Editor: Thomas A. Smith
Saturday, October 27, 2012
By Tom Smith
All this ad really needs is the national debt clock counting up across the center of the screen and for each kid to slowly fade from view, since they will never born with how the debt is piling up on their potential/questionable futures.
Generational theft is real and the consequences will be felt by those who come after us.
Blame Obama, and mom and dad if the vote for him a second time.
Posted by: Paul Frawley | Oct 27, 2012 6:21:57 PM
Dear Paul (if I may),
I seem to recall that Clinton started to pay down the debt, then Wall Street freaked out that they wouldn't have enough bonds to sell and benchmark against.
After Clinton Bush came in and spent the surplus and more. There was deregulation, leading to a financial bubble. The deficit growth was in a growth period, not a recession, making both the bubble and the deficit a bigger problem.
Obama comes in, the economy is tanking, he does some half-hearted Keynesian stimulus, and it half works -- stopping the rot, but not curing the whole economy. And you are blaming Obama for the deficit? When austerity is killing Europe? When even the IMF is admitting that austerity was an error (see http://seekingalpha.com/article/935291-the-imf-and-the-fiscal-multiplier), and that the multiplier for government spending in a financial recession is much bigger then they had thought?
There are none so blind...
Posted by: Keynesian | Oct 27, 2012 8:19:14 PM
The 1990s surplus meant govt was diverting capital from high-ROR private investment and using it to pay down low-interest debt. That's a dumb trade, never mind the surplus was accidental and not the consequence of any oracular financial insight on the part of Clinton and Rubin. You can be sure there would have been no surplus if Clinton had gotten the tax rate increases he wanted and hadn't gone along with the Republicans' cap-gains rate cuts.
The debt's a problem now because our current genius in chief and a Democratic Congress did their best to suppress capital investment that might enable us to grow our way out of it, and borrowed heavily for worthless politically motivated boondoggles that will have negative rates of return. But don't you dare blame him for anything, he is rescuing us from President Hoover's destructive policies that benefited only rich white guys.
Posted by: Jonathan | Oct 28, 2012 10:00:47 AM
The Rubin et al decision to reduce the debt was anything but accidental, and quite controversial at the time.
Today, however, government debt now is almost zero-interest, sometimes actually negative interest in real terms, yet you and yours fulminate against it. Hypocrisy much?
And yes, the austerity program that is trashing Europe and is the GOP program (note I don't say "Romney" since it is impossible to tell what his program might be this week) is very much like Hoover's and fails for much the same reasons. See "liquidity trap" in a basic macro textbook near you.
We would be in much better economic shape and employment shape if government sector employment (state + federal) had at least remained stable instead of shrinking so much.
Posted by: Keynesian | Oct 28, 2012 1:05:19 PM
"half-hearted Keynesian stimulus, and it half works", that is the funny thing about Keynesian economic history no stimulus is ever big enough and it didn't even half succeed by Obama's own measure, so what are you talking about? The economy stabilized because that is how a correction works, the economy stops going down after the market "people" thinks it has hit bottom.
Government stimulus has worked where? Europe? That is the problem, if the government multiplier actually worked in reality, instead of just in theoretical models, Greece would not be in the shape it is in today, with little or no liquidity and its people in the street demanding more of the same.
Anyways Keynesian, fraud has always been illegal, and the mortgage crisis was basically fraud, the selling of mortgage backed securities as if they are the same thing as an AAA investment, is fraudulent. More regulation (i.e more government) is not the answer here since the process (loaning money to people who can not afford it) has be going on since Carter years and we have the same people (regulators) in power now, as we did in the beginning of this crisis; and did any of them lose their job? No. So what do we "the people" need? More government or more accountability? IMHO accountability. The question is how do we get there?
Posted by: Paul | Oct 28, 2012 2:59:06 PM
This blog is an Amazon affiliate. Help support The Right Coast by making purchases through Amazon links on this site at no cost to you.
PageViewsSince Septermber 1, 2005