[johnu]

y66, on 2021-February-08, 15:15, said:

Very accommodating. Freeway underpass sounds like the promised land for trolls.

A famous Seattle landmark, the Fremont Troll, located under a major highway bridge.

[Chas_P]

johnu, on 2021-February-08, 14:07, said:

Fortunately, the Seattle activists are very friendly and will help you find a freeway underpass to pitch a tent.

Yes, I've read about the friendliness of the CHOP. It looks very inviting.

[y66]

Paul Krugman said:

A dozen years ago, just before Barack Obama was sworn in as president amid the Great Recession, I wrote a disconsolate column titled “The Obama Gap.” At a time when many viewed the president-elect as a transformational figure, I lamented the caution of his economic policy. His proposed stimulus, I argued, would fall well short of what was needed.

Sadly, I was right. And as I also warned at the time, Obama didn’t get a second chance; the perceived failure of his economic policy, which mitigated the slump but didn’t decisively end it, closed off the possibility of further major action.

The good news — and it’s really, really good news — is that Democrats seem to have learned their lesson. Joe Biden may not look like the second coming of F.D.R.; Chuck Schumer, presiding over a razor-thin majority in the Senate, looks even less like a transformational figure; yet all indications are that together they’re about to push through an economic rescue plan that, unlike the Obama stimulus, truly rises to the occasion.

In fact, the plan is aggressive enough that some Democratic-leaning economists worry that it will be too big, risking inflation. However, I’ve argued at length that they’re wrong — or, more precisely, that, as Treasury Secretary Janet Yellen says, the risks of doing too little outweigh any risk of overheating the economy. In fact, a plan that wasn’t big enough to raise some concerns about overheating would have been too small.

But how did Democrats get so bold? The answer is that they’ve learned some important things about both economics and politics since 2009.

On the economic side, Democrats have finally stopped believing in the debt boogeyman and the confidence fairy, who will make everything better if you slash spending.

There was a time when many Democrats — including President Obama — accepted the proposition that public debt was a huge problem. They even took seriously warnings from people like Representative Paul Ryan that debt was an “existential threat.” But predictions of an imminent fiscal catastrophe kept being proved wrong, and at this point mainstream economists have become much more relaxed about debt than they were in the past.

Some Democrats also used to worry that big spending programs would hurt the economy by undermining business and investor confidence, and conversely that caution would be rewarded with higher private investment. But this doctrine has also been belied by experience; austerity doesn’t instill confidence, it just imposes pain.

Obama came into office sincerely believing that he could reach across the aisle, that Republicans would help him deal with the economic crisis. Despite the reality of scorched-earth opposition, he continued to seek a “grand bargain” on debt. He regarded the rise of the Tea Party as a “fever” that would break in his second term. He was, in short, deeply naïve.

Many progressives worried that President Biden, who had served in the Senate in a less polarized era, who talks a lot about unity, would repeat Obama’s mistakes. But so far he and his congressional allies seem ready to go big, even if that means doing without Republican votes.

One thing that may be encouraging Democrats, by the way, is the fact that Biden’s policies actually are unifying, if you look at public opinion rather than the actions of politicians. Biden’s Covid-19 relief plan commands overwhelming public approval — far higher than approval for Obama’s 2009 stimulus. If, as seems likely, not a single Republican in Congress votes for the plan, that’s evidence of G.O.P. extremism, not failure on Biden’s part to reach out.

Beyond that, Biden and company appear to have learned that caution coming out of the gate doesn’t store up political capital to do more things later. Instead, an administration that fails to deliver tangible benefits to voters in its first few months has squandered its advantage and won’t get a do-over. Going big on Covid relief now offers the best hope of taking on infrastructure, climate change and more later.

Oh, and Democrats finally seem to have learned that voters aren’t interested in process. Very few Americans know that the Trump tax cut was rammed through on a party-line vote using reconciliation, the same maneuver Democrats are now pursuing, and almost nobody cares.

Finally, I suspect that Democrats realize that getting policy right is even more important in 2021 than it was in 2009 — and not just because of the economics. When much of the opposition party won’t acknowledge election results, condones insurrection and welcomes conspiracy theorists into its ranks, you really don’t want to pursue policies that might fall short and thereby empower that party in the years ahead.

Put it this way: Debt isn’t and never was an existential threat to our nation’s future. The real existential threat is an illiberal G.O.P. that looks more like Europe’s far-right extremists than a normal political party. Weakening policy in ways that might help that party’s prospects is a terrible idea — and I think Democrats realize that.

So this time Democrats are ready to seize the day. Let’s hope it will be enough.

[kenberg]

Lots of things have changed since Obama was first elected. Krugnan's arrogance is not one of these things. He is greatly pleased to see that the Dems have finally realized that he was right ion2009, he is right now, and he will always be right.
But of course my skepticism has also not changed.
I thought and still think that how much debt a country runs up actually matters. it's not the only thing that matters, but it matters.
It is good to be clear, and I don't require all statements to begin with the disclaimer "Of course I could be wrong", but Krugman?
Well, he does not lack confidence. Perhaps that's a virtue.

[shyams]

kenberg, on 2021-February-09, 08:53, said:

But of course my skepticism has also not changed.

I thought and still think that how much debt a country runs up actually matters. it's not the only thing that matters, but it matters.

Let me attempt to explain how incremental debt does not matter right now. Caveat: I am not an economist, an Econ major, or an expert in this field. Any economics courses I attended as a student have all faded from memory years ago.

Many have come across that analogy which equates debt with "borrowing on the nation's credit card". This pernicious analogy permanently distorts readers' mind which is one reason it is used by politicians and deficit-hawks. Our life experiences also help reinforce the negativity embedded in that analogy --- many have either personally borrowed on credit cards and found it to be painful OR know people who have experienced such pain. So it is very easy to have negative views about debt.

Let's amend the above analogy to something more aligned with current reality. Instead of "credit card", imagine a "special loan" where the effective interest rate is on amount borrowed is currently negative!! and is likely to remain negative for a few years. Imagine also that the borrower who can avail this loan is a 40-something year old with a steady source of income that is sure to rise (although slowly) in the coming years. Would this person wish to borrow? Even if the amount borrowed goes largely towards spending on vacations, clothes and such -- i.e. things that do not create long-term assets in the borrower's life?

I think a reasoned view would be: YES, let's do it. One can deal with the principal repayment in the coming years, especially as this loan will actually earn (not cost) interest in the first few years! This is what the US Federal Debt situation is at present (p.s. also true for the UK, the EU and other well-developed economies). The yield/coupon on borrowing is lower than the inflation rate --- which causes the Govt. to have to pay smaller amounts in future.

Now I know the analogy is not water-tight and it should be easy to poke holes in it. However, the essence is true. When interest rates are so low as they have been for over a decade, the Govt can err on the side of excess and yet be all right despite the incremental borrowing.

[Cyberyeti]

shyams, on 2021-February-09, 10:00, said:

Now I know the analogy is not water-tight and it should be easy to poke holes in it. However, the essence is true. When interest rates are so low as they have been for over a decade, the Govt can err on the side of excess and yet be all right despite the incremental borrowing.

This is true, but in the past if you did this, the rate you could borrow at initially evaporated if people started worrying about whether you could pay it back. Why has this ceased to be the case ?

[y66]

The ability of the U.S. to pay back what it borrows is not an issue. The ability to pay back what it borrows without generating inflation may become an issue down the road but the bond market is saying that it's not an issue at the moment.

[y66]

kenberg, on 2021-February-09, 08:53, said:

Lots of things have changed since Obama was first elected.

For example:


You can fool all of the people some of the time ...

[kenberg]

shyams, on 2021-February-09, 10:00, said:

Let me attempt to explain how incremental debt does not matter right now. Caveat: I am not an economist, an Econ major, or an expert in this field. Any economics courses I attended as a student have all faded from memory years ago.

Many have come across that analogy which equates debt with "borrowing on the nation's credit card". This pernicious analogy permanently distorts readers' mind which is one reason it is used by politicians and deficit-hawks. Our life experiences also help reinforce the negativity embedded in that analogy --- many have either personally borrowed on credit cards and found it to be painful OR know people who have experienced such pain. So it is very easy to have negative views about debt.

Let's amend the above analogy to something more aligned with current reality. Instead of "credit card", imagine a "special loan" where the effective interest rate is on amount borrowed is currently negative!! and is likely to remain negative for a few years. Imagine also that the borrower who can avail this loan is a 40-something year old with a steady source of income that is sure to rise (although slowly) in the coming years. Would this person wish to borrow? Even if the amount borrowed goes largely towards spending on vacations, clothes and such -- i.e. things that do not create long-term assets in the borrower's life?

I think a reasoned view would be: YES, let's do it. One can deal with the principal repayment in the coming years, especially as this loan will actually earn (not cost) interest in the first few years! This is what the US Federal Debt situation is at present (p.s. also true for the UK, the EU and other well-developed economies). The yield/coupon on borrowing is lower than the inflation rate --- which causes the Govt. to have to pay smaller amounts in future.

Now I know the analogy is not water-tight and it should be easy to poke holes in it. However, the essence is true. When interest rates are so low as they have been for over a decade, the Govt can err on the side of excess and yet be all right despite the incremental borrowing.

If Krugman said only that in this singular time of covid we need to prioritize helping the hard hit and we need to stimulate the economy I would agree. It's the condescending "On the economic side, Democrats have finally stopped believing in the debt boogeyman and the confidence fairy, who will make everything better if you slash spending." that I object to.


I am also not an economist (In college I took Econ 101 and 102 but let's not rely on that). But here is how I think. So far Becky and I have received two stimulus checks. The first one went in the bank and sat there, the second one we divided the money up among others who we thought would make better use of it, the third one who knows. But I don't need it and I won't spend it. I went to Burger King and got Whoppers for the two of us today, and I think I did the same last week. And an almond croissant at Starbucks. I fill the gas tank every two or three weeks. If the government wants to send us $2400 I'll take it, they can send me 10 or 20 grand if they want to, but I don't see why they would want to. This idea that we will just send out money to everyone, who cares, debt doesn't matter, sounds fishy to me.

Let's look at stock market gains during the Trump presidency. The Dow went up maybe 50% or so. So did the national debt, probably more than 50%. I could check the figures but I don't need to know them exactly to make a point here. I worry about the long-term shake-out of high stocks and high debt. I have stocks. I don't like thinking about that stuff and so I don't. I have no plans to make a killing in the market. I didn't bet on the SuperBowl either. And I know about as much about the stock market as I know about the SuperBowl . I now know who played and that Brady was the quarterback, for Tampa Bay, I forget the other guy's name. But even not knowing much, and I think that knowing when we don't know much is very useful, I worry that large deficit spending can trigger large market gains that are not really warranted by the basic economic structure. I haven't sold off and buried the money in the garden, but I worry.


I am not prepared to debate economics with Krugman, or with anyone. But the last time we moved housing prices had risen rapidly and I was determined to sell the old house quickly because I was confident prices would be dropping sharply. They did. You do not have to be a genius to see when something gimmicky is going on. I get uneasy when people get so certain that of course there is no need to worry about X, pretty much regardless of what X is. Krugnan is very very sure of himself and very very dismissive of anyone who thinks there might be a problem with too much debt. I admit he knows more than I do. That does not really calm me.

[shyams]

kenberg, on 2021-February-09, 12:52, said:

If Krugman said only that in this singular time of covid we need to prioritize helping the hard hit and we need to stimulate the economy I would agree. It's the condescending "On the economic side, Democrats have finally stopped believing in the debt boogeyman and the confidence fairy, who will make everything better if you slash spending." that I object to.


I am also not an economist (In college I took Econ 101 and 102 but let's not rely on that). But here is how I think. So far Becky and I have received two stimulus checks. The first one went in the bank and sat there, the second one we divided the money up among others who we thought would make better use of it, the third one who knows. But I don't need it and I won't spend it. I went to Burger King and got Whoppers for the two of us today, and I think I did the same last week. And an almond croissant at Starbucks. I fill the gas tank every two or three weeks. If the government wants to send us $2400 I'll take it, they can send me 10 or 20 grand if they want to, but I don't see why they would want to. This idea that we will just send out money to everyone, who cares, debt doesn't matter, sounds fishy to me.

Let's look at stock market gains during the Trump presidency. The Dow went up maybe 50% or so. So did the national debt, probably more than 50%. I could check the figures but I don't need to know them exactly to make a point here. I worry about the long-term shake-out of high stocks and high debt. I have stocks. I don't like thinking about that stuff and so I don't. I have no plans to make a killing in the market. I didn't bet on the SuperBowl either. And I know about as much about the stock market as I know about the SuperBowl . I now know who played and that Brady was the quarterback, for Tampa Bay, I forget the other guy's name. But even not knowing much, and I think that knowing when we don't know much is very useful, I worry that large deficit spending can trigger large market gains that are not really warranted by the basic economic structure. I haven't sold off and buried the money in the garden, but I worry.


I am not prepared to debate economics with Krugman, or with anyone. But the last time we moved housing prices had risen rapidly and I was determined to sell the old house quickly because I was confident prices would be dropping sharply. They did. You do not have to be a genius to see when something gimmicky is going on. I get uneasy when people get so certain that of course there is no need to worry about X, pretty much regardless of what X is. Krugnan is very very sure of himself and very very dismissive of anyone who thinks there might be a problem with too much debt. I admit he knows more than I do. That does not really calm me.

1. You are absolutely spot-on when you point out Krugman's condescending style and tone. I find him often annoying and occasionally boring. I read his stuff because his knowledge of economics is probably a million times mine.

2.A. I understand your assertion that a $1,400 cheque will make no difference to how & how much you spend. However, the $1,400 will matter hugely to some people on the lower end of the financial ladder. To them, it is almost a sink-or-swim situation.

It is worth noting that the US economy is largely driven by Consumer Spending and people who receive such an amount will spend more. People who don't really need the funds will likely contribute (statistically speaking) by spending more than usual.

2. B. I don't know how a "means-tested" programme can be administered efficiently while ensuring that deserving people definitely receive their cheque. There is a certain simplicity in keeping the programme more broad-based. I simply don't know enough about this topic to comment with any degree of certainty.

It is worth nothing that there is a known issue with "means-tested" programmes if they are based off your 2019 tax return. The adverse economic impact of Covid occurred in the 2020 or 2021 tax years and it is quite possible that incomes in these years for large swathes of Americans are well below their 2019 income. The Govt. risks not helping these people if they rely on a 2019-income based test.

3. Re. the stock market and other assets. You are absolutely correct to be worried about the bubble in a variety of asset classes and the impact of rising debt levels.

However, the debt levels causing this worry are not US Govt. debt. Instead there is a growth in the private sector borrowings for which the Federal Reserve's liberal monetary policy might be to blame. The US legislators authorised the Fed to "print money" in order to save the corporates during the first Covid relief bill which may have exacerbated the indebtedness levels.

In my opinion, there definitely is too much debt in the US Economy and there is also too much of money sloshing around artificially inflating all asset prices. One never knows how and if/when these risks will create a massive issue to the global economy.

[pilowsky]

If you think economics is a dry subject (people that don't play Bridge all the time).
Or if you have never travelled,
Or if exchange rates don't make sense to you.
Then you don't know about the macPPP - that's the Big Mac PPP - not the computer nerd one.
You can read about it here: The Big Mac Index.
Economists wanted to synthesise all the elements of an economy into one small packet (product).
They needed something that:

• Is freely available all over the world
• Purchased by almost everyone
• Purchased frequently
• Didn't cost much
• Was uniform in its size shape and content.
• Incorporated as many elements of the economy into one unit as possible

What they came up with was the Big Mac. It costs <$10; It is purchased all over the world - frequently (unfortunately), and wherever you buy it, it is the same - in theory.
Hamburger companies tolerate only small variations in their products - the UK is the only place in the world where you can get sachets of vinegar with your "fries" - or chips as people living in the 'pink' countries (the colour of Commonwealth countries on old maps) call them.
Mind you, since we are discussing a macPPP maybe 'chips' is a better term.

So, what goes into a Big Mac that makes it so suitable for this purpose?
It has extensive labour input - people have to make the thing and manufacture the ingredients.
It includes all of the major components of the economy - transportation, energy,
All Demographics consume it - from Pauper to President - hopefully not so much now.
Like gambling, cigarettes and alcohol, it is simultaneously desirable and repellent - theirs a cost to consuming it.
Large amounts of real estate are involved.
Entertainment is involved.
This one shitty piece of food is a microcosm of society and economy.

The same is true of currency. Each currency unit contains all elements of an economy in a small banknote (even a 'virtual banknote').
To accurately compare 'economies' compare the cost of a Big Mac in each one.
Currently, the USD has been steadily dropping against the UKP. In Feb 2020 it was .87. Now it is .72.
The cost of a Big Mac in the USA is 5.66, in the UK it is 4.44 (in USD) giving a ratio of 0.78
this means that ATM (not automatic teller machine) the UK currency is Undervalued by >10%.

Another useful economic indicator that I created is the "Capuccino test".
The cappuccino test measures "opportunity cost".
Suppose you see something that you quite like and it costs around $50, but you don't desperately need it.
Apply the Cappucino test. Would you spend this money on a luxury item that costs as much as another 'real-world' item such as a Cappuccino?

It basically creates an 'external locus of control' to decide how much you need it. In Bridge terms, a fiscal puppet perhaps?

I applied the same approach to real-life Bridge Clubs - they really came up short compared to Bridge as a video game.

This same principle can be modified and applied in many real-life situations.

The most important and valuable thing to come out of all this is the sure and certain knowledge that you should not travel to Switzerland to buy a big Mac - they charge (in USD) 7.29 - it's like buying a milkshake at Harrods. What's the point?

[awm]

shyams, on 2021-February-09, 13:57, said:

2. B. I don't know how a "means-tested" programme can be administered efficiently while ensuring that deserving people definitely receive their cheque. There is a certain simplicity in keeping the programme more broad-based. I simply don't know enough about this topic to comment with any degree of certainty.

It is worth nothing that there is a known issue with "means-tested" programmes if they are based off your 2019 tax return. The adverse economic impact of Covid occurred in the 2020 or 2021 tax years and it is quite possible that incomes in these years for large swathes of Americans are well below their 2019 income. The Govt. risks not helping these people if they rely on a 2019-income based test.

There is a very simple solution to this problem. You send everyone a check. Then you raise taxes on high incomes.

If you really want a means-tested program, you make it a one-time clawback where if your 2020/2021 income is not substantially less than your 2019 income (and you're at least comfortable overall) you have to pay back the stimulus amount. If you want to reduce the debt you raise taxes on high incomes by more than this.

This way the IRS can do the means-testing after the pandemic calms down (when taxes are due) and all the government has done is give a low interest loan to a few people who didn't need it for a year or so (while helping people who definitely did need help and stimulating the economy).

We have a friend with a chocolate-making business here in Switzerland and she gets checks from the US government because she's a citizen. It is funny that they are stimulating the Swiss economy! Our friend's chocolate business was actually helped by the pandemic (because her competitors' walk-in stores are closed and she can compete online on more equal footing) but of course the US won't know this until they see her 2020 tax forms.

[helene_t]

awm, on 2021-February-09, 15:34, said:

There is a very simple solution to this problem. You send everyone a check. Then you raise taxes on high incomes.

Yes.

This discussion about whether it is right to give social benefits to well-off people comes up regularly.

It may seem wasteful to give free health care, free school meals, child benefits etc etc to people who can easily manage without it, but it may be simpler just to provide benefits to everyone and then adjust with the income and/or wealth tax as appropriate.

[kenberg]

With the pandemic, and it's the pandemic that has led to much of the stimulus, I think we start with the kids. People with kids have problems that I don't have. Back last March or April or whenever the first stimulus was, there maybe wasn't time to think this through. But now we have had a year to think about it. Some parents have been hit harder than others, sure, that's always the case. And yes, there are some whose kids are gone, or never existed, that need help. But on the whole, it's the kids and their parents that are really getting whacked by this. I am not saying that I know exactly what we should be doing, but I think the focus should be on the kids.

[Winstonm]

A problem inherent in the Covid stimulus is that it needs to be done rapidly so fine-tuning who is eligible has to take a back seat to expediency. The claw-back with taxes approach makes a lot of sense - too much sense for Republicans to ever agree to it.

[johnu]

awm, on 2021-February-09, 15:34, said:

There is a very simple solution to this problem. You send everyone a check. Then you raise taxes on high incomes.

I have previously suggested that stimulus payments should be based on who actually needs them, based on their income loss from the pandemic. If you have the same income during this pandemic as you did before the pandemic, you wouldn't necessarily be entitled to payments. So, if you were making $40,000 a year before the pandemic, and you are still working and earning at a $40,000 rate you wouldn't be entitled to payments. If you were at $100,000 before the pandemic and lost your job so are at $0 income, you could get a stimulus check.

I haven't seen any numbers on this, but I'm guessing 80-85% of the working population did not suffer a catastrophic decrease in income during the pandemic.

[pilowsky]

johnu, on 2021-February-09, 17:21, said:

I have previously suggested that stimulus payments should be based on who actually needs them, based on their income loss from the pandemic. If you have the same income during this pandemic as you did before the pandemic, you wouldn't necessarily be entitled to payments. So, if you were making $40,000 a year before the pandemic, and you are still working and earning at a $40,000 rate, you wouldn't be entitled to payments. If you were at $100,000 before the pandemic and lost your job so are at $0 income, you could get a stimulus check.

I haven't seen any numbers on this, but I'm guessing 80-85% of the working population did not suffer a catastrophic decrease in income during the pandemic.

Your guess might be slightly off; unless you are talking about Jeff Bezos, ITC professionals, people that don't get paid by Trump and neurosurgeons.

"As of May 31, about one-third of people surveyed in the United States lost 10 to 25 percent of their income over the past 4 weeks due to the coronavirus pandemic. At the same time, it's the U.S. who, with 13 percent, has the highest share of respondents who lost all their income."

This is survey data from 'Statista" - A usually reliable source.
There are multiple factors at play that determine whether or not a person may require financial support in an emergency.
1. Which sector of the economy they live in.
2. The proportion of household income that they normally spend.
3. Whether or not they are included in the census data of the country in which they live.

Regarding 3. The USA is notorious for vilifying 'undocumented immigrants' as they call them and then using these same people as slave labour.
In America, the base hourly rate is $7.25. This is enough to buy a Big Mac, fries and a coke. Around 2 million Americans are trying to live on this.
If you wonder how easy it is to sustain one person on an "income" as pathetic as this, I suggest that you read Jeffrey Steingarten. Steingarten explains in excruciating detail that the Hollywood fantasy that 'anyone can cook' is just that: a fantasy.

So, what happens when the thin (gossamer in the USA) veneer of civilisation is torn away.
Ordinary people starve.
In the USA, absolutely everything that people have depends on continuing employment: food, health care, shelter - everything.

In non-developing countries such as Australia, Sweden and Canada (to name a few). The health education and welfare of its residents are not dependent on the whim of their employer.
This is just one reason why America is a failed state.

If you can't even look after your own when they need it, what are you?

This is - in my opinion - why Trump was elected. He lied to the people that the State forgot. he told them that he would care for them 'bigly'. He would remove all the evil people from Washington (synecdoche for the polity of the USA), so they could all get a fair suck of the sav. Of course, what Trump meant was that he wanted to eat the whole f**king sav and screw anyone that tries to stop him.

In this way, Trump is the same as the phone scammer that wants to help you fix your computer problem.

[y66]

Trevor Noah said:

Trump’s lawyer is giving the speech you give when you have to stall because the actual lawyer is stuck in traffic.

Trump is probably watching this at home like: ‘What the hell is wrong with this guy? The ad on the side of the bus said he was the best. Why would he be on the bus if he’s not the best?’

[kenberg]

Well, Trump'slawyers have to argue that the trial is unconstitutional when it clearly is constitutional. This can lead to babbling. I can imagine him trying to think of a suitable slogan. How does it go? If the glove fits you must not acquit? Something like that.

[Zelandakh]

kenberg, on 2021-February-10, 08:15, said:

Well, Trump'slawyers have to argue that the trial is unconstitutional when it clearly is constitutional. This can lead to babbling. I can imagine him trying to think of a suitable slogan. How does it go? If the glove fits you must not acquit? Something like that.

"If it doesn't fit you must acquit". Trump's slogan: "Don't impeach, call the police."