Comments on: Confessions of a deficit denier Sat, 03 Jan 2015 16:42:55 +0000 hourly 1 By: zhmileskendig Wed, 21 Nov 2012 20:09:31 +0000 Interest rates are this low because central banks have made it their business to keep them this way. Suggesting that low interest rates indicate soundness of the economy is unsound foolery of the highest order eclipsed only by such stalwarts of economic theology as perfect pricing, information and rationality in human decision cycles.

By: fresnodan Wed, 21 Nov 2012 12:09:20 +0000 “For there is actually no fiscal crisis in the United States, Britain or most European countries — including even Italy and Spain” ss/global/jobs-data-underscore-rajoys-wo es.html?adxnnl=1&adxnnlx=1353498756-t9Cq G1VFHO4+CYTJmOgSeg&_r=0&gwh=8F2745469CF0 9D76E596A64F5F6449DA
I guess that 25% unemployment in Spain is not a problem.
So….if just creating money would solve all our problems, WHY DON’T WE DO THAT???
Oh yeah, in decomcracies….people are fooled and vote against their own best interests…..hmmm….but WE KNOW THAT NEVER HAPPENS WITH MARKETS!

“Especially since the investors falling all over themselves to lend them money are not naïve widows and orphans or government-controlled central banks.”

REALLY!??! REALLY!!?? After Fitch, S&P, and Moodys are revealed to be incompetent, venal, and criminal, Mr. Kaletsky’s arguement is to believe in the wisdom of the bond market? Yeah, those bond buyers are not naive….they know the government believes no bond holder should EVER take a loss… aug/22/ratings-agencies-conflict-of-inte rest rating-controversy/p22328

After all the problems with MBSs, CDOs, the 2000 Stock bubble, the housing bubble,etcetera, Mr. Kaletsky’s arguement is to believe in the market??? We are doomed…

By: DeanPlassaras Tue, 20 Nov 2012 23:48:57 +0000 This is a long way of saying that the next bubble is in government bonds.

By: Aussiecol Tue, 20 Nov 2012 09:23:22 +0000 Simple point which I think goes to credibility…..6th paragraph reference to the Fed being part of the US Govt??????…The Fed is a private bank that does not submit tax returns….and does not disclose who the shareholders are????? Chew on that LEEDAP!

By: ReeseBobby Sun, 18 Nov 2012 23:33:10 +0000 Kaletsky’s arguments are misleading and/or just plain wrong:
“The U.S. government net debt is expected to stabilize at 89 percent of gross domestic product from 2014 to 2017, according to the International Monetary Fund.”
-> The IMF has never gotten anything right…ever. Where does “stabilize” come from if GDP is at stall speed and fiscal deficits are above $1 trillion?
-> An honest calculation of “government debt” must include entitlement liabilities like Medicare and Social Security, and they are massive.
“Since the Federal Reserve and the Bank of England are part of their respective governments, the bonds they own represent debts the government owes to itself.”
-> This is just plain false. The Fed is not part of the U.S. government. It is owned by global banks.
“…since the money printed by central banks to finance governments was scarcely enough to offset the shrinkage of the money supply caused by deleveraging commercial banks.”
-> Commercial banks have not delevered. Commercial bank assets are up in price but liabilities are not lower.
Liberal MMT groupies like this guy are wolves in sheep clothing.

By: ProgresConserv Sun, 18 Nov 2012 22:59:50 +0000 Here is another perspective for all you Kalesky cool aid drinkers. ness/playing-poker-with-trillions-a-pris on-of-debt-on-both-sides-of-the-atlantic -a-867404.html

Oh Yeah, ask Mr. Kalesky how well he predicted the 2008-09 financial crisis in the first place (remember that debt bubble), and his insistence at that time that the housing market and the credit bubble in the U.S. was not a big problem at all.

By: RogerMKE Sun, 18 Nov 2012 13:44:38 +0000 I find this article to be alarmingly dismissive of the problems of debt. We may not be in a “crisis”, but that does not mean we don’t have a serious problem.

Within a few years, the US government will owe $20 trillion dollars. Most of this debt has a maturity of 10 years or less. When rates return to normal levels, say 5%, the government will be paying $1 trillion per year in interest. That’s a trillion dollars – due every year – that can’t be spent on infrastructure, social programs, defense, or tax cuts. It makes every other problem enormously more difficult to tackle.

Politicians fail miserably at Keynesian economics. Keynes said governments should run deficits when times are bad, and surpluses when times are good. We seem to have the deficit part figured out, but every time there is a whiff of a surplus they blow the money on new government spending or tax cuts.

By: Danioton Sat, 17 Nov 2012 22:29:31 +0000 Climate change denial is silly but denying the political goals and agenda of recent climate evangelicals is very rational.

You might want to reconsider. You might be in denial if you think that the decades long – recently accelerated – global debt accumulation is not a serious problem.

Interest rates are low as you point out possibly because this economic crisis has a banking / financial element embedded and not because they’re signaling that all is well. As you point out further on in your column the low interest rates are probably connected to the widespread system wide massive deleveraging forced on the banks by circumstances and regulators.

Banks and central banks lent so much to sovereign borrowers at least in part because global regulators via Basal back in the early 90;s fixed the relative capital costs so low thus encouraging excessive debt creation and enabling excessive deficit spending on rising government employee salaries and benefits not to mention entitlements. Using the current low interest rates to justify even more borrowing to feed these problems is shortsighted and foolish.

And then taking comfort from the fact that governments are borrowing from themselves i.e. monetizing is again foolish and short sighted – this sort of behavior has never ended well. This time is no different. Any breathing space we have should be used to work towards solutions before more drastic measures are forced upon us by circumstances. Simply refusing to acknowledge the problem and dealing with it while we still can is a huge mistake.

What’s needed is not a calmer attitude toward deficits, but an understanding of their causes (too much government spending and commitments on entitlements) and a systematic cure applied. We need austerity applied to the public sector not the private.

Governments beyond certain minimum needs cannot create wealth. It’s the private side that is the prime generator and sustainer of wealth creation and our growing standard of living providing the resources to divert to sustain necessary government functions and provide for the less fortunate.

By: injuntrouble Sat, 17 Nov 2012 20:38:51 +0000 ‘I expect to welcome many Tea Partiers and tax lobbyist to the ranks of deficit deniers’ – You must be kidding! Tea Partiers like many republicans are highly intellectually challenged. They won’t undertand your argument or logic.

They have the talent to completely ignore facts. They just know in their gut that if the government borrows money, it goes out of their pocket and into the pockets of some lazy, non-white person who probably does not speak English. The only solution to such a problem is to drastically cut the budget even if it causes a depression.

By: elder_bear Sat, 17 Nov 2012 15:41:23 +0000 Mr. Kaletsky is indeed an award winning journalist. But he also denied there was a recession in 2008. And we all know how that proclamation turned out….