Posted on 06/17/2014 5:30:59 PM PDT by SeekAndFind
“If the USA is the wealthiest country in the world then the US government is the entity that exists to enact public policy by transferring some of this wealth at times.”
With all due respect, please accept my invitation to eat s**t. Who will define those times when it’s right to transfer wealth? Will it be us or will it be the Somalias of the world? Will it be intellectuals like you who think they are smarter than everyone else?
“The USA has a certain “exorbitant privilege” due to the size of its economy and its status in the global economy”
No, it has this privilege because of the Bretton Woods agreement which standardized world commerce (in short) on the US dollar. Should this standard, or agreement deteriorate, we would find ourselves in an instant detonation of our markets and our ability to conduct international trade because the market would impose an interest rate upon our debt our economy could not sustain. What would happen then, is our assets you speak of would become pledged in vastly greater numbers of dollars in terms of the debt service thereby due.
You posted this without comment. Are you in agreement with the author? Just curious.
RE: You posted this without comment. Are you in agreement with the author? Just curious.
The answer is no. But why are you interested in what I think? I posted this for DISCUSSION. If you think the author is wrong, by all means, tells us why.
I suspect that Cullen Roche is a pen name that Krugman uses because everyone recognizes that he is a fool.
(the assets of the USA likely exceed $200 trillion)
So, the unfunded liabilities are getting close to the worth of the assets of the USA, which are privately owned. I feel much better about that unfunded liability now! WTF! Is this guy on drugs?
The unfunded liability is real as the $17 trillion of national debt does not include the obligations we have for social security, and especially medicare. If a private sector company had this huge a percentage of liabilities that they kept off their books, the CEO and CFO would be put in jail for cooking the books, a Sarbanes-Oxley violation. But it’s ok for the government!
Are those the resources on Federal land that they won’t allow drilling on?
I’m not going to pretend for an instant that I am any kind of expert on Keynesian economics; but one thing about his proposals and theories that is always, always left out of any expositions of same is the idea that when an economy is booming, money should be set aside in a (for lack of a better term) “rainy day” fund to...I suppose...stimulate the economy for those times when it falls into a doldrums. As we both know, this never happens. Any time (talking about the US) the tax receipts of the Tsy appear to be heading to a surplus or even (heaven forbid) a reduction in outstanding debt, immediate and widespread claims for redistribution and wanton spending arise. This is from the same crowd that wish to spend your money and my money to buy the votes they think they need for their own re-elections. So when folks talk about “Keynesian” economics, they never want the listener to think about this idea that some part of the fat pile (when it is indeed fat) is to be set aside for lean times.
The distortion, of course, also applies to those of us who generally resist Keynesian policies once they are named or characterized as such. We may or may not know that Keynesian advocates themselves may or may not know the rainy day fund aspect, but we are perfectly certain that said fund will be raided before it materializes.
This assumes that the $150 Billion is the Governments money, which it isn’t. The Government only gets a portion of that in taxes and fees. The balance belongs to the private companies that extract the oil/natural gas. Thus the whole argument is fictional.
Billions should have been Trillions. Sorry about that.
Billions should have been Trillions. Sorry about that.
Typical leftist, pose strawman questions and then use them as the “answers”
1. He states that $150 trillion in fossil fuels available to more than counter our unfunded tax liabilities. This does not magically happen. It must be gathered at great expense and currently from private land (moratoriums on public land). Perhaps most importantly, 100% of sales of those fossil fuels do not go to the Treasury for the debt—a very small fraction will and Washington will spend it as they see it ramp up to come in. Cullen's proving he's clueless.
2. When the tax rates are high, incentive to risk or spend money is reduced, reducing government's tax income. The Laffer Curve helps illustrate this. When uncertainty around further increases looms, it further depresses economic activity. The onerous debt burden piling up does not ever get appreciably reduced, so how can it be said to not affect the future? Additionally, other countries are funding today's lavish spending here, and they can always pull out as the economic viability tipping point approaches.
Again, Cullen's obviously ignorant.
This guy has his head up his butt.
Stupid article by a stupid author....typical lib who cares????
Incoherent.
“Who wrote this, Paul Krugman?”
Obviously a liberal of the highest order.
“But why are you interested in what I think?” I guess for some mix of entertainment and enlightenment. David Brat is somewhat unfamiliar to me, and the author of this article utterly so. Context would be helpful.
a) Does Brat actually advocate oddball economic ideas that make him “dangerous”? (if he does, the author failed to describe them);
b) Is the author part of the Republican establishment, or a Leftist? What are his motives for attacking Brat with a mallet? Politics? Attention? Personal animus? What are his qualifications to comment on economics?
I found the author to misconstrue basic concepts out of either duplicity, ignorance, or perhaps both. For someone playing on the word “bankruptcy”, he seems unaware that bankruptcy involves insufficient current liquidity to meet current obligations, not an utter absence of fixed assets. He falsely implies that theoretical US current assets (many of which are intractably illiquid) can in some way “fund” unfunded liabilities, without disastrous consequences for values like national sovereignty. He seems oblivious that fixed estimates of liabilities relate to a closed end time-frame, whereas entitlement liabilities and interest continue to accrue after that artificial time-frame ends (or at least until collapse stops the game); the expended assets can’t be spent or borrowed against again. Because having cake and eating it too doesn’t actually work, this is a death spiral. He resorts to special pleading about the US, as if it is somehow immune to economic laws, and thinks currency devaluation can buy free lunch forever without consequences (such as hyperinflation and/or other nations establishing alternative reserve currencies). On the positive side, he spelled “Brat” correctly.
You are SO right!
The problem that Cullen has is that he is making a false equivalence, hoping no one will notice. Brat knows what he is talking about. Brat said ". . . money we do not have. . . " to which Cullen responds we have at least $150 trillion in petroleum still in the ground.
The serious mistake that Cullen is making is that the potential asset of "petroleum in the ground" is in no way the equivalent of the medium of exchange called "money."
Money, as we use it, is loaned into existence, not pumped out of the ground. Petroleum is consumed; money is not. As an analogy, let's say I owe Jim Robinson $117,000. I have $150,000 in equity in my house. I'm already borrowed to the limit on my signature trying to pay Jim And my other creditors back and can't carry much more debt service on my income. . . but I'm borrowing more from Jim at about $1000 more each year, a lot of which I pay on interest to Jim. Cullin is saying that because I have that valuable asset, my house, I'm not in trouble. . . My house will save me when it comes time to pay Jim. But after Jim is paid, WHERE WILL I LIVE????
Think about the ramifications of Cullin's "Pragmatic Capitalism" and you'll recognize it for what it, and he is. Cullin is assuming that the US government will realize 100% of the value of the assets in the ground. He's talking about 100% taxation!!!! Cullin's is a fascist. A statist. . . and "Pragmatic Capitalism" is another name for fascism.
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