U.S. debt $150,000 per taxpayer

Discussion in 'Budget & Taxes' started by kazenatsu, Apr 12, 2018.

  1. Reiver

    Reiver Well-Known Member

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    Nope. As a label it demonstrates meaning. Neo-liberalism, as a label, has provided us with a means to fight back against lobby led market fundamentalism
     
  2. OldManOnFire

    OldManOnFire Well-Known Member

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    You can fight the merits without need to fight the labels...
     
  3. Reiver

    Reiver Well-Known Member

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    To fight the bad economics, the label is vital. It highlights the false narrative.
     
  4. a better world

    a better world Active Member

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    Reiver, I've argued it's time to adopt a global counterbalance to neo liberalism, along the lines suggested by Keynes way back in 1944, at the Bretton Woods conference, with his "clearing union" concept.

    (Predictably the US - emerging from WW2 as the world's largest creditor nation - rejected the idea....somewhat ironic , given that the US is now the largest debtor nation - though I note your comments that this debt is not necessarily a bad thing).

    A common response is that such a concept (ie Keynes' "clearing union") is utopian.

    Perhaps it's more a matter of parties of the Left, world-wide, communicating with one another, to bring about the reformed IMF that is required.
     
  5. Reiver

    Reiver Well-Known Member

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    This is an interesting angle. I had a slightly different view. I'd argue that things went pear shaped with GATT. We should have had the International Trade Organisation with development at its core. This would have ensured a more level playing field today and a less dysfunctional US. There's an irony that the US stopped it...
     
  6. OldManOnFire

    OldManOnFire Well-Known Member

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    Don't need labels to discuss issues and seek solutions...
     
  7. Reiver

    Reiver Well-Known Member

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    You do if you want to achieve validity and also refer to effective policy change. Labels, for example, provide the means to track costs and benefits such that we have the means to understand inefficiencies.
     
  8. OldManOnFire

    OldManOnFire Well-Known Member

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    Not labels...hard calculations and performance monitoring relative to well-defined societal goals is all that is needed to move forward...
     
  9. Reiver

    Reiver Well-Known Member

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    Afraid not. There are labels (sand value judgements), else economic modelling falls flat.
     
  10. OldManOnFire

    OldManOnFire Well-Known Member

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    Forget economic modeling...look only to actual solutions to solve actual problems sans political bias...
     
  11. kazenatsu

    kazenatsu Well-Known Member

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    Reiver, there's also the argument that all this borrowing might be having some (immediate) negative impact of its own.

    To think that the government can just inject money into the economy without taking money out of that economy in other ways.

    Surely government borrowing money puts an upwards pressure on interest rates, which the Fed (the central bank in the U.S.) tries to counteract but in doing so leads to inflation.
     
    Last edited: May 24, 2018
  12. Reiver

    Reiver Well-Known Member

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    Economic modelling is crucial for finding solution. It's naive to think otherwise, given the complexities of the economy.

    Now modelling can be destructive. We saw that with Freidman's monetarism. We also saw it with the financial crisis, as the orthodox models used encouraged policy makers to sit on their hands. However, that only gives an excuse to vote for the superior policy makers...
     
  13. OldManOnFire

    OldManOnFire Well-Known Member

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    I'm not naive and it's precisely because of the complexities of the economy why I prefer to review each issue on it's own merits and be open-minded to securing long-term solutions instead of trying to stereotype a certain model...
     
  14. kazenatsu

    kazenatsu Well-Known Member

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    Usually, the actual reality can be best understood by applying a few different models, but the real problem is understanding in what proportions those different models create effects. Just because a certain model is true doesn't mean it's a good descriptor of what's happening in a particular situation in the economy.

    I'll give you an analogy from human genetics. People afflicted with Down syndrome have all the same genes as you and me, the problem just happens to be there's an extra copy of some of them. That throws everything off balance because the human development process is very dependent on genes being expressed in exact proportions, a ratio of one gene activity to another.
    Or if you're mixing paint. You can mix three different colors of paint together and get a very different resulting color than someone else, even though you both used the exact same three types of paint to start off with.
     
    Last edited: May 28, 2018
  15. Reiver

    Reiver Well-Known Member

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    Your error here is "a certain model". You choose a school of thought. That then allows for debate over the nature of the model.

    There's really only two outcomes here. You can adopt the Blairite 'third way' and forget all principles. Alternatively, if you believe in a pluralist approach, you adopt an approach which has inherently learnt from multiple schools (e.g. post Keyensianism and it's links to Institutionalism, Marxism and organisational economics)
     
  16. OldManOnFire

    OldManOnFire Well-Known Member

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    I'm not interested in adopting any single approach. If we could do that we simply can fill the computer with algorithms and let it make all the economic decisions. I cannot accept a broad brush approach to something so complex and dynamic...
     
  17. Reiver

    Reiver Well-Known Member

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    There isn't one approach (e.g within post Keynesianism there is debate). But if you don't choose a particular economic school then you have no spine to your analysis
     
  18. 61falcon

    61falcon Well-Known Member

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    Last month for the 28th month in a row spending growth exceeded income growth as Americans go further into debt.In a truly healthy economy savings would be growing not debt!!
     
  19. Reiver

    Reiver Well-Known Member

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    Why would high savings be a sign of health? Surely either debt or high savings is an example of an economic imbalance (e.g. China versus US)
     
  20. OldManOnFire

    OldManOnFire Well-Known Member

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    If consumers have confidence in the economy, or specifically have confidence in their economic position, they will be inclined to establish more debt as they purchase cars and homes and vacations, etc. If consumers are racking up more debt buying common essentials or reckless debt spending to keep up with their peers, this IMO is unhealthy...
     

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