^ But there are times when it’s appropriate for individuals (and for countries) to go into debt. When you buy a house, you go into debt big time, with the understanding that you will be able to pay it off over time. If you had to wait until you had the whole price of the house before buying, you’d wait a long time. If you start up a business you may well begin with a bank loan – that is, debt. If you want to go to university, you may well get a loan. So debt in and of itself is not always bad – the question is when and why and for how long. In my opinion, for what it’s worth, part of the problem now is that when times were relatively good the government ran up too much debt, so that now when deficit spending makes sense the government doesn’t have enough room to maneuver.
^^Another problem is that there are no agreed-upon rules for the “who-what-when-where and why” that justifies spending, along with the “how much”. It would be nice if we had some kind of charter Gov’t officials had to be held to, as it would also settle what kind of tax burden we’re stuck with… but good luck getting professional tax collectors to do something like that for us :-).
Lonecat, NeoConMan will explain it better but I don’t see him here yet……so……
It is inappropriate to go into debt to buy a house. You should already have the money from your family/inheiritance. You should not be going to school anywhere that isn’t named after your family or at least has a building named from them.
Gosh, Kylop – thanks for telling me. I must remember to get born into the right family.
(One of my best friends in college did belong to a family that had a building on campus named after them – she was a radical lefty, a close friend of Abbie Hoffman, but she grew up in a mansion in Georgetown. Oh, the sixties!)
lonecat, now i know why i love your civil, intelligent posts (3hours ago)
and now i know why i just plain like you (actually i met mr. hoffman at ut austin - the late 60s i think) - oh yeah the 60s - i was only half hippie - i didn’t do the drugs but i marched; i didn’t like the music but i had the hair and i loved the clothes
hey parker – I bet we were at the same marches from time to time. Well, maybe not if you were in Texas – I was in New York mostly. I never did the drugs, either. But I had hair all down my back – now I would be challenged to do a comb over. Those were interesting times – hard times, sometimes, but there was hope and there was change.
Hmm, I know how to balance a checkbook, did borrow to buy my house, but everything now, house, cars, dachshund, are all paid off. My “savings” might do just as well under the mattress, or better, based on what “conservative wisdom” did to my IRA.
As to the 60”s watched the Beatles on TV sitting in a basket chair hanging from the ceiling in Haight-Ashbury. Had the long hair, and well, some good weed, that made the Beatles even better. A year later I was on my way to ‘Nam, with short hair- found some pretty good weed there. Came home, got out, went into law enforcement. Tried to be “nice” to folks, treating them fairly, and gave up on pot, as didn’t want to be a hypocrite. Worked for low salary, couldn’t invest.
Saw Reagan come in, economy actually go down, and the setup for huge debt increases by the “government”. The “market” started running the government, and Reagan said government was the “enemy”– subliminal message- it was the “market” and “bankers” and HIS contribution to “government”. So I guess he was right?
bruce – I think we are in substantial agreement on principle, at least. I agree that too much debt for the country over a long period is bad. I wish that the various administrations in the recent past had not built up such a large debt. But here we are. I don’t claim to be an economic whizz, but I do think that without some more stimulus spending it’s going to take a long time to get out of this mess. (Thomas Freidman had a good column this morning in the NYT, but I deleted it before I came here – he argues that there are three structural problems that need to be addressed – stimulus is only part of the package, he says, but it is part.)
Anyone who is serious about reducing the debt has to favor either a reduction in services or raising some taxes.
I would consider cuts in services – but which ones? Probably the defense budget could be cut, but there’s a lot of resistance to that. I would also consider some tax increase – specifically a return to the pre-Bush tax levels for the wealthy.
dtroutma; “As to the 60”s watched the Beatles on TV sitting in a basket chair hanging from the ceiling in Haight-Ashbury. ”
I too lived there, way back then. We used the Haight cleaners but they went out of business. Maybe we were neighbors.
Mario Savio, Suzanne Goldberg, auto row sit-ins.
lonecat You seem to be advocating classic Keynesian economics. That philosophy can never fail. Spend $1T to stimulate. Didn’t work, well spend another $1T. That didn’t work, spend more. Eventually the economy turns around and hooray, we were right, it was the twelfth $1T expenditure that did it.
According to Krugman the reason why FDR failed was he didn’t spend enough.
The analogy to home mortgages and borrowing is very apt. People earning $50,000/year bought $500,0000 homes on mortgages. They went bankrupt. That is what is happening to the US.
lib1 – I may be a little more fiscally conservative than some on the left – or on the right, for that matter. I think that in good times the government should run a balanced budget – even a slight surplus – and then in bad times the government can go into deficit to stimulate the economy. I’ve read various economists, but I don’t claim to be an expert, and I’m always willing to learn more. I am not confident that any school of economic thought has it all right.
(I think Krugman’s argument is a little more complicated, by the way.)
– “There’s a problem: conservative politicians, clinging to an out-of-date ideology–and, perhaps, betting (wrongly) that their constituents are relatively well positioned to ride out the storm–are standing in the way of action. No, I’m not talking about Bob Corker, the Senator from Nissan–I mean Tennessee–and his fellow Republicans… . I am, instead, talking about Angela Merkel, the German chancellor, and her economic officials, who have become the biggest obstacles to a much-needed European rescue plan.”–former Enron adviser Paul Krugman, New York Times, December 15, 2008.
– “Why is Europe falling short? Poor leadership is part of the story. European banking officials, who completely missed the depth of the crisis, still seem weirdly complacent. And to hear anything in America comparable to the know-nothing diatribes of Germany’s finance minister you have to listen to, well, Republicans.”–Krugman, New York Times, March 16, 2009.
– “The euro area economy grew 1 percent in the second quarter of this year, a much better rate than had been expected, as Germany’s best quarterly performance since reunification compensated for slow growth in Spain and Italy and a sharp decline in Greece, according to data released Friday.”–news story, New York Times, August 14, 2010.
Bruce – I’m okay with ending the wars – I was against them (both of them) from the beginning – but are we prepared for the fallout? (I hope not nuclear.) Iraq is looking not so peaceful these days – perhaps we should leave them to work it out, but that breaks the pottery barn rule. And trouble i Iraq could mean an opportunity for Iran. As for Afghanistan, turmoil there has potentially big repercussions in Pakistan. Both of these are big messes, and there was no need for either of them.
I get pretty fed up, too.
As for the jobs – how would you bring them back? The business cycle has been around for a long time – the Great Depression of the 30s was only one among many. Then we had a pretty good period of prosperity after WWII – some economists think that the New Deal policies contributed to that prosperity. Now do we do nothing? Do we just assume that the cycle will just work its way out? Let the poor people suffer while the rich cut back to one yacht? I need an alternative.
lonecat over 13 years ago
^ But there are times when it’s appropriate for individuals (and for countries) to go into debt. When you buy a house, you go into debt big time, with the understanding that you will be able to pay it off over time. If you had to wait until you had the whole price of the house before buying, you’d wait a long time. If you start up a business you may well begin with a bank loan – that is, debt. If you want to go to university, you may well get a loan. So debt in and of itself is not always bad – the question is when and why and for how long. In my opinion, for what it’s worth, part of the problem now is that when times were relatively good the government ran up too much debt, so that now when deficit spending makes sense the government doesn’t have enough room to maneuver.
iamthelorax over 13 years ago
^^Another problem is that there are no agreed-upon rules for the “who-what-when-where and why” that justifies spending, along with the “how much”. It would be nice if we had some kind of charter Gov’t officials had to be held to, as it would also settle what kind of tax burden we’re stuck with… but good luck getting professional tax collectors to do something like that for us :-).
Kylop over 13 years ago
Lonecat, NeoConMan will explain it better but I don’t see him here yet……so……
It is inappropriate to go into debt to buy a house. You should already have the money from your family/inheiritance. You should not be going to school anywhere that isn’t named after your family or at least has a building named from them.
lonecat over 13 years ago
Gosh, Kylop – thanks for telling me. I must remember to get born into the right family.
(One of my best friends in college did belong to a family that had a building on campus named after them – she was a radical lefty, a close friend of Abbie Hoffman, but she grew up in a mansion in Georgetown. Oh, the sixties!)
parkersinthehouse over 13 years ago
lonecat, now i know why i love your civil, intelligent posts (3hours ago)
and now i know why i just plain like you (actually i met mr. hoffman at ut austin - the late 60s i think) - oh yeah the 60s - i was only half hippie - i didn’t do the drugs but i marched; i didn’t like the music but i had the hair and i loved the clothes
lonecat over 13 years ago
hey parker – I bet we were at the same marches from time to time. Well, maybe not if you were in Texas – I was in New York mostly. I never did the drugs, either. But I had hair all down my back – now I would be challenged to do a comb over. Those were interesting times – hard times, sometimes, but there was hope and there was change.
Dtroutma over 13 years ago
Hmm, I know how to balance a checkbook, did borrow to buy my house, but everything now, house, cars, dachshund, are all paid off. My “savings” might do just as well under the mattress, or better, based on what “conservative wisdom” did to my IRA.
As to the 60”s watched the Beatles on TV sitting in a basket chair hanging from the ceiling in Haight-Ashbury. Had the long hair, and well, some good weed, that made the Beatles even better. A year later I was on my way to ‘Nam, with short hair- found some pretty good weed there. Came home, got out, went into law enforcement. Tried to be “nice” to folks, treating them fairly, and gave up on pot, as didn’t want to be a hypocrite. Worked for low salary, couldn’t invest.
Saw Reagan come in, economy actually go down, and the setup for huge debt increases by the “government”. The “market” started running the government, and Reagan said government was the “enemy”– subliminal message- it was the “market” and “bankers” and HIS contribution to “government”. So I guess he was right?
fallacyside over 13 years ago
^^hippies bore me.
lonecat over 13 years ago
^ That’s okay, you’re pretty boring, too.
fallacyside over 13 years ago
^pretentiousness bores me.
myming over 13 years ago
GREAT BALLS OF FIRE -
this is a great group of posters w/ a common sense of balance (except the puppy) , similar backgrounds/experiences and worth. we could overcome…
myming over 13 years ago
URL: http://cheezburger.com/View/3872960256
lonecat over 13 years ago
bruce – I think we are in substantial agreement on principle, at least. I agree that too much debt for the country over a long period is bad. I wish that the various administrations in the recent past had not built up such a large debt. But here we are. I don’t claim to be an economic whizz, but I do think that without some more stimulus spending it’s going to take a long time to get out of this mess. (Thomas Freidman had a good column this morning in the NYT, but I deleted it before I came here – he argues that there are three structural problems that need to be addressed – stimulus is only part of the package, he says, but it is part.)
Anyone who is serious about reducing the debt has to favor either a reduction in services or raising some taxes. I would consider cuts in services – but which ones? Probably the defense budget could be cut, but there’s a lot of resistance to that. I would also consider some tax increase – specifically a return to the pre-Bush tax levels for the wealthy.
myming over 13 years ago
^ nothing wrong w/ that.
DR. C. - what did/do you teach ?
Libertarian1 over 13 years ago
dtroutma; “As to the 60”s watched the Beatles on TV sitting in a basket chair hanging from the ceiling in Haight-Ashbury. ”
I too lived there, way back then. We used the Haight cleaners but they went out of business. Maybe we were neighbors. Mario Savio, Suzanne Goldberg, auto row sit-ins.
lonecat You seem to be advocating classic Keynesian economics. That philosophy can never fail. Spend $1T to stimulate. Didn’t work, well spend another $1T. That didn’t work, spend more. Eventually the economy turns around and hooray, we were right, it was the twelfth $1T expenditure that did it.
According to Krugman the reason why FDR failed was he didn’t spend enough.
The analogy to home mortgages and borrowing is very apt. People earning $50,000/year bought $500,0000 homes on mortgages. They went bankrupt. That is what is happening to the US.
lonecat over 13 years ago
lib1 – I may be a little more fiscally conservative than some on the left – or on the right, for that matter. I think that in good times the government should run a balanced budget – even a slight surplus – and then in bad times the government can go into deficit to stimulate the economy. I’ve read various economists, but I don’t claim to be an expert, and I’m always willing to learn more. I am not confident that any school of economic thought has it all right.
(I think Krugman’s argument is a little more complicated, by the way.)
Libertarian1 over 13 years ago
^ Krugman is always complicated because no matter what happens in the world he is always right.
Agree with balanced budget in good times etc
Obviously as a Libertarian i follow the principles of the Austrian school.
Libertarian1 over 13 years ago
3 items from the NYT
– “There’s a problem: conservative politicians, clinging to an out-of-date ideology–and, perhaps, betting (wrongly) that their constituents are relatively well positioned to ride out the storm–are standing in the way of action. No, I’m not talking about Bob Corker, the Senator from Nissan–I mean Tennessee–and his fellow Republicans… . I am, instead, talking about Angela Merkel, the German chancellor, and her economic officials, who have become the biggest obstacles to a much-needed European rescue plan.”–former Enron adviser Paul Krugman, New York Times, December 15, 2008.
– “Why is Europe falling short? Poor leadership is part of the story. European banking officials, who completely missed the depth of the crisis, still seem weirdly complacent. And to hear anything in America comparable to the know-nothing diatribes of Germany’s finance minister you have to listen to, well, Republicans.”–Krugman, New York Times, March 16, 2009.
– “The euro area economy grew 1 percent in the second quarter of this year, a much better rate than had been expected, as Germany’s best quarterly performance since reunification compensated for slow growth in Spain and Italy and a sharp decline in Greece, according to data released Friday.”–news story, New York Times, August 14, 2010.
lonecat over 13 years ago
Bruce – I’m okay with ending the wars – I was against them (both of them) from the beginning – but are we prepared for the fallout? (I hope not nuclear.) Iraq is looking not so peaceful these days – perhaps we should leave them to work it out, but that breaks the pottery barn rule. And trouble i Iraq could mean an opportunity for Iran. As for Afghanistan, turmoil there has potentially big repercussions in Pakistan. Both of these are big messes, and there was no need for either of them.
I get pretty fed up, too.
As for the jobs – how would you bring them back? The business cycle has been around for a long time – the Great Depression of the 30s was only one among many. Then we had a pretty good period of prosperity after WWII – some economists think that the New Deal policies contributed to that prosperity. Now do we do nothing? Do we just assume that the cycle will just work its way out? Let the poor people suffer while the rich cut back to one yacht? I need an alternative.