Comments on: The ‘Obama debt’ fallacy http://blogs.reuters.com/lawrencesummers/2012/11/05/the-obama-debt-fallacy/ Sat, 21 Jun 2014 15:30:06 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: matthewslyman http://blogs.reuters.com/lawrencesummers/2012/11/05/the-obama-debt-fallacy/#comment-723 Tue, 06 Nov 2012 20:36:07 +0000 http://blogs.reuters.com/lawrencesummers/?p=281#comment-723 @Gordon2352: The first Spiegel article is interesting. It’s a German article about America today… But you could interchangeably read the opening paragraph as the start of an American article from around 1987–1988, about the Soviet Union!!!

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By: Gordon2352 http://blogs.reuters.com/lawrencesummers/2012/11/05/the-obama-debt-fallacy/#comment-722 Tue, 06 Nov 2012 16:57:47 +0000 http://blogs.reuters.com/lawrencesummers/?p=281#comment-722 In summary, it is people like Mr. Summers who are the problem. They have NO interest in telling the American people the truth about how desperate our situation really is, which is why I included the above two articles for an “unbaised” view of this nation as it really is.

Unfortunately, as the first article in Spiegel indicates, the American people “aren’t even trying” to curb the excesses of the wealthy class which continue to grow exponentially worse daily.

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By: Gordon2352 http://blogs.reuters.com/lawrencesummers/2012/11/05/the-obama-debt-fallacy/#comment-721 Tue, 06 Nov 2012 16:47:54 +0000 http://blogs.reuters.com/lawrencesummers/?p=281#comment-721 For those interested in reading the original article, here is the link:

Total Capitalism and the downfall of America

http://www.spiegel.de/international/worl d/commentary-total-capitalism-and-the-do wnfall-of-america-a-865437.html

What is not mentioned, but only hinted at, in the above article is that much of the “big business and its lobbyists” is related to our massive “Military/Industrial Complex” — for which we are about to sacrifice our Social Security and social programs, since it has now grown so large and ravenous that it needs to continue to feed at the expense of our elderly and poor.

Our continued massive spending on our current course of aggressive militarism — no one really knows how much at this point because much of the real cost is hidden in the “volunteer military” concept — has consequences:

This article describes the rise of Chinese militarism, due to the collapse of the US economy as a result of the greed of the US wealthy class (the US “elite” in the article above), which has given China a chance to become the world’s next superpower.

China seeks role in world as second superpower

http://www.spiegel.de/international/worl d/global-ambitions-china-seeks-role-in-w orld-as-second-superpower-a-864358.html

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By: Gordon2352 http://blogs.reuters.com/lawrencesummers/2012/11/05/the-obama-debt-fallacy/#comment-720 Tue, 06 Nov 2012 16:18:38 +0000 http://blogs.reuters.com/lawrencesummers/?p=281#comment-720 The truth that Americans refuse to face as seen from Der Spiegel, a highly respected German news source.

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11/05/2012

Destroyed by Total Capitalism America Has Already Lost Tuesday’s Election

A Commentary by Jakob Augstein

Cleanup after debris following Hurricane Sandy in the Queens borough of New York.

Germans see the US election as a battle between the good Obama and the evil Romney. But this is a mistake.

Regardless of who wins the election on Tuesday, total capitalism is America’s true ruler, and it has the power to destroy the country.

The United States Army is developing a weapon that can reach — and destroy — any location on Earth within an hour.

At the same time, power lines held up by wooden poles dangle over the streets of Brooklyn, Queens and New Jersey.

Hurricane Sandy ripped them apart there and in communities across the East Coast last week, and many places remain without electricity.

That’s America, where high-tech options are available only to the elite, and the rest live under conditions comparable to a those of a developing nation.

No country has produced more Nobel Prize winners, yet in New York City hospitals had to be evacuated during the storm because their emergency generators didn’t work properly.

Anyone who sees this as a contradiction has failed to grasp the fact that America is a country of total capitalism.

Its functionaries have no need of public hospitals or of a reliable power supply to private homes.

The elite have their own infrastructure.

Total capitalism, however, has left American society in ruins and crippled the government.

America’s fate is not just an accident produced by the system.

It is a consequence of that system.

Obama couldn’t change this, and Romney wouldn’t be able to either.

Europe is mistaken if it views the election as a choice between the forces of good and evil.

And it certainly doesn’t amount to a potential change in political direction as some newspapers on the Continent would have us believe.

A Powerless President

Romney, the exceedingly wealthy business man, and Obama, the cultivated civil rights lawyer, are two faces of a political system that no longer has much to do with democracy as we understand it.

Democracy is about choice, but Americans don’t really have much of a choice.

Obama proved this.

Nearly four years ago, it seemed like a new beginning for America when he took office.

But this was a misunderstanding.

Obama didn’t close the Guantanamo Bay detention camp, nor did he lift immunity for alleged war criminals from the Bush-era, or regulate the financial markets, and climate change was hardly discussed during the current election campaign.

The military, the banks, industry — the people are helpless in the face of their power, as is the president.

Not even credit default swaps, the kind of investment that brought down Lehman Brothers and took Western economies to the brink, has been banned or even better regulated.

It is likely the case that Obama wanted to do more, but couldn’t. But what role does that play in the bigger picture?

We want to believe that Obama failed because of the conservatives inside his own country.

Indeed, the fanatics that Mitt Romney depends on have jettisoned everything that distinguishes the West: science and logic, reason and moderation, even simple decency.

They hate homosexuals, the weak and the state. They oppress women and persecute immigrants. Their moralizing about abortion doesn’t even spare the victims of rape. They are the Taliban of the West.

The Winner Makes No Difference to Europe

Still, they are only the symptom of America’s failure, not the cause.

In reality, neither the idealists and Democrats, nor the useful idiots of the Tea Party have any power over the circumstances.

From a European perspective, it doesn’t matter who wins this election.

Only US foreign policy is important to us — and Obama is no dove and Romney no hawk.

The incumbent president prefers to wage his wars with drones instead of troops, though the victims probably don’t care if they’re killed by man or machine.

Meanwhile, despite all the criticism, his challenger says he wouldn’t join Israel were the country to go to war with Iran because the US can now no longer afford such a thing.

In any case, it is wrong to characterize Republicans as the party of warmongers and Democrats as the party of peace — or even to call the latter a left-wing party at all.

After all, it was Democratic presidents Harry S. Truman, John F. Kennedy and Lyndon Johnson who started the wars in Korea and Vietnam.

Republican presidents Dwight D. Eisenhower and Richard Nixon ended these wars.

And Ronald Reagan, who Europeans see as the embodiment of both the evil and absurd aspects of American politics, was a peaceful man compared to the standards we have since become accustomed to. He only ever invaded Grenada.

The truth is that we simply no longer understand America.

Looking at the country from Germany and Europe, we see a foreign culture.

The political system is in the hands of big business and its lobbyists.

The checks and balances have failed.

And a perverse mix of irresponsibility, greed and religious zealotry dominate public opinion.

The downfall of the American empire has begun.

It could be that the country’s citizens wouldn’t be able to stop it no matter how hard they tried.

But they aren’t even trying.

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Notice the “key” to what is ailing this nation lies in this comment:

“The political system is in the hands of big business and its lobbyists. The checks and balances have failed.”

This election is totally meaningless unless the American people are willing to do something about a system completely corrupted by the system itself.

It doesn’t really matter who wins. The American people will lose, because the “game is fixed”.

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By: LysanderTucker http://blogs.reuters.com/lawrencesummers/2012/11/05/the-obama-debt-fallacy/#comment-719 Tue, 06 Nov 2012 15:57:28 +0000 http://blogs.reuters.com/lawrencesummers/?p=281#comment-719 Why is it that the same people who claim our money is backed by nothing are the same people crying over the debt? As if the US has never had anything but the Federal Reserve. As if they never confiscated gold before, or set maximum working hours to cure unemployment, or that there never was a Bank of the United States in the control of Congress.

That’s the thing about laws written by the “Might Is Right” country. It can undo anything and tell the rest of the world to take a hike. I know how it sounds but we do it every day. Stop worrying about the debt and realize that the system is what it was designed to be which is a fear mongering vacuum for wealth. If it ever collapses, the Congress will simply cancel the Federal Reserve Act, assign the debt to them by accusation of fraud, institute a new centralized bank and currency and be done with it.

The debt is just a tool for a government without a conscience. They don’t operate on the same “honor your debts” principle that we are taught to believe. Get over it people.

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By: trevorh http://blogs.reuters.com/lawrencesummers/2012/11/05/the-obama-debt-fallacy/#comment-718 Tue, 06 Nov 2012 02:02:23 +0000 http://blogs.reuters.com/lawrencesummers/?p=281#comment-718 I’ll just put in a few things that come to my mind in case it has any value and/or validity.

Most of the developed world are on opium.
matthewslyman above has it right. China injects their real wealth into the developed world, giving the mass in these countries a standard of living that is much higher than their appropriate actual supply capability(ie their worth). China buys their debt, to ensure smooth debasing of these country’ currency (cook the frog slowly, the frog won’t notice).

It also damages China, because the Chinese capitalist elites are still running the show. The CCP is fooled by them. They keep advising the CCP to keep currency low so they can export. But it really helps the business owner class. Chinese business owners don’t innovate, don’t create new things. They only do things that other people have done (solve known problems) at cheaper cost.

Keeping wages low for workers helps MOSTLY just the business owners, so China doesn’t compete by making better things (work smarter). China competes globally by pressing their own workforce (make them work harder) and sell to the world cheaper stuff.

Keeping currency low depresses real wage (at global level) for Chinese workers (I thought they understand Marx’s stuff), it helps the Chinese business class sells more stuff, increase their profit. This is the classical exploitation case. So the business owners in China will get richer, inequality there will grow.

Letting wage in China rise will create less jobs for the Chinese, that is a problem. Without things to do and an income stream, the Chinese mass might do another deadly peasant uprising. But they cannot compete by working harder forever. Working smarter should be the way.

I read that some of them say letting real wage to rise (by having the currency rise) cause Japan style stagnation. That’s nonsense, Japan’s GDP per capita was already too high (the second biggest amongst major economies), even higher than Germany. Japan stagnated because there was not much room left (Japan reached the technological limit on the variety of things they can produce and sell, and there were only so many people in the world with money to buy their stuff).

There are multiple problems in the current global system which affect lot of countries not just the US. I seriously doubt who’s at the helm in the US can actually make a material positive difference because the problem is structural all over the world. Having said that, an idiot at the helm making wrong radical change can easily make a material negative difference if not a real disaster.

Anyway I will list all problems in order of seriousness:
1. The underclass (and possibly some middle class) mindless and thoughtless reproductive behaviour.
2. Moral decay everywhere, too many scammers and cheaters who contribute little, has little value yet demand all the privileges. You can’t really make progress when so many people are hell bending on back stabbing another for immediate gain.
3. Overspecialization everywhere, so the workers know his task extremely well but little else. This inflexibility reduces the worker bargaining power (they can’t change job for ex), helps the owners get more leverage, and get richer and richer.
4. Entitlement complexity of the mass and its political representation even in practically developing country (eg Greece)

Now, as Franklin says “Any fool can criticize, condemn and complain. And most fools do”. Finding solution is hard, identifying problem is much easier.

I propose
1. Education, so everybody becomes self-aware of their worthiness and contribution to society and thus have appropriate reproductive behaviour.
2. Education so people become aware of the importance of good ethics and being righteous. Some minimal level of welfare is also needed so people don’t become too desperate and trash the ethics code. It’s a vicious negative feedback loop when a jerk does something bad, gets the reward and excites others to do the same.
3. Allow workers more flexibility. For example, with the intellectual property law in IT right now, even if the worker does something in his OWN time with his OWN equipment, the company can still CLAIM it. This is UTTERLY non-sense and also stymies the creation of really “quality, profitable and sustainable” start-ups (in my opinion, the vast majority of startups in Silicon Valley are not quality and sustainable ones with good revenue and business model). Most people don’t want to take too much risk (like quitting a decent job to start his own company), so allowing the workers to still work for someone else to have a sense of financial security while bootstrapping his own ideas, his own company will encourage the creation of many new businesses.
4. Education so people understand, the living standard and lifestyle they should have should be decided by their level of contribution, the uniqueness of their talents not the circumstances of their birth or other kind of lottery.
5. Stop thinking that overt redistribution of outcomes will make things better.
6. Every country stop trading with China if they refuse to play by the rule and let the real wages of their worker rise. It’s work smarter, not harder.

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By: matthewslyman http://blogs.reuters.com/lawrencesummers/2012/11/05/the-obama-debt-fallacy/#comment-717 Mon, 05 Nov 2012 22:43:11 +0000 http://blogs.reuters.com/lawrencesummers/?p=281#comment-717 @Decatur: Oops! I posted the wrong link to you… Here it is…
http://www.taxpolicycenter.org/taxfacts/ displayafact.cfm?Docid=200
Thanks for your patience!

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By: matthewslyman http://blogs.reuters.com/lawrencesummers/2012/11/05/the-obama-debt-fallacy/#comment-716 Mon, 05 Nov 2012 22:15:19 +0000 http://blogs.reuters.com/lawrencesummers/?p=281#comment-716 @weneedchange: You’re right in all the principles you have stated (although it will take time to see whether your predictions come true). Someone needs to tell Grover Norquist it’s high time to stop it off with his crusade to abolish taxation!
15–16% federal taxation by GDP,
24–25% federal spending by GDP.
As you have suggested, these two numbers MUST be moved closer together FROM BOTH DIRECTIONS, if the USA is going to reduce future economic pain. I have demonstrated, using publicly available data (from taxpolicycenter.org, bls.gov, oil price data etc.) that the optimal proportion of federal taxation by GDP is over 18% in the USA in the modern era post 1977 (perhaps as high as 21%—22%, if you extrapolate from my scatter plots). My study is entitled,
“Reaganomics and prudent taxation”, and is reachable via a search on Google.

OTOH, how is Obama better than Romney on the deficit (when taking into account the mysterious deductions Romney promises to eliminate; and when you take into account Obama’s actual record of NOT regulating congressional pork effectively)? Obama just isn’t a credible counterbalance for vested interests in Congress. He’s got too many of his own vested interests to protect, and he’s apparently too nice to use his veto. I don’t think he’s a villain, but I do think he’s fallen in love with big borrowing & spending along with many American voters. I think you’re all getting addicted on the “stimulus”. China might just as well have you all hooked on opium! (We all know how that went for them, 200 years ago.)

Take a look at some broad-based economic graphs to see how real the current economic recovery is:
http://slyman.org/m_politics/US-Economic -Indicators-graphs-1950-2011-wide.png
— Unfortunately, it appears that the current blip of “recovery” is a sham, created artificially by the continued injection of Chinese money. The US government (White House and Congress, collectively) has been papering over the cracks instead of fixing the problems (what they are paid to do).
You’re in for some real pain unless you get some integrity and backbone in the White House. The Presidential veto is not something to be embarrassed about or avoided; but rather, is part of the constructive genius of the American political system!

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By: matthewslyman http://blogs.reuters.com/lawrencesummers/2012/11/05/the-obama-debt-fallacy/#comment-715 Mon, 05 Nov 2012 22:10:30 +0000 http://blogs.reuters.com/lawrencesummers/?p=281#comment-715 @Lawrence Summers: I’m linking to the original article you’re replying to, because it’s scrolled off the front page of Reuters Opinion links:
http://blogs.reuters.com/great-debate/20 12/11/02/the-consequences-of-obamas-debt  /

@Decatur: Where are you getting your figures from? They don’t agree with independent data:
http://blogs.reuters.com/great-debate/20 12/11/02/the-consequences-of-obamas-debt  /
I answered your point on the other thread — sorry if this is getting a little confusing (to cut this short I’ll refer you there where you first made your remarks, instead of cutting and pasting my reply and continuing this game of comment tennis!)

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By: weneedchange http://blogs.reuters.com/lawrencesummers/2012/11/05/the-obama-debt-fallacy/#comment-714 Mon, 05 Nov 2012 19:40:54 +0000 http://blogs.reuters.com/lawrencesummers/?p=281#comment-714 Decatur – you have stated the obvious. Too bad more Republicans don’t listen to reason. Mitt, appropriately known as “Bush on Steriods” will destroy this country. The only sensible way to reduce the deficit is with a balanced plan. You can’t reduce the deficit with more tax cuts and additional defense spending. I’m praying that Obama is re-elected and Democrats still control the Senate – after tomorrow.

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