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

If they are simply attempting to explain the machinations of vertical transactions, then they are correct in that regard. It is true that government surpluses lead to decreases in net financial assets in the form of less acquisition of bonds, used as investments (in this case, savings). In other words, if the government takes on less debt, the private sector will take on more debt. If the government takes on more debt, the private sector will take on less debt. I think this can simply be displayed on a circular flow diagram on government financing. I would partially agree with this theory just because I am certain that all other things are not equal in the real economy as opposed to the theoretical economy we are discussing.

In addition, I do not believe MMT attempts to endorse persistent demand shocks. This is my observation of what would come from the theory if the concept of persistent budget deficits and fiscal stimulus was employed.

Lastly, as a Keynesian purist, I wholeheartedly agree with deficit spending. However, as a Keynesian purist, I uphold the concept that deficit spending should serve to stabilize the economy, and if it increases potential output, then it would be a symptom of stabilization efforts, not a primary purpose. Therefore, deficit spending should remain as a mechanism to combat only recessionary gaps and anemic economic recoveries.

 

This myth has already been shattered in other threads. This is one of the worse cases of selective statistics I have ever seen. Only the most gullible would even entertain the concept.

 

How is it that leftists....who've endlessly exclaimed Big Fed needs to be printing, borrowing and spending more and more money to "stimulate the economy"....

now expect to be taken seriously in their laughably intellectually dishonest promotion of Obama as a fiscally conservative, miserly budget hawk?

Here...let me help....
they're myopic, "level one" thinking, duplicitous frauds....from the top down.

 

That's something 99/100 people do not comprehend and would never accept. The most common misconception of our economic system is that the Govt must take from the private sector in order to spend, so less Govt spending would mean the private sector gets to keep more money. It's such a weird paradox, and something I have never been able to fully explain to get those certain individuals to realize what they are saying is not true. They are actually advocating to give back more of their money to the Govt. To me I think the Govt should be spending trillions on infrastructure, alternative energies, space, science, technology, etc. There is no reason we should be handicapping ourselves because our politics.

 

It's the basic truth. Not really sure how you can "shatter" this "myth". But thanks for stopping by with such amazing insight, lol!!

 

So do I. However, I am a believer in government financing through taxation rather than borrowing or other mechanisms. This is because I have many ideas on how government could provide tens of trillions of dollars in revenue to finance its operations, all the while not taking away from production which goes towards GDP.

 

To me the system you are describing would only work if we switched up our system and gave the Government the ability to issue interest free money and take seigniorage over it. But as of now, the only way us American's can have net financial assets is if the Govt goes in to debt. Otherwise we are solely dependent on borrowing from banks.

The fact that the Govt has to borrow from the banking system to spend doesn't bother me. I think that's the evolution of our economic system that allows for the most control over the monetary system. That can be showed by how well we have controlled inflation for the past 30+ years that it was instituted.

 

Actually, my system, which I have described on other threads, can be employed through a highly regulated free banking structure alongside the Federal Reserve. The approach would be centered in the private sector. The government would not need to be involved, although I do have an approach in which the Federal Reserve can use its quantitative easing abilities.

The goal is to implement what is known as a derivatives excise tax for the purpose of financing government operations, mitigating risk in securities markets, promoting job creation (upon elimination of all other taxes), among other efforts. The private sector approach is based upon a proposal made by I believe former CFTC chairman Brooksley Borne, with the inclusion of private equity rather than the Federal Reserve.

 

Explain this in laymen terms. What do you mean by "derivatives excise tax for the purpose of financing government operations".

 

A derivatives excise tax is a tax upon this financial asset. In this case, I am considering a derivative, which is a financial asset with an "underlying asset" used to hedge risk, a product. The product will be taxed as though it was a regular good. The rate at which derivatives will be taxed would be from 1 to 6 percent. According to the Office of the Comptroller of the Currency, United States banks currently hold derivatives with a collective notional value of $231 trillion dollars. Consequently, a 6 percent DET would yield $13 trillion in annual federal revenue. Upon restructuring, which is the private sector approach I am referring to, the notional value of such financial assets are realized, and are therefore able to be taxed.

 

Since the numbers in the chart do not include Obama's stimulus from 2009, how can you claim that it is not a myth?

 

These are the actual Federal Reserve balances. They do not move stimulus money around to prove some partisan objective. They did not move Obama's 2009 stimulus spending in to 2008, lol.

Stop drinking so much Kool-Aid!! It's frying your brain. There is absolutely nothing you can say to disprove the fact that Obama has been the most conservative spending President in the past 50 years.

I know this is like telling a child there is no Santa Claus, but it's about time you grow up!

 

Show the picture?

 

Show the source of the data and then we can discuss how disingenuous the entire thread is.

 

http://research.stlouisfed.org/fred2/data/AFEXPND.txt

 

The DOC and the Federal Reserve are indifferent to politics. They don't care who's spending should be attributed to which President. They simply record actual transactions when they occur. To argue that Obama has not increased spending by the lowest % in the past 50 years would be like arguing 2+2 doesn't equal 4.

 

So which is it, lefties....

"We need a President who understands that massive government spending is the only way to stimulate the economy during an economic downturn"...

or...

"We need an austere, budget hawk President who strictly adheres to fiscal conservative principles"?

 

Apologize, thought this was referencing the Nutting article from Marketwatch. I should have paid attention.

As for the OP, this is one way to cut the data to appear that the Government is not spending money or spending less money, when in fact, Government spending is at an all time high. As a percent of GDP, no president since 1950 has spent as much as Obama (over 40%).

Again, didn't mean to hijack the thread with my original post.

I do believe those that look at the numbers will realize that whether in aggregate or as a percent of GDP, no president has spent more than Obama. I hope Obama is not betting his reelection on this chart.

 

Lol, what a ridiculous argument. Every President for the past 60 years has nominally spent the most money at their time. And I knew someone would bring up debt to GDP. Why can't you just admit that Obama has increased Govt spending by the lowest amount in the past 50 years. Is it that hard for you to admit that?

And on a % basis plenty of President's have spent more than Obama. WAY more than Obama. Nice spin though.

 

Is government spending good for the economy?

 

The percent of incremental year over year spend under Obama is less. If you believe that one measure is important, great for you, but it doesn't outline the true challenges in total spend.

Government spending is at historic levels and maintaining/increasing that historic spend each year. And no, no other president has spent more than Obama as a % of debt to GDP.

 

Yes..... it is