Did Obama completely cave on Taxes yet?Follow

If he's going to continue to attempt to pass both bills (one to extend cuts for those under 250k and one to extend cuts for those under 1mil) he's going to have a hard time with that. Both will probably pass the House with it being Republican controlled, but I highly doubt that the higher one is going to pass the Senate or be signed by President Obama.

Only if we use a very narrow definition of math.


Yes, the one involving intellectual rigor. Not "the math" that Karl Rove uses, but, you know, math.


If it really were the standard, no one would pay a moments heed to liberal economic theories Smash. Their theories aren't based on math, or science, or even historical precedent. They are based on the need to appear to have an economic excuse to enact liberal social policies.

What are the mathematical issues you have with Keynesian economics?


What conclusions? You're saying that 100% of economists agree with Krugman? Or that 100% of "people who are good at math" would? I know a hell of a lot of people who are far far far better at math than Paul Krugman, and most of them think he's a complete idiot.

No you don't. You don't know anyone who's "better at math" than Krugman. Not because he's going to win a Fields Medal or anything, but because you clearly live in a weird echo chamber of "common sense" where having your gut instinct be wrong 99 times out of 100 just means you didn't believe hard enough.


When you say "people with sufficient math skills", what you really mean is "liberal economists". Which is to say you're not really saying anything at all. I mean "100% of people who agree with me agree with me" isn't exactly a strong argument, is it?

Nope. It means there is no mathematical basis for austerity measures in the present economy. None. Just philosophical ones. I'm happy to entertain challenges to that idea. If there was a valid argument that austerity would do something other than stall a tepid recovery and lead to a generation of decline, that'd be great. I'm sure I'd disagree on what to cut or how to raise revenue or whatever, but I'd genuinely like that to be true because it would avoid the horror show we're actually in for.


Too large a deficit is always a problem. But the causes of that deficit and making sure that we reduce that deficit correctly is even more important. If someone is spending more money than he has and going deep into debt in order to pay for his drug habit, the fact that he's got a budget deficit is a problem, but the correct response is never to just give him more money so he can afford his drug habit. The correct solution is to stop him from spending money on drugs and thus solve two problems at once. Both solutions would solve the deficit problem, but one just masks another problem, while the other solves that.

Yeah just stop with the "If I spend all my monies, then I gots no monies!" analogies. Macro still isn't Micro. It's not easy to understand. It can't be translated to metaphor for people too lazy or intellectually incapable of understanding theory. It's not simple. You've never made any sort of financial decision that even vaguely relates to nation state economic policy. Me either. Most corporations that aren't also sovereign states haven't either. A nation isn't a family or a company, it's a completely different entity. Central banks aren't merchant banks. Etc.


Same deal here.

Yeah no. I could counter with other analogies that supported my philosophical views about expanding safety net spending or whatever, but they wouldn't speak to economic outcomes for the nation. Because they're only vaguely related. Totalitarian sates can have great economies. Slave labor works fine in the market. Starvation can benefit an economy long term. There are things I believe we should do regardless of economic impact, and there are things I believe we should do because of the economic impact. If you want to cut social security because the idea of entitlements bothers you, just be an adult and say that. I don't particularly care if providing food for everyone in the world is a drain on the global economy. I think it's something we should do as a species. I think it's part of what makes us human. The same holds true for access to medical care, etc. Many of the things I believe, single payer healthcare for example, inarguably also have economic benefits. Some of them, like a very high minimum wage, clearly don't. I don't need to pretend everything I want guarantees a utopian best outcome for everyone

Because I'm not reading a fairy tale to my daughter.


Just raising taxes to pay for increased government spending may address the deficit problem, but doesn't solve the spending problem. And just as with a drug user, if you increase that revenue, he'll likely just increase his spending, meaning the deficit problem comes back. Do you then eternally increase revenue until you actually can't do it anymore? Or do you realize the trend and nip it in the bud before it gets out of hand?

There is no deficit problem at the moment. Because money is close to free. I'm not sure why that's so confusing. The only "problem" that deficits potentially cause is making it harder for the US to borrow money. I don't think taxes should be raised on the wealthy to generate revenue to avoid borrowing. I think taxes should be raised on the wealthy to be put back into the economy to generate demand. Alternately, we could just borrow more. I don't really care that much. Philosophically, I think people with the highest incomes who benefit the most from our society monetarily should carry more of the burden for funding that society, but I don't think it has much to do with economic outcomes on a large scale. When it becomes harder to borrow money (which is no time soon) then there's a valid case for raising marginal rates particularly on the high end to generate revenue.

The idea that the defect is currently a "problem" is a PR campaign. Quite literally. It's sold to people who don't understand economics but who understand that shouldn't carry a bunch of 19% credit card debt instead of saving money and buying less stuff. Which is great, and they shouldn't, but conceptually it's a meaningless comparison. The goal is cut entitlements, period. I have no idea if the engineers of that PR campaign believe or care that cutting entitlements would be better for the economy or not. It's clear they'd prefer other people to die in the streets before they were forced to pay another nickel.


Romney absolutely would have focused on fixing the deficit.

Again, nothing to fix. Also, a blatant lie. Romney would have been a deer in the headlights afraid to damage a mild recovery. He would have cut taxes, likely borrowed even more in the wake of less revenue, and tried to push for entitlement "reform"until, on about January 28th it was made clear to him that he wasn't going to be re-elected if he attacked Medicare or Social Security, and he would have signed an Unemployment Benefits extension, extended the payroll tax cut, etc. It's somewhat difficult to determine what he would have actually advocated for larger economic policy given that he either had no idea or had no interest in letting anyone know, but it's a good bet it would have revolved around continuing to attempt to destroy unions and softer targets like programs for the very poor.


But it would have been critical to him to fix it by bringing government spending under control. Yes, this would have to include entitlement spending, since that's where the bulk of our increase has been.

Yeah, I'm too lazy to bother with this, to be honest. Yes, entitlements are most of the budget. If you want to eliminate entitlements, fine, just say so. Pretending we "have to" to avoid the deficit boogeyman isn't required. It's also untrue. It's also political suicide. There's zero political will to lessen spending on the most costly entitlement programs. Doing so will just result in the change being reversed. People like Santa, you know. Didn't you get the memo?

Only the folks on the left think that we can just spend our way out of debt. The irony is when folks like you defend such lunacy by arguing that it's somehow good math.

Yeah, so first of all there is no "left wing math" and "right wing math". There's just math. Secondly, no one's arguing spending will reduce the debt, the argument is that you pay down the debt when the economy is doing well by increasing revenue, and that to stimulate the economy....you spend more money...UNLESS it's expensive to borrow money to spend. See how that works? THE MARKET determines when it's a bad idea to borrow more money to spend by making it more expensive to do so. That's what happened in the 70's. It was a bad idea to borrow money at 14% of whatever Tbills auctioned for in 1977. It would be a bad idea to do that now. On the other hand, slowing the economy even slightly out of fear for running up too much debt when you can borrow money at .017% is idiotic.

Get it? The interest rate on debt matters a great deal, for obvious reasons. This is in an inapt metaphor, but since I know you can't do the math required to understand the actual issue: You can understand how it might be a good idea for someone to buy a house now, when prices have come down substantially and mortgages are at ~3% rather than save another 2% for a down payment while interest rates and prices rise, right? Even though they will acquire more debt immediately, the net effect of that borrowed money is much more beneficial now than in the future if interest rates and prices rise. Let me be clear that I am in no way interested in debating the metaphor. It's a poor one, because there are no good ones, but I do try to dumb it down for you as best I can.

You know who could probably do that more effectively?

Paul Krugman.

The economic formulas themselves, nothing. The application of them? Lots. But then, those aren't actually mathematical issues, are they? Remember when it was you claiming that neo-Keynesian economic was just good math? Remember me saying, "only for a very narrow definition of math"? You're defining math to not be about the adding and subtracting of numbers, but assumptions which really have nothing to do with the math and everything to do with social theory.

I suppose I technically should have said "only for a selectively incorrect definition of math", but I honestly can't remember exactly what you said that prompted that response, so I was probably thinking in terms of math like "Borrowing $1T/year can be fixed by simply raising taxes by $80B/year. Or something similarly silly.



Yes, I do. Again though, I'm defining math as actual math as performed by people with degrees in math. You're defining it as "people who assume that higher deficits can be eliminated via massive inflation without any negative effects". That's not actually math though. Which is were the problem arises. It's the same silly claim Obama was making during the campaign when he kept saying "it's just math", when what he was talking about had nothing to do with math at all.

You do understand that a theory which states that rising interest rates will have a given effect on monetary flow isn't actually based on math, right? People like you claim it does because by comparing your pet theories to something concrete and proven like "math" make them seem like they are concrete and proven too. But no amount of saying that something is math makes it so.



Ok. So meaningless ramblings aside, do you actually disagree that a nation can have too high a deficit? BTW, I don't disagree with you that some deficit is fine and in fact can be economically beneficial for a nations economy. But I think it's pretty reasonable to assume that when deficits reach the point where nations credit ratings start getting downgraded, they are problematic.



Sure. But you do understand that most people don't agree with you there, and that people like Krugman therefore have to lie to them and convince them that it's actually good for the economy to spend money on the social programs that they want to create in order to get enough people to allow them to create them? Cause that would seem particularly relevant here.



And you can't see the problem there? Money ceases to be "close to free" when it becomes harder to borrow it. Funny how that happens when people who think that "deficits don't matter because money is free" borrow too much money. It's almost like it's a self created problem.

What's so startlingly amusing about this, is that you've basically adopted the college kid maxing out the credit card scenario to macro-economics. Just like that kid, who thinks that borrowing money doesn't matter as long as the credit card company keep upping his limit, you can only do that for so long before you do eventually hit a limit. And when you do, you find yourself in a nearly impossible to get out of situation. It's incredibly irresponsible. And yes, before the inevitable "macro isn't micro" response, the big mistake that Keynesian's make is assuming that nations have the equivalent of an unlimited credit card. They don't. The negatives may take different forms, but they are there.


The larger point is that most liberal economists don't care because the negatives are things that they're ok with in some way. Destruction (redistribution in a way) of personal wealth being one. When you want everyone dependent on the government, and spending every dime either consuming or paying taxes for those great government programs, creating forces in the economy which massively dissuade savings and investing is a good rather than bad thing. Again, the math isn't the issue. It's an ideological difference of opinion over what a "healthy economy" actually is. Hell. It's a difference over what the purpose of government policy with regard to the economy should be.




When it becomes harder to borrow money, it will become harder very fast and uncontrollably. We've seen this in past recessionary cycles back when both republicans and democrats were following Keynesian economic models. It'll happen much the same way the current economic downturn began. One day lenders will wake up and realize that lending money isn't actually producing the returns they thought once other economic factor are taken into account. There will then be a huge upswing of interest rate increases to entice them into lending more money. This will lead to inflation, more debt and more lack of return value, necessitating higher interest rates. Rinse and repeat.

When that happens, it will happen very suddenly. We will go from "money is free cause you can borrow as much as you can", to "money is expensive and getting moreso every day". Now, the positive of this is that current debt will become relatively smaller. But the negative is that personal wealth and upward mobility within the economy will be massively impacted. People will lose relative economic value on a level that will dwarf the losses in 2008.




Still missing the point aren't you. I'm not calling either position "math". You are.




Sigh. Except we will end up with interest rates like the 70s if we don't get the deficit under control. You're missing an entire huge component of this.

What's bizarre is that you know what you just said is false. You've argued it in the past. Borrowing boatloads of money is intended to force interest rates and inflation upwards, which will cause existing debt to be smaller relative to those things. That's how you "borrow your way out of debt" in a macro economic situation. Borrow enough money and those rates *will* go up.

You're right on one thing though, but you're projecting the liberal view onto the conservatives. The left does not care about this from an economic point of view. It's all about their social agenda (I thought I said this). They aren't pushing us into a debt/inflation/recovery cycle again just because it's a fun exercise, but because along the way they'll have increased the total relative size of social spending in the US. That's the brass ring here. Tossing the country through a couple decades long economic ringer is a small price to pay to do so.



Yes. That's exactly what I'm talking about. The current economic approach of the left only makes sense if the intent is to spur those future increased interest rates. It's funny because you get this, but then pretend that you don't when it's convenient. In exactly the same way it's a good idea to borrow money to buy a house right now because interest rates are low and that debt will be lower relatively speaking once interest rates increase, the same applies to government spending. It's a cycle. And frankly, it's even a relatively painless cycle at the first part (where we are right now). The pain comes in when you have high interest and inflation rates and no one can save money or get ahead.

I'm not saying that those things are bad "right now", but that if we don't do something about our deficit and resulting debt things will become bad. It's funny because the last time we went though this cycle as the 60s/70s. It took Reagan pushing conservative economic policies to get us out of the back end (the bad side), and for the next 30 years we've had unprecedentedly stable and low interest and inflation rates. But all that stability and upward mobility and wealth generation is just horrible for liberals to see. Can't have people becoming successful can we? So they're intentionally creating conditions designed to put us back through that pain again.

Sadly, far far too many people don't realize this and continue to buy the lies the left sells about this. The "free money" is the bait. But the ultimate intention is to create a high interest high inflation economy where individual wealth acquisition is nearly impossible so that everyone has to live day to day and paycheck to paycheck. That's the environment where liberal social policies sell the best. Which is the real objective here. Get as many people poor as possible. Make sure their opportunities for success are as small as possible. And ***** them over if they do happen to be one of the fortunate ones.


It's not an accident that the periods when liberal social programs have experienced the most growth have been the periods when we've been suffering the most economically. Is it really that much of a stretch to conclude that liberals might just intentionally put our economy on a track to create those conditions? I don't think so at all. And I don't think you think so either.

As opposed to a very broad definition of math, where 2 + 2 = 647!

Sure. But you do understand that most people don't agree with you there, and that people like Krugman therefore have to lie to them and convince them that it's actually good for the economy to spend money on the social programs that they want to create in order to get enough people to allow them to create them? Cause that would seem particularly relevant here.

Nope. He doesn't. I'm sure when you closed your eyes and pretended instead of actually reading anything, that was what happened, but not here in reality. Also, Hitler not a Socialist, Romney not President, Rape doesn't have to leave marks, companies can't just decide not to hire blacks, etc.

I started to read the rest of your post which seemingly amounts to "yeah, see, Liberals want to borrow money so the economy improves and interest rates go up! Then we'll be in real trouble. We can stop that by preventing the economy from improving NOW. Duh" So I'm not going to bother with it. The rest of is a little amusing and a little sad. There are times I feel genuine pity for you when make posts like you have here. You normally carefully qualify everything to the point of seeming to have some vague credibility, if no balls. When you try to respond in kind to a well thought out post it exposes you, as this one has, as, frankly, just not that bright. I'm sorry I baited you into it, it really ruins it for all of us. It's one thing to win a fight with an over matched opponent, It's another thing to kick a retarded kid.

Sorry about that. Of course your right, the deficit is a BIG PROBLEM. /headpat.

Wow, listening to the radio on the ride home he was fairly confident that it was going to be a sure thing in the House, that it was all up to the White House and Senate Dems now...

Say what you will about Pelosi, she was the master of arm twisting when it came down to the crunch.

Maybe Boehner should sign up for lessons from her.

Hell hath no fury like a woman scorned...

I got up this morning to our Christmas tree lying on the floor in a puddle of water and broken ornaments. Hearing about Boehners big failure on my way in to work helped sort out the start of my day.

Personally, I'm just having fun watching these "ultra conservative" tea party ***** vote themselves out of office. I don't pretend to know or understand the full impact of the fiscal cliff, but I do know that my bi-weekly paycheck would be approximately $60 shorter if the payroll tax reduction expires. Whoop de ******* doo.