USA is not Greece = cutting deficits will only weaken a still-fragile recovery

[Oldstyle]

The USA is not broke....

How do we know this?

1. Golden Parachutes are plentiful

2. CEO pay packages are quite plentiful

3. Special interest funding of elections is at an all time high

4. Health Care industry has many billionaires

5. Corp jets are still flying

6.There are some very smart and very rich people, and the central banks of Japan, China, and many other countries that hold a large share of their assets in U.S. government bonds.

That's all wonderful, Merrill...but we're talking about the US "Government" which is in fact broke.

 

[Oldstyle]

"Today, deficit spending remains critical as working people continue to struggle through an economic recovery that has done little to create jobs or to lift wages, but much to restore profits.

Governments finance deficit spending by borrowing. Governments sell bonds—promissory notes—to domestic and foreign investors as well as other government agencies, and then use the proceeds to pay for spending in excess of their tax revenues.

In the United States, domestic investors, foreign investors, and government agencies hold near equal shares of government bonds issued by the Treasury and receive the interest paid on those bonds."

There are some very smart and very rich people, and the central banks of Japan, China, and many other countries that hold a large share of their assets in U.S. government bonds. Something to ponder.

Ponder this, Merrill...those very smart people that have money in the US because it's viewed as still relatively safe are expressing concern over our level of debt and ongoing ability to repay our bonds. They want to see us cut our deficit. Failure to get our fiscal house in order will at a certain point make us a bad risk and those very smart people won't buy our bonds or will buy them only at a much higher interest rate because of the inherent risk. Or do you not understand what our recent credit rating downgrade means?

 

[kyzr]

It may be more understandable by looking at the US Budget like a household budget.

The group looked at some key figures, mainly tax revenue, the current federal budget, debt and budget cuts, and divided each figure by $100 million, in an effort to break it down into simple terms that most Americans can comprehend. The group posted its findings online and came up with a household with an average family income of $21,700. But that "family" spent nearly twice that -- $38,200 -- and has an existing credit card balance of a whopping $142,710.

Its that $142,710 credit card balance that needs to be addressed.

 

[CrusaderFrank]

We have record setting, credit killing deficits and we're still not so shovel ready...how insane do you have to be to not see that government deficits DO NOT STIMULATE the economy???????

 

[merrill]

Jobs Jobs Jobs Jobs jobs jobs jobs jobs is the answer.

America is not broke and investors know this. America is broke is coming from politicians who have no idea what they are talking about.

USA industry is sitting on trillions of dollars instead of putting america back to work.

 

[FireFly]

Jobs Jobs Jobs Jobs jobs jobs jobs jobs is the answer.

America is not broke and investors know this. America is broke is coming from politicians who have no idea what they are talking about.

USA industry is sitting on trillions of dollars instead of putting america back to work.

That "USA industry is sitting on trillions of dollars" is so bogus. Those same companies have underfunded pensions.

 

[merrill]

USA Banks and industry sitting on 19 million jobs to make Obama look bad!

WASHINGTON -- Corporate America is sitting right on top of the solution to the nation's employment crisis, according to a new report from a group of University of Massachusetts economists.

If America's largest banks and non-financial companies would just loosen their death-grip on a chunk of the $3.6 trillion in cash they're hoarding and move it into productive investments instead, the report estimates that about 19 million jobs would be created in the next three years, lowering the unemployment rate to under 5 percent.

"There is no reason that the U.S. needs to remain stuck in a long-term unemployment crisis," Robert Pollin, lead author of the report and co-director of the Political Economy Research Institute, said in a statement accompanying the report's release Tuesday.

"Getting the banks and corporations to move their hoards into productive investments and job creation requires carrots and sticks -- policies such as a new round of government spending stimulus as well as taxes on the banks' excess reserves -- that can both strengthen overall market demand and unlock credit markets for small businesses," Pollin said.

Corporate America Is Sitting On The Solution To The Jobs Crisis: Report

 

[FireFly]

There are many reasons corporations are sitting on cash. Here are just a few.

1. - Uncertanty about elections & what that means for the 2013 carbon sequestration mandates.

2. - Uncertanty about elections & what that means for the 2013 health-care mandates.

3. - Funding gap doubles to $450 billion for US corporate pensions.

4. - Uncertanty about elections & what that means for the 2013 expiration of the tax cuts.

5. - Economic outlook is bleak.

 

[Big Fitz]

There are six ways any country can reduce its debt, and the United States differs from Greece in only one. Greece has only five options, for the moment.

1. Economic growth. Higher growth means higher revenues.

2. Negotiate a lower interest rate on the debt.

3. Bailout by another entity.

4. Default.

5. Internal devaluation, a.k.a. "austerity measures".

6. External devaluation, a.k.a. "printing money".

As a member of the Euro, Greece cannot fall back on number 6. It has been trying variations of the other 5 for the past two and a half years. If Greece feels trapped, they will leave the Euro and go to option number 6 with a vengeance. And then we are all fucked.

I believe it is inevitable the United States will use 1, 5, and 6 to lower its debt, just as it did following WWII.


The only reason investors are not punishing the U.S. with higher interest yields on our bonds is because we are seen as the least of all possible evils in the economic landscape at the moment.

I would not depend on that lasting forever.

Out of your list, we've been doing 2, 3 and 6 which is making 1 hard to do, and the libs are screaming bloody murder against 5.

BTW, doing 4? that destroys this nation, just like it did the Weimar republic. You want to see hyperinflation? Just default.

 

[CrusaderFrank]

The 1920 Depression was deeper than the 1929 Depression. Yet the 1929 Depression became known as the Great Depression. Why?

Because in response to the 1920 Depression, the government cut spending and cut taxes. In response to the 1929, the government, under both parties, kept trying to manipulate the economy.

One action lead to one of the greatest economic expansions in human history. We call this period the Roaring Twenties.

Which was a gigantic stock bubble which lead to the Great Depression.

WRONG

F

The correct answer is: The Fed caused the Crash, started the Depresison and strangled the US economy nearly to death by reducing the money supply by 1/3

 

[Oldstyle]

USA Banks and industry sitting on 19 million jobs to make Obama look bad!

WASHINGTON -- Corporate America is sitting right on top of the solution to the nation's employment crisis, according to a new report from a group of University of Massachusetts economists.

If America's largest banks and non-financial companies would just loosen their death-grip on a chunk of the $3.6 trillion in cash they're hoarding and move it into productive investments instead, the report estimates that about 19 million jobs would be created in the next three years, lowering the unemployment rate to under 5 percent.

"There is no reason that the U.S. needs to remain stuck in a long-term unemployment crisis," Robert Pollin, lead author of the report and co-director of the Political Economy Research Institute, said in a statement accompanying the report's release Tuesday.

"Getting the banks and corporations to move their hoards into productive investments and job creation requires carrots and sticks -- policies such as a new round of government spending stimulus as well as taxes on the banks' excess reserves -- that can both strengthen overall market demand and unlock credit markets for small businesses," Pollin said.

Corporate America Is Sitting On The Solution To The Jobs Crisis: Report

So what you're basically saying is that rather than create an environment where investors willingly risk their capital because they see an opportunity to make a profit...your solution is to tax them if they don't? This Administration has repeatedly either tried to pass anti-business legislation or enforced anti-business policies and then wonders why they can't get businesses to invest? Duh? Here's a suggestion, Merrill...stop reading the Huffington Post. It's an absurd collection of nonsense.

 

[CrusaderFrank]

USA Banks and industry sitting on 19 million jobs to make Obama look bad!

WASHINGTON -- Corporate America is sitting right on top of the solution to the nation's employment crisis, according to a new report from a group of University of Massachusetts economists.

If America's largest banks and non-financial companies would just loosen their death-grip on a chunk of the $3.6 trillion in cash they're hoarding and move it into productive investments instead, the report estimates that about 19 million jobs would be created in the next three years, lowering the unemployment rate to under 5 percent.

"There is no reason that the U.S. needs to remain stuck in a long-term unemployment crisis," Robert Pollin, lead author of the report and co-director of the Political Economy Research Institute, said in a statement accompanying the report's release Tuesday.

"Getting the banks and corporations to move their hoards into productive investments and job creation requires carrots and sticks -- policies such as a new round of government spending stimulus as well as taxes on the banks' excess reserves -- that can both strengthen overall market demand and unlock credit markets for small businesses," Pollin said.

Corporate America Is Sitting On The Solution To The Jobs Crisis: Report

You meant that Obama is blaming bank ATM's and airport kiosks, right?

Is that what you meant?

 

[merrill]

USA Banks and industry sitting on 19 million jobs to make Obama look bad!

WASHINGTON -- Corporate America is sitting right on top of the solution to the nation's employment crisis, according to a new report from a group of University of Massachusetts economists.

If America's largest banks and non-financial companies would just loosen their death-grip on a chunk of the $3.6 trillion in cash they're hoarding and move it into productive investments instead, the report estimates that about 19 million jobs would be created in the next three years, lowering the unemployment rate to under 5 percent.

"There is no reason that the U.S. needs to remain stuck in a long-term unemployment crisis," Robert Pollin, lead author of the report and co-director of the Political Economy Research Institute, said in a statement accompanying the report's release Tuesday.

"Getting the banks and corporations to move their hoards into productive investments and job creation requires carrots and sticks -- policies such as a new round of government spending stimulus as well as taxes on the banks' excess reserves -- that can both strengthen overall market demand and unlock credit markets for small businesses," Pollin said.

Corporate America Is Sitting On The Solution To The Jobs Crisis: Report

So what you're basically saying is that rather than create an environment where investors willingly risk their capital because they see an opportunity to make a profit...your solution is to tax them if they don't? This Administration has repeatedly either tried to pass anti-business legislation or enforced anti-business policies and then wonders why they can't get businesses to invest? Duh? Here's a suggestion, Merrill...stop reading the Huffington Post. It's an absurd collection of nonsense.

Taxpayers bailed out the banks with tax dollars. Where's the money that was intended to get the economy moving? Banks depend on government and tax dollars. Put the damn money to work.

 

[kyzr]

Taxpayers bailed out the banks with tax dollars. Where's the money that was intended to get the economy moving? Banks depend on government and tax dollars. Put the damn money to work.

WRONG! Taxpayers "loaned" the banks enough money to survive the financial crisis caused by government policies. Every penny of those loans was paid back with interest. Saving the banks cost taxpayers ZERO.

It was Clinton's "Community Reinvestment Act" where banks had to make loans to the unqualified, who defaulted on those loans, that created the financial crisis.

Late-2000s financial crisis - Wikipedia, the free encyclopedia

Concept:2008 Financial Crisis

 

[skookerasbil]

It may be more understandable by looking at the US Budget like a household budget.

The group looked at some key figures, mainly tax revenue, the current federal budget, debt and budget cuts, and divided each figure by $100 million, in an effort to break it down into simple terms that most Americans can comprehend. The group posted its findings online and came up with a household with an average family income of $21,700. But that "family" spent nearly twice that -- $38,200 -- and has an existing credit card balance of a whopping $142,710.

Its that $142,710 credit card balance that needs to be addressed.

Holy shit..........how do some people navigate in the real world


k00k post is about 25 years too late!!!

 

[Oldstyle]

USA Banks and industry sitting on 19 million jobs to make Obama look bad!

WASHINGTON -- Corporate America is sitting right on top of the solution to the nation's employment crisis, according to a new report from a group of University of Massachusetts economists.

If America's largest banks and non-financial companies would just loosen their death-grip on a chunk of the $3.6 trillion in cash they're hoarding and move it into productive investments instead, the report estimates that about 19 million jobs would be created in the next three years, lowering the unemployment rate to under 5 percent.

"There is no reason that the U.S. needs to remain stuck in a long-term unemployment crisis," Robert Pollin, lead author of the report and co-director of the Political Economy Research Institute, said in a statement accompanying the report's release Tuesday.

"Getting the banks and corporations to move their hoards into productive investments and job creation requires carrots and sticks -- policies such as a new round of government spending stimulus as well as taxes on the banks' excess reserves -- that can both strengthen overall market demand and unlock credit markets for small businesses," Pollin said.

Corporate America Is Sitting On The Solution To The Jobs Crisis: Report

So what you're basically saying is that rather than create an environment where investors willingly risk their capital because they see an opportunity to make a profit...your solution is to tax them if they don't? This Administration has repeatedly either tried to pass anti-business legislation or enforced anti-business policies and then wonders why they can't get businesses to invest? Duh? Here's a suggestion, Merrill...stop reading the Huffington Post. It's an absurd collection of nonsense.

Taxpayers bailed out the banks with tax dollars. Where's the money that was intended to get the economy moving? Banks depend on government and tax dollars. Put the damn money to work.

We had to bail out the banks because the banks made bad loans. Do we then demand that those same banks make other bad loans simply because we can't seem to come up with a jobs plan that puts people back to work? The banks paid back the money they were given under TARP. They also tightened up their lending practices. That isn't a bad thing. You seem to expect that the banks are now obligated to make foolish loans...a la Solyndra...that will put them right back into trouble again. Banks shouldn't depend on government or tax dollars...they should depend on sound lending practices. Government should concentrate on passing common sense legislation that removes impediments to companies looking to invest. Do that and the "damn money" WILL get invested because people with capital WANT to grow that capital. Pass foolish legislation like ObamaCare and people with capital will wait for a better investing climate.

 

[Big Fitz]

USA Banks and industry sitting on 19 million jobs to make Obama look bad!

WASHINGTON -- Corporate America is sitting right on top of the solution to the nation's employment crisis, according to a new report from a group of University of Massachusetts economists.

If America's largest banks and non-financial companies would just loosen their death-grip on a chunk of the $3.6 trillion in cash they're hoarding and move it into productive investments instead, the report estimates that about 19 million jobs would be created in the next three years, lowering the unemployment rate to under 5 percent.

"There is no reason that the U.S. needs to remain stuck in a long-term unemployment crisis," Robert Pollin, lead author of the report and co-director of the Political Economy Research Institute, said in a statement accompanying the report's release Tuesday.

"Getting the banks and corporations to move their hoards into productive investments and job creation requires carrots and sticks -- policies such as a new round of government spending stimulus as well as taxes on the banks' excess reserves -- that can both strengthen overall market demand and unlock credit markets for small businesses," Pollin said.

Corporate America Is Sitting On The Solution To The Jobs Crisis: Report

So what you're basically saying is that rather than create an environment where investors willingly risk their capital because they see an opportunity to make a profit...your solution is to tax them if they don't? This Administration has repeatedly either tried to pass anti-business legislation or enforced anti-business policies and then wonders why they can't get businesses to invest? Duh? Here's a suggestion, Merrill...stop reading the Huffington Post. It's an absurd collection of nonsense.

Taxpayers bailed out the banks with tax dollars. Where's the money that was intended to get the economy moving? Banks depend on government and tax dollars. Put the damn money to work.

[ame="http://www.youtube.com/watch?v=e8w5H6fkC4U"]The Quick and the Dead[/ame]

Anyone else feel this is how the Public Sector Unions and their cronies think?

 

[FireFly]

The U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses.

GAO

Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
and many many more including banks in Belgium of all places

 

[P F Tinmore]

Central Banks and Deficit Spending

When economic activity plummeted during 2008 and 2009 in the United States, Europe, and throughout the world, coordinated stimulus spending of nations across the globe prevented the collapse of world output from becoming another Great Depression. Today, deficit spending remains critical as working people continue to struggle through an economic recovery that has done little to create jobs or to lift wages, but much to restore profits.

Governments finance deficit spending by borrowing. Governments sell bonds—promissory notes—to domestic and foreign investors as well as other government agencies, and then use the proceeds to pay for spending in excess of their tax revenues.

In the United States, domestic investors, foreign investors, and government agencies hold near equal shares of government bonds issued by the Treasury and receive the interest paid on those bonds.

The Federal Reserve (“the Fed”), the U.S. central bank, can buy U.S. government bonds as well. The Fed can also create money (sometimes metaphorically called “printing money”) simply by entering an appropriate credit on its balance sheet and spending it.

When the Fed uses this newly created money to purchase bonds directly from the government, it is financing the government deficit. Economists call the Fed’s direct purchase of government bonds “monetizing the deficit.”

By such direct purchases of bonds that finance the deficit, the Fed can fund government spending in an emergency, should it choose to do so. Monetizing the deficit also significantly expands the money supply, which pushes down interest rates, which can also help stimulate the economy.

In the current crisis, the Fed did precisely that. By purchasing government bonds, the Fed financed public-sector spending, and by pushing down interest rates, it encouraged private-sector borrowing. In doing so, the Fed supported a market recovery, but also helped to keep unemployment from rising even higher than it did.

In seeking to lower unemployment, the Fed was exercising what is known as its “dual mandate” under the law to promote both low inflation and low unemployment.

Nevertheless, the Fed’s decision to inject more money into the economy has come under heavy fire from those who worry more about inflation than unemployment, and who think that “printing money” is always inflationary. Neither continued low inflation rates nor persistently high unemployment were enough to change the thinking of these inflation-phobes. Back in August, Rick Perry, the Texas governor and candidate for president in the Republican primary, went so far as to insist that if the Fed “prints more money between now and the election” (in November 2012) it would be “almost treasonous.”

The central banks of most other countries have much the same abilities as the Fed has to inject money into their economies and to buy government debt. As with the Fed, they may or may not choose to use this power. But the power is unquestionably there.

Dollars and Sense

When the Fed uses this newly created money to purchase bonds directly from the government, it is financing the government deficit. Economists call the Fed’s direct purchase of government bonds “monetizing the deficit.”

Isn't this just more debt?

 

[Quantum Windbag]

Why the United States Is Not Greece


Even for those who understand that cutting deficits right now will only weaken a still-fragile recovery, and that weakening the recovery will only increase deficits, getting past the argument that “a eurozone crisis is on its way” is no easy task. Here is a self-defense lesson.

BY JOHN MILLER AND KATHERINE SCIACCHITANO

For almost two years, we’ve been hearing a new battle cry in the war against government spending: unless the United States slashes deficits we will become Greece, Europe’s poster child for fiscal insolvency and economic crisis.

The debt crisis in the eurozone, the 17 European countries that share the euro as their common currency, is held up as proof positive of the perils that await the United States if it continues its supposedly fiscally irresponsible ways.

Take the Heritage Foundation, the Washington-based think tank that specializes in providing red meat for anti-government pro-market arguments. Heritage introduces its 2011 chart on the rising level of government debt (to GDP) with this dire warning: “Countries like Greece and Portugal have suffered or are anticipating financial crises as a result of mounting debt. If the U.S. continues federal deficit spending on its current trajectory, it will face similar economic woes.”

Even for those who understand that cutting deficits right now will only weaken a still-fragile recovery, and that weakening the recovery will only increase deficits, getting past the argument that “a eurozone crisis is on its way” is no easy task.

What follows is a self-defense lesson on why the United States is not Greece—or Europe. The U.S. economy is far larger and more productive than Greece. The United States has many more tools in its macro-economic policy box than countries in the eurozone.

And while calls for austerity have kept the United States from undertaking government spending and investment large enough to support a robust economic recovery, at least thus far, the United States hasn’t undertaken the same self-defeating austerity measures Europe has. If we learn the right lessons from what is happening in the eurozone now, we never will.


Con't:
Why the United States Is Not Greece | Dollars & Sense

Are you trying for the title of resident idiot of USMB? If so, you have a lot of competition, and you will have to do a lot better than this. I will have to admit that the idea of raising taxes and increasing spending is pretty stupid, but it is far from the stupidest thing I have ever read here.