Election 2010: Teabaggin' the Ds & Rs

[Hank Chinaski]

Originally Posted by Tyrone Slothrop

Sounds like George W. Bush's memoir could have been written by Stephen Ambrose or Doris Kearns Goodwin.

given that obama has done 90% of what you've criticized W for, shouldn't you stop criticizing w for new stuff?

[LessinSF]

Originally Posted by Secret_Agent_Man

Weren't you the one on here predicting hyper-inflation in 2010?

S_A_M

Yes, I was wrong.

Words you have never seen GGG or Ty write.

[LessinSF]

Originally Posted by Adder

Or if one prefers there is a trade off between inflation and growth (doing that stating differently thing again).

One way of looking at thing is that there is greater incentive to buy things today if they are going to coat more in the future; and greater incentive to put off buying things if they are going to coat less in the future.

Simply put, bullshit. Not in real terms. Your gum has gone in price, but not value.

[LessinSF]

Originally Posted by Adder

Are you really asking why deflation isn't better than inflation?

eta: if so, ask Japan.

You are an economic moron and I cannot engage with you on this point. Japan's deflation was not a cause, but a symptom. To channel Hank, do you believe that $10 gallons of milk are good?

[LessinSF]

Originally Posted by Tyrone Slothrop

There's a trade-off between inflation and unemployment. Higher inflation, more people working. The Fed is supposed to balance these goals. Except that it doesn't -- it's under the influence of bankers who think, simply, inflation is always bad and less is good. Hyperinflation is, of course, bad. That is not our problem right now. QE is aimed at getting the economy going.

Like the last $2T? No. It is to inflate the debt away.

[Tyrone Slothrop]

Originally Posted by LessinSF

Like the last $2T? No. It is to inflate the debt away.

No, it isn't. The debt is not bad when compared to GNP, especially when you consider how low interest rates are. Pushing interest rates higher will make the (same amount of) debt more expensive.

[Adder]

Originally Posted by LessinSF

Your gum has gone in price, but not value.

You are looking at the wrong side of it. It's your cash that you have held on to has gone down in value.

[Adder]

Originally Posted by LessinSF

Japan's deflation was not a cause, but a symptom.

It is factor that reinforces the malaise.

To channel Hank, do you believe that $10 gallons of milk are good?

This nonsequitor is even sillier than the video.

[Adder]

Originally Posted by LessinSF

Like the last $2T? No. It is to inflate the debt away.

If I were a less charitable man, I might be tempted to call you an economic moron with whom it is impossible to engage.

First, as Ty said, the debt is manageable still. You don't have to project that far down the road to see real trouble, but we aren't there yet.

Second, $600 billion isn't all that much money.

Third, if $2 trillion didn't lead to any inflation (that's right, none), then why would we expect a much smaller amount in a quite similar circumstances to make much of a dent?

Fourth, try reading a wider pool of economists.

[Hank Chinaski]

Doctors-

had dinner with a friend who runs a family practice. apparently medicare (or caid? the one for old people) sets payments according to a formula. it's pretty complicated but essentially it goes like this Medicaid funds= X % of GNP*

as long as the economy doesn't stagnate that means there is some growth . but there are shitloads more old people. so with no growth in $ and huge growth in sick old people they periodically set "reductions" in what the GPs get.

There have been delays in implementing the reductions but now the delays are over. He will be taking a 30% reduction in what he is paid starting 1/1. His overhead is 50 or 60% and several private insurances plans flag fees to MC. meaning his income is about to drop about 50%.

apparently the specialists fight the hits and it tends to be directed against GPs.

fucked world if Doctors can't make money.

*not sure if it is GNP, but some reflection of the economy. I AM An economic moron.

[Hank Chinaski]

Originally Posted by Adder

If I were a less charitable man, I might be tempted to call you an economic moron with whom it is impossible to engage.

First, as Ty said, the debt is manageable still. You don't have to project that far down the road to see real trouble, but we aren't there yet.

Second, $600 billion isn't all that much money.

Third, if $2 trillion didn't lead to any inflation (that's right, none), then why would we expect a much smaller amount in a quite similar circumstances to make much of a dent?

Fourth, try reading a wider pool of economists.

you can't convince sexually active single women in urban areas to let you do that which they let any number of other guys do.

why do you think you can convince hard boiled old lawyers to change ingrained politcal opinions?

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

No, it isn't. The debt is not bad when compared to GNP, especially when you consider how low interest rates are. Pushing interest rates higher will make the (same amount of) debt more expensive.

I assume you're referring to the projections arguing the yearly debt service will only be 4-5% of GDP by the end of the decade. If so, you're right. But those are projections. They assume normal economic growth between now and then.

Suppose the growth in that period instead remains abnormally depressed? Suppose we've only 80% of the projected GDP? I'm not going to go through the exercise of listing all the possible negative events that could radically change how much we spend on debt service, but it could just as easily wind up being 10-15% of GDP.

[Tyrone Slothrop]

Originally Posted by Adder

Fourth, try reading a wider pool of economists.

Tyler Cowen, with whom Less probably sympathizes a fair bit, said this (original has many links) to a reader about folks are flipping out:

Philip W., a loyal MR reader, asks:

First, Interfluidity is a wise man.

Second, I believe the price of gold is high because of "financial-existential risk," not because of inflation per se. The U.S. dollar and debt are no longer unambiguously safe and is there any real solution to the triple menace of highly leveraged banks, moral hazard, and financial strategies of extreme negative skewness? It remains to be seen. Given the forthcoming flow of debt finance required to keep Uncle Sam up and running, lots of inflation today wouldn't maximize political rents to leaders or medium-term seigniorage.

Third, the libertarian right is having a hard time seeing the Fed as a relative ally over the last three years, which it has been. That admission implies an unappetizing shift in the goal posts for what is possible, and that sounds like a intellectual surrender to a lot of people I know. I think they are in denial. One alternative to acceptance is to view the Fed as sinister, which then leads you to fear anything they do, including QEII, their current major monetary policy initiative.

Fourth, trust in government is at an especially low level and so monetary policy is viewed through this lens. You need not have absolute trust in government (ha) but I doubt if government today is significantly more sinister, if at all, than in recent times past. Possibly Obama is an arrogant man who wishes to lower your relative status in the broader scheme of things (at least with some "p" this is true), but don't let that influence your analysis of his policies or the policies affiliated with him. Keep your eye on the ball -- most of all markets are telling us that future inflation just won't be that high.

eta: Here is his earlier post telling people not to flip out.

[Replaced_Texan]

Originally Posted by Hank Chinaski

Doctors-

had dinner with a friend who runs a family practice. apparently medicare (or caid? the one for old people) sets payments according to a formula. it's pretty complicated but essentially it goes like this Medicaid funds= X % of GNP*

as long as the economy doesn't stagnate that means there is some growth . but there are shitloads more old people. so with no growth in $ and huge growth in sick old people they periodically set "reductions" in what the GPs get.

There have been delays in implementing the reductions but now the delays are over. He will be taking a 30% reduction in what he is paid starting 1/1. His overhead is 50 or 60% and several private insurances plans flag fees to MC. meaning his income is about to drop about 50%.

apparently the specialists fight the hits and it tends to be directed against GPs.

fucked world if Doctors can't make money.

*not sure if it is GNP, but some reflection of the economy. I AM An economic moron.

Google "Medicare Sustainable Growth Rate" for a better understanding of what he was talking about.

He's not getting a pay cut. This has happened at least six times since 2003, and Congress temporarily adjusts the formula for awhile and kicks the ball a little bit further down the field. Every. Single. Time. (Most recently in June, which was applicable retroactively. Medicare holds payments until Congress gets its act together and then adjusts the charges after Congress gets around to listening to the AMA lobbyists.) No one actually wants to fix the problem permanently because it fucks with the deficit formulations, so they just temporarily fix it for a little while. And then a year or so later, every doctor in the country bitches and moans about upcoming pay cuts and we do this dance all over again.

[Adder]

Originally Posted by Hank Chinaski

apparently medicare (or caid? the one for old people)

This post was satire, and this bit was intended as a tell, right?