How do we fix the economy???

Imaginos1892 wrote:Bullshit. US federal debt at the end of 2000 was about $5.7 trillion and at the end of 2008 it was about $9.7 trillion. That's horrifying, but "president shrubbery" didn't even double the existing debt, so you can only blame him for about 21%. Today, 0bama owns 54% of the US government debt and still has another 8 months left to dig the hole even deeper.

That´s only true if you elect to be highly dishonest about how it happened.

What was one of the first things Obama did after taking office?
Oh yeah right, he signed onto the Bush emergency packages! Which if he had NOT signed onto, would almost certainly have turned the crash into a free fall without a visible bottom. And he and his folks had literally zero chance to replace those with anything of their own, because again, that would have been as bad as not signing them.

Those by themselves were one of the single largest contributors to the runaway deficit.
But not the only ones.

Next we can take a look at how the Bushmen played around with the military, especially R&D projects, they essentially set a number of less than sane projects up, contracted from at the earliest 2006, up until ending as late as 2015.
And many of those just "amazingly" happens to have been porkchop buddy-contracts for "friends" of the Bush-regime.

And of course, when Obama shut down the most stupid of those projects, the Rep´s blamed him for being "weak" and whatever. Despite the fact that most of those projects were outright just stupid or bad ideas.


Then we have financial economy issues. Which just happened to make sure Obama was the one who had to handle the USD crash and its effects in regards to paying debts to foreign creditors.


THEN we have the economy as a whole, which yeah... The Bushmen pretty much made sure the oil and military industry was doing great with all the subsidies... And much of the rest was ready to crash and burn along with the financial crash.

The moment you start trying to look at who caused what, you find that GWB took USA from an almost zero deficit situation, to a plunge into near bankruptcy, AND made sure that it was his successor who got to pay the political price for it.

Imaginos1892 wrote:Bullshit again. The government does not hire people to create value; most of them spend their days filling out and piling up government forms which are of no use to anybody.

Shows how much you know. Seriously?
If a government starts/ends up with a commercial business, do you really think they´re going to hire/keep nothing but paperpushers?

How extremely narrowly indoctrinated are you really?

Imaginos1892 wrote:The only way to create value is by making physical products that are worth more than they cost, and governments don't do that.

Actually, LOTS of governments do that, your ideological blindfolds just doesn´t allow you to see that.

Imaginos1892 wrote:The only way to create value is by making physical products that are worth more than they cost

So, you´re saying Microsoft has no inherent value beyond its physical products then?
Companies supplying you with electricity are worthless?
The shops where you buy food have absolutely no value?

Imaginos1892 wrote:Government spending is at best neutral to the economy; money is taken from here and spent there, it is not worth any more when the government spends it, and no additional value is created.

*sigh*

You really don´t understand either economy or society do you.

A blanket statement like "and no additional value is created" is so utterly ignorant and stupid that it´s just sad.
It ranges anywhere from barely true to ridiculously incorrect.

Haven´t you ever even wondered why economic climate is sometimes talked about as "economic activity"?

And the PRIMARY issue is, WHAT did the government spend the money on.
If for example it spends it on a railroad supporting a startup mining industry, then the value added can be HUGE.

I mean really, how stupid can you get with trying to claim that "the government" somehow is a black hole COMPLETELY UNCONNECTED to the rest of the economy?

Imaginos1892 wrote:Every dollar the government spends was either borrowed or taken from a taxpayer who got no value in return.

If it wasn´t so sad, your lack of understanding would be amusing.

Imaginos1892 wrote:I remember when the Russians tried to have everybody working for the government, and that didn't seem to work out very well.

First of all, Russia and USSR is not and never was the same thing. I´m not calling you a Brit or Frenchie am i?

Secondly, well you obviously know as little about the USSR economy and WHY it worked and didn´t work as it did, and since this subject is massive in its complexity there´s no point in me even trying to explain it.

Let´s just summarise simply with saying that whether people worked for the government or not had very little to do with either the parts that worked, nor with those that didn´t work.

As an example, the US military works EXACTLY like some of the unsuccessful parts of the USSR economy did, which of course is why the US military ends up with things like the F-35 or the original Bradley model(which was a poorly functional deathtrap waiting to happen until the fixes made for the Israeli´s were implemented, simplified at least).

I'll add to Tenshinai's comments but perhaps a little more calmly. World wide there are lots of examples of governments efficiently producing goods and services or facilitating such delivery. Our electricity networks, railways, highways, and ports are all state government owned and run. An indication of how successfully they are run is that the state government before last sold some state enterprises and lost the next election, the next government proposed 99 year leases instead of selling and lost its first election.

I worked in both private and public sectors, plus ran and still in a lesser way run businesses, and can attest that each sector has good and bad employees and practices in it.
The simplistic snide remarks about bureaucratic paper hufflers by ignorant people who haven't been there really annoy. Police, ambulance workers, military, road constructors, fire fighters are all public servants as are the essential services that support them behind the scenes. An example of a military without logistic support is medieval foragers using swords to fight.
One bureaucratic job I held once was a senior manager of a national job shop that placed people for free. A conservtive government outsourced that and economists estimate that the cost to the economy is three times now due to duplication and inefficiencies.

Daryl.

Yet I look at the state run product producing thing like electricity and note the inefficiencies of a straight government run thing, seemingly throughout the world.

Also note that in the US a Government run Single Payer Health Care System also exists. The Veteran Affairs and tribal health care systems. Both can be very good but also are can be exceptionally bad.

Though I do acknowledge the services part of the deal is best, sometimes. Much like the above paragraph. Much like the value of the Ferguson and Baltimore Police Departments. How do measure the costs of riots due to racism charges? Especially something like South Central Riots in 92?

Much as I rail against them, bureaucracies are more or less a requirement of civilization. Though it is really hard to quantify when they help or when they hurt. All depends on who you trust to do those studies that you are quoting.

Have fun,
T2M

Tenshinai wrote:Oh yeah right, he signed onto the Bush emergency packages! Which if he had NOT signed onto, would almost certainly have turned the crash into a free fall without a visible bottom.

Without a visible bottom? Hardly. Washington Mutual, Bear Stearns and Lehman Brothers sleep wit da fishes, and the world did not end. Bailing out the shitheads that profited from inflating the real-estate bubble was a mistake. And, if you're looking for the original source of that "crisis", look no further than Clinton's "community banking initiative" which...well, maybe not forced, but...strongly encouraged banks to write mortgages they never should have touched. This artificially increased housing demand, raising prices without increasing value. People were chasing "profits" buying and selling the same things over and over again. That never ends well.

Of course the banks did everything they could to get rid of those mortgages before they went bad, the financial hustlers came up with all sorts of inventive ways to confuse who was buying and selling what and hide the risks - and they all got bailed out leaving us with the bill. It was their party, they should have paid it.

As for after-effects, check back in 5 years or so after 0bamacare collapses. We're already seeing the first signs; estimates of the final cost range from $7 to $12 trillion.

Maybe things are different where you come from, but here in the US most government work does not add value. Consider the DMV. Issuing drivers licenses may be a useful service, but it does not add value to the economy; it's an expense. Building permits are necessary, but they are a big expense and do not directly add value either. And so on.

In this country most "government" work is done by private contractors because they do a better job and cost less.

Tenshinai wrote:So, you´re saying Microsoft has no inherent value beyond its physical products then?

I would consider most of their products the opposite of value.
-------------------------
If a business tries something that doesn't work, they either stop doing it or they will go broke. If the government tries something that doesn't work, they just keep shoveling our money into it forever.

Imaginos1892 wrote:Maybe things are different where you come from, but here in the US most government work does not add value. Consider the DMV. Issuing drivers licenses may be a useful service, but it does not add value to the economy; it's an expense.

A smaller expense than a vastly more unsafe driving environment would be, surely.

Question: What is your position on public infrastructure work like road building or road maintenance? Does it add value?

Building permits are necessary, but they are a big expense and do not directly add value either. And so on.

Except of course for the inherent value of a building built to code generally being safer and more likely to last some time; then there's fire code considerations that, if they were not enforced, would regularly see entire neighborhoods go up in smoke.

As an example, a couple years back, Turkey was hit by a rather massive earthquake. Because building codes in the affected region were treated more as a suggestion than a rule to be followed, the damage was rather severe both in monetary and humanitarian terms; while the earthquake could not have been prevented, the ensuing damage could have been mitigated if proper building codes and their enforcement had been in place.

So, do building codes add or subtract value? Personally, I see them as adding value.



You are right of course: Most work is being done by private contractors. But who, in their right mind, would choose to go into road building or, god forbid, road maintenance, if it weren't for the government (which includes your local city government) putting money into it? This is something we've actually seen when the big national rail lines in Europe went private: Very quickly, necessary maintenance of the infrastructure started to slip because in traditional accounting practice, those are straight operating costs that a prudent manager should do his utmost to reduce. It did not, strangely enough, result in better service.

thinkstoomuch wrote:Daryl.

snip

Much as I rail against them, bureaucracies are more or less a requirement of civilization. Though it is really hard to quantify when they help or when they hurt. All depends on who you trust to do those studies that you are quoting.

Have fun,
T2M

Like the need for paperwork to keep track of the finances.

One problem is the tendency to look at immediate results and not consider the long term results of a given policy and practice. Example: in many bureaucracies, 1) your pay scale depends on how many people are working under you, and 2) if you don't spend all your budget, it is likely to be cut in the next budget cycle. You do not get any incentive to be effective except your own desire to do good work. The equivalent head wind for free economies is the need for obvious profits to continue something.

Consider:

Ireland, France, Portugal, Hungary Argentina, UK, Poland, Bulgaria and Russia have all seized state and private company pension plans to varying degrees.

What kind of policy and practice would NOT require seizures to stave off collapse for a little time

Imaginos1892 wrote:Consider the DMV. Issuing drivers licenses may be a useful service, but it does not add value to the economy; it's an expense. Building permits are necessary, but they are a big expense and do not directly add value either. And so on.

You seriously need to start thinking beyond the little box you´ve been confined to.

A drivers license is an attempt to keep unsafe drivers away from roads.
What happens if you put ANYONE who wants to drive a vehicle on the roads?

Accidents is what happens. Many. How much do you think that will cost society as a whole?
Several magnitudes more than the DMV costs, i can guarantee.
Just the effects from additional loss of life alone costs many times more than the DMV.

Imaginos1892 wrote:I would consider most of their products the opposite of value.

While i don´t exactly disagree, billions of people still use that software and are willing to pay for it(more or less).
That IS value.

Imaginos1892 wrote:In this country most "government" work is done by private contractors because they do a better job and cost less.

After the last 2 decades of privatisation here, the same is mostly true here as well, except the cost of the jobs done has gone UP UP UP and they do NOT do a better job.

So, i´ve seen how it works both with government handling the job AND private contractors doing it. Noone sane or not ideologically blinded would prefer the private contractors.
But the change was done under the great banner of personal choice, oh yes, we can now choose where to pay more for less, wonderful idea.

Oh and it was supposed to increase efficiency and reduce costs. Neither happened, instead the owners get profits.

Imaginos1892 wrote:And, if you're looking for the original source of that "crisis", look no further than Clinton's "community banking initiative" which...well, maybe not forced, but...strongly encouraged banks to write mortgages they never should have touched.

The idea as such wasn´t a problem, how it was handled, and especially how it was used for speculation, that was a BIG problem.

Imaginos1892 wrote:Without a visible bottom? Hardly. Washington Mutual, Bear Stearns and Lehman Brothers sleep wit da fishes, and the world did not end.

You say that as if it was proof of something.
You need to realise that that is how it went because everyone knew the government was "doing something BIG" to take care of things.

If Obama had not signed up on it, the 2nd wave of crashing it had caused would have been epic.

Imaginos1892 wrote:This artificially increased housing demand

Not really. The DEMAND was always there, regular banks just didn´t let a lot of people get the loans needed.

And the irony, you know what that is?
That the vast majority of those loans were 100% safe BEFORE the crash, because without the crash and the mishandling of those loans, something like 85-95% of the debtors would have had only minor or even no trouble paying off the loans in the long run.

Imaginos1892 wrote:strongly encouraged banks to write mortgages they never should have touched

Except the vast majority of those loans were perfectly safe. As long as the scare the speculation in them didn´t cause the crash they did cause.

And even then, the majority of the debtors were still capable of keeping up payments.
Except banks started panicking and messing with them, more still once they began to desperately need cash quickly, and suddenly you have a crisis made from stupid.

The creation of that initiative wasn´t the cause, it could have kept on working at least reasonably ok for forever(because the vast majority of debtors were solid enough to make their payments even if they were not solvent by usual banking standards), but with idiocy added it was an enabler.

Imaginos1892 wrote:Of course the banks did everything they could to get rid of those mortgages before they went bad

While the majority of them wouldn´t have gone bad without that panic.

Daryl wrote:I'll add to Tenshinai's comments but perhaps a little more calmly.
...

Oi! I´m perfectly CALM. Annoyed and appalled at the ideological blindfolds, that´s another matter.

The E wrote:
snip

Very quickly, necessary maintenance of the infrastructure started to slip because in traditional accounting practice, those are straight operating costs that a prudent manager should do his utmost to reduce. It did not, strangely enough, result in better service.

The problem with each system seems to be built in systemic head winds and tail winds, which would be different for each design.

Of course, for either there is the

Tenshinai wrote:but with idiocy added it was an enabler.

factor. IIRC, one of our bloggers has a signature about how hard it is to devise a foolproof system!!!

I've found it best when evaluating anything to try to devise a reiterative evaluation design with a built in occasional new look at the basic assumptions, and comparing results with reality. The unchanging assumption is that there will be non-obvious errors, the problem is locating them.

Could an accounting practice be designed to show long term effectiveness of good infrastructure early without rewarding poor infrastructure? What changes would be needed for this? Where would infrastructure maintenance be put instead of "operating costs"


If we can come up with some ideas that look like they might work, we could start an "improving accounting" thread. There is even a small probablity that it could result in an improvement somewhere in practice

DDHv wrote: Could an accounting practice be designed to show long term effectiveness of good infrastructure early without rewarding poor infrastructure? What changes would be needed for this? Where would infrastructure maintenance be put instead of "operating costs"

We already have those. Problem is that modern public businesses run on quarterly or yearly results. As soon as shareholders and investors enter the picture, sustainability and long-term thinking go out the window.