Obama: Biggest Fiscal Conservative we have had in over 50 years!! Way bigger than RR!

Discussion in 'Political Opinions & Beliefs' started by akphidelt2007, May 27, 2012.

  1. akphidelt2007

    akphidelt2007 New Member Past Donor

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    FACT #1: Obama has increased Govt spending by the lowest % in the past 50 years. In fact Reagan increased Govt spending by ~6 times as much as Obama

    FACT #2: Obama has decreased Govt employment by the highest % in the past 50 years.

    source:

    [​IMG]

    [​IMG]

    Wow, conservatives should be loving Obama right now. He did what Reagan, Bush Sr, and Bush Jr couldn't do!!!

    But I'm sure conservatives will discredit the data for some stupid reasons... most likely bring up debt or unemployment to distract from the actually facts!
     
    AJTheMan and (deleted member) like this.
  2. wgabrie

    wgabrie Well-Known Member Donor

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    Yes, I know isn't it great?! You'll never get the Republicans to admit it though.

    But, I'd like to point out that Obama did have some influence on the budget prior to his actual term that's thanks to Bush being nice (aka bailouts).

    Also , it seems that bailouts didn't matter because, at least from your charts, it appears that the boosted spending in the recession (gray bars) later leads to a drop in expenditures afterward, unfortunately, in part, because of Tea Party hostage taking over the budget.
     
  3. thediplomat2.0

    thediplomat2.0 Banned

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    Net measurements in federal government spending indicate the 'fiscal conservatism' of the President. Gross measurements paint a much different picture.
     
  4. NetworkCitizen

    NetworkCitizen New Member

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    #doesn't include bailouts or not telling the truth about bailouts. The massive increase in debt is not simply from less taxes collected, especially if Obama is the biggest fiscal conservative of all time.

    Fed Lies. Always.
     
  5. akphidelt2007

    akphidelt2007 New Member Past Donor

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    Oh yea, the Republican (Tea Party led) obstructionists are doing everything they can to block any help for the economy and doing everything they can to blame the economy on Obama. It's absolutely ridiculous.

    The fact we have cut the most Govt jobs in the past 3 years speaks volumes to how little control Obama has over the economy. There is just nothing he can do. The Repub's have drawn a line in the sand.

    I kind of want the Rebub's to take over and watch the country go in to a Depression just so we never have to deal with this crap again.

    The next round of debt ceiling debates is going to be even more epic than the last ones.
     
  6. wgabrie

    wgabrie Well-Known Member Donor

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    Actually I've altered my view some after studying the 1st post's bottom chart. Only the winter 2010 crisis with normal Republicans helped us out, since Obama went beyond anything they would have consider doing (huge tax cuts in capital gains tax). Thanks to Obama we no longer destroy generational wealth.

    The Tea Party mess in the second round just reduced the 4-trillion in savings over 10 years from Obama's plan, that we could have had, to the smaller 1 trillion savings over the same time. And the Tea Party crisis got our treasury bond rating reduced on the world market making us pay more for interest payments on our debt over the long term.
     
  7. akphidelt2007

    akphidelt2007 New Member Past Donor

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    What gross measurements are you referring to? Source please
     
  8. thediplomat2.0

    thediplomat2.0 Banned

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    Fiscal year expenditures from 2010 and 2011 combined paint a picture of massive federal government spending.

    Net measurements serve the Obama Administration well, whereas a gross measurement such as the one mentioned above do not. On the other hand, net measurements did not serve the Bush Administration well, whereas gross measurements did.
     
  9. akphidelt2007

    akphidelt2007 New Member Past Donor

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    What are you talking about?
     
  10. akphidelt2007

    akphidelt2007 New Member Past Donor

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    Oh you are talking about deficit spending aren't you?
     
  11. thediplomat2.0

    thediplomat2.0 Banned

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    I am talking about federal government outlays as shown on the White House Historical Tables. This paints a much different picture from the graphs above. Combined FY2010 and FY2011 federal outlays are above $7 trillion. This is a gross measurement and indicates that the President is not a fiscal conservative in comparison to his predecessors. On the other hand, percent change in federal government expenditures indicates supposed fiscal conservatism under President Obama. I have used the first graph you mentioned to calculate the percent change during President Obama term so far. The value I got was 5.3 percent, which paints a better picture if one calculates the percent change in federal government expenditures under President George W. Bush, which was 60 percent.
     
  12. wgabrie

    wgabrie Well-Known Member Donor

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    On the positive side Quantitative Easing kicked out the interest rate on our shorter-term Treasury debt to about 0%, so in the long run we won't pay as much for our debt (since we are obligated to keep paying interest on bonds that aren't cashed out for up to 30 years after they expire) and we can now pay it off over a longer time frame for less.
     
  13. akphidelt2007

    akphidelt2007 New Member Past Donor

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    Ever since the 70s, we have evolved in to an economy where interest rates on the debt are solely created by the Federal Reserve. They can do whatever they want to control what yields are on the treasuries. I think what they didn't expect was investors still pumping money in to treasuries even taking on an inflation adjusted negative yield. They could do as many QE's as they want and it will still not change the economy. We need fiscal measures.
     
  14. akphidelt2007

    akphidelt2007 New Member Past Donor

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    I don't care about gross outlays. I care about net Govt expenditures. And the fact is Obama has increased Govt expenditures by the lowest % amount in the past 60 years.
     
  15. FreshAir

    FreshAir Well-Known Member Past Donor

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    it's not cheap cleaning up after a president like Bush
     
  16. akphidelt2007

    akphidelt2007 New Member Past Donor

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    But we haven't been able to spend the money to clean it up. That's the point!
     
  17. Kessy_Athena

    Kessy_Athena New Member

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    That already happened in 1937. Unfortunately people seem to have really short memories.

    Actions speak louder then words, do they not? So shouldn't "fiscal conservative" be defined by what people who call themselves that actually do? Consider that since WWII, five Presidents have submitted at least one balanced budget to Congress (Truman, Eisenhower, Kennedy, Johnson, and Clinton) and six Presidents have run a deficit every year of their term (Nixon, Ford, Carter, Reagan, Bush, and Bush.) You will note the partisan distribution there. It seems to me that a fiscal conservative is really someone who wants massive irresponsible tax cuts while keeping spending the same or even increasing it, resulting in huge deficits.

    Me, I'm a fiscal liberal. I believe in tax levels appropriate to pay for the services the government provides and balanced budgets.

    Of course that's talking about when the economy is normal. When the economy's in recession, everyone with an ounce of sense you need to run a deficit to get the economy running again.
     
  18. thediplomat2.0

    thediplomat2.0 Banned

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    I am a Keynesian purist when it comes to fiscal policy. Simply put, when the economy is in a recession or anemic recovery, expansionary fiscal policy (tax cuts, spending increases) is necessary. When the economy is in an inflationary gap, contractionary fiscal policy (spending cuts, tax increases) is necessary.

    Republicans always ignore the severity of the Great Depression, arguing that self-correction could have occurred much faster. That could be true, but unlike the 1920-21 Depression, a common case study Republicans like to use for laissez-faire recovery, the economy was not seeing a massive influx in labor, meaning nominal wages were not decreasing, and therefore supply was not increasing. Government had to act, and act with tremendous ferocity to help stabilize the economy. Could Roosevelt have done better? Yes he could. It does not mean his efforts were in vain.
     
  19. akphidelt2007

    akphidelt2007 New Member Past Donor

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    You are a pretty smart dude... I would think you would find MMT very intriguing. I would like to hear your refutes to MMT and why you do not believe in the premise of sustained deficits. I don't deal with much past economic theory, so just explain in terms of real world balance sheets/data why MMT is incorrect in their explanation of deficit spending being the root of all money creation and why sustained deficits are not needed.

    Also I'd like to hear your thoughts on sectoral balances.
     
  20. thediplomat2.0

    thediplomat2.0 Banned

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    I would need to do some research on MMT and sectoral balances before providing my opinions on such matters. However, there are inherent problems with sustained deficits. Most importantly, they hinder long-run economic growth. Fiscal stimulus is intended to be used for economic stabilization, or returning aggregate output to potential output. It is intended to keep the business cycle stable. Prolonged periods of fiscal stimulus beyond what is necessary to fix a recessionary gap/anemic recovery will push the economy into an inflationary gap that is not necessary. If potential output does not increase swiftly during that inflationary gap, or short-run aggregate supply does not decrease, the economy suffers, and a positive demand shock ensues. This spells trouble for people hurt by the inflation tax, and if it persists too long, people who may not be usually hurt be inflation.
     
  21. akphidelt2007

    akphidelt2007 New Member Past Donor

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    I say start here. I believe there is evidence that running surpluses cause more harm to the economy than good and that the most efficient way to continue economic growth is through sustained deficits regardless of how fast the economy is moving.

    What the sectoral balances show is the relationship between Govt/Private/Foreign accounting. Whereas Govt deficits are Private sector savings.

    Good read... I think you will thoroughly enjoy the world of MMT. It makes more economic sense then I have ever seen in any economic theory.

    http://pragcap.com/understand-the-modern-monetary-system/understanding-modern-monetary-system
     
  22. thediplomat2.0

    thediplomat2.0 Banned

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    I am reading a Washington Post article on MMT, it is quite interesting, but as I cited in my previous post, the theory is very dangerous. It requires persistent positive demand shocks, which means it requires rapidly decreasing short-run aggregate supply to maintain long-run macroeconomic equilibrium (or the realistic equivalent), or rapid changes in potential output. This means the economy will either have to be consistently producing more with less, or seeing constant improvements in physical capital, human capital, technology, and resources. One option sounds great for the environmentalist, the other great for the ideologue who believes Earth's resources are endless.

    Furthermore, in regards to standards of living, there would have to be significant oversight in regards to controlling inflation. With such a theory, the ability for nominal wages to increase faster than inflation is imperative to maintaining decent incomes. Either way, it is an intriguing theory, and does make some economic sense, but has too many possible consequences that prevent it from being a truly mainstream economic concept.
     
  23. akphidelt2007

    akphidelt2007 New Member Past Donor

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    I had many of the same reservations as you do when I first started with MMT. I thought it was nothing but a bunch of semantics thrown together that was too far out of reality. But the more and more you read and understand the relationships between the entities and how money flows throughout... it starts making a lot of sense. And it might not be mainstream in the sense that people don't describe our current system with the words they use. But it is mainstream in the fact that it describes what actually happens in our monetary system. So no matter how many theories people throw out or how partisan they are, the country still works the way MMT describes.

    If you want to start getting in to serious material. Here's a piece written by Warren Mosler... co-founder of the Center for Full Employment And Price Stability at the University of Missouri-Kansas City

    Pages 13-63 are rich with information!!

    http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf
     
  24. thediplomat2.0

    thediplomat2.0 Banned

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    I actually do not believe it is an unrealistic theory, but it certainly is not mainstream in nature, as in it is rejected by many New Keynesians such as Paul Krugman, etc. In other words, it may not be as out there as Austrian economics.

    MMT seems to be fueled by the idea of maximizing the demand side of the economy. As I stated, it requires persistent positive demand shocks, which therefore requires rapidly decreasing short-run aggregate supply or rapid increases in potential output. This is not inherently bad, but it is tougher to accomplish. It requires a belief in rational choice on an even greater scale than the conventional neoclassical economist prescribes to. For MMT to work in full in terms of policy, it would also require massive enhancement of institutions.

    In summation, I will certainly do some research on MMT. However, I must keep in mind my understanding of conventional neoclassical economics. This means I probably will not endorse the policy implications behind MMT, but I could certainly get into some of the machinations, because many of them are agreed upon by economists who do not believe in MMT.
     
  25. akphidelt2007

    akphidelt2007 New Member Past Donor

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    Paul Krugman hasn't completely rejected MMT. He disagrees mostly about how deficits are financed and the bond market. But he is slowly agreeing more and more with MMT.

    http://pragcap.com/paul-krugman-again

    I think you are pushing MMT too far in terms of what their objective is. I do not think they are trying to have persistent demand shocks. I don't think they are asking for ridiculous amounts of deficit spending to flood the market every year with new money. Their premise is that private sector financial savings are derived from Govt deficits. So if the Govt runs a surplus they are reducing the net financial assets out in the market and requiring people to take on more debt in order to continue or maintain growth.

    One thing for sure though is both MMT and the New Keynesian's believe we need more deficit spending now.
     

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