Economy, Banks, Gold, and other stuff.

[Doktor]

Is there a measure for freedom?

[DOR]

The point is that if Bernanke and Obama are right then indeed they are stopping being from going hungry today (which is the moral aspect) and 5-10years from now. However if they are wrong then the opposite is true; they are economically incompetent and by causing people to starve are morally culpable.

The experience in Europe shows them -- one Democrat, one Republician -- to be right.

Hayek said

Yeah, but Krugman didn't. You have your view, which is fine, but Hayek never met a hedge fund.

Dr Paul.

Yawn.

[cyppok]

What I mentioned is precisely that which pertains to sovereign economies.

The British Empire defaulted by debasement, the pound lost real value so the debt load got progressively easier to handle. If the pound dropped from 5 to 3 to 2 to 1.5 in relation to every other world currency (hypothetically while the debt load increased the interest rates paid on it were actually negative)
Graph of £/$ exchange rate (1915 - today)


When you have a marginal contraction due to money supply being artificially gamed to suit a specific market actor like banks an individual cannot artificially create one dollar in one pocket to lend to the other. Back to reality, the GDP and cashflow within the economy does not grow through purchases being expanded since everyone is struggling to get money of which there is a shortage except for banks whom do not circulate it within the broader economy because the risk adjusted rates they get are negative. Ergo they may earn 6 or 8 percent but the risk of not getting it back may be 20.

Entering nominal numbers on the central bank computer does not translate to real on the ground actions unless those numbers circulate through the actual economy and not merely a ring of banks and their computers to hold up values which are in reality not there. It becomes a simulation. The problem is that once that money goes into circulation they cannot control or fathom where it ends up bidding things up they can create incentives for housing and other stuff but in the end how irrational that gets, usually gets out of hand.

In Europe right now they are simply printing money and giving it to insolvent governments, by taking insolvent government debt as collateral. Germany et al. supplies 'real' perceived capital to print 'real' perceived debt by the others. This does not take away the actual carry costs those others have to maintain out of their respective economies which they cannot sustain. So you get into a refinancing cycle by the lender of the insolvent borrower both know each cannot stop because one cannot pay and the other cannot have the perception of payments stop. In reality both are wasting time and creating an environment where one sinks the others ability to prosper if the circumstances were to change to something both may be happy with. (hypothetical example is thus: Imagine Spain defaulted and had to haircut their debt by 50% and Germany had to eat that 50% loss, they would still be in the Eurozone but lower burdens would allow Spain to create an environment as a tourist hub with a bureaucracy cut across the board. Lets say in 5 years Spain is a world tourist hub due to efficiency and other aspects and the remaining debt it owes Germany is actually more valuable since their common currency may have strengthened due to Spain becoming more solvent.)

[DOR]

.
cyppok,

“The British Empire defaulted by debasement,”

. . . if you define ‘default’ to include ‘debasement,’ then you define the outcome of the discussion.

.

“the GDP and cashflow within the economy does not grow through purchases being expanded”

. . . if you define ‘grow' to exclude expanded purchases, then you define the outcome of the discussion.

.

But, I disagree with your definitions.

[snapper]

allow me to put it this way. the US in the 1940s had a top marginal tax rate of 94%, extremely stiff tariffs, wage/price controls, rationing, and outright government takeover of major industries.

would you state that the US was on a road to totalitarianism then?

was the US more free in 1850 with no income tax than it was in 1913, when the income tax was instituted?

Wasn't something going on in the 1940s, a war or something? Income tax was first introduced in Britain in 1799 as a 'temporary' tax to beat Napoleon, see HM Revenue & Customs: Taxation: A tax to beat Napoleon. Yes I would say in general the less people are taxed the free-er they are. They keep more of their own money and can make more decisions for themselves because they have the financial means to. For example if my tax bill is reduced 500 whatevers ($, £ or euros etc) then I might save it or buy or new car or new cooker or whatever. If I have been saving to start my own business the extra 500 might enable me to start and if I started 2 years ago it might make worthwhile to take on a new employee. You see whatever is taken in tax (or confiscation a la Cyprus) clearly limits the options available to me; it diminishes my liberty. So if liberty means the number of options available to a person, for such is the logical extrapolation of Hayek, the more money you have the greater liberty you enjoy. This is why we want to make ALL members of our society better off. The question is how?

I take your point about Keynesian economists and reduction of Government and you are of course correct. However the Governments that use Keynesian economics as an justification for increasing their role are not economists. It is a little like a Marxist economist accusing the Soviet Union of not practicing perfect Marxist economic theory. Once you have got there it is difficult to role back... wages are notoriously 'sticky' and people lose the incentive to look after themselves. While I concede the point in economic theory in practice it is very hard to role back - take the British income tax example!

Is there a measure for freedom?

Good question. I refer you to Freedom in the World | Freedom House There you will find that by their methodology Europe is 'free'. Cypriot depositors and Greeks who are forbidden to strike may care to argue of course.

The experience in Europe shows them -- one Democrat, one Republician -- to be right.

Yeah, but Krugman didn't. You have your view, which is fine, but Hayek never met a hedge fund.

David Sir, I wasn't aware that M. le President of France Hollande should be regarded as a Republican in the American sense. I'm sure he would not see it that way. But in a way we are back to discussing whether the US borrow and spend and QE policy has worked. Employment statistics show it's way off what was supposed to have happened. Then again to suggest that I support the European approach is the opposite of the truth. I have argued the exact opposite; when broke let it fail. In the European case this involves countries AND banks. But as we openly accept European policy does not follow an economic rational; it follows a political one. I have yet to see any proof that Obama term 1 did not do the same. When I see things like the 'American Taxpayer Relief Act' being used to raise $600bn I know I am walking in Orwellian fantasy land.

As for Krugman and Hayek... Well Hayek never proposed we invent an alien invasion to create stimulus spending as Krugman did. Nor do I see anything wrong with hedge funds per se. I too with my limited means have shorted currencies and banks and profitted from it. Is it 'wrong'? Well my answer is "no"; it highlights an already existing problem or imbalance and forces banks and Governments to address the problem. Would you prefer they that carried on ad infitum regardless of their solvency? If I, or a hedge fund, get it wrong and there is no problem then we lose. Seems not only fair but necessary to me. I mean supposed we made a law that said you can't hedge or short certain bonds, currencies, stocks etc... Then it doesn't matter what they do - the share price is nigh on guaranteed. It's almost like saying once you've bought this commodity you can NEVER sell it... but is that my money then? Was it an 'investment' or a 'donation'? Clearly not the former if I can't withdraw it.

One market where the hedge funds are powerless at present in the bond bubble created by the Fed. All bubbles burst as you will know. What would happen if US bond yields rose to 6-8%? Is it not possible? Why not? How long can Japan go?

[astralis]

snapper,

Wasn't something going on in the 1940s, a war or something? Income tax was first introduced in Britain in 1799 as a 'temporary' tax to beat Napoleon, see HM Revenue & Customs: Taxation: A tax to beat Napoleon. Yes I would say in general the less people are taxed the free-er they are.

note that all of these conditions, except for the rationing, persisted well into the early 60s. moreover, contrary to the assertion of many libertarians, we HAVE seen a roll back in government: the US government, for instance, now takes less taxes in than at any point since the 1920s.

the size of the government has shrunk as well, measured in number of federal/state employees.

finally, economic freedom is not solely defined by tax rates, nor is economic freedom the sole or even the most important basis for freedom in general. case in point, russia has a flat tax of 13%, belarus has a flat tax of 12%, yet i do not believe these countries to be shining beacons of freedom...

If I have been saving to start my own business the extra 500 might enable me to start and if I started 2 years ago it might make worthwhile to take on a new employee. You see whatever is taken in tax (or confiscation a la Cyprus) clearly limits the options available to me; it diminishes my liberty. So if liberty means the number of options available to a person, for such is the logical extrapolation of Hayek, the more money you have the greater liberty you enjoy.

if this was completely true, then every government would seek to have an absolutely minimal level of taxes, say 1%, and then by the powers of the free market they'd be drowned in revenue.

as with all things, there is a limit to its effectiveness. for instance, 1 sweet roll may be delicious indeed, but not the 5000th. similar with the tax effect; lowering taxes from 80% to 60% will pay for itself, but not when it is from 20% to 1%.

the issue with injecting liberty, a political term, into the economic arena, is that it distorts the debate on economic efficiency.

I take your point about Keynesian economists and reduction of Government and you are of course correct.

thank you for keeping an open mind. :)

However the Governments that use Keynesian economics as an justification for increasing their role are not economists.

and what of governments that use Austrian economics as a justification for pushing their libertarian/shrink-the-government policy? is this not what US republicans are doing? or what Cameron is doing?

It is a little like a Marxist economist accusing the Soviet Union of not practicing perfect Marxist economic theory.

poor analogy, because Marxism IS a political ideology masquerading as economics. i've heard these arguments too, and those people are fools.

While I concede the point in economic theory in practice it is very hard to role back - take the British income tax example!

things are harder in a democracy, of course. but harder does not mean impossible. if we choose a suboptimal economic theory in deference to politics, then the result will be, at best, a suboptimal economic policy. at worst, a disastrous one. and given politics, it's not hard to guess where things usually land.

[DOR]

Mademoiselle,

I wasn't aware that M. le President of France Hollande should be regarded as a Republican in the American sense.

The Democrat and Republican to which I refer are Barack Hussein Obama II and Benjamin Shalom Bernanke, respectively. They are the ones proven to be correct. (And, I love the juxtaposition of their middle names!)

.

Employment statistics show it's way off what was supposed to have happened.

.

That’s only the case if you think 2007+ is a recession.
After the 1974 recession, unemployment didn’t return to trend levels for 2-1/2 years.
After the second of the two 1980-82 recessions, the lag was just under 2 years.
After the 1991 recession it was 3 years.

If we are now in the fifth year of a recesion, we’d expect the unemployment rate to be back very close to trend about now.

But, that wasn’t a recession.

In 1949, nominal GDP fell year-on-year for three quarters in a row. It happened again in 1954 and for two quarters in 1958. In between then and now, we had a slew of recessions, but no fall in nominal GDP.

The next time that happened was 50 years later, in 2008-09 (four quarters of nominal contraction).

.

In 1949-50, the US experienced 14 straight months of deflation. In 1954-55 it was 12 months.
The next time was 2008-09, for 10 months.

Since 2009, the Fed Funds rate has been negative in real terms for 41 months. That’s exactly as long as in the 1974-78 period, so unless you think that recent economic unpleasantness was nothing more than a typical recession, or even a severe one, you would expect we’d be about done by now.

But, that was no recession, and to expect an economic recovery that mirrors an inappropriate image is simply wrong.

- - - - -

I didn’t say Hayek was wrong (although I do believe that), simply that he had never seen a hedge fund. His thinking could not account for the kinds of financial machinations that we consider normal. It was a different world back then.

[snapper]

note that all of these conditions, except for the rationing, persisted well into the early 60s. moreover, contrary to the assertion of many libertarians, we HAVE seen a roll back in government: the US government, for instance, now takes less taxes in than at any point since the 1920s.

the size of the government has shrunk as well, measured in number of federal/state employees.

Firstly it is hardly surprising that Government intervention has rolled back since the 1940s. Secondly though it depends to some extent on how you class a 'Government employee'. Take the case of Fisker Automotive Inc. for example;

"Newly obtained documents show the Obama administration was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion dollar government loan, nearly a year before U.S. officials froze the loan after questions were raised about the company’s statements. An Energy Department official said in a June 2010 email that Fisker’s bid to draw on the federal loan may be jeopardized for failure to meet goals established by the department. Despite that warning, Fisker continued to receive money until June 2011, when the DOE halted further funding. The agency did so after Fisker presented new information that called into question whether key milestones — including the launch of the company’s signature, $100,000 Karma hybrid — had been achieved, according to a credit report prepared by the Energy Department. Vice President Joe Biden announced in late 2009 that Fisker would reopen a shuttered former General Motors factory in Wilmington, Del., to produce plug-in, electric hybrid vehicles. The plant was never completed and never produced any cars." Bad Karma: Obama admin kept funding Fisker while knowing it was failing « Hot Air

Nor was Fisker a 'one-off'... you may have heard of Solyndra? Solyndra: Politics infused Obama energy programs - The Washington Post

So my question is this: Given that the employees of these companies were in part at least payed for by the public purse are they not equally partly public employees? Subsidised business, whether they be bailed out banks or companies offering healthcare are not only more immune to normal operations of the market, which I would agrue makes them less responsible, but their employees are also subsidised by the taxpayer and therefore arguably partly public employees.

finally, economic freedom is not solely defined by tax rates, nor is economic freedom the sole or even the most important basis for freedom in general. case in point, russia has a flat tax of 13%, belarus has a flat tax of 12%, yet i do not believe these countries to be shining beacons of freedom...the issue with injecting liberty, a political term, into the economic arena, is that it distorts the debate on economic efficiency.

In general I agree with you here. Freedom of expression what comes from it (free press and media etc), the 'right' to private property, freedom of association, the right to withdraw your services etc are all components of a society we might call 'free' or an individual have 'liberty'. I would also agree that "injecting liberty, a political term, into the economic arena...distorts the debate on economic efficiency". It was David (DOR) that first raised the ethical implications of an economic policy. I agree with him that economic policy DOES have social and therefore moral consequences. In such a debate of the consequences of an economic policy both hunger and liberty are valid issues. Indeed if we were not to some degree interested in the social consequences of economic policy economics would more akin to maths.

poor analogy, because Marxism IS a political ideology masquerading as economics. i've heard these arguments too, and those people are fools.

But Marxists too understand that economic policy has social consequences. I don't suppose they would accept that their economic policy is unproductive or inefficient. They would no doubt argue that their system brings greater economic efficiency AND 'social justice' or whatever they call it. They too started off wanting to keep people from hunger no doubt. As it is said the road to hell is paved with good intentions.

if this was completely true, then every government would seek to have an absolutely minimal level of taxes, say 1%, and then by the powers of the free market they'd be drowned in revenue.

as with all things, there is a limit to its effectiveness. for instance, 1 sweet roll may be delicious indeed, but not the 5000th. similar with the tax effect; lowering taxes from 80% to 60% will pay for itself, but not when it is from 20% to 1%.

I am aware of the diminishing return of desirability (and of investment). In terms of the percentage of tax a person pays I am not sure it applies an absolute rule. Those who earn the lowest wages must spend a greater extent of their earnings to survive - they have limited 'discretionary spending' ability if any. Say such a person HAS to spend 99% of what he/she earns on food, bills, etc then taxing him/her even 1% effectively makes it not worth their while to work - it 'enslaves' them as they have to work to live. I can see how it may apply to higher levels of earnings though whether it is 'economically efficient' there is questionable.

and what of governments that use Austrian economics as a justification for pushing their libertarian/shrink-the-government policy? is this not what US republicans are doing? or what Cameron is doing?

To be honest I am not sure any Government has ever practiced Austrian economics. The US Republicans I think are more monetarists and Cameron doesn't believe in anything, he is an opportunist and many of the policies his Government are practicing such as subsidising mortgages and 'funding for lending' are no different from Obama's. I doubt he's even heard of Mises or Rothbard.

things are harder in a democracy, of course. but harder does not mean impossible. if we choose a suboptimal economic theory in deference to politics, then the result will be, at best, a suboptimal economic policy. at worst, a disastrous one. and given politics, it's not hard to guess where things usually land.

Whether we live in a democracy has been questioned in this thread; "The financial big boys siezed sovereignty from national governments long, long ago". I am not sure that David/DOR really believes this but if it IS true then surely increasing Government/Federal Bank involvement and spending, although proclaimed to help the normal person, will actually only help those 'vested interests' who have "siezed sovereignty from national governments". Indeed this is most certainly the case with QE. However I understand the Keynesian idea of 'store food in summer so you feed your family in winter' so to speak. I think it is more difficult than that in practice, democracy or not. The question for US citizens when considering 'reducing Government' I suppose depends on the Constitution. Certainly the 'rights' first granted by the Constitution are far exceeded today, take copyright for example... This works both ways; once a Government creates a subsidy/dependency sector they feel entitled to claim it as a 'right'. It becomes a vicious circle... people become dependent on government and claim it's their 'right' to x,y and z and to get elected a Government must promise to uphold these supposed 'rights' if not expand them in the 'liberal' tradition. Of course this has the opposite effect of traditional liberal policy which aimed at empowering people against the State.

Economic efficiency in my view is pretty simple. If a business goes broke let it go. If a business cannot raise the capital to get started by itself or a person can't get a mortgage by themselves the Government should NOT promise taxpayers money to support the project. Just imagine for example what would happen if Governments stopped 'guaranteeing' bank deposits altogether...

thank you for keeping an open mind. :)

I am not here to play 'Devil's Advocate'. For me at least it is a genuinely interesting debate and to my mind a vitally important one at present. I am obliged to you and David/DOR for explaining you views and pointing out weaknesses in mine. cyppok I think is more on my side.

[snapper]

Mademoiselle, The Democrat and Republican to which I refer are Barack Hussein Obama II and Benjamin Shalom Bernanke, respectively. They are the ones proven to be correct. (And, I love the juxtaposition of their middle names!)

Monsieur,

The names do seem ironic. Bernanke is practicing what I have seen referred to as 'macro monetarism'. I am not sure Freidman would endorse his policy but that question is academic as he's gone. It is misguided in my opinion and far from helping the less well off in society benefits primarily the large banks. In my view it succeeds only if the deficit can be cut and the Fed has an exit plan without bursting the bond bubble. Earlier in this debate you quoted James Carville saying “When I die, I want to come back as the bond market. You can intimidate everybody.” If only...the 'bond vigilantes' have been broken by the Fed's magic money machine. If I did the same it would be criminal but Bernanke is only a private individual as I am, he is no official of the State or Crown. He claims to be acting in the public good... I can too if he gives me plates!!! I could help him!!! No? Why not? How come only he/the Fed can 'help'?

Hell if Bernanke gave me the 'magic money machine' which only he has a 'right' to use I'd buy gold upto a set amount and give some of it to miminum wage people. First gold would rise as I bought and then it would fall again as most the 'ordinary people' to whom I have given it (and I with what I retained) sell it. They get $'s to spend and I, having sold at a high, would buy again at the low. If you want people to have more money to spend and invest that is a better way I would suggest. At present it is the large financial istitutions that benefit most from QE.

That’s only the case if you think 2007+ is a recession...But, that was no recession, and to expect an economic recovery that mirrors an inappropriate image is simply wrong.

So I think what you are saying here is this is WORSE than a normal recession. I think generally I'd have to agree with that. The question is why? I have no doubt that you will have your own explanation for that which I look forward to reading. My explanation is that it was a mistake to bail out the banks in the first place. Fine if the Government has stupidly 'guaranteed' deposits of below x amount there may have been case to keep the promise but tranferring their debts to the public account is completely unjustifiable in my view. It caused a potential threat to the solvency of the Governments and created the need for QE and the artificially low interest rate and bond yield. This and the various attempts in the US (and UK) for 'stimulus' just add more distortions to the market - they are trying desperately to create bubbles. Instead of letting people keep more of their money they have raised taxes to create these 'stimulus bubbles'. Certainly the underlying flaws and politically motivated insistence on maintaining them in the eurozone have contributed to the problems of the US and UK, more so for the UK. The loss of trade in both Europe and the US have fueled a deeper malaise than had just one failed, this has yet to hit China where stimulus spending has been highest... Millions of real 'normal people' lost money and homes because interest rates were too low in the early 2000's, both in the US and Southern Europe. Now they trying to do the same thing again in the US and UK.

I didn’t say Hayek was wrong (although I do believe that), simply that he had never seen a hedge fund. His thinking could not account for the kinds of financial machinations that we consider normal. It was a different world back then.

You may be right... like the Friedman case it seems a pointless debate since we can never know. The point is though that the risk of failure is integral to capitalism. It is not something to be feared - it is beneficial. Hedge funds don't 'gang up' with malicious intent to crash a profitable business. Nearly all of them will have stocks they hold for years, my family certainly does. They like the management, might even know them and agree with the general policy of the company. 'Hedging' in the way I think you mean is only ever a part of anyones business. Sure when they see what they think is a high they'll sell... hardly a sin. For myself I freely admit to having shorted government bonds and banks and some companies that I already had shares in. Lost some, won some but overall up. Buy on the low and sell on the high or vice versa... It's NORMAL, not 'evil' or malicious. I bought some gold the other week. Is that a hedge against QE or just because the price dropped?

So having answered both astralis and your most polite self as best I can please may I ask you both a question or two? You are not obliged to reply of course. Do all bubbles burst? Is there a bond bubble? If so what happens when the bond bubble bursts? From a trading perspective what would a safe investment against such an event?

[astralis]

snapper,

So my question is this: Given that the employees of these companies were in part at least payed for by the public purse are they not equally partly public employees? Subsidised business, whether they be bailed out banks or companies offering healthcare are not only more immune to normal operations of the market, which I would agrue makes them less responsible, but their employees are also subsidised by the taxpayer and therefore arguably partly public employees.

by this incredibly loose definition, any company with a government contract would be counted as a 'government employee'.

the facts of the matter are that the USG has shrunk, both as a percentage of GDP and employee-wise. the expansion of USG spending now is not upon itself but on entitlement programs established roughly 80 and 50 years ago as US demographics change.

as a centrist i actually would like to see a somewhat bigger government (vice more entitlement spending) at this point in time, as i'd rather the government be more than an insurance company with an army.

Indeed if we were not to some degree interested in the social consequences of economic policy economics would more akin to maths.

the pure study of economics should be limited as much as possible, akin to maths as you say.

injection of social scientific/philosophical ideas distorts economic analysis. i've noticed austerians doing much more of this since academic...and real-life...proof that their theories are 1.) correct and 2.) economically efficient have been in serious decline.

moreover, i judge economists by a different set of standards, whether it is that of political economics or punditry, if they engage in such. IE, yes, i look at krugman's political commentary through a different set of lens than i do with his economic analysis.

I don't suppose they would accept that their economic policy is unproductive or inefficient. They would no doubt argue that their system brings greater economic efficiency AND 'social justice' or whatever they call it. They too started off wanting to keep people from hunger no doubt.

what is your point? marxism was NEVER about economic efficiency, because according to them capitalism is inherently inefficient. of course they believed that their communist society would be more economically efficient, but that's a side-benefit to the overall goal of freeing humanity from exploitation by capitalists and the governments they buy to do their bidding.

the irony is that austerians/libertarians have a VERY similar viewpoint of the world, complete with big financial capitalists and the governments doing the exploitation. hell, frederick hayek advocated a guaranteed minimum income once the world was unified under a single government and economy.

must be a mitteleuropa thing.

The US Republicans I think are more monetarists

LOL, no they're not.

they -used- to be. but not anymore.

Economic efficiency in my view is pretty simple. If a business goes broke let it go. If a business cannot raise the capital to get started by itself or a person can't get a mortgage by themselves the Government should NOT promise taxpayers money to support the project. Just imagine for example what would happen if Governments stopped 'guaranteeing' bank deposits altogether...

i know it's pretty simple. this is the basis of neo-classical economics, the grand-daddy of all economic studies and most commonly studied in econ 101.

however, the logical endpoint of neo-classical economics is that depressions and recessions are a GOOD thing, and should not be interfered with as interference distorts the economy.

the entire development of 20th century economics past 1930 was a refutation of this statement, until the rise of the Austrian school.

I am obliged to you and David/DOR for explaining you views and pointing out weaknesses in mine. cyppok I think is more on my side.

i'd be interested to know if your views have evolved any.

[cyppok]

snapper,

the facts of the matter are that the USG has shrunk, both as a percentage of GDP and employee-wise. the expansion of USG spending now is not upon itself but on entitlement programs established roughly 80 and 50 years ago as US demographics change.

as a centrist i actually would like to see a somewhat bigger government (vice more entitlement spending) at this point in time, as i'd rather the government be more than an insurance company with an army.

(i call bullsht on your statement)

Federal employment drops after years of explosive growth

The decline is tiny: Just 9,900 fewer workers in May compared with a year earlier, excluding postal and temporary Census workers, reports the Bureau of Labor Statistics. That's a fraction of the 2.2 million civilian federal workforce.

Nevertheless, the reversal marks the end of a period of enormous employment growth that spanned the end of George W. Bush's presidency and the start of President Obama's term.

Federal employment grew 13% — 250,000 jobs — from the recession's start in December 2007 to a peak last September. During that time, private employment fell 5% and state and local governments cut staffs by 2%.
[ATTACH]32831[/ATTACH]

notice after years of explosive growth the decline is laughable about 10,000 while the private sector bleeds tens of millions of jobs. The proportionality is absurd. Granted they may have fired more people into this year it is still at record levels.

What facts you just pontificate your standing out of thin air, prove it. Show me those facts that say gov't went down. There are quiet a few new departments that weren't present like homeland insecurity, and other czars.



If you go to the bea.gov and look at annual rates of gov't expenditures they are climbing from 4 to 4.2-4.3+ from last year to this. If you go by the C+I+G+exim=Gdp then G is eating someone else's share. Cannibalism doesn't improve economic growth if we consider that the real multiplyer for gov't spending is below 1 (yes they published bullsht studies with 1.5+ but those were tempered down by subsequent studies facing reality)

[DOR]

After rising 2.3% per annum from the mid-1990s to the end of 2008, real government consumption expenditure fell by 0.6% p.a. in 2009-12. Federal was flat while State & Local was down 1.1%.
See [http://www.bea.gov/iTable/iTable.cfm...05=2013&906=Q]

Federal non-Postal employment fell 1.9% p.a. in 1996-2000, rose 1.2% p.a. over the next eight years and increased 0.9% p.a. in the next four.
See []Download Data - All Employees: Government: Federal, Except U.S. Postal Service (CES9091100001) - FRED - St. Louis Fed

= = = = =

cyppok,

If you go to the bea.gov and look at annual rates of gov't expenditures they are climbing from 4 to 4.2-4.3+ from last year to this. If you go by the C+I+G+exim=Gdp then G is eating someone else's share. Cannibalism doesn't improve economic growth if we consider that the real multiplyer for gov't spending is below 1 (yes they published bullsht studies with 1.5+ but those were tempered down by subsequent studies facing reality)

That only applies if he economy is close to, at or above the potential GDP growth rate. The US is not.

[cyppok]

Three things, you are selecting different time frames to make your point. Ergo I used a decade from 2002 to 2012 you on the other hand have 2009-2012, 96-2000, etc... To show the decline from the flatline. You simple took the article I posted about where the change stopped and went negative very marginally mind you and threw it back at me.

Second, apparently postal workers do not count even though they are still on government payroll.

Third, and most important those changes by the federal government have to be in relation to something. If the private payrolls contract by 5% and fed gov't grows by 2% that's a difference of 7%...

-------------------------------------------------------------------------------------------------------------
What you did was simply manipulate the data to give you the answer that supports your argument. It did not represent the reality of today. Private business is contracting while Gov't is flat to growing on the back of tax increases (or tax limit expiration whichever you want to call it).

I could by the same virtue as you have take one year or a set of years from different time frames... and show a 10% growth in gov't and say there you are wrong. But I don't have to the reality is what it is. Too many gov't workers, the end.

[DOR]

cyppok,

So, if you choose the time frame that’s backing your arguments up with facts, but if I do it’s manipulating the data, is that it? Sorry, not good enough.

Postal workers are specifically excluded from the data set I quoted (a) by the Fed data base; and (2) because it is an independent federal agency with very high levels of employment that is fundamentally different from other major employers. For example, it can sue / be sued; and it can adopt, amend and repeal its own regulations.

Finally, the numbers I posted were most definitely “in relation to something.” Please note the different time frames offered for the same data, both pre-crisis and since the crisis began. Or, pre-Obama and during the Obama Administration, if you will.

Any analysis that ignores the worst economic slump in many, many decades is biased.

[cyppok]

cyppok,

So, if you choose the time frame that’s backing your arguments up with facts, but if I do it’s manipulating the data, is that it? Sorry, not good enough.

Postal workers are specifically excluded from the data set I quoted (a) by the Fed data base; and (2) because it is an independent federal agency with very high levels of employment that is fundamentally different from other major employers. For example, it can sue / be sued; and it can adopt, amend and repeal its own regulations.

Finally, the numbers I posted were most definitely “in relation to something.” Please note the different time frames offered for the same data, both pre-crisis and since the crisis began. Or, pre-Obama and during the Obama Administration, if you will.

Any analysis that ignores the worst economic slump in many, many decades is biased.

You are putting up two different time frames if you put up something longer and it encompassed date through the present it would be acceptable. If you made a case for 70s to TODAY it would be fine. You picked 4 year time frame 10+ years ago to compare to the data that is more recent. 96-2000 is not comparable to 2002 to 2012 if you went 96 through 2012 that would be fine. But apparently you think it doesn't matter when change happens they are just numbers right. (sarcasm*towards the end there*)

We are talking about budgets and government workers in relation to the economy as a whole. You made no mention if the private sector grew or contracted during that time. If we simply look at amount of workforce levels the amount of people participating has fell continuously. Ipso facto (just like the usa today article) government workers as a % of the overall workforce is actually larger since the participation rate fell.

We actually are at 63.3 according if you believe the BLS (bureau of lies and scams)

Postal workers count, so do the workers in Fannie and Freddie [they stopped being public when we backed their bond and they went into gov't administration.] because they all work for the government. Directly or indirectly we fund them. USPS is consuming tens of billions of taxpayer money it counts.

Labor force participation shrank that's a fact, government workforce grew over the same 10 year period.

P.S.
if the government grew by 20% over 10 years and the rest of the economy employment wise mind you shrank by 10% how much did the government grow in relation to the rest of the economy?
I ll make it simpler for you if the gov't grew 2% a year while the rest of private sector contracted by -1% a year how much did it grow in relation to the private sector? (3%)