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**MrFun** · April 2, 2013, 13:16

Originally posted by gribbler View Post

Fascinating could you present the figures on which you base this assertion?

I'm pretty sure any spending to support food stamps program and PBS is a lot less than the spending to subsidize defense contractors.

**kentonio** · April 2, 2013, 13:27

Originally posted by DinoDoc View Post

He likes telling people every chance he gets. He was also the source of ken's appeal to authority, so I thought he'd be the best rebuttal.

Yes, quoting his appraisal of the situation of 16 years ago is clearly a brave rebuttal of the things he's saying now about the America of today. Well done, have a cookie.

**giblets** · April 2, 2013, 13:35

Originally posted by MrFun View Post

I'm pretty sure any spending to support food stamps program and PBS is a lot less than the spending to subsidize defense contractors.

Didn't know that the budgets for the departments of education, health & human services, and housing and urban development didn't qualify as "public/social spending". Would it be okay to slash those budgets since the money apparently isn't for public/social welfare?

**DaShi** · April 2, 2013, 13:36

It was amusing that he then appealed to that very quote himself shortly thereafter.

**Imran Siddiqui** · April 2, 2013, 14:32

Originally posted by kentonio View Post

Yes, quoting his appraisal of the situation of 16 years ago is clearly a brave rebuttal of the things he's saying now about the America of today. Well done, have a cookie.

Indeed. When Krugman realized he could make more money becoming a political hack, he decided the Hell with intellectual honesty!

**DinoDoc** · April 2, 2013, 14:36

Originally posted by Imran Siddiqui View Post

Indeed. When Krugman realized he could make more money becoming a political hack, he decided the Hell with intellectual honesty!

Imran

**kentonio** · April 2, 2013, 14:41

Originally posted by Imran Siddiqui View Post

Indeed. When Krugman realized he could make more money becoming a political hack, he decided the Hell with intellectual honesty!

Ah right, so when he's saying something you agree with he's an expert in the field, but when he isn't he becomes a greedy liar with no honour? Interesting..

**Ben Kenobi** · April 2, 2013, 14:43

It is the same as saying 'the stock market is going down, sell sell sell!' rather than saying 'the stock market is going down, let's hold until it goes back up again'.

Austerity is inevitable. Entitlements alone will exceed revenues by 2020. Eventually, the rise in interest will exceed the rise in government revenues, which means that every year, there will be less and less to spend.

Let me put it this way. Say you already owe 500k in debt. You have two choices - cut back on your daily spending and start to pay down the debt, or continue to borrow more. Obama has chosen the latter. Is it better to continue spending and increasing your debt, or is it better to cut back (austerity), and spend less now in order to avoid worse cutbacks later?

**Jon Miller** · April 2, 2013, 14:53

When you are a country and the global economy (and local economy) is in a liquidity trap conditions... you spend.

You don't restrict liquidity further, otherwise you will have even less income and more debt later.

The choices are not 'austerity and end up with no debt' or 'spend spend spend and end up with increased debt', the choices are 'austerity, increased recession/etc, lower gdp and increased debt' or 'spend spend spend, hope when the recession/etc is over, that people keep the current responsible mindset and pay down the debt'.

JM

**Jon Miller** · April 2, 2013, 14:53

The biggest immediate problem with US entitlements is health care costs.

This is a problem for the US whether it is public or private, and must be solved.

The solution is not to destroy our recovering economy now with austerity.

The US is not an invidiual

JM

**PLATO** · April 2, 2013, 15:11

Originally posted by gribbler View Post

What is your point exactly? The yield curve for treasuries slopes upward? Yes indeed, in fact right now the 10-year rate is 1.86%:

Interest Rate Statistics

http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield

NOTICE: See Developer Notice on changes to the XML data feeds. Daily Treasury PAR Yield Curve Rates This par yield curve, which relates the par yield on a security to its time to maturity, is based on the closing market bid prices on the most recently auctioned Treasury securities in the over-the-counter market. The par yields are derived from input market prices, which are indicative quotations obtained by the Federal Reserve Bank of New York at approximately 3:30 PM each business day. For information on how the Treasury’s yield curve is derived, visit our Treasury Yield Curve Methodology page. View the Daily Treasury Par Yield Curve Rates Daily Treasury PAR Real Yield Curve Rates The par real curve, which relates the par real yield on a Treasury Inflation Protected Security (TIPS) to its time to maturity, is based on the closing market bid prices on the most recently auctioned TIPS in the over-the-counter market. The par real yields are derived from input market prices, which are indicative quotations obtained by the Federal Reserve Bank of New York at approximately 3:30 PM each business day. Treasury began publishing this series on January 2, 2004. At that time Treasury released 1 year of historical data. View the Daily Treasury Par Real Yield Curve Rates Daily Treasury Bill Rates These rates are indicative closing market bid quotations on the most recently auctioned Treasury Bills in the over-the-counter market as obtained by the Federal Reserve Bank of New York at approximately 3:30 PM each business day. View the Daily Treasury Bill Rates Daily Treasury Long-Term Rates and Extrapolation Factors Treasury ceased publication of the 30-year constant maturity series on February 18, 2002 and resumed that series on February 9, 2006. To estimate a 30-year rate during that time frame, this series includes the Treasury 20-year Constant Maturity rate and an "adjustment factor," which may be added to the 20-year rate to estimate a 30-year rate during the period of time in which Treasury did not issue the 30-year bonds. Detailed information is provided with the data View the Daily Treasury Long-Term Rates and Extrapolation Factors Daily Treasury Real Long-Term Rate Averages Beginning on January 2, 2004, Treasury began publishing a Long-Term Real Rate Average. This series is intended for use as a proxy for long-term real rates. Treasury provides historical data back to 2000. View Daily Treasury Real Long-Term Rate Averages

And the 30-year rate is 3.08%. That's very likely to be less than rate of nominal GDP growth we'll have over the next 30 years, but I'm supposed to believe we're approaching some death spiral of unpayable interest?

OMG. Please understand what you are talking about before posting.

**PLATO** · April 2, 2013, 15:15

Originally posted by Jon Miller View Post

The biggest immediate problem with US entitlements is health care costs.

This is a problem for the US whether it is public or private, and must be solved.

The solution is not to destroy our recovering economy now with austerity.

The US is not an invidiual

JM

Austerity is not what I am talking about. The figures I showed earlier reflect a robust increase in revenues as well as expenditure. The problem is not that we need to reduce the total outlay, but rather that we need to decrease the rate of increase to be below the rate of increase in reciepts. This is not only doable, but would be foolish not to do...particularly when the money we currently have borrowed is going to cost more to service in the future.

If you look at your logic, you say that "spending" in down economic times is good...I agree. I think we should have a tax cut so that people can spend more...surely you wouldn't argue against that given your position?

**DinoDoc** · April 2, 2013, 15:17

Originally posted by Jon Miller View Post

The choices are not 'austerity and end up with no debt' or 'spend spend spend and end up with increased debt', the choices are 'austerity, increased recession/etc, lower gdp and increased debt' or 'spend spend spend, hope when the recession/etc is over, that people keep the current responsible mindset and pay down the debt'.

JM

If your claim is correct, why have we seen an explosion of sovereign debt over the course of the Obama administration with barely any economic growth despite the recession being over for years?

**Jon Miller** · April 2, 2013, 15:34

Originally posted by PLATO View Post

Austerity is not what I am talking about. The figures I showed earlier reflect a robust increase in revenues as well as expenditure. The problem is not that we need to reduce the total outlay, but rather that we need to decrease the rate of increase to be below the rate of increase in reciepts. This is not only doable, but would be foolish not to do...particularly when the money we currently have borrowed is going to cost more to service in the future.

If you look at your logic, you say that "spending" in down economic times is good...I agree. I think we should have a tax cut so that people can spend more...surely you wouldn't argue against that given your position?

The issue is that if you impose austerity now you won't have a robust increase in revenues at all.

I think that a tax cut that went away after the recession got better would be a good thing. As long as it went away.

Sort of like the payroll tax cut that Obama put in place.

Of course, due to Fiscally Responsible people that had to be ended because now we are being forced to deal with the deficit.

A tax cut that happened right when we started paying off our debt and continued through two expensive wars is a stupid thing.

JM

**Jon Miller** · April 2, 2013, 15:36

Originally posted by DinoDoc View Post

If your claim is correct, why have we seen an explosion of sovereign debt over the course of the Obama administration with barely any economic growth despite the recession being over for years?

It is because the recession kills revenues.

Countries instead of increase spending have been imposing austerity.

This doesn't work.

See europe.

JM

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