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HUFFPOST SUPER USER
phang10113
06:10 AM on 12/05/2012
Just because interest rates are low. Doesn't make it wise to borrow money you don't have and can't afford. The government is borrowing 40 cents of every dollar it spends. How long could any of us avoid bankruptcy if we conducted our finances in like manner? Throw in that the fed is devaluing our money at the same time with quantitative easing and it's idiotic. We are going to pay the price for this foolishness sooner than later.
madkoz
Dog is my co-pilot
06:40 AM on 12/05/2012
Seriously you don't have a clue. America is not a small business. We are a country with gazillions in assets. We have a work force that can make anything, we have an unmatched earning potential. Whats holding all that back is not debt its a handful of plutocrats that do not want to pay taxes or their employees a living wage. Our country has less revenue because its workers are earning less than ever. The only people making money right now and for the last ten years are the very rich and corporations both of who pay little or no taxes.
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HUFFPOST SUPER USER
phang10113
08:36 PM on 12/05/2012
Neither a small nor large business but that in no way means that you don't run it like one. We do have a lot of assets and are especially rich in natural resources. Getting at them is starting to be a problem because of government regulation. The national debt is not holding us back but it is becoming more of a problem. Especially without growth in the economy. It's not a handful of plutocrats. What the far left seems to have no ability to understand. Corporation's board of directors have a fiduciary duty to the shareholders. That is a legal obligation to try and make money on their investment. And we compete in a global economy now. It's kind of hard to compete if our auto workers cost over $70.00 an hour. And they pay factory workers in china $70.00 a week. One thing that could be done is allow corporations to repatriate assets they are holding overseas. In exchange for using those funds to invest in new factories/plants, upgrading existing, and creating jobs. Finally it's ridiculous to look to corporations for taxes. Taxes are built into the cost of goods sold or service provided. You tax Exxon more and a gallon of gasoline costs more. You tax ATT more and your cell phone service cost more. And so on and so on. Taxes on a corporation are an indirect tax on us because ultimately we pay them in the cost of good or service purchased.
05:55 AM on 12/05/2012
End the Fed and its printing press. What if another inflation cannot be engineered by QE'3? Then we won't be able to raise interest rates. What if banks cannot raise their interest rates? We've been here before.. Japan has been unable to raise her interest rates pretty much since 1989. Deflation is what we may be facing here. No inflation, no interest hike - (Krugman's) Keynesian economics made simple. Bring in von Mises for a change.
05:52 AM on 12/05/2012
I would encourage all of those who support Krugmans views to practice his view in the real world and see how it works out. Increase your debt to 100% of your income, spend 35% more than you earn and see how that works out. Interest rates are low so borrow, borrow, borrow.
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HUFFPOST SUPER USER
Alex Fidelibus
Give reason a chance.
06:03 AM on 12/05/2012
It's a common error to assume that a Government should or does operate the same way a business or a household does.
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HUFFPOST SUPER USER
phang10113
06:21 AM on 12/05/2012
Okay genius explain how so. What exempts government from the economic rules. Other than they can print their own money. At which some point it becomes so devalued it's useless. I mean how did that work out for the Germany of old. Hell for that matter how did it work out with Soviet Russia. Why shouldn't the government operate on a budget? Isn't the whole purpose of Congress to budget and approve spending. .
HUFFPOST SUPER USER
rekamlias
Sound Money is a good thing
08:36 AM on 12/05/2012
It is a more common error to assume that Government should not be run like business or a household. Even Hamilton knew that when he consolidated the US debt to Create US Credit that was only to run long enough to get The Us out of debt. Jefferson said " "I believe that banking institutions are more dangerous to our liberties than standing armies...". He also said ""If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered." Then we Madison "History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance." -James Madison. What argument can you have against these principals, i have an open mind, and I would love to hear them.
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06:39 AM on 12/05/2012
good idea

If we ran our households as Krugman advocates that we run our country, we would be living in the woods. Krugman is stuck on one theme "borrow".

He thinks that because he has a trophy he can advocate publicly for nonsensical policies and people should believe him.
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05:28 AM on 12/05/2012
He's right.

1) "The process of setting the debt ceiling is separate and distinct from the regular process of financing government operations, and raising the debt ceiling does not have any direct impact on the budget deficit "

2) " A vote to increase the debt ceiling is, therefore, usually seen as a formality, needed to continue spending that has already been approved previously by the Congress and the President "

3) "The debt limit does not control or limit the ability of the federal government to run deficits or incur obligations. Rather, it is a limit on the ability to pay obligations already incurred"

4) "Since 2010, the U.S. Treasury has been obtaining negative real interest rates on government debt"

50 negative real interest rates - the inflation rate is greater than the nominal interest rate.

it's the best time to borrow money and "should" be a no-brainer.

The true question is why did Congress passed legislation [since 2001 when there was a budget surplus handed over to Bu$h from Clinton] without the necessary funding while at the same time lowering taxes?

And where's it written the only time to worry about the deficit and take drastic actions to reduce it should only be accomplished while Democrats hold the White House and Senate?

I suspect this was a set-up-for-failure by the republicans - run up the debt and if they lost control over the government, push to make it fail while under the control of Democrats.
05:02 AM on 12/05/2012
How come there are so few faint voices calling for Medicare Part D required price negotiation, making sensible changes to military spending, bringing home nearly all troops from everywhere and eliminating corporate goodies in the tax laws? That would cut a bunch.
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HUFFPOST SUPER USER
ainnbeen
Put human rights above political expediency.
04:12 AM on 12/05/2012
WHAT IS FISCAL CLIFF

"This refers to the simultaneous expiry of tax breaks with the introduction of tax increases and spending cuts at the end of 2012, the cumulation of which could push the US back into recession."

EXAMPLE.

"If Congress take no action by January 1, the US will be hit by a fiscal contraction worth $600bn in 2013, which could tip the economy into a new recession. The fiscal drag results from the expiry of a series of Bush-era tax cuts, as well as the entry into force of automatic cuts to defence and domestic spending programmes. At roughly the same time, US lawmakers will have to raise its borrowing limit, or face the risk that the country could default on its debt."

http://lexicon.ft.com/Term?term=fiscal-cliff
iam99
To know what you prefer...
04:05 AM on 12/05/2012
Now that is interestingly put; we create so much out of thin air.
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nlkennedy
Realism Only
04:00 AM on 12/05/2012
The media was feverishly waiting to unleash the term "Fiscal Cliff" immediately following the president's reelection..

Notice how they didnt refer to the sequestration as the fiscal cliff up to, during, and after the passing of the legislation?

They needed their post-wrestlemania angle to bank off of... Vince McMahon would be proud of the showbiz aspect of our "journalism"
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meanjoker
Voting exterminates republicans
03:50 AM on 12/05/2012
balogne crisis
iam99
To know what you prefer...
04:06 AM on 12/05/2012
Please pass the yellow mustard.
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Alux
Pull the Wool Over Your Own Eyes!
03:29 AM on 12/05/2012
JounoList and former paid Enron advisor Paul Krugman said, "The idea we should be obsessed with the deficit right now is insane."

But then Krugman NEVER thinks it is the right time to be obsessed with deficits.

Well, except when conservatives are running up the deficits.

Krugman says, "Two legs bad, Four legs good."

And to think, I am so old I remember when Krugman was a widely respected, Nobel Prize winning economist, BEFORE he became a bought-and-paid-for political hack.
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HUFFPOST SUPER USER
BRAINS4USA
Vote. Just do it. Always.
04:14 AM on 12/05/2012
No Avux, that is not true. Libs have NEVER yacked about the fake debt crisis or so - that is an entirely GOP made up myth. A fairy tale to scare us into accepting their insane policies. And send us back to the bad old days in the 50s or earlier... Nothing else. And the last thing Krugman is, is paid and bought for. that is you when you collect you Koch pennies - and most economists supporting the GOP.
04:39 AM on 12/05/2012
Thank you for the clarification...I didn't understand he was a political hack..

i thought he was an unemployed clown...I assumed he popped too many balloons when making animals....
HUFFPOST SUPER USER
ThinkinPerson
03:08 AM on 12/05/2012
I agree with you. I want the rest of December to be spent actually sitting down with some numbers. Who gets what and for what. Let the Republicans fall off the cliff. We can postpone the budget until February after we've had our smart people looking over the budget and coming to terms with what doesn't serve us as a people.

A country simply can not ignore a whole 98% of Americans and give more money to the 2%.

If they couldn't stimulate the economy with $16T in bailouts on top of the money already subsidized by the American taxpayer, what makes us think another tax break will.

Time is up. We need to stimulate the greatness of America, not the uglies.
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03:04 AM on 12/05/2012
The real crisis is the attempted coup and obstruction of the United States by Libertarians.

Not Spending!
02:56 AM on 12/05/2012
.....

the government raised the debt ceiling by $2.5 trillion in August and 6 months later we need to raise it again. $2.5 trillion gone in six months.
HUFFPOST SUPER USER
ThinkinPerson
03:11 AM on 12/05/2012
And, the banks got $16T in one pop, secretly, on top of the stimulus money we did know about.

So, where are the economic geniuses now?
02:44 AM on 12/05/2012
Every new dollar that is emitted into the economy is borrowed....that is the real crisis mr krugman, but of course you will never question the insanity of it because you are a fraud.
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HUFFPOST SUPER USER
Adam L Brinklow
Writer, editor, critic.
02:30 AM on 12/05/2012
No, really, coming to think of it, doesn't anyone else find it weird that the "fiscal cliff" is wholly the creation of the Senate? I'm not talking in an abstract, ideological way, I mean that they actively made this happen on purpose. This is a set of penalties that they set up for themselves if they didn't work out a deal. Then they didn't work out a deal. So now they're freaking out trying to avoid being punished by...themselves.