met. This is the type of deal making Obama is going to have to make if he wants to be reelected. If he doesn't at least propose something dramatic and unprecedented with sufficient Republican sweeteners to get it passed then he'll lose anyway and I won't care. It doesn't matter if I believe he is the lesser of two evils if he can't come through right now. If he thinks he can sit back and say, "well I tried" then he needs to to fire all of his advisers. Republicans are going to turn out proportionately to the vehemency of their rhetoric (socialist! marxist!). It won't matter if Romney proposes the Fair Tax or even nothing at all. I'll give him till June 30th before the next jobs report comes out, and if I don't see anything I'd be tempted to bet the house (literally http://www.politicalbettingodds.com/2012-us-presidential-election-odds.html )

 

[mshan]

1) Eventually, this cycle of debt deleveraging will end and, gasp, global growth will resume.


2) Some of this plunge in interest rates could be rational in a deflationary environment because real rate of return is acceptable (though talking heads on tv seem to agree that there is no real value as an investor below 1.7 - 1.8% on 10 year).


3) For some reason (correlation, not causation?), 5 years always pops up for period of harsh austerity needed to get debt to more sustainable levels for this particular cycle:

- e. g. Warren Buffet on Charlie Rose right after Lehman 2008 had best and worst case scenarios for The Great Recession in the U. S. (I think he said 2 years was best case scenario, and 5 years was worst case scenario): http://www.charlierose.com/view/interview/9284

- in Britain, right after Cameron came into office, he declared a 5 year policy of harsh austerity that they were not going to waver from despite social unrest

- even during the very bleak time in stock market last November, some strategists were coming on tv saying there were select opportunities in stocks if you had a 5 year time horizon (could be very unhappy year 1 or 2, but probably very happy some time between year 3 - 5)

"A third scenario is that the status quo just continues. The Euro-Zone buys more time through the application of various half measures and Band-Aids until they eventually get their financial house in order. Fiscal austerity would need to be the order of the day throughout Europe. That would take about five years to accomplish if they are sincere about cutting spending. Assuming they eventually subsidized all financial losses, the price tag would be upwards of three trillion dollars, include a prolonged recession, and a falling Euro."

(from link in my follow-up posting directly below)

4) I've also seen commentary that Bernake taking this less than maximal stimulus approach to hopefully contain inflation if it flares up in say 2014 might be setting stage for 5 - 10 year buy and hold bull market in stocks (commentator on yesterday's Nightly Business Report seemed to be implying same: http://www.nbr.com/videos/video?id=1668186265001


5) Regarding the "horrible" jobs report yesterday, it may not be as bad as spin makes it out to be: http://www.morningstar.com/Cover/videoCenter.aspx?id=555946 (perhaps Bill Clinton stuck his neck out and predicted strong victory for Obama based on underlying trends in that horrible jobs report?:http://www.google.com/hostednews/af...docId=CNG.23be00b47d798c091d4e7e2aec2ceec0.b1)

 

[mshan]

Even this gold bug's Doomsday Armageddon scenario from last December has U. S. eventually emerging stronger relative to competitors around the world if Germany chooses deflation for the Eurozone, economies of India and China weaken significantly, and a global recession ensues:

"I have always been an optimist when it comes to America and I can even see a bright side for the US if the Euro-Zone busts apart and goes into what I think would be a deflationary depression much like Japans, especially if you add an additional shock to the system like an economic downturn in China. If that were to occur we’d be assured of a deflationary recession, worldwide. Yet, North America in general could fare well, as I will explain.

I’ve been sending my readers reports of newly constructed vacant train stations in China, and quoting Chinese insiders who are predicting a housing crash there. I'm worried about a stealth crash in China that would bring more chaos to an already chaotic world. Fox News recently showed footage of an entire “ghost city” in China, complete with a state of the art convention center and a beautiful modern library surrounded by hundreds of high rise condos. Yet it sits virtually deserted. Built to house a million people this city has no industry, no businesses, and no one living or working there.

This is reminiscent of previous “five-year plans” where a bunch of bureaucrats sat around deciding what they should spend people’s money on. These plans always create an initial illusion of prosperity but cannot be sustained and inevitably fail. China has been pretty lucky, parlaying its artificial boom into an impressive expansion. If however it is about to fail, the whole world will be thrown into a deflationary recession or even depression as all of Asia is dragged down with China.

Interestingly, if this were to happen, the only country that would be able to stand on its own two feet would be the US. We will be affected adversely of course, but we are not dependent on exporting like almost every other nation in the world. Exports account for only about 1.7% of our 14 trillion dollar economy. Other nations will fight to export to us with cheaper and cheaper goods—an obvious benefit to the American consumer. Nor are we dependent on the value of other nation’s money. The supply and value of the US dollar is within our control. And we have most of the resources we need right here at home and won’t need to import them, although you can bet other nations will fight to provide them to us first, for less.

Canada and Mexico are our major trading partners, and between the three of us, we could move quickly to compensate for the loss of other trading partners if need be. In fact, if we handled a worldwide deflationary recession correctly, we could become energy independent in a few years and be one of the only growth areas in the world, all by tapping our huge oil and natural gas reserves. A North American block would become a formidable economic power in the world.

Europe, Japan, and Asia would go into a depression for years. Even Germany and England would not survive a collapse like that. North America, however, wouldn’t necessarily do all that bad. "


http://www.paulnathan.biz/commentaries/111-at-the-point-of-panic.html

 

[Jaskalas]

Debt DOES matter, but it is certainly not the most important thing short term. A properly done substantial stimulus could get us back on the growth path-then we address the debt problem.

Sounds like Reagan. He started this whole idea of short term government spending to 'fix' the economy, a temporary debt that looks anything but temporary 30 years later.

In a perfect world you'd work on shrinking it later. In this world, the plan is f'ed.

 

[TheBlackRabbit]

I agree that the US will be far better off than the rest of the countries; I am simply saying we are going to make it unnecessarily drawn out and painful.

I'm also certain a nice chunk of money was lost through corruption, but aiding the states, providing government benefits, and reducing taxes designed to immediately boost consumer spending is pretty immune to corruption (unless the state government did it).

Obama won't find the political capital to pass much related to infrastructure. I'd double down on the payroll tax cut and insourcing (which could amount to forced trickle down from outsourcing to record profits). I don't see what else he has.

 

[Genx87]

Please address the facts, counter, rebut, but be a logical adult. All quotations C&P'd from link.

http://www.businessinsider.com/what-the-collapse-in-interest-means-2012-5

"Well, the fact of the matter is that the size of the U.S. debt or deficit just doesn't matter that much. Actually, it's never mattered at all."

I wonder if it would have helped if the Stimulus was over $1 trillion and Obama's original Jobs Act was passed. The one where he wanted to lower the payroll tax rate to 3.1% and give billions to businesses to boost hiring.

"A few things matter.
One of them is inflation. When people think that inflation is high (meaning that the value of their dollars will erode rapidly) they will want a high return from the government."

This is obvious...no commentary needed.

"Another factor that matters is growth.
Growth is critical because if you think that the economy is going to grow in a robust fashion, then you won't want to lock up your cash with the government. You'll want to invest in real things or at least stocks that might boom along with the economy."

Rephrase: The debt might matter more in the future, but only if the economy is booming enough to where it probably offsets the affect anyway.

"There's another factor that's mattered a lot lately: FEAR!
If you think that everything is going to collapse (for example Europe's economy completely imploding in a crisis that makes Lehman's aftermath look like child's play) all you'll want to do is give your money to the one entity that has unlimited (thanks to the printing press) power to pay the money back."

In other words, many of the wealthiest entities in the world trust the United States with their money over any other person, country, mattress, or vault in the world. Because we have a printing press


Not trying to be Obama's cheerleader, I think he betrayed his base by being little Bush Jr. in many ways, but can we look at the facts?

If you are going to argue the stimulus either shouldn't have been passed or you disagree with my statements, then please explain your detailed, superior proposal that you would have passed instead.

If you attack Obama's economic plan, explain what you or an alternative POTUS would have passed that was superior to Obama's Jobs Bill.

Were the Republicans correct in blocking key measures in Obama's Jobs Bill? Yes: Explaination or No: Explanation.

Feel free to address part or all of the post, just don't say "Obama Marxist No Good Economy Kenya" without addressing the Jobs Bill & Stimulus.

If deficits dont matter and neither does debt, why dont we stop making people and corps pay income tax and simply borrow for the rest of eternity? Can you imagine all the success we would have if none of us had to pay taxes?

 

[Jhhnn]

This is a lie. The top received tax benefits below the share they paid as I have posted before. Stop letting your bigotry against the rich color your world view.

Hogwash.

http://www.perrspectives.com/blog/archives/001955.htm

 

[Jhhnn]

If deficits dont matter and neither does debt, why dont we stop making people and corps pay income tax and simply borrow for the rest of eternity? Can you imagine all the success we would have if none of us had to pay taxes?

More reductio ad absurdum.

When you don't have anything meaningful to say, it's best to say nothing.

 

[Anarchist420]

If we're to continue to be taxed at all, then the payroll tax should be eliminated and SS could be funded through low tariffs on everything and more excise taxes. Then, all but top 2-5% should have to pay any income tax and they shouldn't pay more than 25%. Spending should be reduced as well as the corporate tax reduced to a flat marginal rate of 15%. SS could just be means tested. There is a problem with most of the above though... it would give the government too much revenue and the gov would just blow it and spending would continue to grow.

Elimination of the min wage and decentralization of regulations will help, but we need a massive depression without government intervention before any unemployment and prosperity happens.

Cutting the marginal corporate tax rate to 15% is a double edged sword. It would give the government too much revenue but then it would reduce unemployment. I'd prefer the outsourcing than the government getting more revenue.

 

[IHateMyJob2004]

Whern you borrow money, you borrow at an interest rate. That is hte bond yield.

To pay it off, you need cash inflows in the form of taxes.

So long as the taxes cover the bond yields and any real time spending, you are fine.

 

[nehalem256]

Hogwash.

http://www.perrspectives.com/blog/archives/001955.htm

Of course you are, and that link is, failing to take into account people's income. Say you cut taxes 10% for everyone. Someone making more and paying more in taxes will of course have a larger $ amount.

Now lets look at the opposite side. Lets say we have 10% flat income tax. A person making $1,000,000 will pay $100,000 and a person making $50,000 will only pay $5,000. OMG UNFAIR!!!!!!

Now lets say we have a tax cut to a flat rate of 9%. The person making 1 million will get a tax cut of $10,000 whereas the person making $50,000 would get a cut of only $500. [OMG UNFAIR!!!!!!

Basically what you are saying is you dont want any tax cuts for the rich at all. I am sure you can make that case, but please make that case instead of lying about the bush tax cuts.

 

[Genx87]

More reductio ad absurdum.

When you don't have anything meaningful to say, it's best to say nothing.

In other words the theory debt and deficits dont matter is bullshit.

 

[IHateMyJob2004]

1) Eventually, this cycle of debt deleveraging will end and, gasp, global growth will resume.


2) Some of this plunge in interest rates could be rational in a deflationary environment because real rate of return is acceptable (though talking heads on tv seem to agree that there is no real value as an investor below 1.7 - 1.8% on 10 year).


3) For some reason (correlation, not causation?), 5 years always pops up for period of harsh austerity needed to get debt to more sustainable levels for this particular cycle:

- e. g. Warren Buffet on Charlie Rose right after Lehman 2008 had best and worst case scenarios for The Great Recession in the U. S. (I think he said 2 years was best case scenario, and 5 years was worst case scenario): http://www.charlierose.com/view/interview/9284

- in Britain, right after Cameron came into office, he declared a 5 year policy of harsh austerity that they were not going to waver from despite social unrest

- even during the very bleak time in stock market last November, some strategists were coming on tv saying there were select opportunities in stocks if you had a 5 year time horizon (could be very unhappy year 1 or 2, but probably very happy some time between year 3 - 5)

4) I've also seen commentary that Bernake taking this less than maximal stimulus approach to hopefully contain inflation if it flares up in say 2014 might be setting stage for 5 - 10 year buy and hold bull market in stocks (commentator on yesterday's Nightly Business Report seemed to be implying same: http://www.nbr.com/videos/video?id=1668186265001


5) Regarding the "horrible" jobs report yesterday, it may not be as bad as spin makes it out to be: http://www.morningstar.com/Cover/videoCenter.aspx?id=555946 (perhaps Bill Clinton stuck his neck out and predicted strong victory for Obama based on underlying trends in that horrible jobs report?:http://www.google.com/hostednews/af...docId=CNG.23be00b47d798c091d4e7e2aec2ceec0.b1)

The jobs number is not to shocking to anyone watching the rail time indicators. Even less surprising were the job losses in cosntruction. Lumber shipment have been down for 2 months now (I think).

 

[CycloWizard]

More reductio ad absurdum.

When you don't have anything meaningful to say, it's best to say nothing.

The problem with your argument is that reductio ad absurdum is generally a logical argument - not a fallacy. You might want to take your own advice.

 

[1prophet]

Debt DOES matter, but it is certainly not the most important thing short term. A properly done substantial stimulus could get us back on the growth path-then we address the debt problem. What we need to avoid is sugar rushes like the Bush tax cuts which did very little in the short run plus made the long term debt situation considerably worse.

What growth path, more mediocre paying jobs that require food stamps or other government assistance to make ends meet?,

http://blogs.wsj.com/economics/2012/06/01/even-mediocre-job-growth-coming-from-wrong-places/

sorry but unless you can create higher paying jobs for the middle class that can afford to put more into the economy including taxes than they take out any growth by increased stimulus will be fleeting at best.

The foundation of this country is the middle class which has been steadily eroding since the 1970's, unless you fix that first and reverse it all you are doing is a stimulus smoke and mirror show.