kkent Wrote: ------------------------------------------------------- > LOL! You think Reagan–and only Reagan–has the > legacy of debt and deficits? Are you kidding me? > What about FDR, whom enacted soical security and > medicare? That’s a $100 trillion unfunded > liability! What about Lyndon Johnson’s Great > Society that has spent trillions of dollars > fighting poverty to absolutely no avail? What > about the FACT that FDR started Fannie Mae? > Freddie Mac was a child of 1970 to compete with > Fannie Mae. These GSEs are debt machines! > > What president since the 1930s hasn’t been > responsible for a culture of debt? Even Bill > Clinton, if not for guys like Gingrich shutting > down the gov’t and trying to pass continuing > resolutions, may very well have fallen prey to > deficit spending. Your allegations against Ronald > Reagan are absurd on their face given, umm, facts > and context. Hit the nail on the head. For all the talk about how conservative GWB’s administration has been, I don’t know many Reagan-conservatives (and their ancestors, Goldwater-conservatives), who would use such a term to describe GWB and the Republican Congress post 2000. There is nothing particularly conservative about huge gov’t spending programs, new and expensive entitlements, and wars of choice. While Reagan did increase our national debt to strengthen our military, as a % of national GDP, it was a drop in the bucket compared to those economic geniuses LBJ and FDR. Reagan also vetoed bills he thought were unconstitutional, or that grew the size of government entitlements; how many bills has GWB vetoed? For anyone to argue that GWB is following the blueprint laid out by Reagan is either unaware of facts, or blinded by ideology.
my fear is that this time, it is 1930s (watered down due to monetary era now) followed by 1970s/80s shocks in quick succession. housing is the largest credit sector by far, and when the largest assets on the banking system’s B/S get impaired, good luck with a quick recovery. lurking in the background is another oil shock. i have yet to find any data saying oil supplies are not capped in near term. 2010 will be interesting.
PeteyPete Wrote: ------------------------------------------------------- > kkent Wrote: > -------------------------------------------------- > ----- > > LOL! You think Reagan–and only Reagan–has the > > legacy of debt and deficits? Are you kidding > me? > > What about FDR, whom enacted soical security > and > > medicare? That’s a $100 trillion unfunded > > liability! What about Lyndon Johnson’s Great > > Society that has spent trillions of dollars > > fighting poverty to absolutely no avail? What > > about the FACT that FDR started Fannie Mae? > > Freddie Mac was a child of 1970 to compete with > > Fannie Mae. These GSEs are debt machines! > > > > What president since the 1930s hasn’t been > > responsible for a culture of debt? Even Bill > > Clinton, if not for guys like Gingrich shutting > > down the gov’t and trying to pass continuing > > resolutions, may very well have fallen prey to > > deficit spending. Your allegations against > Ronald > > Reagan are absurd on their face given, umm, > facts > > and context. > > > Hit the nail on the head. > > For all the talk about how conservative GWB’s > administration has been, I don’t know many > Reagan-conservatives (and their ancestors, > Goldwater-conservatives), who would use such a > term to describe GWB and the Republican Congress > post 2000. > > There is nothing particularly conservative about > huge gov’t spending programs, new and expensive > entitlements, and wars of choice. While Reagan > did increase our national debt to strengthen our > military, as a % of national GDP, it was a drop in > the bucket compared to those economic geniuses LBJ > and FDR. Reagan also vetoed bills he thought were > unconstitutional, or that grew the size of > government entitlements; how many bills has GWB > vetoed? > > For anyone to argue that GWB is following the > blueprint laid out by Reagan is either unaware of > facts, or blinded by ideology. i am not a big history buff, so i may not have the exact facts of the reagan politics right. i did not live in this country back then. my simple analysis is based on what conventional view is of “reaganomics” but i saw a chart somewhere recently - in one of the forums, that showed the debt-GDP ratio skyrocket during the reagan era. that’s what got me thinking about reagan’s legacy. remember - 1. there is a tendency to deify popular leaders and 2. what seems like the right answer in the ST soon takes on a life of its own when followed to the extreme, and turns into the next disaster in the LT. no one, including lincoln, FDR, gandhi, MLK, mandela are paragons. i don’t see enough critical analysis of the reagan years from you guys, which makes me suspicious of the widely held views of the reagan legacy - too rose tinted.
I think there’s a little truth to it, but only in this Reaganomics filtered through the muddied mind of GWB kinda way. Reagan believed at least for awhile in this supply side approach that cutting taxes would increase producitivity and the increased productivity would get us out of deficits when combined with cutting spending. He was partly right in that decreasing taxes did cause increases in productivity but not enough to stop the deficits. Under Reagan, the debt went from 35% of GDP to 55% of GDP or close. That was a failure of the Reagan promise. However, under Reagan military spending went up by about 1% of GDP and domestic spending went down by about 2% of GDP. Had military spending dropped by the same amount as domestic domestic spending, the deficits wouldn’t have increased by much (or gone down or something). The key trade-off is that Reagan’s military spending brought an end to the Cold War (IMHO) which was an enormous achievement. The Berlin Wall coming down is an achievement in my lifetime that seemed more impossible to me than landing a man on the moon. Was it worth it? Fast forward to GWB who calls Reagan his economic muse. GWB believes in the parts of Reaganomics that even Reagan didn’t believe in after about 1983 about cutting taxes on the richest few because they are obviously the most productive so we increase productivity the most by giving them a boost. Further GWB has increased both domestic and military spending as a percentage of GDP by more than 2%. Also, Reagan policies or whatever meant that Reagan was raising the debt during times of economic prosperity while GWB seems to be doing these things without regard to global economic conditions. If Reaganomics is a belief is supply-side economics and the dead-weight loss of taxation, I am an economic Reagan Republican. I don’t think that I want to be grouped with GWB at all on responsible economic policy.
The problem I have with supply-siders is that they’re all about tax cuts, but they never curtail spending. They sell this myth to the public that you can increase military spending by 50% if you just get rid of public assistance programs. Look, the economy does well when the federal gov’t spends money (on anything) and cuts taxes, and, guess what, tax revenue will also increase. But, I don’t think that’s a sound policy. Another claim they use is that they always have an urgent pressing issues that must be attended to, regardless of the debts incurred i.e. 911, the Cold War, etc. While this, for the most part is true, the problem is these guys never pull back when things are good – they never prepare for a rainy day. I’m not always against tax cuts; I’m just against them when the economy is on fire and when everyone is getting rich. It would be nice if the Bush tax cuts were cut in, say, 2005; this way we could reinstate them now, giving us a nice fat bullet to use to help us get out of this mess. I, like most people, consider Reagan a great president, but I have to agree with Fish when he says that he set in motion this myth that, as stated by D. Cheney, "deficits do not matter” (I would also argue that this spread to the public and helped create the culture of negative saving). The fact is the national debt is a national security issue and for better or worse the populace will not accept deficits for liberal programs instituted by liberal politicians, but will accept them for military endeavors. The problem is that the creditors don’t care what the money was spent on. Also, it’s true that this military build-up during the 1980’s most likely contributed to bringing about the end of the cold war, but let’s not forget the impact that the collapse of the price of oil (thank you Saudi Arabia) had on the fall of the Soviet Union.
countercyclical fiscal and monetary policy - they teach you that in econ 101. its not rocket science, but the political pressures, elections mess it all up. i am always amazed by china in that regards - buggers may not have political freedom, but they’re sitting on budget surpluses, forex coming out of their ears, no debt issues. they’re sitting pretty - the govt there has so many levers they can pull. we think we’re the economically literate capitalists - well looky here now - where are we and where are the ‘free-market communists’. amazing. in india we always used to joke that we could solve all of india’s problems if we turned from a democracy into a one party state like china. i totally disagree, of course. no one is sticking a needle into my gonads so i can’t have more kids.
> Also, it’s true that this military build-up during > the 1980’s most likely contributed to bringing > about the end of the cold war, but let’s not > forget the impact that the collapse of the price > of oil (thank you Saudi Arabia) had on the fall of > the Soviet Union. This is basically right—Reagan gets much too much credit from people for “winning the Cold War.” That is frankly absurd. The Soviet Union was rife with contradictions and inefficiencies, and the population hated the system and the government. The government spent way too much of a percentage of GDP on the military, but that has less to do with the “genius” of Regan than with the incompetence of the Soviet system. The growth rates between the West and East simply diverged too far over time. If Reagan had any insight here, it was easing up the arms race so that each side could take a look over the wall rather than just basing policy on fear because the Soviet Union still had the military chops to hold things together even in the early 90s. Frankly, the one man who deserves nearly all of the credit for ending the Cold War is Gorbachev with an assist from G.H.W. Bush, who negotiated a relatively orderly dissolution of the Soviet Union. So while we’re taking the Reagan myth apart, this is probably the biggest fallacy of all.
It is very clear, especially today, that Russia (the former Soviet Union) derives its power from the price of oil. IMO, Reagans single biggest achievement (which is often forgotten/overlooked/etc) was his ability to influence OPEC to maintain an oil price at which the Soviet Union was unable to sell profitably (due to their lack of decent oil production technologies). This essentially destroyed a large revenue source for the Soviet Union and accelerated its demise. IMHO, this was the single largest contributing factor to the end of the cold war, much more so than the US’ spending on defense.
I know Russia gets a lot of its revenue from exporting oil and natural gas… I didn’t realize that the Soviet Union was such a big exporter, other than, perhaps, to Eastern Europe and China, which didn’t purchase in the same quantities as the West.
While we can speculate that Reagan’s defense spending, or his impact on OPEC caused the fall of the Soviet Union, the direct cause was ethnic strife and inability of Gorbachev to forcefully put it down. From Baltic to Central Asian states, local leaders saw that central government was weak and decided to take matters into their own hands. Totalitarian governments rarely fall because of economic conditions - just look at Cuba or North Korea.
rohufish Wrote: ------------------------------------------------------- > > i am always amazed by china in that regards - > buggers may not have political freedom, but > they’re sitting on budget surpluses, forex coming > out of their ears, no debt issues. they’re sitting > pretty - the govt there has so many levers they > can pull. we think we’re the economically literate > capitalists - well looky here now - where are we > and where are the ‘free-market communists’. > amazing. > Just like your claims regarding Reagonomics, your claims here are empty of any real comparative value and lack substance. You simply cannot compare a state in the middle of a high growth period to a mature one such as the U.S. Astronomical growth does not continue forever and comparing China’s position now to that of the U.S. is not an apples to apples comparison. Let’s look at some of your claims. Budget surplus…great, but not saying much considering that on a real scale, their real per capita GDP adjust for purchasing power parity is $5,400 versus $45,800 in the United States. Lets also think about what China is sacrificing to maintain that surplus. In China, population life expectancy is 73 in china, infant mortality is 21.16/1000, literacy is 91%, and 21.5MM people live on less than $90 per year (should we sign you up for the victorious free market communist structure Rohu?). Compare this to a population life expectency at birth of 78 in the U.S., infant mortality of 6.3/1000, and 99% literacy. Or maybe they could use some of that surplus to fix this problem: “Chinese women are lured abroad through false promises of legitimate employment, only to be forced into commercial sexual exploitation, largely in Taiwan, Thailand, Malaysia, and Japan; women and children are trafficked to China from Mongolia, Burma, North Korea, Russia, and Vietnam for forced labor, marriage, and prostitution; some North Korean women and children seeking to leave their country voluntarily cross the border into China and are then sold into prostitution, marriage, or forced labor tier rating: Tier 2 Watch List - China is on the Tier 2 Watch List for the fourth consecutive year for its failure to provide evidence of increasing efforts to combat human trafficking, particularly in terms of punishment of trafficking crimes and the protection of Chinese and foreign victims of trafficking; victims are sometimes punished for unlawful acts that were committed as a direct result of their being trafficked, such as violations of prostitution or immigration/emigration controls; the Chinese Government continued to treat North Korean victims of trafficking solely as economic migrants, routinely deporting them back to horrendous conditions in North Korea; additional challenges facing the Chinese Government include the enormous size of its trafficking problem and the significant level of corruption and complicity in trafficking by some local government officials (2008)” All above facts are from: https://www.cia.gov/library/publications/the-world-factbook/ On the note of their FOREX position, this is almost entirely due to their goverment depression of their exchange rate, which is neither advantageous nor sustainable over the long term. I am not here to bash on China, they are surely on the way to be a global superpower and have shown incredible progress, more than likely on their way to surpass the United States. However, this is not due to some economic genious, but rather them playing catchup to the world and finally realizing the competitive advantage of their resources as they adobt capitalistic free markets, and their current position can not be used in an apple to apple comparison with the United States as Rohu did in his meaningless comparison. In addition, are they really so much better off? Their “great” economic model is dependent one an undiversified demand base, resulting in 100,000 factories closing this year: http://www.treehugger.com/files/2008/11/100000-chinese-factories-closing.php In fact a better question for China model zealots would be,“Considering the fact that they always had access to these same resources, what took them so long?” There is nothing innovative about industrial output driven by government subsidations and cheap labor.
If Reagan won the Cold War, then why did the Soviet Union last three years after he left office (he was done in 1988, the Soviet Union held on until December 1991)? Seventy years of collectivization and dictatorship had nothing to do with the collapse of the Soviet Union? Just the genius of Reagan? That is pure Republican revisionist history and an American-centric view of the world. Give the credit to Gorbachev and Yeltsin–partially for incompetence and partially for not rolling tanks into Central Europe, which the Soviet Union had already done successfully several times before. The Afghanistan war was over, so they still had the muscle to do it.
Black Swan Wrote: ------------------------------------------------------- > rohufish Wrote: > -------------------------------------------------- > ----- > > > > i am always amazed by china in that regards - > > buggers may not have political freedom, but > > they’re sitting on budget surpluses, forex > coming > > out of their ears, no debt issues. they’re > sitting > > pretty - the govt there has so many levers they > > can pull. we think we’re the economically > literate > > capitalists - well looky here now - where are > we > > and where are the ‘free-market communists’. > > amazing. > > > > Just like your claims regarding Reagonomics, your > claims here are empty of any real comparative > value and lack substance. You simply cannot > compare a state in the middle of a high growth > period to a mature one such as the U.S. > Astronomical growth does not continue forever and > comparing China’s position now to that of the U.S. > is not an apples to apples comparison. Let’s look > at some of your claims. Budget surplus…great, > but not saying much considering that on a real > scale, their real per capita GDP adjust for > purchasing power parity is $5,400 versus $45,800 > in the United States. Lets also think about what > China is sacrificing to maintain that surplus. In > China, population life expectancy is 73 in china, > infant mortality is 21.16/1000, literacy is 91%, > and 21.5MM people live on less than $90 per year > (should we sign you up for the victorious free > market communist structure Rohu?). Compare this > to a population life expectency at birth of 78 in > the U.S., infant mortality of 6.3/1000, and 99% > literacy. > > Or maybe they could use some of that surplus to > fix this problem: > > “Chinese women are lured abroad through false > promises of legitimate employment, only to be > forced into commercial sexual exploitation, > largely in Taiwan, Thailand, Malaysia, and Japan; > women and children are trafficked to China from > Mongolia, Burma, North Korea, Russia, and Vietnam > for forced labor, marriage, and prostitution; some > North Korean women and children seeking to leave > their country voluntarily cross the border into > China and are then sold into prostitution, > marriage, or forced labor > tier rating: Tier 2 Watch List - China is on the > Tier 2 Watch List for the fourth consecutive year > for its failure to provide evidence of increasing > efforts to combat human trafficking, particularly > in terms of punishment of trafficking crimes and > the protection of Chinese and foreign victims of > trafficking; victims are sometimes punished for > unlawful acts that were committed as a direct > result of their being trafficked, such as > violations of prostitution or > immigration/emigration controls; the Chinese > Government continued to treat North Korean victims > of trafficking solely as economic migrants, > routinely deporting them back to horrendous > conditions in North Korea; additional challenges > facing the Chinese Government include the enormous > size of its trafficking problem and the > significant level of corruption and complicity in > trafficking by some local government officials > (2008)” > > All above facts are from: > https://www.cia.gov/library/publications/the-world > -factbook/ > > On the note of their FOREX position, this is > almost entirely due to their goverment depression > of their exchange rate, which is neither > advantageous nor sustainable over the long term. > > I am not here to bash on China, they are surely on > the way to be a global superpower and have shown > incredible progress, more than likely on their way > to surpass the United States. However, this is > not due to some economic genious, but rather them > playing catchup to the world and finally realizing > the competitive advantage of their resources as > they adobt capitalistic free markets, and their > current position can not be used in an apple to > apple comparison with the United States as Rohu > did in his meaningless comparison. In addition, > are they really so much better off? Their “great” > economic model is dependent one an undiversified > demand base, resulting in 100,000 factories > closing this year: > > http://www.treehugger.com/files/2008/11/100000-chi > nese-factories-closing.php > > In fact a better question for China model zealots > would be,“Considering the fact that they always > had access to these same resources, what took them > so long?” There is nothing innovative about > industrial output driven by government > subsidations and cheap labor. wow, you’ve got a few chips on your shoulders. no one anticipates national collapses - the UK went down, USSR went down, Japan/Germany went down, the USA will (is?) go down someday, and so will China one cycle of history later. it always starts with a false sense of superiority, empty optimism, and denial. it ends with irrelevance as a nation. ask the brits and the russians. you and your family owe the chinese $600B. you are a debtor to your adversary - congratulations, mate.
> no one anticipates national collapses - the UK > went down, USSR went down, Japan/Germany went > down, the USA will (is?) go down someday, and so > will China one cycle of history later. > I admitted as much when I said China would likely surpass the U.S. at the end…read better. > it always starts with a false sense of > superiority, empty optimism, and denial. it ends > with irrelevance as a nation. ask the brits and > the russians. Again, never said we would recede, just that they couldn’t claim economic prowess. > you and your family owe the chinese $600B. you are > a debtor to your adversary - congratulations, > mate. Just my family? Really? No not really, it’s just another moot point by Rohu, we’ve spent more than that on the financial sector, big deal. Secondly, never said they were an adversary anywhere…again, read better. Of course, if you actually took the time to read carefully at all, you wouldn’t be spouting useless media generalizations (ironically this what you keep campaigning against) of the Reagan administration based on sound clips you heard on CNN.
I think Reagan deserves a good deal of credit for the end of the Cold War - if not for ending it, then for hastening it by getting the Soviet Union to spend unsustainably. Of course, Osama bin Laden also deserves some of the credit for tying down and sucking up Soviet resources in Afghanistan and keeping the Soviets bogged down in a horrendously unpopular asymmetric war. Something that looks disturbingly familiar right now.
“The key trade-off is that Reagan’s military spending brought an end to the Cold War (IMHO) which was an enormous achievement” Pretty amazing how that sentence morphed into: “Seventy years of collectivization and dictatorship had nothing to do with the collapse of the Soviet Union? Just the genius of Reagan?” My point was not to elucidate how the Cold War was won or argue about it. Everyone knew who was going to win the Cold War by about 1947; it was just a matter of how much damage would it cause and when would it happen. I think it is fair to say that the Reagan military build-up was a significant factor in convincing Gorbachev et. al. that they weren’t going to be able to keep up and that there might be a better way. Obviously, all those things that happened between 1947 and 1989 had lots to do with the wall coming down. However, if you had asked me in 1988 (I was grown up by then working at the RAND Corp) if the Berlin Wall was coming down within a year, I would have said “No chance”. It was stunning, and Reagan deserves lots of credit for being the guy in charge when it happened.
bchadwick Wrote: ------------------------------------------------------- > Of course, Osama bin Laden also deserves some of > the credit for tying down and sucking up Soviet > resources in Afghanistan and keeping the Soviets > bogged down in a horrendously unpopular asymmetric > war. Something that looks disturbingly familiar > right now. Yeah, but we can’t vote for him because he associates with terrorists.
swan - you know too much for a mere mortal like me to argue with you. and you sound bitter and vicious enough to scare me into silence. i will go back to watching my CNN and improving my reading skills so i can stand a better chance with the ‘smart crowd’. any stock tips, while you have my attention?
bchadwick Wrote: ------------------------------------------------------- > I think Reagan deserves a good deal of credit for > the end of the Cold War - if not for ending it, > then for hastening it by getting the Soviet Union > to spend unsustainably. Actually, there is no evidence that Soviet Union increased miltary spending during the 80s: despite the War in Afghanistan, their spedning only grew at 2% a year while US was growing at 8%+. Simple issue is that Gorbachev was a spineless leader, basically Harry Reid of the USSR.
rohufish Wrote: ------------------------------------------------------- > > any stock tips, while you have my attention? I said lehman was a buy at $17, it’s a steal at $0.17.