IMF admits it got the effects of Austerity wrong

[Juror No. 8]

We ARE the creditors. Lost buying power? Buying from whom?

So all U.S. government debt is owed only to ourselves? There are no foreign creditors holding any of our debt?

Link please?

Yes, lost buying power, as in, inflation tends to produce the result of lost buying power. Do you really not know what inflation is? LOL.

 

[Darwin333]

Conservatives don't believe in macro economics. They believe government is like a family and should budget like a family. Of course they ignore the fact that families regularly go into debt because it will benefit them in the long term, like investing in a house or a college education.

If you "invest" in a house with borrowed money and pay only the interest on it, and never the principle, until the day you die you made an absurdly bad investment.

 

[highland145]

Then change it.

Sadly, I don't think the politicians on the left or right are interested in anything other than themselves 1st and if it helps the country, "Look what we did." If it doesn't, "Look what they did." Some may have good intentions when they get there but the majority/machine prevent them from making beneficial changes or they get sucked into the $$/system. Vested after 5 years of service....really?🙄

It's almost as if we need a short term dictator to make the tough/necessary decisions because D.C. will never.

And here we(Americans) are, "your side"..."no, your side." We're fucked, imo.

 

[Fern]

-snip-
and now is not the time to cut spending.

Looks like you only remarked on half the problem.

In your article they're blaming both spending cuts and TAX INCREASES for the reduced growth.
----------------

Otherwise, since they've now figured out the "effects of austerity" maybe they can turn their attention to figuring out the "effects of massive debt".

We're in between a rock and a hard place. As usual some are seeing the rock and acting like the hard place doesn't exist.

Fern

 

[Throckmorton]

If you "invest" in a house with borrowed money and pay only the interest on it, and never the principle, until the day you die you made an absurdly bad investment.

No it's not. If you paid nothing but interest and got to live in a nice house, you came out on top.

 

[Phokus]

Looks like you only remarked on half the problem.

In your article they're blaming both spending cuts and TAX INCREASES for the reduced growth.
----------------

Otherwise, since they've now figured out the "effects of austerity" maybe they can turn their attention to figuring out the "effects of massive debt".

We're in between a rock and a hard place. As usual some are seeing the rock and acting like the hard place doesn't exist.

Fern

You can increase taxes on the wealthy without stiffling demand. Because the rich have a marginal propensity to save, tax increases won't affect them much. Tax increases on the poor and middle class (which conservatives want to enact) would have a DEVASTATING effect on the economy because they have a higher marginal propensity to spend. Democrats actually want LOWER middle class taxes. Notice that Obama enacted payroll tax cuts that affected like 95% of Americans, so we're paying lower taxes than we were under bush.

So when you're talking about tax cuts or increases, it really depends on who you're talking about.

 

[Juror No. 8]

No it's not. If you paid nothing but interest and got to live in a nice house, you came out on top.

So paying rent to live somewhere, no matter the amount, means you've always "come out on top"?

 

[highland145]

You can increase taxes on the wealthy without stiffling demand. Because the rich have a marginal propensity to save, tax increases won't affect them much. Tax increases on the poor and middle class (which conservatives want to enact) would have a DEVASTATING effect on the economy because they have a higher marginal propensity to spend. Democrats actually want LOWER middle class taxes. Notice that Obama enacted payroll tax cuts that affected like 95% of Americans, so we're paying lower taxes than we were under bush.

So when you're talking about tax cuts or increases, it really depends on who you're talking about.

So let's blow through their $$? Then what? The next lower rich group?

But isn't obummercare a tax on the backs of the middle class? The poor don't pay and the rich can afford it. Mine is $428/mo $10,000.00 deductible for 3, with no significant health issues. Where is my cheaper health insurance? Not going to happen. There were simple things that could have been done to improve efficiency, to save $$$$$$. Want links?

TBFair, everyone takes a hit. Cap gains, defense, entitlements, EIC, G.E. "types" with no tax(Immelt sent jobs to China) , vested congress dicks, cut pork at home/abroad, foreign aid to our enemies, etc, etc, etc....

Zero tax on repatriated $$.

Proven manufacturing (not solyndra), proven track records/products, buy American, ....we must produce...Sorry Wal mart(not).

 

[Greenman]

There are no good choices there are least bad choices and the worst choices. Introducing Austerity NOW would mean you not only lose more jobs/destroy more capital, you also create a BIGGER deficit with no end in sight.

You want to clean up the debt? Do it when the economy is recovered.

How the fuck do you drooling morons even exist? This is macro econ 101. It's not an either/or proposition.

Your thesis may have merit, but why would anyone listen when it's presented by such an obnoxious turd such as yourself? Your cause would be better served if you simply shut up.

 

[Jhhnn]

So let's blow through their $$? Then what? The next lower rich group?

Total misrepresentation. Nobody is talking about wealth confiscation, just higher taxes on enormous incomes.

 

[shira]

Except... we NEVER do. NEVER. Because what will happen when someone says "now that the economy is humming, we have to raise taxes to pay for the debt we incurred during the recession," BOTH parties will say..."No way! You'll kill the recovery!"

Keynsian economics sounds great on paper, but ultimately fails because of the above... namely, that NO ONE ever wants to pay the piper. So we get stimulus spending paid for with borrowed money, which becomes the new baseline for all govt spending going forward into perpetuity, and no new revenue to pay for it.

Therefore, the only solution is not to do it.

Really? So under Bill Clinton we didn't have a budget surplus?

Excuse me while I puke, but it was GW Bush and the rest of the "lower taxes is always a good thing" ideologues who cut taxes, creating HUGE deficits.

 

[Jhhnn]

No it's not. If you paid nothing but interest and got to live in a nice house, you came out on top.

As compared to what? Certainly not as compared to a lot of alternative scenarios.

A big part of what's wrong with the current economy & America in general is that very few people have meaningful assets as opposed to debt, and very few people have incredible assets all at the same time. The former can't survive at all w/o work income while the latter exploit that ruthlessly.

That's the true nature of trickledown economics. There is no trickle-down, only trickle-up.

 

[shira]

If you "invest" in a house with borrowed money and pay only the interest on it, and never the principle, until the day you die you made an absurdly bad investment.

Really? So I purchase a $100,000 house for 20% down at $3.5% interest, live in it for 30 years, during which time the loan is completely paid off and the house goes up 5-fold in value, I profit $400,000, minus about $53,000 in total interest (plus the tax savings on the interest).

Or, I use the $80,000 that I would have used to pay down the loan to instead purchase four other $100,000 houses (five in total), and get 3.5% interest-only loans which I pay for 30 years. I live in one of the houses and rent out the other four at a positive cash flow. I sell each of the houses for at $400,000 profit ($2,000,000 total profit), minus $525,000 interest (all tax deductible), plus my positive cash flow on the rent, plus about $150,000 of depreciation over 30 years, minus the $150,000 of recaptured depreciation when I sell the the rental houses.

Which scenario do you think represents the greater economic position?

 

[Throckmorton]

So paying rent to live somewhere, no matter the amount, means you've always "come out on top"?

I think you're missing the point.... If you die in debt, you won.

 

[Zstream]

Really? So under Bill Clinton we didn't have a budget surplus?

Excuse me while I puke, but it was GW Bush and the rest of the "lower taxes is always a good thing" ideologues who cut taxes, creating HUGE deficits.

Actually it was the housing & .com bubble that started it. Who cares what side helped really poor people purchase housing... I mean darn them banks for lending out money to people who have no idea how to find a budget... I mean darn our education system for letting dumb people graduate.... I mean, I mean, I mean. Don't even talk to me about the .com bubble, people investing in businesses that didn't sell or own a damn thing.

Stop it with your holier than thou emotional drivel, it's quite old. The reason we're in this problem in the first place is because of the housing bubble and the two wars. The housing problem is a Democrat and Republican issue but mainly the Democrats who wanted everyone to own a house which let banks run wild with loans and poor people being stupid. The Iraq war is a Republican issue while Afghanistan had bipartisan support.

 

[nextJin]

Who told Greenspan to start a housing bubble again?

 

[EagleKeeper]

Total misrepresentation. Nobody is talking about wealth confiscation, just higher taxes on enormous incomes.

1) Where do you draw the line. Obama has already shifted it.

2) You are still penalizing someone for earning more than you in a vindictive manner. confiscating their income is the same as taking their wealth. INcome is what can generate wealth

 

[EagleKeeper]

Really? So under Bill Clinton we didn't have a budget surplus?

Excuse me while I puke, but it was GW Bush and the rest of the "lower taxes is always a good thing" ideologues who cut taxes, creating HUGE deficits.

The government was performing accounting tricks; counting money that was not theirs.

Then there was a PROJECTED surplus IF the economy and government spending stayed on course.

As we know; it did not.

The economy tanked while Clinton was still in office and 9/11 impact has helped screw up the economy even more.

 

[feralkid]

Yes, of course, the answer is to keep borrowing, printing, and spending, regardless of whether we can pay it back or not.

Krugman economic theory: Just keep kicking the can down the road, it'll all sort itself out later!

You don't understand economics, that's o.k.

But for the sake of this forum, please stop pretending you do.

 

[dank69]

Except... we NEVER do. NEVER. ...

Wrong. Clinton reduced the deficit during good times while Republicans fought the reduced spending. Bush increased the deficit during good times while Democrats fought the reduced taxes. But Republicans are the fiscal conservatives and Democrats are the fiscally stupid. Both parties are the same. Rah rah Ron Paul fight the powah!

 

[Darwin333]

Really? So I purchase a $100,000 house for 20% down at $3.5% interest, live in it for 30 years, during which time the loan is completely paid off and the house goes up 5-fold in value, I profit $400,000, minus about $53,000 in total interest (plus the tax savings on the interest).

Or, I use the $80,000 that I would have used to pay down the loan to instead purchase four other $100,000 houses (five in total), and get 3.5% interest-only loans which I pay for 30 years. I live in one of the houses and rent out the other four at a positive cash flow. I sell each of the houses for at $400,000 profit ($2,000,000 total profit), minus $525,000 interest (all tax deductible), plus my positive cash flow on the rent, plus about $150,000 of depreciation over 30 years, minus the $150,000 of recaptured depreciation when I sell the the rental houses.

Which scenario do you think represents the greater economic position?

Lol, I give you credit for creativity. The .gov isn't borrowing money to rent a damn thing out and it NEVER pays the loan off. So please use your very creative math to tell us all how borrowing money to extend the elderlies life a few years or purchase another aircraft carrier and then never paying it off nets us a positive return. I am not sure if you know this or not but the amount of money we invest in tangible stuff that can be argued will net us any sort of return is rather miniscule.

 

[Darwin333]

No it's not. If you paid nothing but interest and got to live in a nice house, you came out on top.

Plenty of people did exactly that 4-8 years ago, they would beg to differ.

 

[Darwin333]

There are no good choices there are least bad choices and the worst choices. Introducing Austerity NOW would mean you not only lose more jobs/destroy more capital, you also create a BIGGER deficit with no end in sight.

You want to clean up the debt? Do it when the economy is recovered.

How the fuck do you drooling morons even exist? This is macro econ 101. It's not an either/or proposition.

Its a catch22. The only reason the economy appears to be recovering at all is because of the borrowed money. Take that out (regardless of how or where it comes from) and the economy must mathematically contract by a LOT. Even worse is a lot of these deficit items are structural, as in not going away, and the politicians will be forced to continue the deficit spending, absent absurdly unrealistic growth, for as long as we can reasonably look forward.

 

[Darwin333]

Really? So under Bill Clinton we didn't have a budget surplus?

Excuse me while I puke, but it was GW Bush and the rest of the "lower taxes is always a good thing" ideologues who cut taxes, creating HUGE deficits.

At no point did the debt go down, the debt went up every single year Clinton was in office, which I am fairly certain was his point.

 

[Doc Savage Fan]

Really? So under Bill Clinton we didn't have a budget surplus?

Excuse me while I puke, but it was GW Bush and the rest of the "lower taxes is always a good thing" ideologues who cut taxes, creating HUGE deficits.

Clinton's budget surplus was due to increased government revenues as a direct result of the dot com bubble. To paint it any other way is either ignorance or intellectual dishonesty.