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Thread: The US Recovery

  1. #31
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    Quote Originally Posted by DOR View Post
    Five years after the Great Depression began, unemployment was three times what it is today. Considering that the past five years were far more than a recession, what rate did you expect?
    Well you see by Keynesian theory you have reach a kind of 'escape velocity' where everything is going so absolutely well that you can claw back Government spending and start addressing the deficit. Obama doesn't expect that time for another 10 years.... Perhaps you think it's possible sooner but lets say 4 years to be conservative. Will the market still have faith in the $ in that time? Which brings us to your theory...

    Quote Originally Posted by DOR View Post
    if you want to decrease the debt-to-GDP ratio, as happened under Clinton and Eisenhower, you need to run a surplus larger than debt repayments, including interest.

    Extremely rare breed of red herring, nearly extinct.
    So how are you going to address the deficit? Cut spending when? When will 'escape velocity' be reached again...

    Quote Originally Posted by DOR View Post
    Stimulus . . . American Recovery and Reinvestment Act of 2009 (ARRA). $288 billion (37%) in tax cuts supported by zero GOPer representatives and three GOPer senators. $144 billion in support for state and local budgets, supported by zero GOPer representatives and three GOPer senators. And $357 billion in federal spending on transport, communications, waste water and sewer infrastructure, energy efficiency, unemployment benefits, etc. . . . supported by zero GOPer representatives and three GOPer senators.

    (Martin Feldstein supported it, but thought more should have been spent on consumers and unemployment support. Paul Krugman thought it was too small. Larry Klein, Paul Samuelson and Joe Stiglitz also supported it. The Cato Institute did not [*gasp*].)
    No mention of TARP... and no use trying to tar me with GOP brush as I am no great fan of theirs either.

    Quote Originally Posted by DOR View Post
    By Q-3 2011, the CBO estimated that the ARRA created between 500,000 and 3.3 million jobs, reducing unemployment by 0.3 to 2.1 percentage points.
    So let's say 1.7m jobs were created... including TARP and all the other stimulus programmes how much did each job cost? Were the jobs created efficient and therefore sustainable? The free market I would suggest would created more efficient and sustainable jobs for less.

    Quote Originally Posted by DOR View Post
    QEternity, as you call it, is about financial sector liquidity.
    So it's about helping the banks? Weren't they bailed out already at taxpayers expense? Here was me thinking you were worried about the normal people! Good of you to be honest though.

    Quote Originally Posted by DOR View Post
    The newspapers this week are full of front-page coverage of the rebound in the US economy. But, you must be better informed than they are.
    Can't be a bubble if the newspapers say it's real recovery!

    Quote Originally Posted by DOR View Post
    Investor borrowing / margin debt is unrelated to the real economy.
    Sure just like food and fuel price inflation - fine if you don't have to borrow, eat or pay any fuel bills.

    Quote Originally Posted by DOR View Post
    investors.com is famous for saying Stephen Hawking wouldn’t have had a chance of getting decent healthcare if he’d lived in the UK.
    Professor Hawking has private health.
    Last edited by snapper; 30 May 13, at 14:57.

  2. #32
    Regular Captain Worley's Avatar
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    I've seen similar articles in the local paper every month for the past four years using various yardsticks to prove 'the market has returned.'

    To quote Sir Paul, "I look around me and I see, it isn't so."

  3. #33
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    snapper,

    Obama doesn't expect that time for another 10 years.... Perhaps you think it's possible sooner but lets say 4 years to be conservative. Will the market still have faith in the $ in that time? Which brings us to your theory...
    you keep on talking as if the last two years haven't happened. between the Budget Control Act of 2011 and the American Taxpayer Relief Act, the debt will stabilize at 76-78% for the foreseeable future. a relatively small $1.4 trillion in further reductions, which can be had by limiting some deductions, will stabilize the debt at 70-72%.

    this is why the market hasn't responded the way it would respond if investors were actually afraid of the US turning into another greece-- and why deficit fearmongerers continue to incorrectly predict, year after year, the impending bankruptcy of the US like some modern-day chicken little.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

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    captain worley,

    I've seen similar articles in the local paper every month for the past four years using various yardsticks to prove 'the market has returned.'

    To quote Sir Paul, "I look around me and I see, it isn't so."
    anecdotal observation does not trump hard data.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  5. #35
    Regular Captain Worley's Avatar
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    Quote Originally Posted by astralis View Post
    anecdotal observation does not trump hard data.
    Figures lie and liars figure, i guess.

    When you hear the house organ playing the same ole tunes, but the songs don't reflect reality, what are you gonna believe: your ears or your eyes?

    And, I'm not exaggerating, "The Housing Market is Turning Around!" hs been the song playing on the jukebox for a good, solid four years.

    They're selling.

    I ain't buying.

  6. #36
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    When you hear the house organ playing the same ole tunes, but the songs don't reflect reality, what are you gonna believe: your ears or your eyes?

    And, I'm not exaggerating, "The Housing Market is Turning Around!" hs been the song playing on the jukebox for a good, solid four years.

    They're selling.

    I ain't buying.
    good for you. my portfolio has increased 23% (slightly above S&P 500 gain of 17%) this year. hell, i bought a house earlier this year, and good timing it was too, as housing prices are going way up in the Arlington area. so what i'm seeing and what i'm hearing is pretty similar.

    we observe things differently. this is why i depend on hard figures to bolster my argument. and hard figures over the long-run, too, which avoids the daily noise that you're talking about.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  7. #37
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    Quote Originally Posted by astralis View Post
    good for you. my portfolio has increased 23% (slightly above S&P 500 gain of 17%) this year. hell, i bought a house earlier this year, and good timing it was too, as housing prices are going way up in the Arlington area. so what i'm seeing and what i'm hearing is pretty similar.

    we observe things differently. this is why i depend on hard figures to bolster my argument. and hard figures over the long-run, too, which avoids the daily noise that you're talking about.
    Mine has shown the same increase.

    You read too much into what I said.

    All I said is the housing market has not returned. And it hasn't. Despite what the real estate industry has said over and over again for four years.

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    All I said is the housing market has not returned. And it hasn't. Despite what the real estate industry has said over and over again for four years
    oh, Realtors can scream until their lungs are blue, but you can see the long-term trend yourself.

    U.S. Housing Recovery 2 Milestones - Business Insider

    look at the chart. trend since 2009 is up, with a much, much sharper trend upward in 2012-2013.

    this is why WSM (williams-sonoma), for instance, is up 20% in the last 6 months, and VNQ (vanguard real estate ETF) is up 12% in the same time period.

    if you're defining "return" as pre-2008 levels, then no, they have not returned (and a good thing, too). but the trend is undeniably upwards, based on multiple variables. that's all.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  9. #39
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    47.8 million need government bread

    11.7% real unemployment

    Dollar down 80% against gold since the 80's

    fuel prices crushing buying power

    boom times for sure....

    Food Stamp Rolls Remain High Despite Economic Improvement
    The Real Unemployment Rate Is Worse Than You Think - Careers Articles
    Welcome to Forbes
    Energy Risk in the Suburbs | The Energy Collective

  10. #40
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    Quote Originally Posted by astralis View Post
    you keep on talking as if the last two years haven't happened. between the Budget Control Act of 2011 and the American Taxpayer Relief Act, the debt will stabilize at 76-78% for the foreseeable future. a relatively small $1.4 trillion in further reductions, which can be had by limiting some deductions, will stabilize the debt at 70-72%.

    this is why the market hasn't responded the way it would respond if investors were actually afraid of the US turning into another greece-- and why deficit fearmongerers continue to incorrectly predict, year after year, the impending bankruptcy of the US like some modern-day chicken little.
    I apologise for not having responded to your earlier points at the same time as I replied to David's but to deal with the immediate points you raise: As you and I and anyone who followed the previous thread on these topics will know the "American Taxpayer Relief Act" is a taxing Act - it relieves the taxpayer of nothing but their salaries which the Government, in all it's 'wisdom' then uses to pay it's staff ($640bn probably doesn't cover that though) and 'invest' in various social programmes which it believes "socially equitable" or some such. Don't try to con me on that one - remember it was me that made that point.

    Can you show me the figures for debt stabilisation? I'd be most interested... or is that a la Krugman and Bernanke, neither of whom foresaw the 2008 crash. You would have thought the Chief Central Bankers would have been fired for not seeing that... Sadly in the cleptocracy that is being run they are necessary accomplices.

    The point is that the Government and the US Central Bank/Bernanke, will force people to pay for mistakes they made while at the same time diminishing the purchasing power of their savings and salaries. Yes Obama can say truthfully "Was Bush what bailed out the banks" but what has he done to change matters in favour of the 'man of the street'? Zilch... kicked the can to your great grand children; during Obama's first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined. Is that sustainable? In my view with the average person actually becoming poorer as QE proceeds (as evidenced by increased debt) it is not. You must achieve 'escape velocity' within the next 2 years or the game will slowly but surely catch up with you. I see no hope of the US achieving a non Bernanke growth rate of 4-5% in that time.

  11. #41
    Senior Contributor DOR's Avatar
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    cyppok,

    CBO stopped being relevant when they revise estimates based on politics instead of on the ground realities.
    Bullshit. You have to show some hard facts to make that kind of off-the-wall slur.

    = = = = =

    snapper,

    Well you see by Keynesian theory you have reach a kind of 'escape velocity' where everything is going so absolutely well that you can claw back Government spending and start addressing the deficit.
    Correct. And, since we aren’t there yet, it makes no sense to focus on the debt, deficit or inflation.

    Obama doesn't expect that time for another 10 years.... Perhaps you think it's possible sooner but lets say 4 years to be conservative. Will the market still have faith in the $ in that time?
    I don’t know. But, to lose faith in the US dollar, markets must – by definition – ‘find’ faith in something else. It won’t be the euro or yen, that’s for sure, and the renminbi isn’t in the game. Commodities? Been there, done that and got a very dirty T-shirt. Real estate? That’s my favorite, but what currency should you use?

    (I bought in San Francisco five years ago. Nice upside.)

    As for decreasing the debt-to-GDP ratio, that isn’t my theory. It’s just math.
    As to how and when, see above line that starts “Correct.”


    No mention of TARP
    Yeah, that’s because ideologues get annoyed when they realize that TARP was not only successful, and paid back, but profitable.

    how much did each job cost?
    Let’s see . . . $1 trillion (just rough, round numbers) divided by between 300,000 and 2.1 million jobs . . . go ahead and do the math.

    Then, add in the value of the economy growing 16% (cumulative) in real terms since 2008, as compared to a EuroZone style (cumulative) -0.8%. That’s worth $2.5 trillion right there.

    Next, be sure to subtract all the support payments (unemployment, social security, food stamps, etc) that weren't paid out because the economy expanded by $2.5 trillion (did I mention that it’s in real terms?), rather than falling by $117 billion (-0.8%). Better deduct something for police security, since there have been a lot more economic riots in Europe lately than in the US.

    My answer comes out as a negative cost of jobs. What's yours?

    The free market I would suggest would created more efficient and sustainable jobs for less.
    Absolutely correct. So, given that the free market wasn’t creating those jobs, should we have let the economy fall by $2.5 trillion, because that would keep the debt-to-GDP ratio from rising?

    Oops. Falling GDP = rising debt-to-GDP ratio . . Damn, I hate when that happens.

    So it's about helping the banks? Weren't they bailed out already at taxpayers expense? Here was me thinking you were worried about the normal people!
    What’s the contradiction? Replacing banks’ core capital so that the entire financial system doesn’t collapse is actually a pretty good thing for ‘normal people,’ wouldn’t you agree? Or, would you have preferred out-right nationalization, with Big Government taking on all of the risk and responsibility?

    Those are the choices, since “let them fail” would be a really, really nasty thing to do to ‘normal people.’ And, (let’s both be honest) that’s not nice.

    Sure just like food and fuel price inflation - fine if you don't have to borrow, eat or pay any fuel bills.
    Disconnect. Remind me again how ‘normal people’ can’t pay their food and fuel bills because rich folks playing the stock margin on borrowed money made a mistake?
    Last edited by DOR; 31 May 13, at 03:03.

  12. #42
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    Quote Originally Posted by zraver View Post
    11.7% real unemployment


    fuel prices crushing buying power
    Watch out for the statistical arguments next! They're fun! People don't eat or use fuel so rises in those prices say nothing about inflation. You really have to read the new economic bible!

  13. #43
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    snapper,

    As you and I and anyone who followed the previous thread on these topics will know the "American Taxpayer Relief Act" is a taxing Act - it relieves the taxpayer of nothing but their salaries which the Government, in all it's 'wisdom' then uses to pay it's staff ($640bn probably doesn't cover that though) and 'invest' in various social programmes which it believes "socially equitable" or some such.
    really-- point out which social programs it's meant to fund. seriously, point out the relevant sections of the signed act. you continue to make assertions based on no data, and this is getting tiresome once more. this isn't a debate, this is me giving you data and you getting on the lectern.

    republicans would certainly not accept this.

    Can you show me the figures for debt stabilisation?
    CBO says deficit problem is solved for the next 10 years

    You must achieve 'escape velocity' within the next 2 years
    how did you get this "2 year" timeframe? are you channeling alan simpson back in 2011?

    Bowles, Simpson: Fiscal Crisis Could Come Within 2 Years - Washington Wire - WSJ

    tell me where interest rates are now?
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

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    Watch out for the statistical arguments next! They're fun! People don't eat or use fuel so rises in those prices say nothing about inflation. You really have to read the new economic bible!
    sigh.

    again, let's look at the data, shall we.

    Attachment 33028
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  15. #45
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    Quote Originally Posted by astralis View Post
    sigh.

    again, let's look at the data, shall we.

    Attachment 33028
    Interesting when compared with median household income

    Attachment 33029
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