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Trump, U.S. Congress leaders reach deal on debt limit, spending caps


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3 minutes ago, lannarebirth said:

It works when your baseline is a balanced budget. But if it's deficits all the time, what's the counter cyclicality of that? It's just deficits on deficits.

Deficits have nothing to do with countercyclical spending. Countercyclical spending is about making up for lack of demand.

If there was high inflation you might have a point. But when you have almost no inflation, your objection makes no sense.

 

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6 minutes ago, bristolboy said:

Because I'm not the only one reading this post. And you told posters that they could look it up for themselves.

And since you acknowledge we've had this conversation before, why is it that you repeatedly ignore the fact that the world's leading economists overwhelmingly disagree with that guy at the St. Louis Fed? Cherry picking much?

I think many of the world's leading economists either work for a government in power or an investment bank, so they've got vested interests in the positions they hold. You could even say they were hired to hold certain positions.

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1 minute ago, lannarebirth said:

I think many of the world's leading economists either work for a government in power or an investment bank, so they've got vested interests in the positions they hold. You could even say they were hired to hold certain positions.

Oh please. Another intellectual corruption theorist. And climatologists only come up with the results they do because of the money. Anyway, most of them work for universities. Several are Nobel prize winners. I guess they were only in it for the Nobel money.

And doesn't that economist you cited work for the government? Can't be much of an economist if he doesn't know what side his bread is buttered on.

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14 minutes ago, bristolboy said:

Because I'm not the only one reading this post. And you told posters that they could look it up for themselves.

And since you acknowledge we've had this conversation before, why is it that you repeatedly ignore the fact that the world's leading economists overwhelmingly disagree with that guy at the St. Louis Fed? Cherry picking much?

 

OK, here's a link to some of the articles. There are lots more.

 

https://research.stlouisfed.org/econ/dupor/frp/

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5 minutes ago, bristolboy said:

Oh please. Another intellectual corruption theorist. And climatologists only come up with the results they do because of the money. Anyway, most of them work for universities. Several are Nobel prize winners. I guess they were only in it for the Nobel money.

And doesn't that economist you cited work for the government? Can't be much of an economist if he doesn't know what side his bread is buttered on.

 

I don't know about climatoloigists, but I think string theorists probably went along with whatever was paying at the time.

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1 minute ago, bristolboy said:

And here's a link critiquing a particularly ludicrous work of Dupor's.

https://delong.typepad.com/sdj/2011/05/distrusted-aggregators-department.html

Because I live in this world I know these things just from that experience. I post links for people like you that doesn't want to believe anything unless someone on the internet agrees with it. I've got news for you. Someoneone on the internet agreeswith anything you can think of, like the link you've just posted.

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2 minutes ago, lannarebirth said:

Because I live in this world I know these things just from that experience. I post links for people like you that doesn't want to believe anything unless someone on the internet agrees with it. I've got news for you. Someoneone on the internet agreeswith anything you can think of, like the link you've just posted.

So there's no such thing as some sources being more authorative than others? It means nothing when the vast majority of highly qualified experts disagree with the one you like? How exactly did your experience in whatever part of the world you live in reveal to you that the countercyclical spending was ineffective? Do you live in some sort of data driven device that comes to these conclusions?

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1 minute ago, bristolboy said:

So there's no such thing as some sources being more authorative than others? It means nothing when the vast majority of highly qualified experts disagree with the one you like? How exactly did your experience in whatever part of the world you live in reveal to you that the countercyclical spending was ineffective? Do you live in some sort of data driven device that comes to these conclusions?

I have said I think countercyclical spending IS effective, given a balanced budget baseline. It's even effectice if you're piling deficits upon deficits until you reach a limit. I don't know what that limit is and neither do you.

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2 minutes ago, lannarebirth said:

I have said I think countercyclical spending IS effective, given a balanced budget baseline. It's even effectice if you're piling deficits upon deficits until you reach a limit. I don't know what that limit is and neither do you.

Wrong. I and virtually all economists would agree that if it's to be effective, inflation should be low or there should be deflation.  That's the consideration that counts. Not deficit levels.

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19 minutes ago, bristolboy said:

Wrong. I and virtually all economists would agree that if it's to be effective, inflation should be low or there should be deflation.  That's the consideration that counts. Not deficit levels.

 

The only deflation that matters is deflation in bond rates.

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32 minutes ago, lannarebirth said:

 

The only deflation that matters is deflation in bond rates.

Where'd you get the from? Is there any economist who believes that. Especially considering that rates are set by government. That sounds like a maxim of the one percent. No. Deflation in goods and services is what counts. That's what tells you that the level of demand is way too low.

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23 minutes ago, bristolboy said:

Where'd you get the from? Is there any economist who believes that. Especially considering that rates are set by government. That sounds like a maxim of the one percent. No. Deflation in goods and services is what counts. That's what tells you that the level of demand is way too low.

 

Rates are proffered by government and they may or may not be subscribed to. The truth though is that rates in affect are proscribed by the market at any given time. The government does not tender bonds in a vacuum.

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6 minutes ago, lannarebirth said:

 

Rates are proffered by government and they may or may not be subscribed to. The truth though is that rates in affect are proscribed by the market at any given time. The government does not tender bonds in a vacuum.

Precisely. Not in a vacuum. And the determining factor is the inflation rate in the economy. The lower the inflation level, the lower the bond rate.

What's more, QE kind of contradicts what you claim. The Feds lowered the rate beyond what it normally should have been to encourage banks to get out of bonds and start lending to business. Doesn't work nearly as well as fiscal stimulus but it does help.

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18 minutes ago, bristolboy said:

Precisely. Not in a vacuum. And the determining factor is the inflation rate in the economy. The lower the inflation level, the lower the bond rate.

What's more, QE kind of contradicts what you claim. The Feds lowered the rate beyond what it normally should have been to encourage banks to get out of bonds and start lending to business. Doesn't work nearly as well as fiscal stimulus but it does help.

 

How does the spread work if rates go negative; which is the next logical(?) step in a Fed driven economy.

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1 minute ago, lannarebirth said:

 

How does the spread work if rates go negative; which is the next logical(?) step in a Fed driven economy.

I don't know that it's the next logical step. But I don't see that it makes a difference. It's all about perception of risk, And actually that's been the situation in Germany, It's has had no problems attracting investors despite its negative bond rate.  Also the fact that because of tax cuts to the wealthy, banks and big time investors have so much money that they have to put it somewhere. They're certainly not putting more of it into productive investments.

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1 minute ago, bristolboy said:

I don't know that it's the next logical step. But I don't see that it makes a difference. It's all about perception of risk, And actually that's been the situation in Germany, It's has had no problems attracting investors despite its negative bond rate.  Also the fact that because of tax cuts to the wealthy, banks and big time investors have so much money that they have to put it somewhere. They're certainly not putting more of it into productive investments.

That's true in a recession or as a hedging mechanism, but of course it only applies to the ultra wealthy or otherwise huge pockets of capital. It reinforces the inequitable distribution of wealth.

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14 minutes ago, lannarebirth said:

That's true in a recession or as a hedging mechanism, but of course it only applies to the ultra wealthy or otherwise huge pockets of capital. It reinforces the inequitable distribution of wealth.

I guess insofar as it gives them a guaranteed place to park their money. Even if they have to pay a fee for the privilege.

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