Crash the train to stop it

[Rajoo]

Originally Posted by whell

European inflation - and Germany is an example - is going to be in large part by high energy prices. Germany getting cut off by Putin, and they have no plan B, other than a PPP-like bailout which will cost billions.

As far as a $1.3 trillion deficit sounding like "progress" to you - whilst comparing it to a 2020 budget that had the double-whammy of reduced revenue due to COVID and increased spending for the same reason - is:

1) Not really apples to apples;
2) Is still $1.3 trillion that will be added to the federal debt, and;
3) Can't really be called "progress" in this content. At best, one might say that it "sucks less".

Did you bitch and moan when 2018 TCJA (Middle Class Tax Cuts ) added $1 to $2 Trillion deficit on tax breaks to people to people who didn't need it. Or did you claim that as a brilliant plan to boost our economy, when it did not need any boosting?

[whell]

Originally Posted by finnbow

The debt is the sum total of accumulated deficits. Accordingly, decreasing the deficit slows the increase in the debt. Even a believer in the fiction of supply-side economics should be able to understand this even if it involves math.

Originally Posted by Rajoo

Because they are inter related, deficit funding of a government leads to national debt. Perhaps you should talk to yourself and spare us from your diatribes.

Have you ever looked at anything from a middle of the road perspective? In engineering we have a saying, statically the answer is always in the middle and never at the extremes.

Yes, they're inter-related, deficit becomes debt, all good. Powell's presumed course of action - increase rates to drive down spending and thus drive down employment thus curb inflation involves increasing rates on debt, and has no short term effect on deficits (except to the extent that budgeted dollars are consumed retiring debt or paying interest on the debt). Which is why I was wondering why you were bringing up deficits.

[whell]

Originally Posted by Rajoo

Did you bitch and moan when 2018 TCJA (Middle Class Tax Cuts ) added $1 to $2 Trillion deficit on tax breaks to people to people who didn't need it. Or did you claim that as a brilliant plan to boost our economy, when it did not need any boosting?

$1 to $2 TR to the deficit over 10 years, estimated by the CBO at that time. That number was promptly kicked to the curb due to COVID 19 related spending, and probably ended up doubling it, so we'll never know what the real number would have looked like.

[finnbow]

Originally Posted by whell

Yes, they're inter-related, deficit becomes debt, all good. Powell's presumed course of action - increase rates to drive down spending and thus drive down employment thus curb inflation involves increasing rates on debt, and has no short term effect on deficits (except to the extent that budgeted dollars are consumed retiring debt or paying interest on the debt). Which is why I was wondering why you were bringing up deficits.

Interest rates are the only tool in the Fed toolbox. Bitching about them using rate hikes to battle inflation is like criticizing a Marine rifleman for using his rifle.

[whell]

Originally Posted by finnbow

Interest rates are the only tool in the Fed toolbox. Bitching about them using rate hikes to battle inflation is like criticizing a Marine rifleman for using his rifle.

So you’ll have no criticism at all when the recession and high unemployment the Powell is predicting comes to pass. Ok, noted.

https://fortune.com/2022/09/22/jerom...t-landing/amp/

[finnbow]

Originally Posted by whell

So you’ll have no criticism at all when the recession and high unemployment the Powell is predicting comes to pass. Ok, noted.

https://fortune.com/2022/09/22/jerom...t-landing/amp/

Where exactly did I say that? I simply stated that interest rates are the Fed's only weapon, a verifiable fact (something you seemingly have trouble with).

[whell]

Originally Posted by finnbow

Where exactly did I say that? I simply stated that interest rates are the Fed's only weapon, a verifiable fact (something you seemingly have trouble with).

You have memory issues? You said it in post 14:

"Interest rates are the only tool in the Fed toolbox. Bitching about them using rate hikes to battle inflation is like criticizing a Marine rifleman for using his rifle."

So, no bitching or criticism from you.

[Chicks]

Claim: Roughly 25% of the nation's debt was incurred during the Trump Administration.
Rating: True

https://www.snopes.com/fact-check/tr...bt-25-percent/

[nailer]

Originally Posted by whell

Why, when I'm talking about debt, you guys jump over and start talking about the deficit? You do understand that they are two different things, and the a deficit actually increases the debt, right?

Indeed, spending more than you make will certainly increase one's debt.

[Dondilion]

Originally Posted by whell

No, I'm not saying that. This isn't a plug or a dig on Powell.

Powell is a Volker fan. That's evident by his comments in the Politico piece. Its also a topic in this WSJ piece: https://www.wsj.com/articles/jerome-...ed-11663595217

In a widely anticipated speech, Chairman Jerome Powell decided to be blunt. He scrapped his original address, according to two people who spoke to him, and instead delivered unusually brief remarks with a simple message—the Fed would accept a recession as the price of fighting inflation.

That's right out of Volker's handbook.

It's also true that the Fed has engaged in about 15 years worth of QE. This was intended to make banks flush after the 2008 mortgage meltdown, but it has continued long after because it has the alternative impact of keeping the cost of debt, including Federal debt, low. While not a bad idea in principle, in execution it fueled an appetite for additional Federal spending.

Now it appears to be time to pay the piper, and you and I will be on the hook for it.

QE also had huge social implications. It provided easy money to those who were close to the system. They then quickly transformed this huge printing into real assets thus exacerbating the division between the have and the have not.