Obama has said that the National Debt is not a problem. He has also said that there is no need to balance the budget. So, why did he push for tax increases on the rich? Why did the Democrats add another $1 Trillion in additional taxes to their budget proposal?
No he didn't. He said it wasn't an immediate crisis. And it isn't. Basic Keynesian economics: in a recession, deficit spend to pull the economy up. Basic Keynesian economics again: the rich save most of their income rather than spending it. This drag on spending drags the economy down with it. By taxing the rich, net spending in the economy increases, and GDP increases. That's why back in the 50's and 60's when the rich were taxed at much, much higher rates than today, the economy was humming along. Targeted at the rich. See previous answer.
did he say there is no need to EVER balance the budget? did he say the debt would NEVER become a problem? I know cheney believed deficits didn't matter but im not sure about obama
The Liberal answer is SPEND, SPEND, SPEND !! Then the theory goes that that the rich will have to pick up the tab later. Of course, it won't just be the rich, it will be the middle class (or what is left of them).
The Republicans may have been bad hypocrites, but Obama made the Republicans look like frugal penny-pinchers by comparison. All that "stimulus" spending will burden down the economy when it eventually has to be paid back. The economy has already been suffering under inflation. Much of it was caused by the housing bubble, and would have just been transient had the Federal Reserve not stepped in with its huge government debt buying programs to "prevent deflation". The inflation may have started before, but you have Obama to thank for its persistence.
Yet, what did he say during the 2008 election cycle? http://www.youtube.com/watch?feature=player_embedded&v=1kuTG19Cu_Q So, it it is "unpatratroitic" to raise the debt 4 trillion in 8 years, then what do you call it when you raise the debt 7 trillion in 4 years? Now after he has been elected for the second time, suddenly it's not a problem. And when has "Keynesian economics" ever worked? Do you know what the biggest problem with Keynesian economics is? There is no real growth. It is simulated growth. As long as the government is dumping money (in this case money that it does not have) into the economy there is growth. As soon as the free money stops, the economy stagnates. If you want to see what happens when a country keeps handing out free money for an extended period of time look at europe. http://www.tradingeconomics.com/united-states/gdp-growth-annual
Right. Just like the economy was "burdened" in the 50's and 60's when we paid back the WWII debt? I would have a lot more respect for Republicans if they had one whit of actual evidence to support their wacky economic theories. Which they don't.
Oh, you mean months before the Bush Recession ruined the world economy? Who cares? When the nation moves rapidly into the biggest recession in 50 years, only a Republican would be dumb enough to insist on staying the course. Bush's problem was that he spent like a drunken sailor during a period of economic growth. That is the opposite of what Keynesian theory recommends, and you saw the results. Obama was correct to call him on it. It worked to end the Great Depression. And it worked to get us out of every recession since WWII. Oh this is rich. How does one distinguish "real" growth from "simulated" growth, using actual economic statistics? Real or simulated? Another oddball non-economic fantasy. What is the difference between "free" money and any other kind of money, in economic terms? Nice graph, but oddly enough it doesn't tell us whether the growth shown is real or simulated. How are we to know without FOX News to tell us? And also, how about that recession that started under Bush? Was that a real recession, or was it simulated? Because it sure seems to me that if growth can be simulated, shrinkage can too.
Except the USA was a RECIPIENT of war debt during that time. This is one of of the seldom mentioned reasons why the USA emerged as an influential power after the second world war, because Britain and France were so indebted. just one example: In any case, all the excessive government debt accumulated during the first world war was one of the primary reasons for the widespread economic disaster which led to the second world war: http://www.bloomberg.com/news/2013-02-04/the-world-war-i-debts-that-wouldn-t-go-away-.html
so what. banks loan money and get paid back. if the money hadn't been lent it could have been earning money elsewhere
except when they don't. Every so often, it seems, there is a massive "crisis" where loans go bad everywhere. Many Keynesians think the solution is to "stop the panic". However, I would assert that the fundamental cause of these problems was all the bad debt in the first place. Trying to stop the panic will result in failure because the loans are fundamentally bad. except, where was this money coming from? It would have to come from future taxation. It is important that we remember the fallacy of composition. Putting too much money in one place alters prices and interest rates. If the government can borrow 100 million at a 2 percent interest rate, it does not mean they can borrow 400 million at the same rate. In fact, if the government keeps borrowing money, the interest rates on all the rest of their debt can start going up, and it can snowball out of control.
US GDP growth rate from 1950 to 1970: http://www.tradingeconomics.com/united-states/gdp-growth So, you are claiming that a downward trend means that Keynesian works?
Think so? Well let's look at that. http://www.tradingeconomics.com/united-states/gdp-growth Now, follow these instructions. 1. Open link. 2. Change start date to January 1950, and the ending date to December 1969. 3. Click on the trend box. You will see that GDP growth peaked in 1950. From there the trend in downward. http://www.usgovernmentspending.com/spending_chart_1950_1970USb_13s1li011mcn_F0t This second link shows Governent spending during the same period of time. By comparing both graphs you will see that as Government spending increased the GDP growth shrank. I believe this is contrary to the Keynesian claim. Now, do you want to try again?
of course the rate of growth peaked in 1950. they were just ramping up after the war. and this is not contrary to Keynesian theory
A classic apples-to-oranges bait and switch. One chart is GROWTH, the other is total amount. This is a HUGE difference. The spending chart uses nominal dollars instead of real dollars. Does the GDP chart? Who knows? Oh, and if you want to go back to the tax structure we had in 1950, GDP growth would skyrocket. THAT is the Keynesian claim.
Do rich people just keep their millions under their mattress or in some sort of Scrooge McDuck money pool? No, they generally keep their money in these nifty little places called "Banks", who give the money to other people using something called "Loans". On another note; is it more important for the government to protect civil liberties or to "Fix" the economy?
Precisely. They save rather than spend. Newsflash: GDP is spending, and saving doesn't count. Newsflash #2: banks are sitting on trillions in assets right now, because they can't find borrowers when the economy is a sluggish as it is. So no, that money isn't being recycled. When Democrats are in charge, we can do both. When Republicans are in charge, we can do neither.
That's why GDP is a poor measure of economic health. So it's neither the fault of the rich people or the banks. It sounds like you should blame potential borrowers. Mneh. I don't buy it.
