Where's the money coming from?

[FUCK THE POLICE]

Krugman delivers yet another resounding pWn to conservative economics (or, as later generations will put it, mythology).

http://krugman.blogs.nytimes.com/2009/06/06/wheres-the-money-coming-from/

Where’s the money coming from?

The huge borrowing by major governments, the U.S. government in particular, has confused many people — and not just Niall Ferguson. What I hear again and again is either the assertion that all this borrowing must drive up interest rates, or worries that the Chinese won’t be willing to lend us the money.

We know as a matter of principle that these concerns are misplaced: if there were a shortage of savings, the economy wouldn’t be depressed. Indeed, one way to think about our current problem is that the world as a whole wants to save more than it’s willing to invest.

But it’s always nice to have some real-world data illustrating a principle. From Brad Setser, private and public borrowing in America, as a percentage of GDP:

We’re actually borrowing less from foreigners than we were before.

 

[Annie]

Krugman delivers yet another resounding pWn to conservative economics (or, as later generations will put it, mythology).

http://krugman.blogs.nytimes.com/2009/06/06/wheres-the-money-coming-from/

Where’s the money coming from?

The huge borrowing by major governments, the U.S. government in particular, has confused many people — and not just Niall Ferguson. What I hear again and again is either the assertion that all this borrowing must drive up interest rates, or worries that the Chinese won’t be willing to lend us the money.

We know as a matter of principle that these concerns are misplaced: if there were a shortage of savings, the economy wouldn’t be depressed. Indeed, one way to think about our current problem is that the world as a whole wants to save more than it’s willing to invest.

But it’s always nice to have some real-world data illustrating a principle. From Brad Setser, private and public borrowing in America, as a percentage of GDP:

We’re actually borrowing less from foreigners than we were before.

Source?

 

[FUCK THE POLICE]

His source for this blog post is: http://blogs.cfr.org/setser/2009/06...-borrowing-and-the-rise-in-the-fiscal-defict/. He embedded it into "Brad Sester" in the original article, but that was lost when I copied and pasted it.

 

[Whomever]

We are borrowing less from foreigners because we are buying less from foreigners.

 

[Cancel 2018. 3]

i fail to see how this pwn's conservative economics....

are you actually saying reagan's borrowing and bush's borrowing were good for our economy....

 

[Whomever]

i fail to see how this pwn's conservative economics....

are you actually saying reagan's borrowing and bush's borrowing were good for our economy....

As a temporary surface effect, yes.

 

[Cancel 2018. 3]

As a temporary surface effect, yes.

so krugman is full of shit...according to you

 

[Whomever]

so krugman is full of shit...according to you

You have not read enough Krugman to make that call obviously.
Krugman is pretty much in with the mainstream economists on the bailout and such. He is not pro re-regulation and such much either.

 

[Cancel 2018. 3]

You have not read enough Krugman to make that call obviously.
Krugman is pretty much in with the mainstream economists on the bailout and such. He is not pro re-regulation and such much either.

what exactly did you mean by this;

As a temporary surface effect, yes.

 

[TuTu Monroe]

Obama will find little money left to spend for "change" without printing the money. Remember the "change" Germany had in 1923? God help us if we go that route.

We are borrowing less from foreigners because we are buying less from foreigners.

 

[FUCK THE POLICE]

We are borrowing less from foreigners because we are buying less from foreigners.

Our government is?

 

[FUCK THE POLICE]

borrow /= buy.

 

[FUCK THE POLICE]

i fail to see how this pwn's conservative economics....

are you actually saying reagan's borrowing and bush's borrowing were good for our economy....

Of course it was "good" for the economy in the short run. However, it was not good in the long run. Borrowing should be something the government does only rarely, during a war (and by war I mean something that directly threatens our nations existence, skirmishes like Iraq should still be funded through the general fund) or when a deflationary recession is imminent. It shouldn't ever be used in boom time simply because you can't find any other way to make your tax cuts palatable.

 

[FUCK THE POLICE]

You have not read enough Krugman to make that call obviously.
Krugman is pretty much in with the mainstream economists on the bailout and such. He is not pro re-regulation and such much either.

Uhmmmm... yes he is. He is one of the biggest economists calling for regulation. He was for the bailouts because it was the best thing for our country and livelihood.

 

[Cancel 2018. 3]

borrow /= buy.

explain to me why it is good for the government but not good private practice....if private citizens had budgets like the government, we would all be bankrupt

 

[Whomever]

explain to me why it is good for the government but not good private practice....if private citizens had budgets like the government, we would all be bankrupt

Many do, that is why we have record numbers of personal bankruptcy and home forclosures.
But that was also one reaosn the economy appeared to do so well under Bush.

 

[FUCK THE POLICE]

Obama will find little money left to spend for "change" without printing the money. Remember the "change" Germany had in 1923? God help us if we go that route.

Our current policies aren't contributing to inflation because the banks aren't lending. We have the prime rate set at 0%, but without action by the banks it's ineffective. In actuality, we have been falling progressively harder into deflation for the past few months, for the first time since the post-war deflation (which was a necessary response to wartime inflation). The only thing that is preventing hard 10% inflation like during the last big deflationary depression (otherwise known as the great depression) is the direct injection of borrowed dollars into the economy.

During the great depression, conservative economists constantly screamed about inflation from 1928 to 1932, when the money deflated in value over 30%. We've seen this pattern before, and luckily our current leaders have learned from history. Although conservatives constantly whine about how big the response was during the new deal, our current response has actually been larger during this recession, and that has made the difference. It will be a moderately severe recession rather than the decades long monstrosity conservatives would have created, just like they did in the Great Depression.

Notably, conservatives have been trying to compare this depression to economic catastrophes with completely different causes, like the 1921 recession and the 1980 recession. The 1921 recession was caused by troops coming home and driving up the unemployment rate, and was so naturally temporary as the economy responded. It needed no government response, and was in this respect much more simialar to the 1946 recession than the current recession or the great depression. The 1980's recession was caused by the stupid monetary policy of the 70's, when people thought that there was a definite link between inflation and unemployment when there really was none. This depression was caused by falling back into the laissez-faire mythology, just like the one in the 30's was. Conservatives also like to point out how the Great Depression lasted long even though they stimulated the economy, and use that to whine about how large our response was in comparison to this minor recession. I'd just like to point - why do you think this recession was minor? Our larger response.

 

[FUCK THE POLICE]

explain to me why it is good for the government but not good private practice....if private citizens had budgets like the government, we would all be bankrupt

Private debt is much greater as a % of the economy than government debt. This was because of Reagan's saving and loan deregulation, which unleashed a monster that destroyed the thrift our citizens had had ever since the 20's. Our government debt compared to our GDP isn't currently all that outrageous in comparison to other countries, and is actually pretty manageable.

 

[Onceler]

Here's where we were in October - January. The banks were failing. Businesses reigned in spending, and laid people off. Consumers lost jobs, and reigned in spending. This, in turn, caused businesses to lay more people off, and reign in more spending.

There really isn't a magical end to this cycle, without some outside stimulus. The gov't spent so that it would create jobs, calm businesses & the markets, and create jobs. This would lead to a more positive cycle than the one described above. And here's the best part: when the economy is humming again, the tax revenue will basically pay back all of the money spent on stimulus.

It's pretty elementary; and it seems to be working...

 

[Cancel 2018. 3]

Private debt is much greater as a % of the economy than government debt. This was because of Reagan's saving and loan deregulation, which unleashed a monster that destroyed the thrift our citizens had had ever since the 20's. Our government debt compared to our GDP isn't currently all that outrageous in comparison to other countries, and is actually pretty manageable.

under obama hasn't the debt to gdp risen to 80% +....?

accordign to the CIA factbook the US is 22nd....

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

according to CNBC the number is quite staggering:

15. United States - 95.09%
External debt (as % of GDP): 95.09%
External debt per capita: $44,358

Gross external debt: $13.627 trillion (2008 Q3)
2008 GDP: $14.330 trillion
http://www.cnbc.com/id/30308959/?slide=2

since i usually defer to you on economic issues, let me ask you this, how is spending and having such a high debt ratio a good thing now?


edit: seems the socialist countries had the highest debt ratio per the CNBC link