When will we hear the end of "fiscal cliff?"

[piece-itpete]

Obama's 'proposal' was a joke. Tax increases only.

It's what I've come to expect from the party of the status quo

ANY cut can be bad, so I'd expect much wailing.

Pete

[Boreas]

Originally Posted by piece-itpete

Obama's 'proposal' was a joke. Tax increases only.

It's what I've come to expect from the party of the status quo

ANY cut can be bad, so I'd expect much wailing.

Pete

And the Republican plan has no tax increases. These starting points, Pete. We'll see where we end up after negotiations.

Austerity has never worked anywhere in crises like this. Austerity measures always cause the economy to contract and result in a worsening debt crisis when measured against GDP, the only measure that counts. Look at these graphs below.



At the end of WWII we had a debt that was 122% of GDP. We solved the problem by growth, not by austerity. You'll see in the graphs that the size of the debt didn't change all that much between 1945 and 1980 but, expressed as a percent of GDP, it plummeted, especially durinng the Truman and Eisenhower administrations but also under Kennedy, Johnson, Nixon, Ford and Carter.

And then we got Reagan.

We will NOT cut our way out of this mess. Try that ans we WILL become "Greece".

John

[piece-itpete]

England and Germany have used austerity as well. Eventually you run out of money.

Do those charts include 'inter government' debt?

And where does this growth come from? Increasing taxes?

Pete

[ebacon]

Originally Posted by piece-itpete

England and Germany have used austerity as well. Eventually you run out of money.

Do those charts include 'inter government' debt?

And where does this growth come from? Increasing taxes?

Pete

Growth comes from immigration.

[Boreas]

Originally Posted by piece-itpete

England and Germany have used austerity as well. Eventually you run out of money.

England, under Cameron, is trying austerity now and it's not working. I don't think Germany has tried it since the 1920s and we know how well that turned out.

Do those charts include 'inter government' debt?

I think intergovernmental debt is contained within the gross debt.

And where does this growth come from? Increasing taxes?

Yes, increased revenue through the growth that governmental investments create. The GI Bill, an investment in the earning potential of individual Americans, paid back its investment many times over in both economic stimulus and revenue. Hell, Pete, even unemployment compensation is an investment. Every dollar that the government pays out in unemployment creates, depending on the source, anywhere from about $1.10 to $1.60 to the economy. (I think $1.25 is the generally accepted figure.)

The Republicans are obfuscating the issue through their messaging. They refer to everything as "spending" when they should be calling it an investment. Our wars are spending. There is no financial return on ant of it. On the other hand, investing in social programs and infrastructure, like the TVA and the Interstate Highway System increase the prosperity of the nation as a whole and, more importantly, the prosperity of "We the People".

John

[piece-itpete]

To be short, if we get back $1.25 for every $1 spent on unemployment, why don't we send it out to everyone?

Pete

[d-ray657]

Originally Posted by piece-itpete

To be short, if we get back $1.25 for every $1 spent on unemployment, why don't we send it out to everyone?

Pete

Because not everyone would spend it. The great majority of folks on unemployment depend on it to purchase necessities.

Regards,

D-Ray

[ebacon]

Originally Posted by piece-itpete

To be short, if we get back $1.25 for every $1 spent on unemployment, why don't we send it out to everyone?

Pete

We sort of do that for lower income people that have jobs. See refundable tax credits, particlularly the Earned Income Credit (EIC).

[piece-itpete]

I'd love to see exactly how we make 20% on unemployment checks.

Pete

[Boreas]

Originally Posted by piece-itpete

I'd love to see exactly how we make 20% on unemployment checks.

Pete

Okay, go ahead.

I think you can find what you want by researching the "multiplier effect". The idea, basically, is that a dollar spent generates activity throughout the economy.

John