Fail Economics & You

http://www.bloomberg.com/apps/news?pid=20601087&sid=ahK38AjIboDg&refer=home

Big Ben seems mildly positive towards reckless stimulus packages. A wizard should know better!

In saying that, at least he notes "Any fiscal action inevitably involves tradeoffs that may burden future generations."

Still I can't help feeling a small bit disappointed in him.

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"On top of all that, budget watchdogs say the sheer size of the interventions is making Washington more profligate than usual. To attract votes in Congress, leaders added several costly items to the $700 billion rescue, including extensions of some tax credits and tax breaks for makers of wooden arrows and stock- car racetrack owners.

Under normal circumstances, there would have been more resistance to such expenses, said Robert Bixby, executive director of the Concord Coalition, a non-partisan budget watchdog.

The rescue legislation ``creates a mask for all sorts of fiscal irresponsibility,'' said Bixby. ``It covers up a multitude of sins.''"

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http://www.bloomberg.com/apps/news?pid=20601087&sid=aD24rTsF1jwE&refer=home

Deflation! Oh noes our purchasing power is increasing!

Only the reckless fools who sold themselves into debt slavery need be afraid.

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"It's like that aesop fable. The lazy one spends the whole summer having fun, the boring one gathers food. The lazy one then has no food when it becomes winter, so the boring one shares it food with the lazy one.

The moral of the story is, being lazy PAYS OFF. win/win situation for the lazy one."

Stumbled upon this in the World of Warcraft Europe forums in relation to something else, but found it very applicable to people who take out mortgages for houses they cannot afford and then default on it. The suggestion that these type of people be helped to keep possession of a house they stole from a bank is absurd. Anyone who defaults on a debt should be legally locked into having all their future earnings above the minimum wage automatically confiscated to repay their creditors. I recall reading something similarish to the above, bankruptcy law looks like a very interesting topic. I should look into a bit more before making any more uniformed warblings.

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"Also linked to the legislation is a two-year extension of tax breaks that will save individuals and corporations about $149 billion over the next decade, another move popular among House Republicans."

$149 billion dollars more debt, which itself will cost further interest every year, and somehow this is a good thing??

maybe if you hate America and want to see it in ruins like me. but this is coming from an extremely nationalist political party which regularly smears its opponents at any opportunity with accusations of lacking patriotism, as if blind belief that the random place that you were born in is automagically superior to other places was some sort of a virtue.

cutting taxes costs everyone more money in the long run if you're already running a deficit or if you have any national debt. what is the meaning of blindly supporting tax cuts regardless of the level of spending? why do this? any shortfall will cost "the taxpayers" even more money than they gain from less taxes as they have to pay interest on the debt issued to cover the shortfall. this is simple maths. governments should first cut wasteful spending and pay off any national debt they have. only after this is done should they even begin to think about cutting taxes and even then, they should only cut taxes to a level that is still high enough to avoid any budget deficits. then if things really do go bad, there will be a large pool of actual savings with which temporary tax cuts or stimulatory spending (if we must sink to this wasteful level) can be dished out without completely neutralizing the beneficial effects of such actions by having to issue debt in the same amounts and then pay interest on it.

I think the bailout is a good thing, indeed a necessary thing for the american economy, given that Ben Bernanke, a low-keyed most studious scholar of the great depression and a bastion of professionalism and impartiality, has issued such unusually direct support for the proposal and issued grave warnings about the potential collapse of the wider economy should the bailout not be passed.

I furthermore cannot possibly fathom how people who have relentlessly championed reckless tax cuts and excessive spending over the current decade could possibly oppose this measure on the grounds of some sort of warped fiscal discipline. This is the one time in all their years of wasteful spending where spending what the government doesn't have is actually needed. they've had approaching a decade to stop their own irresponsible spending, yet they choose the one time where irresponsible spending actually makes some sort of sense to make their "stand'? and they only back down when given a guarantee that even more debt will be piled up through more reckless tax cuts?

what???

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http://www.bloomberg.com/apps/news?pid=20601039&sid=aBEM0cTTdBmA&refer=home

Reminds me of a similar arrangement the Japanese government has. They own $500 billion of U.S. debt which earns higher interest then the debt issued by the Japanese government. They have no reason to sell off these assets until the JCB raises interest rates. They're the biggest carry trader of them all.

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http://www.bloomberg.com/apps/news?pid=20601087&sid=a5LnfjbIV3bU&refer=home 

``My interest is solely for the strength and recovery of the U.S. economy.''
"Bernanke, putting aside prepared remarks...."

Big Ben knows best! But seriously it fucking disturbing if the
situation is so bad that low keyed Bernanke is visibly moved trying to
make his point. I'd do whatever he says. Regardless of the immorality
of the government paying above market prices for sub-prime mortgage
backed securities, surely everyone will be worse off in a depression.

the bailout is the thing to do, but only because I believe in Ben.

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http://en.wikipedia.org/wiki/Michael_Bloomberg 

Particularly loved:

"Being a fiscal conservative is not about slashing programs that help
the poor, or improve health care, or ensure a social safety net. It's
about insisting services are provided efficiently, get to only the
people that need them, and achieve the desired results. Fiscal
conservatives have hearts too - but we also insist on using our
brains, and that means demanding results and holding government
accountable for producing them.
To me, fiscal conservatism means balancing budgets - not running
deficits that the next generation can't afford. It means improving the
efficiency of delivering services by finding innovative ways to do
more with less. It means cutting taxes when possible and prudent to do
so, raising them overall only when necessary to balance the budget,
and only in combination with spending cuts. It means when you run a
surplus, you save it; you don't squander it. And most importantly,
being a fiscal conservative means preparing for the inevitable
economic downturns - and by all indications, we've got one coming."

He raised taxes and cut spending...it worked! Like it worked in the
1990's for the whole country. I think there's a pattern here.

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"Bankruptcy is also documented in the East Asia. According to al-Maqrizi, the Yassa of Genghis Khan contained a provision that mandated the death penalty for anyone who became bankrupt three times." 

That is the best idea I've heard in a long time.

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