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RE: Obama's Energy Policy - 8/2/2008 3:01:57 PM
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colliefan
Posts: 2789
Joined: 4/12/2005
From: Raleigh, NC
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quote:
ORIGINAL: blessedinnyc
quote:
ORIGINAL: colliefan
quote:
Stop the growth, and you stop inflation.
stop growth and you get the rust belt
You'll note that in the rust belt, $100 in 2008 isn't worth $0.01 in 2007 as it was in South America in the '80s and in Zimbabwe today.
We can inflate our way out of a recession, but I'd take the rust belt any day over hyper-inflation. It is the surest sign of the impending end of an empire/civilization.
The decline of the result came in part due to EPA restrictions and no growth policies. It doesn't tale a rocket scientst to figure out when one tries to control growth they also control or limit the jobs and spending that comes with the growth. The following describes the end of an empire and civilization:
Judg 21:25 (ESV) 25In those days there was no king in Israel. Everyone did what was right in his own eyes.
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RE: Obama's Energy Policy - 8/2/2008 3:18:16 PM
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iluvatar
Posts: 1956
Joined: 4/12/2005
Status: online
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quote:
ORIGINAL: colliefan
quote:
ORIGINAL: blessedinnyc
quote:
ORIGINAL: colliefan
quote:
Stop the growth, and you stop inflation.
stop growth and you get the rust belt
You'll note that in the rust belt, $100 in 2008 isn't worth $0.01 in 2007 as it was in South America in the '80s and in Zimbabwe today.
We can inflate our way out of a recession, but I'd take the rust belt any day over hyper-inflation. It is the surest sign of the impending end of an empire/civilization.
The decline of the result came in part due to EPA restrictions and no growth policies.
Could you be a bit more specific, please?
-Dan.
_____________________________
Well, I've been to one world fair, a picnic, and a rodeo, and that's the stupidest thing I ever heard come over a set of earphones.
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RE: Obama's Energy Policy - 8/2/2008 4:29:06 PM
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inthysite
Posts: 770
Joined: 2/12/2008
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quote:
The grand irony about the Bush administration using communist China as its personal ATM over the past several years is that were a Dem president to do so, the White House's lackeys on talk radio and on Fox would scream bloody murder.
Talk about fear and smear.
First off Bush is not using China as a personal ATM. The tresury prints off T-bills and T-notes, which basically say "the owner of this note is entitled to $10,000 on March 15, 2018". The treasury then sells these to whoever wants to buy them, including China.
Secondly, it is Congress that authorizes the limit that the debt can reach:
At any given time (at least in recent decades), there is a debt ceiling in effect. Whereas Congress once approved legislation for every debt issuance, the growth of government fiscal operations in the 20th century made this impractical. (For example, the Treasury now conducts more than 200 sales of debt by auction every year to fund $4 trillion in debt operations.) The Treasury was granted authority by the Congress to issue such debt as was needed to fund government operations as long as the total debt (excepting some small special classes) did not exceed a stated ceiling. However, the ceiling is routinely raised by passage of new laws by the United States Congress every year or so. The most recent example of this occurred in September 2007, when the Congress raised the debt limit to $9.815 trillion. As of July 28th 2008, the recently passed "landmark housing bill" raises the current debt ceiling by 800 billion to 10.6 trillion to account for the bailout of the two mortgage giants Fannie Mae and Freddie Mac.
United States public debt
And before you say that the debt is used to fund Bush's war, remember that Congress voted for the war, so it's expenses were approved. When we needed more money to fund the troops, once again, Congress approved the funding.
And as the article linked to above notes, there are other things that attribute to our debt and thus selling more treasury notes, such as the banking buyouts, the housing buyouts, etc., which, once again, were approved by Congress.
_____________________________
Let the words of my mouth and the meditation of my heart
Be acceptable in Thy sight, O LORD, my rock and my Redeemer - Psalm 19:14
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RE: Obama's Energy Policy - 8/2/2008 8:05:18 PM
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blessedinnyc
Posts: 1966
Joined: 10/12/2007
Status: offline
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quote:
ORIGINAL: colliefan
The decline of the result came in part due to EPA restrictions and no growth policies. It doesn't tale a rocket scientst to figure out when one tries to control growth they also control or limit the jobs and spending that comes with the growth. The following describes the end of an empire and civilization:
Judg 21:25 (ESV) 25In those days there was no king in Israel. Everyone did what was right in his own eyes.
I would argue that it came because of a number of factors:
1.) Unions overplayed their hand. By the mid '70s, Chrysler was paying its employees $15/hour on average- and this was ~1975 US dollars! These days, most of the unions have learned their lesson- and have gone back to their original role- helping employees negotiate with their employers.
2.) The US was dependent on foreign oil. Japanese automakers, who were producing cars that got over 15 mpg, had an advantage.
3.) Nobody wanted to invest (this became a problem in the later '70s). When you have 12% inflation, the bare minimum ROI you'd want would be 13%. This inflation was attributable to a foreign war that came without a tax increase during the war. Thus, it was difficult to create new jobs.
So in other words, inflation is bad for growth. The easiest way to cut inflation is to decrease the deficit and increase interest rates. We're seeing a repeat of the '70s, and Paul Volcker had it right when he said that the only solution to inflation is a recession.
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RE: Obama's Energy Policy - 8/2/2008 8:32:07 PM
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blessedinnyc
Posts: 1966
Joined: 10/12/2007
Status: offline
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quote:
ORIGINAL: inthysite
And before you say that the debt is used to fund Bush's war, remember that Congress voted for the war, so it's expenses were approved. When we needed more money to fund the troops, once again, Congress approved the funding.
I view the war as a sunk cost, and assuming we're going to cut the cost by 2/3 by 2010 no matter who's president, its merits are largely irrelevant.
However, something relevant is the fact that the only other war in US history that didn't correspond with a tax increase was the Vietnam War. Naturally, it was much more expensive, but how the government handled it was very similar: it borrowed, borrowed, borrowed, and inflated the currency at the same time.
All I'm saying is that government spending- at least when it comes to war (or anything that we would be hard-pressed to call an investment)- is a zero-sum game. If it isn't funded by tax increases or spending cuts, we will pay for it with either higher taxes or inflation in the future.
quote:
And as the article linked to above notes, there are other things that attribute to our debt and thus selling more treasury notes, such as the banking buyouts, the housing buyouts, etc., which, once again, were approved by Congress.
Yes, the feds are participating in a lot of bailouts right now, and I wish they'd cut back on the stuff that doesn't improve the economy's efficiency. (Warren Buffett noted that had the Bear Stearns bailout not gone through, Bear's counterparties would have waited in BK court for several years, and there would have been even more economic uncertainty and inefficiency.) It's a tough call- but ignoring the moral hazard part for a moment, I think a good chunk of the federal government's involvement in the market creates long-term value by letting everyone know what their trades are worth.
And most of the government's "bail-outs" translate into investments. For the record, the feds are buying mortgages at prices that smart wall street folks just two years ago never expected. Ironically, they are doing the same things that many of the traditionally smarter hedge funds are doing. When we exits these trades in a few years, I expect that we could make a profit (assuming the prime mortgage rate increases by less than about 200 basis points.)
One thing, however, that doesn't create long-term value right now is road construction. We could be using the $0.18/gallon federal gas tax to pay down the debt or fund research on the electric car. One might question whether new roads will be used if we need to drive oil-powered cars on them.
So again, the solution to energy prices is very simple:
A recession. (A carefully engineered one would also help us pay down the deficit).
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