Originally Posted by wtrg8

I would rather know so I can vote out every politician who spends more than what is put back in. We have made available through the Federal Reserve, the bank loan program to Europe.

See website below, it can explain it better than I;

http://www.bloomberg.com/apps/news?p...d=amiI5qIW8gDI

Its scary as hell!!

The role of the Fed and the US Treasury are rather different. If you aren't happy with the Fed's activities, what changes in fiscal policy could make it better? We still have a liquidity problem, and that's about all the Fed is focusing on at the moment. They don't have the tools to do what really needs to be done, mainly big-bank dismemberment.

I can't see how changing our spending habits, or issuing fewer or more US Treasury bonds does anything to help. Raising taxes mights sense for other reasons, but it's not going to have any impact in bank-world.

Originally Posted by Copperfield

Actually the UK is in even worse shape:

http://www.guardian.co.uk/business/2...se-than-greece

Additionally the uncertainty saw England elect a Parliment that will probably be unable to work together enough to make the hard choices that need to be made.

The European banking system is about to collapse and thanks to the genius of globalization this will likely swing back around to hit us. Get ready for recession part II folks.

It will get even better once China's bubble bursts.

And during the next 1T and into the next 2T, many people will be distrustful of globalization. The next round of globalization may have to wait for the 3T, when the Millies are dying off.

Originally Posted by Marx & Lennon

The role of the Fed and the US Treasury are rather different. If you aren't happy with the Fed's activities, what changes in fiscal policy could make it better? We still have a liquidity problem, and that's about all the Fed is focusing on at the moment. They don't have the tools to do what really needs to be done, mainly big-bank dismemberment.

I can't see how changing our spending habits, or issuing fewer or more US Treasury bonds does anything to help. Raising taxes mights sense for other reasons, but it's not going to have any impact in bank-world.

Well, the Unholy alliance has voted 96-0 to audit the Federal Reserve. This should get interesting now and a very good thing to happen for this country.

Edit: we are on the hook for $54 Billion dollars if EU does tap into IMF loan fund.

http://www.cnbc.com/id/37084075

Originally Posted by wtrg8

Well, the Unholy alliance has voted 96-0 to audit the Federal Reserve. This should get interesting now and a very good thing to happen for this country...

This is a perfect example of legerdemain. While the focus is on the Fed, every politician in town can perform a little of that famous blame-shifting they all seem so adept at using on one another. Putting a little somewhere other than Congress has to feel good ... to them, anyway.

No wonder they voted 96-0.

The Economist May 8th, 2010

Greeks greet another government austerity plan, and an IMF/EU rescue package, with riots and violence

"...Even those who accept that Greece's problems are largely self-made are depressed by an austerity plan that seems to offer so little hope for the medium term, and will punish many hard-working and modestly paid ordinary Greeks.

"And there is a hotheaded minority, at least, that does not believe the government when it says it had no choice. Miki Theodorakis, Greece's most famous composer, expressed the visceral reaction of many when he said the crisis was probably a plot by dark forces in America and other capitalist centres to subdue proud, independent nations. Crazy as such talk may sound to euro-zone governments that believe they have strained every muscle to save Greece from collapse, it will convince some people in a country where conspiracy theories (and, indeed, conspiracies) have a long history.

"Greek politics still includes a Communist Party that is rigorously Stalinist (it damns Khrushchev as a liberal backslider) and commands some 8% of the vote. There is an emerging party of religious-nationalist far-rightists under the acronymn LAOS (the Greek world for people), which has tried to gain respectability by accepting the need for tough measures, but still stands to gain from the ferment. So do groups of malcontents even further removed from the political mainstream.

"The unprecedented prosperity enjoyed by most Greeks during the past decade helped to disguise some sentiments that were never far below the surface: ultra-leftism (including the violent sort which spills over into terrorism), ultra-nationalism and xenophobia. Such feelings may now be unleashed...."

The Economist, May 8th 2010

"...Greek governments have...spent years buying social peace and votes with public spending, generous pensions, tax breaks, EU money and jobs for life, directed to an array of rent-seeking interest groups. This sort of social contract, lubricated by endemic corruption and lax law-enforcement....

"...has proved to itself unsustainable. So Greece's euro-zone partners...are being asked to lend huge sums in the name of EU solidarity and peace on the streets of Athens...."

Originally Posted by TimWalker

The Economist, May 8th 2010

"...Greek governments have...spent years buying social peace and votes with public spending, generous pensions, tax breaks, EU money and jobs for life, directed to an array of rent-seeking interest groups. This sort of social contract, lubricated by endemic corruption and lax law-enforcement....

"...has proved to itself unsustainable. So Greece's euro-zone partners...are being asked to lend huge sums in the name of EU solidarity and peace on the streets of Athens...."

Another version of that story: http://www.fourthturning.com/forum/s...092#post304092

Originally Posted by Marx & Lennon

The mistake made by Greece that has made their economy untenable was the decision to lash themselves to a currency not under their control. The mistake made by Greece that has made their economy untenable was the decision to lash themselves to a currency not under their control...

-Right... Greece's social welfare (i.e. Taxpayer Funded Charity) policies wouldn't have been a problem without the Euro...

Originally Posted by Marx & Lennon

If they were still on the Drachma, they could devalue and slowly inflate their way out of trouble... We have our own currency, so this is not going to happen here...

-Right... because you advocate "devaluing" the dollar, which is a fancy word for "inflation", which does wonders for interest rates.

Originally Posted by Silent39

Reagan and Bush promoted tax schedule cuts. It was based upon supply side economics. Most exonomists acknowledged the theory is discreditied...

-That's not what they say:

http://online.wsj.com/article/SB10001424052748704608104575217870728420184.html

...Increases in federal tax rates, particularly if targeted at the higher brackets, produce no additional revenue. For politicians this is truly an inconvenient truth...

..."Hauser's Law," as I call this formula, reveals a kind of capacity ceiling for federal tax receipts at about 19% of GDP...

[See Chart]

... conventional methods of forecasting tax receipts from increases in future tax rates are prone to over-predict revenue.

...Changes in marginal tax rates do not make a perceptible difference to the ratio of revenue to GDP, but recessions do. When GDP falls relative to its potential, tax revenue falls even more...

...it's the spending, as you touch on, the Greeks have found out.

Originally Posted by haymarket martyr

WARNING: The poster known as jamesdglick has a history of engaging in fraud. He makes things up out of his own head and attempts to use these blatant lies to score points in his arguments. When you call him on it, he will only lie further. He has such a reputation for doing this that many people here are cowed into silence and will not acknowledge it or confront him on it.

Anyone who attempts to engage with glick will discover this and find out you have wasted your time and energy on an intellectual fraud of the worst sort.

...So cry many Boomers like Haymarket whenever they fail to explain their hypocritical self-justifications, their double-standards, and their double-think forays into evil. Perhaps their consciences bother them, perhaps not. Who knows.

Originally Posted by Marx & Lennon

Internationally, no more so than Argentina's were...

-And Argentina has been such a long-term font of free-marketeering...

Originally Posted by Marx & Lennon

The WSJ, why didn't I think to use them as a source for accurate information on taxing rich people...

-Ad Hom. You don't attack the substance:

http://online.wsj.com/article/SB10001424052748704608104575217870728420184.html

...Increases in federal tax rates, particularly if targeted at the higher brackets, produce no additional revenue. For politicians this is truly an inconvenient truth...

..."Hauser's Law," as I call this formula, reveals a kind of capacity ceiling for federal tax receipts at about 19% of GDP...

[See Chart]

... conventional methods of forecasting tax receipts from increases in future tax rates are prone to over-predict revenue.

...Changes in marginal tax rates do not make a perceptible difference to the ratio of revenue to GDP, but recessions do. When GDP falls relative to its potential, tax revenue falls even more...

...because you can't.

Originally Posted by Marx & Lennon

Taxes are social policy as much as revenue generators...

-Yet another topic where I've noticed your sense of envious sour grapes against those who accomplish what you fail to do. That's you attitude problem.

Originally Posted by Marx & Lennon

When the top rates were very high, the economy simply worked better...

You keep ignoring a few facts:

1) Every country which has dedicated itself to the policies you advocate sucks;

2) America always came out of post-4T Crisis Wars in great condition during 1T, but before we did it without a mound of debt and policeis which hamstring future growth, and ebntitlement programs guaranteed to keep us there.

You know, like Greece. Watch the reast of Europe, next...

Originally Posted by haymarket martyr

WARNING: The poster known as jamesdglick has a history of engaging in fraud. He makes things up out of his own head and attempts to use these blatant lies to score points in his arguments. When you call him on it, he will only lie further. He has such a reputation for doing this that many people here are cowed into silence and will not acknowledge it or confront him on it.

Anyone who attempts to engage with glick will discover this and find out you have wasted your time and energy on an intellectual fraud of the worst sort.

...So cry many Boomers like Haymarket whenever they fail to explain their hypocritical self-justifications, their double-standards, and their double-think forays into evil. Perhaps their consciences bother them, perhaps not. Who knows.

http://www2.macleans.ca/2010/05/20/not-just-their-big-fat-greek-funeral/

From the Times of London: “The President of Greece warned last night that his country stood on the brink of the abyss after three people were killed when an anti-government mob set fire to the Athens bank where they worked.”

Almost right. They were not an “anti-government” mob, but a government mob, a mob comprised largely of civil servants...

Their hapless victims—a man and two women—were a trio of clerks trapped in a bank when the mob set it alight and then obstructed emergency crews attempting to rescue them...

...the Greek rioters are the logical end point of the advanced social democratic state: not an oppressed underclass, but a pampered overclass, rioting in defence of its privileges and insisting on more subsidy, more benefits, more featherbedding, more government.

Who will pay for it? Hey, not my problem, say the rioters. Maybe those dead bank clerks’ clients, assuming we didn’t burn them to death, too...

...As to every profligate Western politician’s enduring faith in mass immigration, what hardworking foreigner in his right mind would move to the Hellenes...when it comes to the ease of doing business, Greece ranks 109th out of 183 countries... Greece ranks 140th when it comes to starting a business, and 154th when it comes to protecting investors. They cannot mitigate their deathbed demography through immigration, because, even more so than Canada and the rest of Europe, the only foreigners with any incentive to head there are those who either want to lounge around on welfare or plot jihad at taxpayer expense...

America still has a choice, Greece isn’t going to have a 2040. The mob is rioting for the right to continue suspending reality until they’re all dead. After that, who cares?

Greece has run out of Greeks to stick it to. So it’s turned to Germany. But Germany too is in net population decline. The Chinese and other buyers of Western debt know that. If you’re an investor and you don’t, more fool you. Tracking GDP versus median age in the world’s major economies is the easiest way to figure out where this story’s heading...

...On my last brief visit, Athens was a visibly decrepit dump: a town with a handful of splendid ancient ruins surrounded by a multitude of hideous graffiti-covered contemporary ruins. If you were going to cut one “advanced” social democracy loose and watch it plunge into the abyss pour encourager les autres, it would be hard to devise a better candidate than Greece...

“Another reform high on the list is removing the state from the marketplace in crucial sectors like health care, transportation and energy and allowing private investment,” reported the New York Times. “Economists say that the liberalization of trucking routes—where a trucking licence can cost up to $90,000—and the health care industry would help bring down prices in these areas, which are among the highest in Europe.”

Removing the state from health care brings down prices? Who knew? This New York Times is presumably entirely unrelated to the New York Times that’s spent the last year arguing for the governmentalization of U.S. health care as a means of controlling costs.

Originally Posted by haymarket martyr

WARNING: The poster known as jamesdglick has a history of engaging in fraud. He makes things up out of his own head and attempts to use these blatant lies to score points in his arguments. When you call him on it, he will only lie further. He has such a reputation for doing this that many people here are cowed into silence and will not acknowledge it or confront him on it.

Anyone who attempts to engage with glick will discover this and find out you have wasted your time and energy on an intellectual fraud of the worst sort.

...So cry many Boomers like Haymarket whenever they fail to explain their hypocritical self-justifications, their double-standards, and their double-think forays into evil. Perhaps their consciences bother them, perhaps not. Who knows.

Entering a Death Spiral?

Tensions Rise in Greece as Austerity Measures Backfire

The austerity measures that were supposed to fix Greece's problems are dragging down the country's economy. Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70 percent in some places. Frustrated workers are threatening to strike back.

My mom said that everytime she went to Greece, people were always kvetching about something, but things are really not that bad there, they just exaggerate it in the news.

http://www.forbes.com/forbes/2011/07...ell-tolls.html

Given its rich mercantile heritage in the Mediterranean, Greece should be the Hong Kong/Singapore/ Switzerland of the Balkans. Its emigrants and their descendants have been huge business successes in the U.S., Australia, New Zealand, Canada and elsewhere. Yet Greece is bankrupt, fiscally and politically.
Why is Greece such a basket case? And what are the implications for Europe and the U.S.?

...not a single person from the Greek government was there to learn from the Poles' experience in pulling off privatizations of such major proportions... And that, in a nutshell, is why Greece is falling apart.


...For instance, automatic Christmas, Easter and summer bonuses to all bureaucrats--the equivalent of two months' pay--were eliminated. But not one civil servant from the bloated public sector was sacked. Thanks to fierce union resistance, privatizations have stalled...

The Greeks are accused--and rightly so--of not paying taxes. Other countries in the region suffered from the same malaise. Their solution? They junked their old tax codes and replaced them with a simple, easy-to-enforce flat tax. While the top tax rate in Greece is almost 50%, in neighboring Bulgaria, which enacted a flat tax, it's 10%; Albania, 10%; Romania, 16%. These countries are growing, while Greece is contracting.

...Property rights, for example, are primitive. Experts estimate the government owns some $500 billion worth of property, yet it has no effective procedures for registering property. Figuring out who owns what can get a bit murky. This is a no-brainer: Get the property situation sorted out and the government could rake in countless billions in leases or in sales to developers...



The end result of progressive policies:

http://www.bloomberg.com/news/2011-0...-cut-debt.html

“The Greeks have to bring to Parliament their austerity measures and their privatization package and they have to implement those measures,” Luxembourg Finance Minister Luc Frieden told Bloomberg Television at a euro crisis meeting in Luxembourg today. “Only if those conditions are fulfilled, we can pay out the next tranche and at the same time look for a possible second program to support Greece.”


...the problem with progressives is, that sooner or later, they run out of other people to tax...

Financial Times Oct. 20, 2011.One article mentioned Greek protests against austerity measures. Another article stated that Germany will downsize its military as an austerity measure...I understand that Germany was supposed to be the economic engine (as in a train?) of Europe. If Germany is beginning to show signs of fiscal distress, who will prop up the other EU countries?

In not too long, US will pass the not so proud to hold distinction of a debt to GDP of 100%.

But wait, there's more!

You too can have riots and discord when you run out of other people's money.

James50

Originally Posted by James50

In not too long, US will pass the not so proud to hold distinction of a debt to GDP of 100%.

But wait, there's more!

You too can have riots and discord when you run out of other people's money.

James50

No, we won't. About 40% of the debt is bonds held by the Social Security Administration. As long as payroll taxes at least equal benefits--which can easily be arranged--none of it will have to be paid. Another large porition of the debt is held by the Fed, which is not about to try to cash it in either. Unfortunately this critical fact is being completely ignored by our politicians and press.

Originally Posted by James50

In not too long, US will pass the not so proud to hold distinction of a debt to GDP of 100%.

But wait, there's more!

You too can have riots and discord when you run out of other people's money.

James50

We're a monetary sovereign. We have as much money as we chose to have.

Originally Posted by Marx & Lennon

We're a monetary sovereign. We have as much money as we chose to have.

The capitalists want to restict our money, beacause then they profit off it.

Nice to see some others on the path of enlightenment; M&L you are way down that path - I am please, but not surprised.

James, just a couple of added points -

You do realize that the feds pay off their debt about 2-3 times a year, i.e. they pay off existing bond holder and then issue new bonds, i.e., like any monetary sovereign, they roll over their debt, they don't pay it off. The once and only time that happen was under Andrew Jackson; he threw a big mortgage burning party. A year later, the country went into an economic depression that by many measures was proportionally worst than the one experienced in the 1930s (e.g. GDP went down for over 6 years starting in 1836; only 4 years starting in 1929).

The rollover of Treasuries has always been fairly easy but now even more so with bid-to-cover ratios of 3 or more, i.e. three times more bids than available bonds.


The only concern for deficits is the spending, i.e., the deficit spending, and that said concern is did the deficit spending (added to non-federal spending) actually increase aggregate demand beyond what the economy can produce that year and we got generalize price increases? Answer, no, not even close when you take out energy that caused price increases unrelated to federal spending. And harmful inflation is not likely far into the future. And if it should raise its head, the feds certainly know how to chop it off pretty fast - raise taxes and/or interest rates.

By accounting identity, the federal deficit represents all non-federal savings in dollars for that year. As such, the federal debt represents the total non-federal savings since the nation got started. The federal debt is the equity held in dollars of our nation by the non-federal sector. Next time you pass one of those federal debt ceiling clocks, you should feel proud.

The only people whose minds don't get blown by MMT reality are the ones that have yet to fully turn their brains on.

Originally Posted by Lady Vagina

The capitalists want to restict our money, beacause then they profit off it.

I think its more that they are wedded to a mythology that is no longer operational but they don't realize or understand that.

They are frigthened by the potential for inflation sufficent to reduce their wealth. That is currently not the problem, likely not to be a problem in our lifetimes, and if it should arise, there are ways to deal with it.

The sad thing is that if federal spending increased to specifically employ everyone that was willing and able to work, aggregate demand would increase and enrich everyones' lives - and I'm not talking about just money.

Pick up any basic economics textbook and it will tell you that economics, as currently crafted, cannot account for a vast array of public good because there is no dollar sign attached to it. Sure, having a reserve job force that employs people to, for just one example (among many many other things), be home care providers certainly has big dollar sign benefits attached to it for both individuals and society, but I think you would be hard press to find anyone that believes taking care of our elderly in a kind and respectful way only has value measured in dollars. That is just one example of a myriad of needs that could be met with an updated understanding of how our monetary system actually works and what it really has to offer to us all.

I find it hard to accept how much future generations will view us as ignorant and unkind.

OK, now we have seen elected members of the Greek Parliament fighting on TV, throwing newspapers and hitting each other.

Let's think about this for a minute. In a European country burdened by debts it cannot pay, and suffering under high unemployment and growing social unrest, a small but virulent far-right party is going after better-established Communists in their Parliament, and isn't afraid to use violence. Hmm, haven't I seen that story before somewhere?

I really don't like the way this movie ends.

Originally Posted by Wandering Nomad

OK, now we have seen elected members of the Greek Parliament fighting on TV, throwing newspapers and hitting each other.

Let's think about this for a minute. In a European country burdened by debts it cannot pay, and suffering under high unemployment and growing social unrest, a small but virulent far-right party is going after better established Communists in their Parliament, and isn't afraid to use violence. Hmm, haven't I seen that story before somewhere?

I really don't like the way this movie ends.

Oh f***! That is a terrifying thought.

Originally Posted by Marx & Lennon

The role of the Fed and the US Treasury are rather different. If you aren't happy with the Fed's activities, what changes in fiscal policy could make it better?

1. Cut defense spending and redirect that money to infrastructure.
2. Delete ALL tax breaks. Or err, just chuck the tax code entirely and have the x income = y tax. No "special" income like capital gains, etc.
3. I guess we could experiment a bit with PW's MMT. I don't think trying it for one year would hurt much, just to see what happens.

We still have a liquidity problem, and that's about all the Fed is focusing on at the moment. They don't have the tools to do what really needs to be done, mainly big-bank dismemberment.

I don't think we have a liquidity problem. I mean, we have ZIRP, operation twist, etc. I think it's the ole liquidity trap myself. Nobody wants to borrow because they're in hock so much right now. Also any sane bank isn't going to lend too much right now as well. As for big-bank dismemberment, yup agreed. I do think it needs to be done before we just go have a redo of 2008.

I can't see how changing our spending habits, or issuing fewer or more US Treasury bonds does anything to help. Raising taxes mights sense for other reasons, but it's not going to have any impact in bank-world.

I'd say raising marginal taxes may prevent bubble blowing. I'd keep it revenue neutral by lowering them for middle class down so that sector can deleverage faster.

Originally Posted by Odin

Oh f***! That is a terrifying thought.

I can't resist. Where you find Greece, you find Turkey!

Originally Posted by Ragnarök_62

I can't resist. Where you find Greece, you find Turkey!

On the other side, yes. And Russia is backing the Syrian regime. The players are starting to form into teams over there.