Why the Budget is the Wrong Thing to Fight About

[Teatownclown]

http://www.onepennysheet.com./2011/05/why-the-budget-is-the-wrong-thing-to-fight-about/

QE 3 baby! And trade wars....bring it!

"Unfortunately for Republicans, that kind of tightwad economics rightly died in the Keynesian revolution over 70 years ago.

It's not so good for Dems either.

To hear some of them talk, you'd think that if only we pump up government spending enough, perhaps financed by higher taxes on the rich, we can pump-prime our way back to prosperity.  This is the elevation of counter-cyclical Keynesianism (spend your way out of a cyclical downturn) into non-stop stimulation of the economy, whether its problems are cyclical or structural.

The fundamental economic problem we face right now isn't recession—in which case we could just sit back and wait for it to end, with a little help from the standard playbook. It is the structural underperformance of the U.S. economy, for reasons that weren't caused by the recession and won't go away when it ends.

As a result, Republicans and Democrats are arguing about how to divide the pie, when the real question is how to bake more pie in the first place."

[Teatownclown]

http://www.economyincrisis.org/content/only-manufacturing-can-bring-real-recovery

" national policymakers will need to not only abandon, but reverse America's failed trade policies."

Congress is so lazy...and overpaid. Over influenced as well especially by those lobbyists who represent the entitled
whose loopholes need adjustments.

[Conan71]

As a result, Republicans and Democrats are arguing about how to divide the pie, when the real question is how to bake more pie in the first place."

Or as Gaspar would say: "They are arguing about how to re-arrange the deck chairs on the Titanic"

I actually liked the author's theory and instead of being one of your usual nebulous blog citations, this one was actually pretty good.  Worth reading.  I don't know that he's 100% correct, but it's an area which is being largely ignored.  Everyone is focused on how much money we are borrowing for China but not really talking about how many jobs have been ceded to the Chinese.  They are producing and our government is paying people who either can't be productive or don't want to be productive to not be productive.

"So... what is the solution?  What do we have to fix?

The number one thing is trade.  Free trade collapsed a very long time ago.  What we have today is not free trade at all, it's ruthlessly manipulated trade—manipulated by America's big trading partners, starting with China but including many others.  And we're doing nothing to stop them.

America's titanic ($497 billion last year) trade deficit is ripping the guts out of industry after industry, but we have no answer.  And you can't gut industry after industry and expect not to reduce your GDP.

If we didn't have this horrendous trade deficit, we simply wouldn't be fighting many of these budget battles. Why? because we'd have a larger GDP, so tax revenues would be higher. Spending on public benefits would be lower, and painlessly so, because fewer people would be poor and middle-class people would have more money to take care of themselves."

[nathanm]

The number one thing is trade.  Free trade collapsed a very long time ago.  What we have today is not free trade at all, it's ruthlessly manipulated trade—manipulated by America's big trading partners, starting with China but including many others.  And we're doing nothing to stop them.

America's titanic ($497 billion last year) trade deficit is ripping the guts out of industry after industry, but we have no answer.  And you can't gut industry after industry and expect not to reduce your GDP.

I agree that the trade we have isn't very free, what with Chinese dumping, but at the same time why should I care about them sending us free smile? We give them dollars that they can't redeem for anything tangible. Why is this a bad thing?

Edited to add: To complete the thought, I see the problem as more social than financial. Offshoring our manufacturing base has rendered much of our population essentially useless to the real economy, and we spend scads of money imprisoning people as a result. That's the real problem.

[Teatownclown]

Something to Share with your wingnuts....So simple even a teabagger could understand if they wanted to.

[guido911]

Not sure if this fits in this thread, but I had a chuckle over it.

A freshman GOP lawmaker rejected an invitation to the White House on Wednesday, saying he didn't want to be "lectured" by President Obama.

"I have respectfully declined the president's invitation to the White House today," Rep. Jeff Landry (La.) said in a statement. "I don't intend to spend my morning being lectured to by a president whose failed policies have put our children and grandchildren in a huge burden of debt."

Landry is skipping a White House meeting with the entire GOP House caucus. Obama will meet with House Democrats on Thursday.

Landry said he would not sit down with Obama to negotiate on a deficit reduction compromise until Obama produces his own budget plan.

[Emphasis added].
http://thehill.com/blogs/blog-briefing-room/news/164159-gop-lawmaker-rejects-white-house-trip-says-he-wont-be-lectured-to-by-obama

This congressman is obviously racist or something.

[we vs us]

Not sure if this fits in this thread, but I had a chuckle over it.
[Emphasis added].
http://thehill.com/blogs/blog-briefing-room/news/164159-gop-lawmaker-rejects-white-house-trip-says-he-wont-be-lectured-to-by-obama

This congressman is obviously racist or something.

Or just a dumbass.

[Conan71]

"I have respectfully declined the president's invitation to the White House today," Rep. Jeff Landry (La.) said in a statement. "I don't intend to spend my morning being lectured to by a president whose failed policies have put our children and grandchildren in a huge burden of debt."

I didn't realize Former President Bush was at the White House today.

(Ducking for cover)

Or a lecture on how it was all Bush's fault he's had to make all these failed policy decisions.

[guido911]

Or a lecture on how it was all Bush's fault he's had to make all these failed policy decisions.

Obama now blaming Europe, earthquakes, and gas prices for our way under-performing economy.

http://www.dailymail.co.uk/news/article-1394389/Jobs-data-forces-DOW-longest-weekly-losing-streak-2004-Obama-heads-Ohio-defend-economic-policies-jobless-total-hits-new-high.html

His 2012 election slogan: "It's everybody else's fault--not mine!"

[Gaspar]

Obama now blaming Europe, earthquakes, and gas prices for our way under-performing economy.

http://www.dailymail.co.uk/news/article-1394389/Jobs-data-forces-DOW-longest-weekly-losing-streak-2004-Obama-heads-Ohio-defend-economic-policies-jobless-total-hits-new-high.html

His 2012 election slogan: "It's everybody else's fault--not mine!"

Well, that's an improvement over his two 2008 slogans:

"It's Bush's Fault"
and
"Anyone But Bush"

I think his 2012 slogan should be:
Double Down!
He could team up with KFC!