Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
You can dislike Krugman all you like, a good way to avoid being substantive. I did not post anything about governance or idiot conflict or rightwingnuts, and do not disagree with many of the sentiments. But if GDP grows, perforce the percentages get 'better', however you define better. If it does not grow, well, then. The important point, over and over and it cannot be said too loudly, is (un)employment. It is not cutting anything now. See as just one example http://krugman.blogs.nytimes.com/2013/01/10/the-mostly-solved-deficit-problem/. There are many other non-Krugman econs who know that we are having the utterly, utterly wrong discussions. While infrastructure and much else rot, and the country continues to overflow with willing skilled experienced workers.
Agree 100% david that reducing unemployment is the main way out. I do not dislike Mr. Krugman and am sure he is a fine man. In your link above, Mr. Krugman looks at the next ten years. On September 17th our CBO reported on the unsustainability of Federal Fiscal Policy http://www.cbo.gov/publication/44521. Tried to furnish a " hot link" to the report which looks out more than 10 years (as I hope we all are here past the 10 year marker.) Link seems to work. Projections are not precise too far into the future but I think we can agree that Mr. Krugman's 10 year and the Congressional Budget Offices 25 years are in the general direction of what we can expect. We cannot sustain the way the political class is running the country.
Reply to @Maurice: Yes, and thanks for the recommendation on the Jefferson biography- it was a good read. It does provide some sense of historical balance, if not comfort, to realize that while we may be angrier and stupider than usual at the moment, at least it's not the first time for that.
Well, I was away for the weekend and you folks have certainly left me a lot to go through closely and mull over. From a quick skim of all of the above commentary it looks like everyone remained civil in their remarks, and I'm very appreciative of that, as I guess that my original response to Hank kind of started this whole thing. While we don't want to turn MFO into a political forum, there are occasional intersections of politics and economics which sometimes need discussion, and this is probably one of those times.
Anticipation of the present situation is why I reduced our fund exposure somewhat drastically back in May and June. I'm primed to ease back in if we don't go over the default cliff. I will have to say though, that if I had not reduced positions earlier I don't think that I would consider doing that at this point. My read is that Boehner isn't going to allow a default. I take him at his word, if for no other reason than if he did take us in that direction, being Speaker would be the least of his worries.
Reply to @MourningStars: I thank you for your gracious response and certainly share your hope. I guess I was partly responding to Darcey, who also had many substantive points of concurrence. Likewise Joe's chime-in. All good.
Allow me to echo what everyone else said: it's great to have a place to discuss this civilly. Apologies if I crossed the political divide. Let's hope Congress is reading.
Reply to @mrdarcey: I admire all of you for your knowledge of these complex issues and ability to discuss them with civility. A bit beyond my meager abilities - but fun to watch. Regards
Howdy mrdarcey, Thank you for your time and efforts with your writings. When politics affects investments to the current extent, by reaching into and being disruptive to the economy(s) in general; it is a worthy topic of discussion for this board. One will not likely find a more diverse group of folks of investment and political leanings than here; and yet the broad group here has maintained a very civil discourse of thinking and writing. A salute to all among the vast age and experience range found here, at MFO. Good Evening, Catch
This may seem off topic, but the Republican resistance started with their distaste (or the perceived, or perhaps induced [do some of these people think linearly?], distaste of their base) for the ACA, which was a flawed attempt to bring this nation closer to the level of medical care in most advanced nations.
These flaws were largely induced by the need to obtain the votes of a few senators and the fact that the Republicans (my political party) refused to participate. I did not vote for Mr. Obama, since McCain (despite Palin) represented more of my beliefs. He's a war sufferer, if not a hero, and he is competent. His medical care plan was nebulous. I think the current Republican stance is based on their perception that independents fear the ACA. The ACA is flawed, but probably not fatally flawed.
Since Obama has essentially taken most of the ACA off the negotiating table, the Republicans have moved on to the entitlement programs. Whether they will touch the third rail of American politics, Social Security and now Medicare, remains to be seen. As an impending geezer, I would like my SS and Medicare untouched, but I realize that other, younger citizens hope their taxes are not raised too much, and they also vote and have a life to live. Fortunately, I have lived fairly frugally and can take a modest hit. I also have children, who hope to live comfortably in the USA. I've seen life in other parts of this earth, and I remain eternally grateful that my embryo static line dropped me here (thanks, Dennis Miller)
The politicians (there are few statesmen currently, but Mr. Obama may represent an argument for hybrid breeding) face the difficult decision as to which group they will try to appease. They can reduce benefits to the future elderly, while hopefully giving them enough lead time to save for their dotage, and hope their votes don't impair their re-election. They can raise taxes (subtly, perhaps by debasing the currency - oops, the Fed controls that option) or raise taxes directly (didn't work too well for Fritz Mondale, even if Reagan raised them anyway) or hope some classes of voters will think this is best for the USA. Or they can gradually limit retirement benefits, especially for those of us in the upper income half of retirees.
We lived in the best place on this earth, had the best goverment (even if it's not so good this month) enjoyed a basically good life. Shut up and pay the bill (to your children).
The "Tea Party" (check the parking lots for the high cost rides at their rallies) represents at the top the "have and have mores" plus a base of racists and rednecks (some of my Kentucky born wife's relatives are ardent supporters). I agree that gov't spending should be curtailed, but Krugman may be correct when he says this is not the time to do it.
I've got no clue what this means for investments. There's no blood in the streets; I have some cash. While I hope my ivestments do well, I hope much more that my country does well.
President Obama (as a reported Constitutional teacher) knows full well that the Government CANNOT default on its obligations.
The Fourteenth Amendment, Section 4, states: The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.
So, the government must pay its debt obligations, even if it means selecting debt service over other government spending.
“He who controls the mob, controls Rome.” Spartacus
What this is saying, in a muddled way in the morning and no Diet Cokes yet, is that you have a Republican party that, much like Microsoft, did not see and adapt to and play to changes going on in the country. Now they're doing the political equivalent of buying Nokia.
Do they give awards to board posters? If so, you get my vote. This analogy is brilliant!
I'm actually a long time Republican, campaigned for Reagan in the Infinite Corridor as an undergraduate. But I'm so disillusioned with my party today.
I'm embarrassed just about every time John Boehner and (even more) Eric Cantor speak.
For me, the party started losing its way as polarizing influences became more dominant: Jerry Falwell and the Moral Majority, Pat Robertson and the Christian Coalition, Newt Gingrich and the Contract for America...add in Rush Limbaugh, Sarah Pallin, Karl Rove, Michele Bachmann to name a few.
A visit to the Tea Party website provides:
The Tea Party is a grassroots movement that calls awareness to any issue which challenges the security, sovereignty, or domestic tranquility of our beloved nation, the United States of America.
Its membership is defined as those having "strong belief in the foundational Judeo-Christian values."
Here are some of the Tea Party's "Non-Negotiable Core Beliefs:"
- Illegal aliens are here illegally. - Pro-domestic employment is indispensable. - Gun ownership is sacred. - English as our core language is required. - Traditional family values are encouraged.
That said, at least it's an inspired website. Which is more than I can say for the GOP website.
Enough of politics...but that's not possible, is it?
Comments
You noted: "us default?
I think it maybe better to 'let it go' since you cannot really fix it anyways"
What do you mean with 'let it go' ?
Anticipation of the present situation is why I reduced our fund exposure somewhat drastically back in May and June. I'm primed to ease back in if we don't go over the default cliff. I will have to say though, that if I had not reduced positions earlier I don't think that I would consider doing that at this point. My read is that Boehner isn't going to allow a default. I take him at his word, if for no other reason than if he did take us in that direction, being Speaker would be the least of his worries.
Thank you for your time and efforts with your writings.
When politics affects investments to the current extent, by reaching into and being disruptive to the economy(s) in general; it is a worthy topic of discussion for this board.
One will not likely find a more diverse group of folks of investment and political leanings than here; and yet the broad group here has maintained a very civil discourse of thinking and writing.
A salute to all among the vast age and experience range found here, at MFO.
Good Evening,
Catch
These flaws were largely induced by the need to obtain the votes of a few senators and the fact that the Republicans (my political party) refused to participate. I did not vote for Mr. Obama, since McCain (despite Palin) represented more of my beliefs. He's a war sufferer, if not a hero, and he is competent. His medical care plan was nebulous.
I think the current Republican stance is based on their perception that independents fear the ACA. The ACA is flawed, but probably not fatally flawed.
Since Obama has essentially taken most of the ACA off the negotiating table, the Republicans have moved on to the entitlement programs. Whether they will touch the third rail of American politics, Social Security and now Medicare, remains to be seen.
As an impending geezer, I would like my SS and Medicare untouched, but I realize that other, younger citizens hope their taxes are not raised too much, and they also vote and have a life to live. Fortunately, I have lived fairly frugally and can take a modest hit.
I also have children, who hope to live comfortably in the USA. I've seen life in other parts of this earth, and I remain eternally grateful that my embryo static line dropped me here (thanks, Dennis Miller)
The politicians (there are few statesmen currently, but Mr. Obama may represent an argument for hybrid breeding) face the difficult decision as to which group they will try to appease. They can reduce benefits to the future elderly, while hopefully giving them enough lead time to save for their dotage, and hope their votes don't impair their re-election. They can raise taxes (subtly, perhaps by debasing the currency - oops, the Fed controls that option) or raise taxes directly (didn't work too well for Fritz Mondale, even if Reagan raised them anyway) or hope some classes of voters will think this is best for the USA.
Or they can gradually limit retirement benefits, especially for those of us in the upper income half of retirees.
We lived in the best place on this earth, had the best goverment (even if it's not so good this month) enjoyed a basically good life. Shut up and pay the bill (to your children).
The "Tea Party" (check the parking lots for the high cost rides at their rallies) represents at the top the "have and have mores" plus a base of racists and rednecks (some of my Kentucky born wife's relatives are ardent supporters). I agree that gov't spending should be curtailed, but Krugman may be correct when he says this is not the time to do it.
I've got no clue what this means for investments. There's no blood in the streets; I have some cash.
While I hope my ivestments do well, I hope much more that my country does well.
knows full well that the Government CANNOT default
on its obligations.
The Fourteenth Amendment, Section 4, states:
The validity of the public debt of the United States, authorized by law,
including debts incurred for payment of pensions and bounties
for services in suppressing insurrection or rebellion,
shall not be questioned.
So, the government must pay its debt obligations, even if it
means selecting debt service over other government spending.
“He who controls the mob, controls Rome.”
Spartacus
I'm actually a long time Republican, campaigned for Reagan in the Infinite Corridor as an undergraduate. But I'm so disillusioned with my party today.
I'm embarrassed just about every time John Boehner and (even more) Eric Cantor speak.
For me, the party started losing its way as polarizing influences became more dominant: Jerry Falwell and the Moral Majority, Pat Robertson and the Christian Coalition, Newt Gingrich and the Contract for America...add in Rush Limbaugh, Sarah Pallin, Karl Rove, Michele Bachmann to name a few.
A visit to the Tea Party website provides: Its membership is defined as those having "strong belief in the foundational Judeo-Christian values."
Here are some of the Tea Party's "Non-Negotiable Core Beliefs:"
- Illegal aliens are here illegally.
- Pro-domestic employment is indispensable.
- Gun ownership is sacred.
- English as our core language is required.
- Traditional family values are encouraged.
That said, at least it's an inspired website. Which is more than I can say for the GOP website.
Enough of politics...but that's not possible, is it?