So much easier to point out what's wrong than come up with a solution!
Re: Debt deciphered
mInvestor
5/16/2012 3:36:52 AM
A good post for summarizing the current situation and challenges. Unfortunately, I haven't seen anybody giving out a viable solution yet.
And there's no reason to doubt the same formula will have any different outcome this time around.
Re: Europe
AskAsa
5/14/2012 8:57:48 PM
Hordes of aimless young men being squandered by their country.
It was the perfect formula for disaster in 1920's Germany.
@Fred
Got it. I think the works of Reinhart/Rogoff are important and I agree with much of it.
I understand what you are saying about % in rising debt. My only point on education and GDP ratio is when you look at the budget you have to look at what's rising the fastest relative to other things. I certainly agree there is "bloat" but you have to use the relationships to find where the most bloat is: Government entitlement programs, healthcare, and war.
I, for one, am for reducing the costs of all of these. I just question people like Paul Ryan who say they want to decrease the government but then at the same time increase defense spending? This makes no sense to me.
Also I think we have to look at why there are growing deficits: Some of it is waste, some of it is demographics (more retirees and less workers) and some of it is uncontrolled structural costs (healthcare). While it is true a lot of it is waste and corruption, it's not ALL waste and corruption -- some of it is just structural changes in demographics.
They are all big problems, not easy to solve, but I agree the first step is for us all to get out of denial...
@Scott, sorry for your cough, it must be going around.
I have recently read Reinhart and Rogoff and certainly do not have the idea that the debt/GDP ratio is unimportant.
I think you are basing your thought on the fact that I totally reject the idea that you can support, as I believe you did, the idea that education is underfunded by forming a ratio between it and a GDP that has been inflated by government waste or spending (but then I repeat myself).
Both education and GDP have increased, but since GDP has increased by a bigger percentage than education it appears that the ratio between them has been reduced. That may be arithmetically correct, but it certainly does not support the assertion that education is underfunded, only that GDP is bloated with waste, fraud and stealing to support election campaign funds through contributions by bribed businesses and unions.
@Fred.
Ahem. I thought you were saying Debt-to-GDP ratio doesn't matter?
The debt bomb is global and pervasive. Exactly why I can't understand Krugmanites who say we need to increase debt levels.
There is all sorts of data that shows that each incremental amount of debt we have added has had less impact on economic growth. And when you get above 90%, as the video shows, the impact on the economy is negative.
To me this seems to be common sense yet people still argue against reducing debt levels.
Maybe to look at our ecomomic future all we have to do is look at Japan, which has some of the highest debt levels.
Congratulations Noreen, your posted video is the only response to your post that even suggests that the US is part of the problem, and a rather big part at that. I hope the others will watch it.
The unemployment of Americans, especially the youth, is quickly approaching that in Europe and the riots in America have already started, just like those in Europe and the UK that your readers decry.
Let's not ignore Oakland, NY and Wisconsin while prattling about Greece and France.
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