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About LinkBacks[ame="http://www.youtube.com/watch?v=2-51rFiljBo"]‪Austrian Economist, Robert Murphy on the Debt Ceiling‬‏ - YouTube[/ame]
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Austrian Economist, Robert Murphy on the Debt Ceiling
[ame="http://www.youtube.com/watch?v=2-51rFiljBo"]‪Austrian Economist, Robert Murphy on the Debt Ceiling‬‏ - YouTube[/ame]
Guru
Granny says be real suspicious o' dem politicians - dey's sneaky...
Beware the debt ceiling vote
July 21, 2011: The stock plunge on Sept. 29, 2008, when the first bank bailout bill was voted down, is a reminder of a risk lawmakers take if they push debt ceiling vote to the last minute.
See also:The debt ceiling talks, for weeks now, have been going on behind closed doors. The negotiations have been conducted by a tiny group of legislative leaders and President Obama's top aides. All the while, the countdown to Aug. 2, when the government will no longer be able to pay all its bills, has marched closer. Any proposal will still have to be put into legislative language, scored by the Congressional Budget Office and vetted by rank-and-file lawmakers whose votes will decide its fate.
Even after the principal negotiators announce a deal, the rest of Congress will have to be convinced to go along. The closer to D-Day Washington gets, the messier it will be. Witness what happened on Sept. 29, 2008, when the House at first rejected the $700 billion bank bailout bill. Weeks earlier, Fannie Mae and Freddie Mac had been placed into conservatorship by the Treasury Department. Lehman Brothers had filed for bankruptcy. AIG Corp, the world's biggest insurer, had been bailed out by the Federal Reserve.
After all that, the Senate passed the bill. And then, as markets watched, the measure was voted down in the House -- a defeat that shocked investors and congressional leaders on both sides of the aisle.
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Debt ceiling talks aim at $3 trillion in cuts
July 21, 2011: WASHINGTON (CNN) -- President Obama is continuing to pursue the most "significant deficit reduction package possible," his spokesman said Thursday, the latest indication officials are keeping a variety of options open while trying to hammer out an agreement to raise the nation's debt ceiling and avoid an unprecedented default.
The president and Vice President Biden met Thursday afternoon with Democratic leaders from the House and Senate. Meanwhile, sources indicated the negotiations were focusing on a deal to cut $3 trillion in deficits over the next 10 years that would be accompanied by a debt ceiling increase. According to the congressional aides, who spoke on condition of not being identified, the possible deal remains in limbo over a disagreement on whether to extend Bush-era tax cuts for families earning more than $250,000 a year. Nothing has been agreed to yet, they noted.
The possible deal would include spending cuts expected to total $1 trillion or more agreed to in earlier negotiations led by Biden, the sources said. It also would reform entitlement programs by changing the eligibility age for Medicare over time, and using a more restrictive inflation index for Social Security benefits, according to the sources.
On taxes, it would permanently extend the Bush tax cuts for families earning less than $250,000 while allowing the cuts to expire at the end of 2012 for those with income above that, the aides said. At the same time, the deal would include a commitment to reform the tax code next year, which is expected to lower all tax rates and eliminate loopholes and subsidies, the sources said.
However, House Speaker John Boehner wants the deal to make all of the Bush tax cuts permanent while keeping the commitment to tax reform, the sources said. Republicans oppose any tax hikes, and their resistance has been a major obstacle to any deal in the negotiations so far.
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Kinda funny how, instead of a 'sequester', the Wall Street bankers got bailed out.
Guru
Granny says somebody gonna take it to the Supreme Court an' dem activist judges gonna muck it all up...
Under the U.S. Supreme Court: Can Obama raise the debt limit by himself?
July 31, 2011 WASHINGTON, July 31 (UPI) -- The dance of raising the U.S. debt limit has gone on for weeks, with President Obama and Republicans circling each other like Sharks and Jets. But can the president use the Constitution to raise the debt limit by himself to avoid economic disaster?
Maybe, maybe not. It all depends on to whom you listen. More on that later. Another debate developing rather late in the game is whether failing to raise the debt limit by Aug. 2 would really be the catastrophe U.S. Treasury Secretary Timothy Geithner says it would be. Actually, in 1979, Congress briefly failed to raise the debt limit and the government briefly defaulted on a small portion of its bills.
Professor Peter Morici of the Robert H. Smith School of Business at the University of Maryland was on SiriusXM radio last Monday and said failing to lift the debt ceiling only would be comparable to a government shutdown. "There is absolutely no possibility that we have to default on our debt," he insisted. "We will only default if Secretary Geithner chooses to default to give the president political advantage."
Morici said the U.S. government takes in $180 billion a month, while interest payments on the national debt are less than $30 billion a month. "The U.S. would not be insolvent but rather in a political crisis." Besides debt interest, he did not say how the government would pay other bills, including those generated by entitlement programs. Another hard-shell conservative, Sen. Jim DeMint, R-S.C., said earlier this month on "Fox News Sunday" Geithner was irresponsibly exaggerating. "There certainly will be disruption, but this is not a deadline we should rush and make a bad deal," DeMint said.
In contrast, the administration points to international companies that threaten to lower the country's gold-plated triple-A bond rating if the debt limit isn't raised, or even if it isn't raised for a long period of time. Lowering the bond rating means higher interest rates for borrowing -- not just for the government but for personal credit cards and loans -- and gutting the value of the dollar, making the national debt that much harder to reduce. One independent voice, George Pennacchi, a University of Illinois finance professor who studies financial institutions and the bond markets, says the effect of a default could be serious.
Read more: http://www.upi.com/Top_News/US/2011/...#ixzz1TkdlElak
Last edited by waltky; Jul 31 2011 at 09:16 PM.
Kinda funny how, instead of a 'sequester', the Wall Street bankers got bailed out.
Correspondent
Austrian Economist is to Economics as an Astrologer is to Astronomy.Originally Posted by DA60
What's wrong with Austrian economics?
Correspondent
Economics is a science. Austrian economics does not pass the riggors of the scientific method. Rather than using mathematics to test their theoreis, they use verbal arguments that can not be tested. Some of their leaders even reject the use of using imperical evidence which is fundamental to the scientific method.
Guru
But it's not an "exact" science, is it? It attempts to build predictive models of human behavior in the market. But people are erratic and unpredictable sometimes. So even if an economic model appears sound, with graphs and formulas, it's still just a best guess. It's like saying psychology is a "science." Social-science is really pseudo-science.
Accounting is an exact science, predicting gambling outcomes is not.
Last edited by Joe Six-pack; Jul 31 2011 at 11:30 PM.
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety."
- Benjamin Franklin, 1775
Banned
Guru
Exactly.
And that is where the aforementioned 'scientific' style of economics all falls down...it tries to put emotional humans and their emotionally based buying/saving practices into neat little boxes.
If emotions did not play a part in economics - then no one would ever buy faster/bigger/sexier cars or put crown mouldings/granite counter tops in their houses or go out to restaurants for fun or buy expensive clothes or so on. They would all drive practical cars and live in small, cookie cutter condos and never dine out and always wear basic clothes.
That is usually why people get SO much into debt - they want more then they can afford; so they live beyond their means to satisfy emotional cravings.
Why do these people think that no one has ever been able to come up with a scientific model to consistently predict how the stock market will do?
Because the stock market runs on emotion - not science.
As does the economy.
Guru
USA cannot just print money to pay off its debt!
What these economists fail to understand is that the dollar is backed by government debt! (around half the collateral assets held by the federal reserve are treasury bonds/notes)
Unless the Treasury actually decides to print its own currency (rather than Federal Reserve notes), it is impossible to pay down the current debt by just printing more money. the Treasury is prevented by law, at least in theory, from printing orders of federal reserve notes unless the federal reserve holds collateral assets to back it
Guru
Economics isn't about predicting markets, it is about analyzing data and reacting with policy measures to counteract or influence market decisions. We know things, like when velocity of money drops and people save more, there will be less income. So to counteract this, they do things like cut taxes, give tax rebates, stimulus spending, etc... to get more money in to the economy to bridge the gap between spending/saving.
Economics is more reactionary than anything else. And to say that policy can not influence market decisions means that you do not even care about any facts other than pushing your anti-Govt rhetoric.
No one will ever be able to come up with a perfect model for the stock market or any other market, because markets are still driven by fundamentals of supply and demand. No economist ever argues otherwise.
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