Thread: The deficit is down!!!

gunnut,

Hong Kong's government does next to nothing compared to the US government. You can afford to have low tax rates. You also don't have millions of regulations that govern businesses here.

I pay HK$100 (US$12.20) a night to stay in a hospital in Hong Kong, and receive the same quality care as the average American, or better. That fee includes the diagnostics and doctors, but not surgery (which is 1/4 or less US prices, and excellent).

As for the lack of US-style business regulations, maybe that's why business likes Hong Kong. Just a thought. . .

highsea,

Anyone in the financial sector earning a bonus saw their incomes drop 50-80% during the financial crisis.

Originally Posted by DOR

gunnut,

I pay HK$100 (US$12.20) a night to stay in a hospital in Hong Kong, and receive the same quality care as the average American, or better. That fee includes the diagnostics and doctors, but not surgery (which is 1/4 or less US prices, and excellent).

Now you're mixing socialized medicine (or the lack of) with taxes.

Tell me, how much does Hong Kong spend on national defense?

Originally Posted by DOR

As for the lack of US-style business regulations, maybe that's why business likes Hong Kong. Just a thought. . .

That was my point. Hong Kong is prosperous due to the minimal government interference in the business sector. Your government doesn't even print money.

What kind of pension and retire system do you have? Does it even compare to our guaranteed public pensions and social security?

Don't get me wrong, I want the US to move toward a Hong Kong style economic system with minimal government interference.

Originally Posted by astralis

gunnut,

btw, CBO says that too.

CBO is a number cruncher. It's GIGO.

Originally Posted by astralis

ironically the way we got out of the 2001 recession was via...the housing bubble, lol.

So Bush replaced the Clinton tech bubble with the Bush housing bubble. Obama is trying to create the next bubble with all these government interference measures. Just leave the market alone. Stop propping up housing prices. Stop rescuing GM (too late). Stop rescuing unions. Kill Obamacare. Half the economy is already exempt from it anyways.

So Bush replaced the Clinton tech bubble with the Bush housing bubble. Obama is trying to create the next bubble with all these government interference measures. Just leave the market alone. Stop propping up housing prices. Stop rescuing GM (too late). Stop rescuing unions. Kill Obamacare. Half the economy is already exempt from it anyways.[/QUOTE] I fully agree with that. The Government needs to stop the meddling !

gunnut,

So Bush replaced the Clinton tech bubble with the Bush housing bubble. Obama is trying to create the next bubble with all these government interference measures. Just leave the market alone. Stop propping up housing prices. Stop rescuing GM (too late). Stop rescuing unions. Kill Obamacare. Half the economy is already exempt from it anyways.

you are giving too much credit to the actual influence a president/administration may have on the economy. the housing bubble comment was a bit tongue in cheek on my part; bush didn't "replace" a bubble, as neither the tech nor the housing bubble were "government created".

they were all part and parcel of private market miscalculation. like i said, these bubbles were global in nature-- especially the housing bubble.

Originally Posted by astralis

gunnut,



you are giving too much credit to the actual influence a president/administration may have on the economy. the housing bubble comment was a bit tongue in cheek on my part; bush didn't "replace" a bubble, as neither the tech nor the housing bubble were "government created".

they were all part and parcel of private market miscalculation. like i said, these bubbles were global in nature-- especially the housing bubble.

Incorrect market regulation formed the bubble. Bush may not have had that much power over it, but the easy money from Fannie/Freddie sure didn't help. Bush also should have had Greenspan raised the interest rate a few quarters earlier.

gunnut,

Incorrect market regulation formed the bubble. Bush may not have had that much power over it, but the easy money from Fannie/Freddie sure didn't help.

i wouldn't say formed, but as you say, it certainly didn't help. however, it's a relatively minor factor and not THE major one that republicans like to make it out to be.

the emphasis in the future should not be more or less regulation, but over smarter regulation. there were more than a few people asleep at the wheel, both at the SEC and elsewhere, and a few cases of government-industry collusion. right now neither party has come up with good ideas-- democrats mindlessly proposing more random regulations and the republican idea of just stripping away existing regulation without proposing alternatives is perhaps an even worse idea.

Originally Posted by astralis

gunnut,



i wouldn't say formed, but as you say, it certainly didn't help. however, it's a relatively minor factor and not THE major one that republicans like to make it out to be.

the emphasis in the future should not be more or less regulation, but over smarter regulation. there were more than a few people asleep at the wheel, both at the SEC and elsewhere, and a few cases of government-industry collusion. right now neither party has come up with good ideas-- democrats mindlessly proposing more random regulations and the republican idea of just stripping away existing regulation without proposing alternatives is perhaps an even worse idea.

But is it? Stripping away existing stupid regulations just might be better for the market. We don't need to replace stupid regulations with more stupid regulations. The smartest regulation is the market. It always self regulates toward maximum profit. It's predictable. It will do that with stupid regulations in place or not.

Granted we need some minimal regulations like no false advertisement or insider trading. But most of the time, government overreaches and stifles the market, or steers it down a horrible path like the housing bubble.

gunnut,

The smartest regulation is the market. It always self regulates toward maximum profit. It's predictable. It will do that with stupid regulations in place or not.

no. you're talking about a perfect adam smith world where individuals always make rational decisions. we know in reality this is not true. see the extraordinary amount of capital spent building infrastructure in china, for instance-- huge ghost towns with no one living in them.

the reason why we have bubbles in the first place is because a large segment of the populace are either ignorant of, deliberately blind to, or are attempting to profit off something a rational individual would recognize as not connected to reality.

strip away regulations and you'll have a much sharper boom and bust cycle. ironically this is bad for the economy as a whole, because as the economy becomes more complex you have a lot more second/third-order effects. proposing stupid regulations is bad, because it creates inefficiency, but OTOH it takes a lot of inefficiency to equal up to the money lost in a bad bust.

Originally Posted by highsea

even more ironic is that if you're a banker or a government employee you got to skip this recession.

Recent Job Losses Are Concentrated in Public Sector - Barrons.com
Bankers maybe. In recessions most dont get pay cuts they get lay offs public sector workers were no different once the stimulus began winding down

Originally Posted by Roosveltrepub

Recent Job Losses Are Concentrated in Public Sector - Barrons.com
Bankers maybe. In recessions most dont get pay cuts they get lay offs public sector workers were no different once the stimulus began winding down

So the stimulus provided merely temporary employment figures to make Obama look good.

Government employs too many people to begin with. These are not even the fat. These are the unwanted hair above the skin, above the fat, that is government employment. Private sectors have been cutting for 2 years. Some companies have been running on skeleton crew for a while, hoping for a turn-around.

Originally Posted by astralis

gunnut,

no. you're talking about a perfect adam smith world where individuals always make rational decisions. we know in reality this is not true. see the extraordinary amount of capital spent building infrastructure in china, for instance-- huge ghost towns with no one living in them.

Infrastructure, you say. Who builds this stuff? Government. How many of these buildings were subsidized by the government?

Originally Posted by astralis

the reason why we have bubbles in the first place is because a large segment of the populace are either ignorant of, deliberately blind to, or are attempting to profit off something a rational individual would recognize as not connected to reality.

strip away regulations and you'll have a much sharper boom and bust cycle. ironically this is bad for the economy as a whole, because as the economy becomes more complex you have a lot more second/third-order effects. proposing stupid regulations is bad, because it creates inefficiency, but OTOH it takes a lot of inefficiency to equal up to the money lost in a bad bust.

I'd rather lose money in the business cycle than to the government.

gunnut,

Infrastructure, you say. Who builds this stuff? Government. How many of these buildings were subsidized by the government?

the main source of funding comes from newbie investors, not government.

A Ghost Town in China - Slide Show - NYTimes.com

I'd rather lose money in the business cycle than to the government.

it's not an issue of what you'd rather lose money to, it's the scale. when regulation failed (among other things) in 2007-8, the US housing market lost $9 trillion in three years.

The bubbles are caused by excess capital and poor price discovery. In the dot-com bubble this was normal market behavior. We had a lot of venture capital available and there was no good way to price the value of an internet company. So we had dot-coms trading for multiples of 200-300 because no one knew what the real price should be.

The housing bubble was caused by a gov't policy to get home ownership over 70%, coupled with an intentionally unregulated capital market. Result was no mechanism for price discovery on those multi-trillions in derivatives that the banks created, and no way to rate the risk they posed to the banking system.

The first was unavoidable, the second was completely avoidable.

The damage caused was relatively minor in the dot-com bubble- a lot of people lost their equity investments, but the economy at large was not seriously harmed.

The housing bubble was infinitely worse, it stripped trillions from the economy. Who knows how long it will take to return to normal- a decade at least, and we will be left with a debt that we may never be able to repay and a dollar devalued by 50% or more. Greatest theft in the nation's history.