We Hold These Truths No Longer Self-Evident [View article]
I don't know where I mentioned that this is a Tea Party position. I don't think it is...I don't really know the TP platform, and I hope no one thinks I am proselytizing for them.
To be honest, I don't know of anyone who rationally thinks the budget can be BALANCED any more...interest just chews up too much unless the government just went away. Personally I'd hope we can bring the deficit down to 1% of GDP over time. Of course, that's not going to happen when one party is trying very hard to ADD to the deficit!
Tremors, And the U.S. Government's Tragic Comedy [View article]
I appreciate you leaving my anti-Democrat tilt aside. :-)
Point one is well-taken, but I would counter by saying that since a lot of it was gained in the last three years we can easily set a course for a three-year plan that gets the primary budget back to the 2008 level (which was still sick and profligately overspent, but not nearly so much as the crisis budgets were). The crisis required crisis spending (although I dispute this, actually, but will concede it for the sake of reaching a deal), but if the crisis is over then we should be able to return to the 2008 level. Except that obviously, a lot of what was written into the budget over the last three years is now regarded as entitlements. By the way, in that time the Gulf War expenditures have sharply decreased, so in principle we ought to be able to get spending back to the 2001 level or so by also cutting the defense budget quite a bit.
$61billion doesn't get us 1/3 of the way back!
On point two, I'll just observe that the Republicans don't control the military. The war in Iraq is over along with much of the spending. The war in Afghanistan (and Libya) can be ended without even the stroke of a pen by the President. So it doesn't seem fair to be blaming the Republicans for ONGOING defense spending!
I don't think almost any cuts in government spending can "cripple us in the long run," but that is clearly a view based on my belief that government spending is either useless or in many cases counterproductive to the economy. I do not agree that we need fiscal appropriations to keep the economy from being "crippled in the long run." In fact I think the economy runs much, much better when the government sector is a small part of the economy than when it is a large part of the economy.
I appreciate the (generally) positive tone of your disagreements. I was afraid that this column would get lots of people flaming me, even though I hope it's clear in there that I'm not in any way absolving the Republicans for the fiscal mess!
We Hold These Truths No Longer Self-Evident [View article]
You have a point about asymmetric rewards, but of course if businesses were less levered it would be less of a problem since it is the leverage that allows big upside (and downside). I don't think you can blame Republicans, or even CEOs, for the corporate structure or for the fact that bond yields were too low for the risk they were funding.
And I think you need to re-check your Depression history...the "right wing ideas" you say extended the Great Depression include prohibiting wages to fall to protect the worker, which was more responsible than anything else for the high unemployment since it implied high real wages when deflation began. I would suggest "The Forgotten Man" as a good book to start with. Thanks for reading.
Is There a TIPS Disaster Developing? Depends on How, And How Long, You Own Them [View article]
Disagree, and I've presented a fair amount of evidence that CPI is pretty close to actual inflation for the average consumer. See my article on the Billion Prices Project (which has nothing to do with the government, surveys different products with a different methodology, and yet comes up with just about the same inflation rate). Also, as I have noted, if this were true then investors of course (unless there's $700bln worth of suckers buying them) would insist on a much higher real yield. Finally, if you're losing value with TIPS because actual inflation is higher then you're losing the same value with every other instrument, since of course no matter what you own you experience the same inflation.
I didn't even mention the mathematical proof of what your lifestyle would look like, compared to what it actually is, if inflation were significantly understated. Over any reasonable timeframe, you would notice.
Look at many of my other comments for these observations, since I've made them ad nauseum to address these concerns.
Stoking the Economic Engine With Paper [View article]
But AminPar, this is the Internet! Nothing is consigned to the dustbin of history any more...it will be here for all time, for you to laugh and laugh at its inaccuracies.
And also, I will say, for future generations to wonder about YOUR remark, "What did The Inflation Trader write in that comment that had anything to do with politics?!?" Because as I re-read my column, I can find nothing that has the slightest thing to do with any political persuasion.
The Gravity Of The European Situation [View article]
Germany certainly wants the Euro. The question is why GREECE wants the Euro, when they'd almost certainly be no worse off with the drachma (I mean, unemployment is 26% and higher for some demographics. How much worse would it get? Since being "saved" a couple of years ago...see my article from a couple of days ago...the economic condition has gotten steadily worse), and furthermore they would then have a chance to devalue and be competitive, plus they could get out from under the debt that will keep them indentured servants for the next generation if they stay. I understand what Germany and the Netherlands are doing...I have no idea what Greece is thinking.
Bonds: It's OK to Panic, But Take Your Time [View article]
Have talked about this many, many times on this blog. Actual inflation is pretty close to the "official" measure, but conspiracy theorists continue to insist that all evidence in support of that is cooked up.
If inflation was really running at 7-8%, then (1) real living conditions would have deteriorated sharply (as in, you would be living 20% as well as your parents did, not 90% as well), and (2) real yields of TIPS would adjust ...unless, of course, the millions of TIPS investors are in on this little scam and so intentionally misprice TIPS.
Go sell crazy somewhere else. We're all stocked up here.
(I'm usually quite pleasant in my responses, but this ridiculous "Shadow Stats" baloney is like a virus. A great example of what the internet is really bad at.)
Confused, as usual, by this post. I've had budgetary religion for a long time - it was my main complaint with Bush (and my column for the last decade proves it). That doesn't mean you shouldn't cut taxes; it just means you should cut spending MORE than you cut taxes. AiP seems to think that the budget only has one side to it. I know his math must be better than that, so it must be that his optimism and faith in our government to spend the taxpayer's money efficiently has no bounds.
We Hold These Truths No Longer Self-Evident [View article]
The news came out the other day that more than half of Americans pay no taxes. And surprisingly, roughly the same proportion of Americans say their taxes are 'about right.' :-) Who was it that said "everyone wants to live off the State; the problem is that the State lives off of everyone?" Something like that...
The reason that most investors do not listen to Fed officials is that they tend to be lousy economists and historically have been right considerably less often than a coin flip would have given them. That's one of the reasons it's so amazing that Bernanke could claim "100% certainty" on 60 Minutes. There's just nothing in the history of the Fed to lead you to think he should be more than about 40% certain.
AiP - I am delighted that you keep reading my articles although you agree with virtually nothing in them and you have such a low opinion of my ability to prognosticate! Thanks for the comments.
We Hold These Truths No Longer Self-Evident [View article]
Not really sure how people concluded this had anything to do with the Tea Party, but...that being as it may...
If you're going to judge the Declaration of Independence and the Constitution on the basis of today's mores instead of those of 230+ years ago, then I am afraid that since you are an Australian I will need to treat you as an aborigine. Or, if you are not of aboriginal descent, I will need to hold you responsible for the harsh treatment that aboriginal Australians have endured. Therefore, nothing you say has merit.
We Hold These Truths No Longer Self-Evident [View article]
To be honest, I don't know of anyone who rationally thinks the budget can be BALANCED any more...interest just chews up too much unless the government just went away. Personally I'd hope we can bring the deficit down to 1% of GDP over time. Of course, that's not going to happen when one party is trying very hard to ADD to the deficit!
Volume Indicates This Isn't A Healthy Market [View article]
Tremors, And the U.S. Government's Tragic Comedy [View article]
Point one is well-taken, but I would counter by saying that since a lot of it was gained in the last three years we can easily set a course for a three-year plan that gets the primary budget back to the 2008 level (which was still sick and profligately overspent, but not nearly so much as the crisis budgets were). The crisis required crisis spending (although I dispute this, actually, but will concede it for the sake of reaching a deal), but if the crisis is over then we should be able to return to the 2008 level. Except that obviously, a lot of what was written into the budget over the last three years is now regarded as entitlements. By the way, in that time the Gulf War expenditures have sharply decreased, so in principle we ought to be able to get spending back to the 2001 level or so by also cutting the defense budget quite a bit.
$61billion doesn't get us 1/3 of the way back!
On point two, I'll just observe that the Republicans don't control the military. The war in Iraq is over along with much of the spending. The war in Afghanistan (and Libya) can be ended without even the stroke of a pen by the President. So it doesn't seem fair to be blaming the Republicans for ONGOING defense spending!
I don't think almost any cuts in government spending can "cripple us in the long run," but that is clearly a view based on my belief that government spending is either useless or in many cases counterproductive to the economy. I do not agree that we need fiscal appropriations to keep the economy from being "crippled in the long run." In fact I think the economy runs much, much better when the government sector is a small part of the economy than when it is a large part of the economy.
I appreciate the (generally) positive tone of your disagreements. I was afraid that this column would get lots of people flaming me, even though I hope it's clear in there that I'm not in any way absolving the Republicans for the fiscal mess!
Just a Passing Market Storm? [View article]
We Hold These Truths No Longer Self-Evident [View article]
And I think you need to re-check your Depression history...the "right wing ideas" you say extended the Great Depression include prohibiting wages to fall to protect the worker, which was more responsible than anything else for the high unemployment since it implied high real wages when deflation began. I would suggest "The Forgotten Man" as a good book to start with. Thanks for reading.
Is There a TIPS Disaster Developing? Depends on How, And How Long, You Own Them [View article]
I didn't even mention the mathematical proof of what your lifestyle would look like, compared to what it actually is, if inflation were significantly understated. Over any reasonable timeframe, you would notice.
Look at many of my other comments for these observations, since I've made them ad nauseum to address these concerns.
Stoking the Economic Engine With Paper [View article]
And also, I will say, for future generations to wonder about YOUR remark, "What did The Inflation Trader write in that comment that had anything to do with politics?!?" Because as I re-read my column, I can find nothing that has the slightest thing to do with any political persuasion.
The Gravity Of The European Situation [View article]
The Gravity Of The European Situation [View article]
Bonds: It's OK to Panic, But Take Your Time [View article]
If inflation was really running at 7-8%, then (1) real living conditions would have deteriorated sharply (as in, you would be living 20% as well as your parents did, not 90% as well), and (2) real yields of TIPS would adjust ...unless, of course, the millions of TIPS investors are in on this little scam and so intentionally misprice TIPS.
Go sell crazy somewhere else. We're all stocked up here.
(I'm usually quite pleasant in my responses, but this ridiculous "Shadow Stats" baloney is like a virus. A great example of what the internet is really bad at.)
All Is Not Lost [View article]
We Hold These Truths No Longer Self-Evident [View article]
Bracing for More Economic Punches [View article]
An Unconvincing Rally [View article]
We Hold These Truths No Longer Self-Evident [View article]
If you're going to judge the Declaration of Independence and the Constitution on the basis of today's mores instead of those of 230+ years ago, then I am afraid that since you are an Australian I will need to treat you as an aborigine. Or, if you are not of aboriginal descent, I will need to hold you responsible for the harsh treatment that aboriginal Australians have endured. Therefore, nothing you say has merit.
Doesn't make sense, does it?