mark
as u know
i greatly
respect your serious non partisan concern
for the whole nation's long run welfare

but we prolly couldn't be much farther apart
on the fed deficit or funding the tax and transfer system
or more generally on the long run
relationship
between domestic growth and the fed macro budget

i hope you run a series of posts on this cluster of policy nodes
like you have on inequality
i look forward to the exchange u will trigger he

hey

b4 we get into trade offs
of votes now for long run welfare

we need to first of all

re examine

the delong-rubin growth paradigm

fiscal "balance "
and productive investment
may have no coherent causal pattern

deficit reduction
by tax increase or soicail spending decrease
maybe be magical thinking
ie human sacrifice contempo style
the conflation of saving with investment
is a joke with vicious consequences

cash gorged corporations can't find enough to invest in here at home already

thrift in fed gubmint
is perhaps
a sacred cow that
we can't afford
since it produces no milk
off to a slow start

non partisan whole nation perspective
means to me
that say mark
unlike say me
does not take a class view point
but tries to work out the bestest for the mostest
long run intergenerational etc etc

as to the narrow party partisanship
on this fiscal deficit issue
the cenrers of the big two
both "share " essentially
the same core notions
less deficit more growth
and
more investment return more growth

each is half qangel half devil

nice yin yang quandry eh ?

jk
why wave
the oily shirt of houston ?????

you got stock in this surge ???
or just fantasy scrap wood ???

anne
your sense of the burdens of empire is much respected
but an attack on the whole fed budget " para crisis "
is a witch's brew
as bi partisan as most state electoral regs

my problem no one here i've read yet questions
the "science " of this "trade off"

who has demonstrated the consequence of an 8% fed deficit

then again
other then single pay health
who has a good public use for the trillions involved

lets cut pay roll taxes
deeply
if we want a new new deal donk party
round here
education grants and such are a non starter

want to goo goo ?

take down the smoke stackers
hit big energy right in its domestic wind fall
hit their air warmers
with red regs
and green retro carbon trappers
and other such
investment tax credits
sure its theatre
but so is bagdad by bomb light

bw
nice comment

save and spend

its easy to do both
just make lots or have lots
and
don't toil like an ant
to make it happen
cause you can't produce that kind of pile
you can only

aquire it
or even better
use others chips
and
get rewaeded "off the top"
for helping others aquire/risk it

forget that
silly old farmer brown ethos

that's
ghost of economy past

used by Trump card players
to shame
the micro souls of us jobbled rubes present

cassandra

"I respect those intent
on more precisely
and scientifically
teasing out the relationship
between inflation and unemployment...."

can't be done with any confidence

my Rx

dive the job less rate till
the prices start to dance ....my bet they won't

the wage profit price dynamic
if it ever was as told by wall street

ain't so now

price pass thru is not a serious option
example

car markets are vitruallly free
of uaw / big three determined
contract driven cost structures

with stig
today
imagine a near perfectly elastic supply
of all products on global markets
except
naturally extracted commodities (oil and ores)
imagine a run down of the jobless rate
to 1-2%

my slogan
tighten up the people slack

the fed's target number range 1-2% is right

but target should be joblessness
not inflation

hollywood eco 101 :

" (fed) Debt matters Interest rates matter"

i don't hold that truth to be self evident

if the dems cut social spending projects because of some deficit barrier
it'll be so far as i'm concerned
only because some third rail taboo
is established
like the inflation accelerating jobless rate

and it becomes an untested
and thus
self full filling prophecy

Posted by: | Dec 24, 2006 12:19:19 PM

Slink,
when you worry
I take the worry seriously
but I am missing something
about your worry

c:
well presented call for caution
but lets lower
the system
till we see "real" problems...
other then :

the good

rising real wage rates

and the temporary
a down blip in productivity growth

anne:

my only concern is a macro policy that as cass sez

"the lost output of even but an extra 0.50% unemployment is humanly tragic
for it be lost foreever"

job hours are availible by the day
and gone by that night

Posted by: slink | Dec 25, 2006 6:33:27 AM
mark (gist)

'forget too big too small '
that's a relative question

we got to know what size expenditure we want first
and are we will to pay for it
or at least what part we are willing to pay for

are you saying no macro science need be applied ???
yup
we got to know what size expenditure we want first
and what part of it we will pay for it
out of what tax sources
or at least
find the rival sets of wants and pay sources

but isn't there some thunder cloud here
on the horizon

some notion
we can defer this to doomsday

and the bigger the deferal the sooner the doomsday

i contend that false fear drives the little folks spooky
this site is running mad with debt tally fiends
like the population bvombers and the gas warmers

numbers numbers numbers

but what if its mad science ???
what if bill vickrey was right ???

open question science needs
to play a starring role here
not as the heavy of wall street's narrative
but maybe as bill V's total employment
win win white hat

after all
a fed bond is somebody's safest asset

clear that mirage away and sense might reign
child poverty rates ???

the apple pie cause

perhaps
whitey nation has awaken from
its a long mid day domestic
ron ron slumber

after new orleans
maybe a majority at the polls can turn back toward uncle activism
and away from
" we just threw money at poverty
and poverty won antway..."

" it was a war as unwinable as nam "

well great
sweden on the mississippi

but folks
war on poverty II
can be lost
can be licked
and by its advocates

if their own narrow minded ignorant
frugal nanny vs nurture nanny
grapple ends in this summation :

"we can't afford this war
anymore then the eye raq war "

beware the steel grip
of
fed deficit phobia
not one of stig's better efforts

blame the trade imbalance
on us over consumption ???

but admit we are pulling the global effective demand wagon ????

what does this imply
that u leave out ???

"persistent global imbalances will continue to produce anxiety, especially for those whose lives depend on exchange rates"

exchange rates matter ???

then where's the rogues gallery
of reval scape grace types ?????

blame the mal distributed tax cut
for not stimualting
household spending
as if this wouldn't effect imports the way household borrowed money does

in fact may be more so eh ??

and the lower rates and standards
for household credit ????

say whats wrong stig

the repubs found a new way to manage effective demand
not uncle's borrowing but joe six packs

and the kicker as a greater debt slave jow will work his job longer and harder too

a win win
for the black hats

kitchen sink time joe ???

then go for it

this has all the terse fire power
of a hubert humphrey stump speech

Posted by: slink | Dec 27, 2006 6:06:01 PM

key ratio

gdp to foreign debt

could it be
vs
should be

on a ten trillion dollar economy
issuing debt in its own currency
whats too high??

without a clear notion
of the danger zone
here
you are sky hooking the problem

just like fed deficit to gdp ratio

now a fast bulid might by itself seem
troubling

say a low ratio like we had in 2000

and CAD rate twice the nominal gdp growth rate
that will build up the debt ratio quick

so if you folks are scared ...why?

foreign debt service burdens ???

what nominal interests rate ??

lots of numbers to plug in here
lots of moving parts
and besides
like bw's ss system "legacy problem "
hard to forecast too

Posted by: slink | Dec

anne

the us
has without intention
run a fine global macro policy
these past 5 years
by
outside borrowing and over spending
at a rate that forces global output
growth to new highs

but this is also
the crisis
because our allegedly
unsustainable borrowing
is world macro needed

our
over spending is the source of earthly prosperity

Posted by: slink | Dec

anne you still miss the macro point

who will replace the yankee effective demand last resort ????
the ec ????
japan ???
china ????
the oilers ????
uncle pulls back and this whole flat earth
piles up short on itself
the faster its going now
maybe the faster it accordians

anne are u secretly
polly anna ????

hope is a precious thing
it makes a sore back receed into the morning coffee
so my advice
don't squander it on
those flea bitten
dem "house canines "

Posted by: slink | Dec 27, 2006 6:10:24 PM

max is indeed
a vet of these affairs

he
reminds me of one of those
19th century carnival tent wrestlers
that cried "i can beat any man in the house"
and then
relied on a guy with a thick board
waiting out side the tent
to make it all happen

all the "champ " needed to do
was
waltz his man
over to the proper pre arranged spot
up against the tent side
where his hidden angel
could plank the bastard
in the back of the head
"from the great beyond"

"okay next rube !!!...what no takers ???"

Posted by: slink | Dec 27, 2006 6:20:11 PM

maria

u make for a fine balance to anne

but if by national finance
folly
you mean the projected level
of federal borrowing
i suggest
u look else where for the economic
equivalent of iraq
my suggestion:

in a phrase
as a nation
of largely jobbled households
we are being slowly crucified
on a cross of
over valued dollars

Posted by: slink | Dec 27, 2006 7:24:04 PM

this hog warsh
is hardly fitting

duncan's hand is a four ace hand

so what if an earlier adam can mash into the later adam
and produce complex contradictions

the street value of smith's
living legacy (so far)
is
indeed this legend of smith
the glorious results
of unfettering the marketplace

fear not "natural liberty"

we need not recoil
at the social outcome of
a free flow of "self interest"
at least
not in a competitive marketplace

this babbit feel good alibi tale
foley outlines
is all there
so far as what
we can call
"from smith"
in the working minds of the research wing
of "the profession "
notice if you will
the new brad mug shot

in particular the odd bluff cover of
secret puzzlement
tell:

the eye squint
that
just about gets the paradigm delong take right

he can't f ing make out
what exactly the hell he's looking at
or listening to
but he's acting kool about it anyway
js paine | 12.27.06 - 9:43 pm | #
"Charlie Brown Democrats"

fraud squad intevention....

max
that gives them the cover story and free re elect pass
they want

"we're hapless sweeties "
like all lesser evils pretending
to be
just bigger fools

nope
their power leeches max
in it for the fame and fortune
and you know it

steny and nan
are about as Peanuts like
as the beagle boys
js paine | 12

nice post
par for u of course

some notion of a smooth pathway
could be applied here
the trust fund as buffer
should be short horizon
and counter cyclical
not to mention
running episodic deficits is hardly a grave outcome

but to me this sense less
surplus till 17 or 21 or 25
requires
an immediate
payroll tax cut

rectify and win votes
what's not to like ???

-------------------------------------------------- --

20/40
has one great virtue it lays your cards on the table

but as to the whys
that remains open for analysis and review
as it should

btw both upper bounds seems too low to me
but i like the 4 square approach
all around

take foreign net debt to gdp
there's a ratio in search
of a "should"
upper bound
pinky | 12.28.06 - 12:04 pm | #

bw
as usual sounding the liberty bell
200 sounds 'bout right to me
long as ifica rates are " meade monitored "
to dip regardless of fund state in recessions
and rise back to target only in prosperity

btw
why have u not declared
for a fica x cut right now ???
pinky | 12.28.06 - 12:56 pm | #

bw
agree on retirement income
keep it payroll based
and use cap and rate moves
to retain balance between in come and out go

but the medi twins and all their offspring need a consumption tax base
not payroll
a vat perhaps
the seats at that decider table
should be just consumers of all sizes shapes and ages

as to prog tax fantasy
the secret agenda
to morph amerika
into
a no profit tax zone agenda
i feel must be attacked head on
with a high deduction
net worth tax

we shouldn't require some one making money fast to pay a higher hunk
as a toll tab on the climb up

since its giant pots of wealth
we have in the cross hairs anyway
a progressive income tax is no way to tax it

the american dream is open unpenalized opportunity
to "rise"
not a warm exemption from heavy tax burdens
waiting to greet u upon arrival at the summit

for a baker's dozen sound reasons
the heavenly house of capital lords
needs a heavy tax laid on it
pinky | 12.28.06 - 4:24 pm | #

What would a high deduction
net worth tax
look like Pinky?
Dale | 12.28.06 -

dale
many roads diverge here
here's my favorite

lets first dedicate the tax

my sense it covers
servicing the fed debt

reason
that's the pay back for shifting
the funding of uncle's over seas armed threat and adventure budget
since 1946
from a tax on the beneficiary
of this 5 trillion plus potlatch
richie rich
to borrowing the funds from mostly this same richie rich

as to the tax

start with all personal net worth
ie balance sheet financial statement

(there can be no other kind
for this game to play out square)

btw it will be great sport going after the frauds and cheaters

the john and jane doe's
will love watching
the special crack ski masked
wealth tax unit
move in on violators

as a first cut on the annual wealth
tax rate

we apply
say the present rolling average
rate
of real return ( nominal less inflation )
on a ten year treasury
(or 1% whichever is higher )

remember
we gotta
cover the interest payments
due that fiscal year

no more no less

so we
work down the net worth cue
till we've extracted the estimated amount
plus or minus last years
post facto tally up

key meme :
all net worth below the cut point is exempt

to reduce uncertainty

create a floor say net worth of 1.5 million

make it deductable

if the whole cue gets wacked
and still the debt service
needs more revenue

we just up that year's rate

i don't want to get wonky

the details are pure fun
only for
sadistic walter mitty wealth milkers
like me

my best gimmick
i save for paid up
members of the
'lets touch midas club'
js paine | 12.28.06 - 8:15 pm | #