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lockmat

The fiscal cliff - world economic collapse

  

19 members have voted

  1. 1. What will happen to the US economy in th near term?

    • Nothing, the economy is looking up
      12
    • Equal to our last recession
      2
    • Worse than our last recession
      4
    • Total collapse
      1


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I heard a presentation from a geopolitical analyst that the threat of an economic collapse is likely to happen and that the US is actually in worse shape than Europe but we are at an advantage because our dollar is a reserve currency and people still believe we can still pay our debts.

He believes the Euro probably will crash. Since they are our biggest trading partner we will almost certainly go under as well.

Our debt is accumulating currently at 4 billion dollars a day.

Well respected economists have been writing about creating a world wide currency to create more stability.

He believes the standard of living we have come to enjoy in the US will no longer exist.

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This is a few months old. Coincidence?

http://www.reuters.com/article/2012/08/10/us-banks-recoveryplans-idUSBRE87905N20120810

(Reuters) - U.S. regulators directed five of the country's biggest banks, including Bank of America Corp and Goldman Sachs Group Inc, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help.

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I am curious what you believe the "fiscal cliff" to be, and what you believe will happen. Most of the doom and gloom predictions that I have heard from non-experts have actually predicted the opposite of what the "fiscal cliff" will cause. Before I weigh in, I'd like to know what you believe will happen, and why.

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I heard a presentation from a geopolitical analyst that the threat of an economic collapse is likely to happen and that the US is actually in worse shape than Europe but we are at an advantage because our dollar is a reserve currency and people still believe we can still pay our debts.

He believes the Euro probably will crash. Since they are our biggest trading partner we will almost certainly go under as well.

Our debt is accumulating currently at 4 billion dollars a day.

Well respected economists have been writing about creating a world wide currency to create more stability.

He believes the standard of living we have come to enjoy in the US will no longer exist.

Was this a reputable economist, or just someone doom-mongering for fun and profit? Governmental debt is something that can be handled in a reasonable way over time. There's no call to panic over it. What the experience of Europe has shown is that trying to drastically reduce debt while the economy is still weak just leads to another recession.

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Was this a reputable economist, or just someone doom-mongering for fun and profit? Governmental debt is something that can be handled in a reasonable way over time. There's no call to panic over it. What the experience of Europe has shown is that trying to drastically reduce debt while the economy is still weak just leads to another recession.

This is correct, and the reason I asked for his opinion first. The biggest threat to the economy is not reinstating the Clinton tax rates. It is the massive reduction in government spending. Spending of any kind spurs the economy. While we prefer it to be private sector spending, government spending also moves the economy.

The "fiscal cliff" doomsayers tend to be those who WANTED the massive reductions in spending in the first place. They demanded austerity, but now that austerity is almost here, they claim that it will be catastrophic...and worse, try to blame it on others. Your statement that debt is accumulating at $4 Billion per day leads me to believe that you believe debt is a problem. The debt reduction plan set to take effect in January is projected to cut the debt in half. If that is your goal, then you should be applauding the "fiscal cliff". If the threat to the economy is the major concern, I wonder why Republicans demanded this "fiscal cliff" in the first place (Remember that the "fiscal cliff" is simply a delay of the cliff that was going to occur last year before they raised the debt ceiling).

We cannot have it both ways. Either we believe the deficit is a bigger problem, or we believe the economy is a bigger problem. Remember that those predicting doom over the fiscal cliff are the same people who demanded we slash spending last year. The fiscal cliff IS the slashed spending that was demanded.

So, which side are you on?

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I honestly do hope we go over the fiscal cliff. It might be the only way to actually get some spending cuts on defense. It might lead to a minor recession, but I think the economy can recover quickly.

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I am curious what you believe the "fiscal cliff" to be, and what you believe will happen. Most of the doom and gloom predictions that I have heard from non-experts have actually predicted the opposite of what the "fiscal cliff" will cause. Before I weigh in, I'd like to know what you believe will happen, and why.

To be honest, I'm not real sure. But his presentation was 95% facts, 5% "prediction." He seemed convincing to me. When I have time, I'll list out some of the facts he laid out.

To be honest, I'm not real sure. But his presentation was 95% facts, 5% "prediction." He seemed convincing to me. When I have time, I'll list out some of the facts he laid out.

Was this a reputable economist, or just someone doom-mongering for fun and profit? Governmental debt is something that can be handled in a reasonable way over time. There's no call to panic over it. What the experience of Europe has shown is that trying to drastically reduce debt while the economy is still weak just leads to another recession.

He has been a geopolitical analyst specializing in Europe for over 20 years and he's been adviser to government officials.'

One of the things I remember off the top of my head that he said is that it could be very likely that Spain goes under. Their unemployment as reported by the govt., is 25% (and actually likely close to 35%), and that they are one of the biggest economies in the EU. He said there isn't enough money in circulation to bail them out. I don't remember if he said if Spain goes down, the EU does, too. But if the EU does, so will we because they are our biggest trading partner. Also being discussed is that Germany pulls out of the EU, which would be a huge blow.

He said the US govt is printing 40 billion dollars a month on an open ended basis. Of course, the more we print, the less the dollar is worth.

The US is accumulating 4 billion dollars of debt a day.

European Central bank is having to buy Spanish bonds.

Foreign countries no longer want to buy our debt. China is actually selling our debt now, at a rate of 7 billion dollars per month.

He said serious, respectable economists are writing about how we would grapple with the what would happen if there is a collapse of the euro or dollar.

Edited by lockmat

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Spending of any kind spurs the economy. While we prefer it to be private sector spending, government spending also moves the economy.

He mentions that each US and European leader are continuing to "kick the can down the road" concerning their debts. He calls it all a ponzi scheme, in which will one day collapse.

I'm not claiming anything will happen. I'm just looking for a discussion. I would not even consider myself an armchair economist. I'm just repeating something someone who seems to be very respectable said. Things he said were factual, not just pure speculation. Which doesn't mean a collapse is eminent, but things are not looking good. We can't just look at the US with this being a global economy.

Edited by lockmat

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I honestly do hope we go over the fiscal cliff. It might be the only way to actually get some spending cuts on defense. It might lead to a minor recession, but I think the economy can recover quickly.

One thing he talked about also was Obama's desire for no nukes to exist, which is simply fairy tale. Our nukes are used as intimidation, in which they don't necessarily need to be used. But once you get, I think he said, 1,500, other countries begin to think they can actually win a nuclear war.

Do these defense reductions some want include a reduction in nukes? What exactly in the military would be reduced?

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I think it would be a lot easier to drop the budget that the department of defense has if it were renamed back to what it was a century ago: the department of war.

Likewise, the secretary of defense would be renamed secretary of war.

It's a lot easier for politicians to justify a bloated defense budget (cause it's for defense, not war!) than it would be to justify a war budget.

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One thing he talked about also was Obama's desire for no nukes to exist, which is simply fairy tale. Our nukes are used as intimidation, in which they don't necessarily need to be used. But once you get, I think he said, 1,500, other countries begin to think they can actually win a nuclear war.

Do these defense reductions some want include a reduction in nukes? What exactly in the military would be reduced?

Take a look at this list:

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

some notable notes:

There's just over 1000 total F16s.

Just under 350 A10s.

Over 700 Apache attack helicopters.

There's currently just under 1400 black hawk helicopters, plans to include over 1000 more.

Who knows how many F35s they want to put into service (these guys were supposed to be cheap replacements for the f16 and f18, but due to cost overruns they are anything but).

The navy should go on a diet as well, here's another list:

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

10 aircraft carriers (3 more on the way), over 50 attack submarines (30 more on the way), 14 ballistic missile submarines, over 340 ships in total.

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

over 6000 M1 tanks

over 250,000 hummers

over 80,000 medium tactical vehicles (whatever those are)

That's where I'd start, and yeah, dumping some of those nukes also, 1500 is enough to make the planet a parking lot a few times over. How about we just lie about the number of nukes, and just get rid of some of them? Hell, according to the Geneva convention, they should be outlawed anyway... http://legal-dictionary.thefreedictionary.com/Nuclear+Weapons

They require distinguishing between civilians and soldiers, and prohibit indiscriminate methods of attack that are not directed at a specific military target. The conventions also prohibit weapons that cause unnecessary injury and those that cause long-term and severe environmental damage. Specific types of weapons are not mentioned.

But hey, we're above those rules, cause we're righteous.

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One thing he talked about also was Obama's desire for no nukes to exist, which is simply fairy tale.

What is his source for this "fact"? I think the "fact" itself is a fairy tale. Obama has been a loyal soldier for the military-industrial complex.

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One thing he talked about also was Obama's desire for no nukes to exist, which is simply fairy tale. Our nukes are used as intimidation, in which they don't necessarily need to be used. But once you get, I think he said, 1,500, other countries begin to think they can actually win a nuclear war.

Do these defense reductions some want include a reduction in nukes? What exactly in the military would be reduced?

I thought he was an economist? Now, he is a defense expert? And, when do we get a name or a link or something other than a few "facts" without attribution? (most of those are not facts, but opinions, by the way.)

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This "fiscal cliff" talk and scare tactic is just is just another trick for politicians (on both sides) to fleece us. They make it sound so complicated and/or scary so that they have to "compromise" to save us (aka stuff their pockets with our money by buying each other out).

Edited by JJVilla
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This "fiscal cliff" talk and scare tactic is just is just another trick for politicians (on both sides) to fleece us. They make it sound so complicated and/or scary so that they have to "compromise" to save us (aka stuff their pockets with our money by buying each other out).

Okay, so are you saying they are writing checks to each other, or handing each other sacks of money? I don't get what you are implying.

If you are saying they are compromising so that they can secure money for NASA, the I-69 improvments, or say the IKE Dike, then they are doing what they are supposed to be doing.

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Take a look at this list:

http://en.wikipedia....litary_aircraft

some notable notes:

There's just over 1000 total F16s.

Just under 350 A10s.

Over 700 Apache attack helicopters.

There's currently just under 1400 black hawk helicopters, plans to include over 1000 more.

Who knows how many F35s they want to put into service (these guys were supposed to be cheap replacements for the f16 and f18, but due to cost overruns they are anything but).

The navy should go on a diet as well, here's another list:

http://en.wikipedia....tary_watercraft

10 aircraft carriers (3 more on the way), over 50 attack submarines (30 more on the way), 14 ballistic missile submarines, over 340 ships in total.

http://en.wikipedia....y_land_vehicles

over 6000 M1 tanks

over 250,000 hummers

over 80,000 medium tactical vehicles (whatever those are)

The medium tactical vehicles are more commonly called trucks.

The Navy was around 600 ships in the Reagan era, so it isn't really that big now. The 3 carriers under construction will replace existing carriers when they go into service. The Navy is the main means of national defense and force projection when it's needed in a hurry, and probably needs to stay the same size as at present.

I would drop the F35/F22 programs and build more F16's and F15's for the USAF, plus some more A-10's, but would transfer the A-10's to the Army, sinc eht eAF has little interest in close air support.

To save money on defense, leave Afghanistan and Iraq, neither of them is a threat to the US.

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To be honest, I'm not real sure. But his presentation was 95% facts, 5% "prediction." He seemed convincing to me. When I have time, I'll list out some of the facts he laid out.

He has been a geopolitical analyst specializing in Europe for over 20 years and he's been adviser to government officials.'

One of the things I remember off the top of my head that he said is that it could be very likely that Spain goes under. Their unemployment as reported by the govt., is 25% (and actually likely close to 35%), and that they are one of the biggest economies in the EU. He said there isn't enough money in circulation to bail them out. I don't remember if he said if Spain goes down, the EU does, too. But if the EU does, so will we because they are our biggest trading partner. Also being discussed is that Germany pulls out of the EU, which would be a huge blow.

He said the US govt is printing 40 billion dollars a month on an open ended basis. Of course, the more we print, the less the dollar is worth.

The US is accumulating 4 billion dollars of debt a day.

European Central bank is having to buy Spanish bonds.

Foreign countries no longer want to buy our debt. China is actually selling our debt now, at a rate of 7 billion dollars per month.

He said serious, respectable economists are writing about how we would grapple with the what would happen if there is a collapse of the euro or dollar.

What is it that constitutes an "economic collapse"? Does he mean a situation like Greece finds itself in today, or a repeat of 2008? Somehow I find it hard to envision a crisis as dire as 2008 recurring after less than five years.

What does he mean by the US printing $40b a day? I assume he means government bond issuance. I don't know any numbers, but isn't most t-bond issuance just rolling over existing debt? It's not necessarily the case that the more they "print" the less the dollar is worth. In the event, there is a strong argument that a weak dollar would be a good thing, by spurring American manufacturing and encouraging fewer imports. To repeat, while US debt levels are probably unsustainable in the long run, in the short run higher debt has been necessary to get the economy moving again after the crisis. Until unemployment drops more the central bank isn't going to be tightening. That's why recovery in the US has been stronger than in the UK and eurozone.

It's misleading to say that foreign countries no longer want to buy out debt. In the case of China, they are running a smaller external surplus (some would say significantly smaller) so they require fewer dollar-denominated assets to balance the books. In other words, their trade surplus narrowed so they have fewer excess dollars sitting around. I don't see this as particularly negative; quite the opposite. This is how capital flows normalize over time. Besides, even if demand falls bond yields are at record lows and have been so for a while now. Despite four years of doom-saying, yields have yet to increase. Such is economics in the liquidity trap.

Saying that if Spain goes down, so does the EU, and so does the US, is pure hyperbole. First of all, I don't know what Spain "going down" means. Bailout or not, the country isn't going away. And while I suppose it is conceivable that the EU would disband itself like the old Soviet Union, it doesn't seem terribly likely at the moment (except for the UK). And even if the EU were to suddenly up and disband, their being the US's biggest trading partner doesn't imply that the US would in turn "go down". The US did just fine long before there was an EU. Finally, I don't think many people put credence in the idea of Germany pulling out of the EU. Germany and France have historically been the drivers of the union. Germany in particular is considered to be the primary beneficiary of the partial monetary union. All that said, while I don't think the EU is going anywhere, the euro currency is certainly at risk of losing members. Still, that doesn't mean worldwide economic disaster.

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EU is USAs largest trading partner http://ec.europa.eu/.../united-states/

4 billion in debt per day http://www.politifac...day-debt-obama/

Economists views

http://www.politifac...day-debt-obama/

President Obama's no nuke dream

http://www.huffingto...u_n_183219.html

Spain unemployment rate

http://www.tradingec...employment-rate

Spain 9th largest economy. More than four times size of Greece

https://www.cia.gov/...ok/geos/sp.html

http://www.thedailyb...sh-bailout.html

US printing 40 billion per month

http://www.bloomberg...each-month.html

I note that you continue to refuse to give your opinion on this "fiscal cliff". Is it because you are not quite sure what the "fiscal cliff" is? Your links certainly suggest that you do not. For example...

EU is USA's largest trading partner: It certainly is. It also has nothing to do with the "fiscal cliff".

$4 Billion debt per day: Yes, you linked an article that said the US issued $4 Billion in debt per day over Obama's entire first term, including the depths of the recession in 2009. What you ignored is that the US no longer issues that much debt. The deficit for FY 2013 is projected to be $901 Billion, or 2.47 Billion per day. A reduction in debt of over 40% is good, isn't it?

No nuke dream: Speak given in Prague in 2009 to receptive audience. No relation to fiscal cliff.

Spain's unemployment rate: Unrelated to fiscal cliff.

Spain 9th largest economy: Ditto.

US printing $40 Billion per month: This is actually a complete misstatement of the article linked. The article states that the Federal Reserve...NOT the US government...is purchasing $40 Billion in home mortgages per month in an effort to boost growth, thereby lowering unemployment.

Economist's views: You linked the same PolitiFact article that applied to the $4 Bil per day argument. No economists are quoted.

In summary, you asked a question about the "fiscal cliff", yet not one article you linked deals with the "fiscal cliff". There is not even unanimous agreement that the "fiscal cliff" is even a cliff. I still would like to hear your opinion about what the cliff is, and whether you believe it to be bad, and why.

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You're right, I actually know close to zero about the fiscal cliff. When I heard the presentation, he was speaking about the US going under economically, which I thought was related to the fiscal cliff, which apperantly is not. The "fiscal cliff should be deleted from the topic name.

What I am talking about is if our economy will go under. Yes - a dooms day scenario.

I thought I had previously stated I was not sure is going to happen. But if push comes to shove, I tend to agree with the guy.

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Says it might not be accomplished during his lifetime. That makes it a worthless platitude.

We might not get to zero during his lifetime, but what if we get to a number lower than an enemy or enemies?

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We might not get to zero during his lifetime, but what if we get to a number lower than an enemy or enemies?

We won't, but even Reagan understood the need to reduce nuclear weapon stockpiles multilaterally.

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The medium tactical vehicles are more commonly called trucks.

The Navy was around 600 ships in the Reagan era, so it isn't really that big now. The 3 carriers under construction will replace existing carriers when they go into service. The Navy is the main means of national defense and force projection when it's needed in a hurry, and probably needs to stay the same size as at present.

I would drop the F35/F22 programs and build more F16's and F15's for the USAF, plus some more A-10's, but would transfer the A-10's to the Army, sinc eht eAF has little interest in close air support.

To save money on defense, leave Afghanistan and Iraq, neither of them is a threat to the US.

Reagan wanted to get to a 600 ship navy, but didn't reach it (but was close enough). That's neither here nor there, we could compare fleet size, or whatever historically until the cows come home, but at the end of the day, why does the US Navy (run by a department that calls itself defense) need 10 aircraft carriers to protect US citizens? Why does it need 14 ballistic missile submarines and over 50 attack submarines for defense?

All branches of our military are far too large, it's an industry that keeps Americans employed, so in that sense it's good, but wouldn't we be better served if at least some of that money were spent on infrastructure projects to improve our quality of life, rather than create a military machine that is far larger than it needs to be in order to defend, but we've all been trained by politicians that we need a military this large to 'protect our national interests abroad'. What about our national needs at home?

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The Navy is the main means of national defense and force projection when it's needed in a hurry, and probably needs to stay the same size as at present.

[...]

To save money on defense, leave Afghanistan and Iraq, neither of them is a threat to the US.

When you have a hammer, everything looks like a nail. That's why we ended up in places like Afghanistan and Iraq in the first place. Very few conflicts America engages in have anything to do with national security. We spend more on defense than the next ten countries combined, and nine of them are allies, and the other is a major a trading partner.

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Well, I'm just sitting back and stockpiling cash to take advantage of the panic selloff that is bound to happen.

Edit:

Darn phone.

Edited by ricco67

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We won't, but even Reagan understood the need to reduce nuclear weapon stockpiles multilaterally.

My knowledge of history is pathetic quite honestly, and I won't blame it on the school systems.

Also note, I am doing most of my reading on a 3g blackberry and ipad, of which is more difficult to accomplish things I want to than if I was on a laptop.

I did just read a letter from Reagan to a president of another country in which he stated he wanted a reduction in nuclear arms, however it was contingent on the Soviets reducing theirs as well.

I am wondering, would/is Pres Obama willing to reduce ours while others do not?

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This seems somewhat relevant to the discussion...

http://articles.washingtonpost.com/2012-09-15/world/35497119_1_nuclear-stockpile-nuclear-weapons-nuclear-facilities

There is no official price tag for the effort to upgrade and maintain the 5,113 warheads in the inventory

the important part of that quote is that there are over 5000 nuclear warheads in our current stockpile.

Replacing the aircraft, submarines and ground-launch systems that carry nuclear payloads will be the most expensive budget item. The nonpartisan Congressional Budget Office estimated it would cost up to $110 billion to build 12 replacements for the aging Ohio-class submarines first launched in the 1980s. The Minuteman III ballistic missiles are undergoing a $7 billion upgrade even as a new generation of intercontinental ballistic missiles is under consideration. Meanwhile, a nuclear-capable fleet of F-35 strike aircraft is being built to replace existing aircraft at a cost of $162 million an airplane.

Finally, there are the buildings and laboratories where the refurbishment of weapons and development of new technologies take place. Modernizing those facilities is expected to cost at least $88 billion over 10 years, according to the NNSA, which is part of the Department of Energy.

here's an interesting pdf from the DoD:

http://www.defense.gov/npr/docs/10-05-03_Fact_Sheet_US_Nuclear_Transparency__FINAL_w_Date.pdf

very interesting data there!

of course, according to Ploughshares, we've got about 8,000, Russia has 10,000. Everyone else has under 500 each. I don't really consider Ploughshares to be unbiased on their tracking methods though.

http://www.ploughshares.org/world-nuclear-stockpile-report

from looking at some other sources, that includes active and non-active warheads...

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My knowledge of history is pathetic quite honestly, and I won't blame it on the school systems.

Also note, I am doing most of my reading on a 3g blackberry and ipad, of which is more difficult to accomplish things I want to than if I was on a laptop.

I did just read a letter from Reagan to a president of another country in which he stated he wanted a reduction in nuclear arms, however it was contingent on the Soviets reducing theirs as well.

I am wondering, would/is Pres Obama willing to reduce ours while others do not?

I have now read and understand we've had a long time agreement to reduce them and per the Washington Post article posted by samagon, the need to update and repair the ones we have are great, or else they will be unable to use them.

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As it happens I was at a luncheon yesterday where the featured speaker was a Texas politician. He was making an identical argument to the one lockmat quoted in the original post. I mean chapter and verse, down to using identical phrasing such as Spain "going down". His argument too was "this just can't go on" without really explaining why. The whole speech was basically throwing together anecdotal economic stories to suggest impending doom.

If you ask me, this whole "fiscal cliff" thing is the biggest scam since "Y2K" (the end-of-millennium panic over nothing). The world is not going to end come January 1st. I suppose there will ever be a cottage industry of politicians and blowhards (if that's not redundant) with us, trying to stir up the populace for some reason or another. Their motto could be "this just can't go on!".

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There are two components to the "fiscal cliff". One is a return to the tax rates imposed during the Clinton years. The top rate, for incomes somewhere north of $200,000 rise to 39.6%, from 36%. The other component is budget cuts to several major programs, the biggest being the defense budget. There are a few things to note here. Republicans are demanding budget cuts...just not to defense. In fact, they want budget cuts LARGER than the ones in place now. They also oppose tax increases. No surprise there. Now, one must ask, if the fiscal cliff is going to cause Armageddon, why won't the Republican budget cuts also cause Armageddon? Answer: it might. or, it might not. Drastic spending cuts cause a slowdown in the economy, due to less money coming into the system. A strong economy can weather the cuts. A weak economy less so. Of course, another way to close a deficit gap is to raise revenue through taxes. Studies show that minor tax increases do not affect the economy. So, a combination of minor tax increases and budget cuts will close the gap quicker.

Republicans do not want to increase taxes, so the only option is to make the entire program scary. Frankly, they would rather have huge deficits than cuts to defense or tax increases. It simply shows where their priorities lie. While the fiscal cliff will be a bit of a shock to the system, it does not all kick in at once. Many of the cuts take place months or years from now. Tax increases are generally not due until April 2014.

Conclusion: Economic "experts" with a political agenda are probably not the best source for information on the effects of the fiscal cliff. Frankly, this will probably be good for our financial health, though a bit painful at times. Closing budget gaps is never easy. Something must be cut. Might as well be a bloated military budget.

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There are a few things to note here. Republicans are demanding budget cuts...just not to defense. In fact, they want budget cuts LARGER than the ones in place now. They also oppose tax increases.

Not exactly. They oppose tax rate increases, but Boehner's proposal decreases exemptions and deductions, raising taxes.

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<>

If you ask me, this whole "fiscal cliff" thing is the biggest scam since "Y2K" (the end-of-millennium panic over nothing). The world is not going to end come January 1st. I suppose there will ever be a cottage industry of politicians and blowhards (if that's not redundant) with us, trying to stir up the populace for some reason or another. Their motto could be "this just can't go on!".

This bold part explains mostly what I was trying to state in my previous post.

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I'd love to see us cut military spending. A good place to start would be to get the HELL out of Afghanistan right NOW. The surge didn't work. Only 1 of the 23 special service units we've tried to create there can operate on their own. ONE. In a decade long war. Additionally, the only thing the surge has done is to cause American deaths to increase.

This last election cycle was laughable in that neither major candidate even bothered to address the WAR. We're in a freaking war and NOBODY is talking about it. How about we stop this nonsense about nation building in Afghanistan and get the hell out of hell? We could save HUNDREDS OF BILLIONS OF DOLLARS and do a little nation building here.

Best way to push our economy over the hump would be a bigger, better stimulus. Build infrastructure. Hire teachers. Expand Americorps. Train and hire new air traffic controllers. Modernize airports.

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Oh yeah. Let's make the same mistake the Russians made when they left Afghanistan after the war they started.

Nothing went wrong then.

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This last election cycle was laughable in that neither major candidate even bothered to address the WAR. We're in a freaking war and NOBODY is talking about it. How about we stop this nonsense about nation building in Afghanistan and get the hell out of hell? We could save HUNDREDS OF BILLIONS OF DOLLARS and do a little nation building here.

this and the climate were two subjects that were not discussed by either candidate.

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Oh yeah. Let's make the same mistake the Russians made when they left Afghanistan after the war they started.

Nothing went wrong then.

Have a better idea?

The truth is, we should have learned from the Soviets mistake and never entered into the war. Hundreds of years of history was pretty clear; you're not going to be able to nation build in Afghanistan.

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When the Soviet Union left the nation the left a government in tatters with no such a control.. This resulted in a 10 year revolution or struggle for control in the region which allowed the Taliban to take control. It was at this point where the people are willing to accept any government at all.

If we were to leave now with no functioning government then we would just be back in 10 or 29 yrs.

Whether or not it was worth to invade the country begin with is pointless. We can always like at what we SHOULD have done with armchair quarter backing, but unless you're there making decisions, you can't really say what you would have done, captain hindsight.

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Whether or not it was worth to invade the country begin with is pointless. We can always like at what we SHOULD have done with armchair quarter backing, but unless you're there making decisions, you can't really say what you would have done, captain hindsight.

Irony. You armchair QB the Soviets, then accuse others of armchair QBing the US. The US had the hindsight of watching the 10 year failed occupation of Afghanistan by the USSR. We knew what we were getting into, yet did it anyway. Afghanistan will be a lawless cesspool no matter how long we stay. It is time we admit failure and leave.

If it makes us feel better, we could admit success and leave instead.

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He said the US govt is printing 40 billion dollars a month on an open ended basis. Of course, the more we print, the less the dollar is worth.

The US is accumulating 4 billion dollars of debt a day.

European Central bank is having to buy Spanish bonds.

Foreign countries no longer want to buy our debt. China is actually selling our debt now, at a rate of 7 billion dollars per month.

He said serious, respectable economists are writing about how we would grapple with the what would happen if there is a collapse of the euro or dollar.

 

Just stumbled on a great blog post that addresses the printing money issue.

 

 

 

1) The government “prints money”.  

The government really doesn’t “print money” in any meaningful sense.  Most of the money in our monetary system exists because banks created it through the loan creation process.  The only money the government really creates is due to the process of notes and coin creation.  These forms of money, however, exist to facilitate the use of bank accounts.  That is, they’re not issued directly to consumers, but rather are distributed through the banking system as bank customers need these forms of money.  The entire concept of the government “printing money” is generally a misportrayal  by the mainstream media.

4)  The national debt is a burden that will ruin our children’s futures.  

The national debt is often portrayed as something that must be “paid back”.  As if we are all born with a bill attached to our feet that we have to pay back to the government over the course of our lives.  Of course, that’s not true at all.  In fact, the national debt has been expanding since the dawn of the USA and has grown as the needs of US citizens have expanded over time.  There’s really no such thing as “paying back” the national debt unless you think the government should be entirely eliminated (which I think most of us would agree is a pretty unrealistic view of the world).

5)  QE is inflationary “money printing” and/or “debt monetization”.  

Quantitative Easing (QE) is a form of monetary policy that involves the Fed expanding its balance sheet in order to alter the composition of the private sector’s balance sheet.  This means the Fed is creating new money and buying private sector assets like MBS or T-bonds.  When the Fed buys these assets it is technically “printing” new money, but it is also effectively “unprinting” the T-bond or MBS from the private sector.  When people call QE “money printing” they imply that there is magically more money in the private sector which will chase more goods which will lead to higher inflation.  But since QE doesn’t change the private sector’s net worth (because it’s a simple swap) the operation is actually a lot more like changing a savings account into a checking account.  This isn’t “money printing” in the sense that some imply.

6)  Hyperinflation is caused by “money printing”.  

Hyperinflation has been a big concern in recent years following QE and the sizable budget deficits in the USA.  Many have tended to compare the USA to countries like Weimar or Zimbabwe to express their concerns.  But if one actually studies historical hyperinflations you find that the causes of hyperinflations tend to be very specific events.  Generally:

  • Collapse in production.
  • Rampant government corruption.
  • Loss of a war.
  • Regime change or regime collapse.
  • Ceding of monetary sovereignty generally via a pegged currency or foreign denominated debt.

The hyperinflation in the USA never came because none of these things actually happened.  Comparing the USA to Zimbabwe or Weimar was always an apples to oranges comparison.

 

 

http://pragcap.com/the-biggest-myths-in-economics

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