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HUFFPOST SUPER USER
jasonfebery
Tech Consultant
07:31 PM on 11/23/2009
A good read. Paul Krugman always has something good to say.

http://jasonfebery.wordpress.com/2009/11/22/not-just-a-theory/
10:25 PM on 11/23/2009
Has any of it ever been intelligent?
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petef59
edit my micro-bio
10:51 PM on 11/23/2009
Is that an intelligent debate point?
12:08 AM on 11/24/2009
What's intelligent about hanging out here wasting your time trying to annoy people with a different ideology than yours?
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valboski
07:11 PM on 11/23/2009
debt + debt + debt + bankruptcy or inflation and skyrocketing taxes. I'll take my chances with bankruptcy
07:35 PM on 11/23/2009
Why choose, if we continue to spend more money than we have at this rate - YOU CAN HAVE BOTH!!
11:27 PM on 11/23/2009
It's about time for skyrocketing taxes on the rich, who have taken everything and left mere crumbs for everyone else.
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demockracy
The Library:Like taking your brain to the gym
07:06 PM on 11/23/2009
Plenty of skeptics... Yet it only took a 3% tax hike on the highest brackets to balance the budget for Clinton... Gee! is that ever suggestive.

It was Reagan who lowered the top progressive rates from somewhere near 70% to somewhere near 30%. This was done to satisfy "Supply Side" economics, but Reagan's own budget director, David Stockman, confessed that that theory was just an excuse (a "Trojan horse") to lower the top rates.

Meanwhile Reagan signed eight tax increases, and between him and Bush 41 quadrupled the payroll taxes. The result? In the last 30 years, the bottom 90% of real incomes have been in decline while those at the 99.99th percentile have received (at least) a 497% raise. Read Krugman's column about that here: http://select.nytimes.com/2006/02/27/opinion/27krugman.html

Big tax hikes on the very wealthy would mean no more $4,000 shower curtains and $10,000 waste baskets, but would revive the economy. See http://www.alternet.org/workplace/106979
07:37 PM on 11/23/2009
NOT TRUE AT ALL HISTORY REVISIONIST. Following the advice of Dick Morris HE FOUGHT FOR a balanced budget against many in his own party. This meant spending cuts. He also benefited from an incredible dot com boom that caused revenues to sky rocket.
09:05 PM on 11/23/2009
A new research paper by Ian Dew-Becker and Robert Gordon of Northwestern University, "Where Did the Productivity Growth Go?," gives the details. Between 1972 and 2001 the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn't a ticket to big income gains.

But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that's not a misprint.
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cabinetmaniac
Think for yourself. Question authority.
09:07 PM on 11/23/2009
He seems fairly accurate to me.

What exactly isn't true?

:-]
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lizr
goofing off here
08:50 PM on 11/23/2009
thank you -

the lies about history continue from the rt.

appreciate the truth for a change!
07:02 PM on 11/23/2009
Social Security gets fixed with a couple of relatively painless modifications:

1) Raise the income cap for social security collections, and
2) Raise the retirement base age based on life expectancy going forward

The whole thing is handled by lifting the cap all the way up. You could get very far if you lift it to $250,000 or $500,000. Shift the retirement base age to 67 and it's fixed for a generation or two. It's kind of like what Reagan had to do with Tip ONeill's help in the '80's.

Medicare only gets fixed when the whole health care system is revamped.
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07:32 PM on 11/23/2009
By Social Security's own numbers, if future GDP growth matches past GDP growth, SS NEVER runs out of money.
Even if we do nothing, it NEVER runs out of money.

Right on on Medicare.
Medicare's problems are healthcare system's problems.
01:56 AM on 11/24/2009
If there is anything the past 18 months have shown us it is that you cannot base future projections on past performance. Something does have to be done to SS to make sure it is there for the next four or five generations.
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BigBagel
09:21 PM on 11/23/2009
If you were born after 1960 the retirement age is 67. Lifting the cap that high would make SS a higher tax then the federal income tax.
06:45 PM on 11/23/2009
Reported today,,,if we took ALL of the profits from ALL of the Fortune 500 companies in America,,, it would take 143 years to pay off the current national debt. This does not include yearly interest either,, just what is owed now. We must demand a madatory balanced budget with 2% going to pay off the debt...then at least we know the debt will be gone in 50 years.
08:48 PM on 11/23/2009
$12,000 billion ($12 Trillion) divided by 143 years equals $84 billion in profits per year (assuming the same value of the dollar into the future...which is unlikely to be the case...so debt will stay in today's dollars and payback will be in less valuable tomorrow dollars).

Just one company, Goldman Sachs, is setting aside almost $17 Billion for bonuses in 2009 - out of their profits....where in the world did you get your numbers???
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petef59
edit my micro-bio
10:51 PM on 11/23/2009
Arse?
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Dukedraven
06:30 PM on 11/23/2009
To "Big Bagel":

I don't follow your point. Krugman believes in federal spending to get us out of the recession, while The Times sees it as a threat to our economy. I agree with the newspaper's opinion. The current spending will simply create more problems.
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06:36 PM on 11/23/2009
I agree with Krugman and the Keynesians.
They have a track record, and it works.

The "don't spend" strategy has a track record, too.
And it never works.
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shivasquest
06:53 PM on 11/23/2009
Simple ..plain and true...
07:18 PM on 11/23/2009
Please give me one example of where it worked? Japan spent trillions and is at the last of its credit line with little to show for it.

When countries use the credit card it doesn't go broke overnight. Just as my friends who lived the good life on credit cards eventually had to pay the piper, it works the same for countries. My friends didn't go broke overnight, but they did in the end. Keynesian have 0 track record of ever working look at Germany 1920s or any other bankrupt country. Its a failed philosophy.

common sense is spending too much is bad. It doesnt take 4 years of learning flawed formulas to know what happens. The economic model of countries is no different than you or I. If Krugman was so smart why not give everyone a billion and we would all be rich.
06:17 PM on 11/23/2009
If the national debt is a constant percentage of national income, the burden of servicing it is also constant and whether the service charge accrues to foreign or domestic savers, the economy will in due course adjust to it and remain in balance. But if the debt as a percentage of GDP keeps rising, it eventually becomes too big to support and a stop must be put to it one way or another.

Everyday plodding rather than emotion is needed in approaching this problem.
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06:36 PM on 11/23/2009
Yes. Factual. Well said.
07:11 PM on 11/23/2009
And if the interest costs of that debt increase from the historic lows that we are paying now then the debt service will increase and the annual deficit will just grow that much larger. Instead of a $1 trillion a year deficit for the next 10 years if the interest costs of servicing that debt go up then it could be $1.5 trillion a year/ Time will tell if Krugman is right And in about 7 years we will have to start paying for Social Security from the General Fund cause the SS revenue will be less than the annual SS costs. All pretty simple stuff
06:07 PM on 11/23/2009
The best way to gauge economic recovery is in the auto and housing sectors. Why? When people have jobs they buy houses and cars. When they lose jobs they lose houses and cars to repossession (see http://www.repofinder.com). Until we create more jobs our economic future will continue to be dark.
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06:22 PM on 11/23/2009
It is not only jobs, but better pay.

The middle class needs to regain its purchasing power.
Middle class wages have stagnated since Reagan.
Upper class wages have increased like 400%.

Policy should include less tax breaks for Corporations shipping jobs overseas.

Legislation to redistribute income from the rich to the middle class, reversing the last 30 years of middleclass to rich income redistribution.
06:23 PM on 11/23/2009
Alan Greenspan used to follow male underwear sales. I wonder how they are doing.
06:06 PM on 11/23/2009
Wall Street is ran like a casino. Do we really expect them to share a vested interest in the common good of the average American Tax-payer?
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06:23 PM on 11/23/2009
GOPers expect that.

That is why they removed serious regulation.
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opines
05:57 PM on 11/23/2009
many 50 year olds and up just hope that they can make it through their lifetime before the lethal economic tidal wave that is now passing over our heads lands with full impact.

Krugman must know that a bubble-bursting caused by the outsized amounts of Federal, State, Municipal, Corporate and Personal debt cannot be repaired by distributing more unbacked greenbacks.

It would also help if he would acknowledge that we are already in the early stage of what will be a 1930s magnitude Depression instead of referring to the current status as the "Great Recession". Were it not for Unemployment Insurance and its extensions we would be seeing the breadlines of the early 1930s.

Recognizing that we are in the early years of a depression would generate a more realistic appraisal of what our priorities should be. Continuing our failed attempt to achieve world dominance through muscular military adventures (invasion/occupation of Islamic countries) and maintaining military bases in over 100 countries would probably no longer be feasible.

But, we seem to prefer listening to those who tell us that hard, hard, times can be avoided by printing more dollars.
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06:24 PM on 11/23/2009
Krugman knows that it was destructtive GOPer tax policy that caused a lot of what you mentioned.
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Niris
Justice for All
07:37 PM on 11/23/2009
Amen!
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05:57 PM on 11/23/2009
. . . too late.
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06:24 PM on 11/23/2009
It's never too late to give up.
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Niris
Justice for All
07:38 PM on 11/23/2009
It will be too late if in 2012 Sarah Palin gets elected. That my will be the beginning of the end of times. Seat & wait. God forbids.
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05:56 PM on 11/23/2009
A phantom menace? I might not be on the faculty at Princeton, or have won a Nobel for the Dismal Science. But I didn't major in underwater basketweaving at the George W. Bush School of Elocution and Arithmetudes either.

The national debt is $12 trillion, or about $40,000 for every man, woman and child in the country. And that does not count the approximately $5 trillion when it comes time to pay the piper on Fannie Mae and Freddie Mac. Then there's a couple of horrendously expensive, and poorly thought-out, planned and executed, wars. DId I forget anything? Oh yes, Baby Boomers retiring in droves, with another $40+ trillion in present dollars for unfunded mandates (mostly Medicare, Medicaid and Social Security). And now possibly universal health care.

Then, there's the interest. The federal government spends (or robs from Peter to pay Paul) between 15 and 20 cents of every budgetary dollar - about $450 billion or so - servicing the national debt. That's more than the GDP of Austria, just keeping the national debt afloat. Annually. To put it another way, that's like working for the entire months of January and February just to make your minimum credit card payment. Not all of this debt is long-term, so if interest rates return to historical norms, the situation gets even worse.

Imagine - just imagine - what the US could accomplish without that millstone around the country's neck. We need to take our medicine now (15 years ago, actually), before it's
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06:16 PM on 11/23/2009
So, YOU can whine about it, or do something about it.
Pulling back and hoading $$$ will not do address anything you talk about.

So, what will?
Why, improving the economy will.
First of all, jobs. Historically, nobody NOBODY has EVER turned jobs around the way Faux expects Obama to do so. Reagan suffered 3 years of increasing job losses before turning things around, and Reagan's debts were WAY more than Obama's.
That said, the stimulus was way too small and too much was in tax breaks. Not enough construction and infrastructure jobs. Thank the GOPers for gutting this.

Secondly, the economy improves when the middle class has more disposable income. The last 30 years saw the greatest transfer of wealth from the middle class to the upper 1%. Mostly through tax policy, whereby the top 1% pay less tax than the next 19%. That is total tax based on percentage of income.
http://www.ctj.org/pdf/taxday2009.pdf

Our economy is middle class consumer driven. Gutting the power of the unions, increase of upper management pay, increase of health costs, deregulation of banking, tax regulation to ship jobs overseas, all of these GOP programs need to be reversed if the middle class to get back their discretionary income.
06:29 PM on 11/23/2009
What about the Fair Tax as a solution? It would:
-- alleviate the chrony-ism and political tinkering of the tax brackets
-- "the economy improves when the middle class has more disposable income" -- no income tax, so if they are working then they'll be able to retain and do what they wish they're money
-- entitlements are increased so those without will still receive sufficient aid
-- "Our economy is middle class consumer driven"... in relation to the fair tax, it seems like this point sums it up well

I know, somehow, this has turned partisan, but seriously, what are your thoughts on the Fair Tax?
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07:45 PM on 11/23/2009
I do not whine. I point out irrefutable facts: the national debt is a long-term problem, and solving it will require difficult near-term choices if we are to avoid a financial disaster that will make the current economic setback seem like a 4th of July beach cookout with the Dallas Cowboy Cheerleaders by comparison.

Agreed that the tax structure needs to be simplified, and that the Porkulus Package was disastrously structured. The GOP - and the Democrats - were in the trough up to their sleek and oily jowls. Plenty of blame to go around.

But more Porkulus is just throwing bad money after worse. Increasing the debt, given the accelerating shift in the US's population demographic, is simply wrongheaded, and if left unchecked will literally bankrupt the country. I am willing to make sacrifices, in the form of higher taxes and fewer government services.

Further, business cycle recovery is not financial "improvement". Recent American prosperity has been driven and defined by consumerism, piratical speculation and questionalbe monetary/fiscal policy. In reality, these are shell games masking the facts that the fundamentals of the American economy are illusory or rotten, and government (under both parties) has gotten too big and far too expensive.

The middle 60% household incomes pay 33.6% of the taxes. Imagine if the government didn't have to pay any interest on the debt: we could lower the middle and lower classes' tax burden by 2/3 (or more), and not decrease federal revenues by a dime.
Jazzcomedian
An easy going responsible bohemian
05:36 PM on 11/23/2009
With all due respect to Professor Krugman, nobody knows definitively what will turn us around. It's important to remember that what is occurring in the US is happening world wide. Advanced economies Germany, Japan, Singapore, and the UK all have larger debt burdens than us and are in the same fix. Many countries have had to go into deficits to try and stimulate demand. This is a global financial crisis. The difference is that many of these countries have a stronger social safety net so the effects haven't been as bad. Those that regulated smartly and didn't practice "cowboy capitalism"--Canada, Australia, Norway and India are doing fine. And China with it's command economy was able to get a huge stimulus out quickly, and order their banks to lend. Something Obama can't do in our democracy.

America is broken on several levels. The financial system is broken, the healthcare system is broken, the educational system is broken, our increasingly dysfunctional political process is broken, our job market and manufacturing sector are broken. All the underlying assumptions that used to work for us need to be rethought for the 21st century. This is way beyond "tax cuts." We're in uncharted waters, and if you asked twelve different noted economists how to pull us out of this, you'd get twelve different answers.
05:54 PM on 11/23/2009
Krugman said from day 1 to spend twice what was passed in that bill. So instead we spent half as much as he suggested and frankly have gotten very little bang for our buck. So would twice the spending have given us the same muted response or was the half way measure too anemic?

I agree that pretty much all systems are broken in this country and have been for about 40 years now except that the degree of failure has increased.

Our urban public schools are graduating many that can't even balance a checkbook. Half don't even graduate that puts them into the category of unskilled which is a death sentence.

The health care costs are skyrocketing because our stupid government refuses to adequately fund programs adequately and thus borrow from Peter to pay Paul. Now they want us to believe they will make 500 billion dollar cuts out of medicare by wellness programs, and refusing duplication of services. FAT CHANCE.

My husband, president of a manufacturing company, told me the other day he is slowly losing business to China because his big customers are sending their business to Asia in order to stay competitive themselves. Recently a big chip company said that most of their business is now overseas not here in the US which was not true 10 years ago when manufacturing was here in the US and so was the demand.
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06:18 PM on 11/23/2009
Krugman knows what will turn us around.

He mentions various options often in his blog.

Doing it is the nearly impossible part.
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BigBagel
05:25 PM on 11/23/2009
The biggest purchaser of US government debt is the US government.
05:28 PM on 11/23/2009
What evidence do you have to support this claim ?
06:20 PM on 11/23/2009
Foreign ownership of fed debt was 25% in 2007 -- see http://www.msnbc.msn.com/id/17424874/
05:54 PM on 11/23/2009
Either China buys are debt, or the Federal Reserve does.
05:13 PM on 11/23/2009
Free the natural spirit of the middle and working class from its obligations to the U.S. Treasury; that will guarantee a complete turn around of the funk our economy finds itself in. The people have need that must be met and dreams to realize !
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BigBagel
05:22 PM on 11/23/2009
Yes. No taxes but keep the government, military, social security all going.
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06:25 PM on 11/23/2009
LOL!!!

This will free corporations from further impoverishing the American people and enriching its own coffers.