It's not the economy stupid.Follow

Hmmm I am not unemployed, nor was I complaining.

Besides, those are mostly First Nations communities. It is sort of complicated in terms of leaving to find employment (people do it) but given the fact that there are unresolved issues of treaties and title, I can see why whole entire communities don't leave the land that their ancestors lived on for thousands of years.

It is also complicated because creating an economy out of thin air is pretty much unpossible.

Aren't you a self-proclaimed "independent" anyways?

You voted for Judy Biggert!

Nope. Card carrying Democrat. Literally! The DCCC keeps sending me membership cards.


No way, I voted for Christine Radogno over Giannoulias for Treasurer, though. I'm not in Biggart's state district; it's Tom Cross around these parts.

Oh, so you just felt like bringing up something irrelevant to the discussion.



I just had ice cream.

Well fuck. There goes my selective reading kicking in again.

You really have no clue what you're talking about, do you?

I honestly don't know where to start. You're making what has to be the most simplistic claim ever in the history of economic discussions (which for this board is saying something!). It's all a result of "deregulation" in the 80s? Which deregulation? Can you even name one, must less describe how said regulatory change caused the current economic problems? Or you just heard someone say it was "all because of deregulation in the 80s" and repeated it here?


Let me give you a basic primer: Unemployment is driven by a business sector which is unwilling to put their money into hiring new people. That happens when they aren't sure how various market forces and choices will pan out and don't want to commit to anything. Everything related to employment represents a hefty business commitment which can't be undone as easily as saying "sell!". Many economists believe that most of that uncertainty is related to current and future tax rates on various business related activities. I suppose that's subject to debate, but it's hard to logically pin this on any other reason. You're free to try though, but I just don't see any of the "business is just greedy" explanations fully answering the "why now" part of the question. Whatever.


In any case, if you can't see how the debt ties into this, you're blind. We're so in debt that it has to be addressed. There's only two ways to do this: Raise taxes or cut spending (or some combination of those). Regardless of where you stand on which of those we should do (or in what combination), until that issue is resolved, business is going to be skittish about committing assets into some activity which might be less profitable tomorrow than they calculated today. That what's keeping unemployment high in a market which otherwise should be recovering.

The housing market is still semi-dorked, and likely will be for some time. But the fact is that most of the damage done there has already been done. That bubble has burst, the money has been lost, and the market is lower in that area as a result. But the housing market does not at all explain the current deficit problems nor does it explain the unemployment problem. One just isn't related to the other at all right now. It was, when the bubble was bursting and lots of money was being lost by those who were invested in that market, but today it's not a causative factor.

Revenues are projected to return to pre-crash levels this year, yet our deficit is going to be about 1.3T dollars greater. That's the current economic problem which is preventing recovery. I know that some people, for political reasons, want to look in every other direction, but you really have to try hard to ignore that huge deficit number and then engage in willful ignorance to pretend that it isn't having a massively negative effect on our economy.


Of course it is. How can it not? To ignore what's going on right now, and point instead to some unnamed "deregulation" from 20-30 years ago is just burying your head in the sand,

Yep.

Yes, yes, and yes. What, you think the history of the world is WIPED CLEAN UNTIL IT IS BLANK every four years? "Things" in the economic sphere knock on, year after year, just like "things" in every other sphere. The Protestant Reformation had knock-on effects for hundreds of years.

Australia deregulated its economy during the 80's as well as the USA and Britain. But Australia didn't deregulate quite as far as America did. And it's acknowledged that the residual regulations kept in place in our banking sector stopped our banks tipping over the same way so many US and European Banks did.

Deregulation didn't FORCE banks into giving out high risk loans in the 2000's. It ALLOWED banks to give out high risk loans. Deregulation firstly ALLOWED banks to gamble the US Housing Bubble wasn't going to burst. Allowed banks to encourage people who weren't sub-prime but couldn't afford their loans if the Bubble burst. Then there is the sub-prime market. May I remind you that sub-prime loans WERE NO MORE THAN 3% OF THE TOTAL LOAN BODY, AND IN THEMSELVES WEREN'T A PROBLEM. But, secondly, deregulation ALLOWED banks to DISGUISE the TRUE risk-vs-return value of the 3% of sub-prime mortgages by selling them off as Collateralized Debt Obligations and other esoteric commercial bank investments. When many COD lucky-dips came up holding extra concentrations of sub-prime mortgages inside, (those that returned less than what they were bought for), then the first catastrophic domino fell that INEVITABLY led to high unemployment in the US this year, among other miseries.

Deregulation in the 80's didn't FORCE this unemployment, it ALLOWED it.

Edited, Jul 9th 2011 6:48am by Aripyanfar

You are making an outlandish claim. You just don't realize it because the same claim has been deliberately repeated by every liberal pundit and politician over and over so that it seems like it's just "common knowledge" or something. Just because something is repeated many times does not make it true. Try stopping and actually looking at the facts.



Are you kidding me!? Between 2007 (the last full year prior to the housing bubble collapse) and 2010 (the last full year on record), revenues dropped by about $400B, while spending increased by $700B. During the same time period we went from a deficit of $160B to a deficit of 1,294B. The math isn't that hard to do here. We are in our current predicament because of overspending.

As a side note, this year revenues are projected to raise back up to 2007 levels. The deficit is projected to be $1.5T dollars. So revenue will come up about $400B, but the deficit will still go up another $200B. So... How the hell do you explain the extra $600B we'll be spending this year to make that happen? Again, this is not complicated math. If you can add and subtract the numbers are there.

This all requires that you do your own thinking of course. And no, it's not because of some mysterious unrecorded costs for wars which we now have to pay. It's because the Democratic controlled congress passed spending bill after spending bill in 2009 and 2010, and the bills for those things they ordered on layaway are coming due and will continue to come due. It is absolutely because of overspending that we're in the current predicament.



Irrelevant. Deficits/debt being "higher" is always the case because of inflation. What matters is the relative size of those things compared to GDP (or at least a trend of GDP to be a bit more fair).



Sure. Oversight which the Democrats opposed. We can play the game of "what caused the housing collapse" if we want. But our current problems are only related to said collapse because of the massive spending the Dems did in response to it. Spending which Republicans opposed nearly universally as unnecessary and which would drive us into exactly the debt crisis we're in now.



You tell me. You picked it for some reason, didn't you? Most people associate the 80s with Reagan policies, while the 90s are associated with Clinton. I suppose you could have randomly picked the wrong decade to blame the regulations on, but I'm going to stick with you wanting to make people think of Reagan and his supply side economics model being responsible rather than the reality that most of this stuff happened under Clinton.



Ok. Then why did you say that it was regulation from the 80s? I'll stop speculating that you're saying things for partisan reasons when you stop mislabeling things in ways which most people will interpret in a specific partisan way.



The CBO budget data doesn't lie. Spending increased massively during that 2 year period of time. This isn't just partisan finger pointing like when people blame the cost of the wars, or Bush's tax cuts for the current problems. This is fact. Spending increased massively during that time period. In 2007, the federal government spent $2,728B. In 2008 it spent $2,982B. In 2009 it spent $3,517B. In 2010 it spent $3,455B. If projections are to be believed, this year it'll spend somewhere very close to $4T dollars.


That's not made up numbers. That's fact. Our deficit problem (and thus our debt problem) is being caused by over spending. It's not because our taxes are too low. It's because we passed legislation mandating massively increased spending each year. Spending we simply cannot afford. The math doesn't lie.

Edited, Jul 11th 2011 1:22pm by gbaji