Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

[Chris Coles]

Re: Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

Can I have the source of that green image in the cover of the post, it is haunting. I love it.

Go to view, (above), and scroll down to source, click on source and then find the associated text message in the Hypertext and that will tell you the colour, sorry color. All you then need to do is find the relevant information on the search engines.

Having said that, I cannot find any reference to colour on this web page which may relate to the underlying software system. So, in which case, try this link: http://html-color-codes.info/ There is a lot of information available on HTML color codes if you Google.

[nidenel]

Re: Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

Can I have the source of that green image in the cover of the post, it is haunting. I love it.

[c1ue]

Re: Illusion of Recovery – Part I: Print, spend, and wait has officially failed - Eric Janszen

Yes, but EJ's premise was that these energy efficiency "investments" would reduce energy use and cost and therefore be the equivalent of a "tax cut" in that they leave more money available for other spending. Therefore, it seems the poster had a very good point. While we'd be headed in the right direction (vs pissing the money away) it would not yet have had much opportunity to return energy savings dividends. Doubly so when you factor in the realistic slow pace of any government project.

I am quite certain EJ's point isn't that TECI spending would fix the economic problem now.

The point is that debt itself isn't a problem if said debt enables the economy to grow, and therefore enables the debt to be repaid.

It isn't that TECI spending would magically make the US trade deficit disappear, or reduce US energy consumption spending immediately, but rather that the long term effect would be to effect some of these two benefits while building up technology/expertise and providing jobs in the meantime.

Even in the short term, some benefit could be almost immediate: for example government subsidies for conservation via insulation improvement.

Either way, the issue isn't the growth of the US federal deficit per se.

It is what is accomplished in doing so.

The $3 billion plus in accumulated deficits since Obama started his Presidency - how much of this has contributed in some way to either long or short term technology/expertise improvement? How much has contributed to long or short term economic infrastructure?

That's the issue - not whether to spend.

Had this money not been spent, the result would be Latvia/Greece: GDP falling at historically high rates.

Re: Illusion of Recovery – Part I: Print, spend, and wait has officially failed - Eric Janszen

Had ROI-based construction programs been started by the end of 2010, without question the following chart of construction spending would look different than it does today.

Public construction spending is below re-recession levels, peaking at the end of the recession in Q1 2009. Non-residential construction spending after recovering to 2006 levels in 2009 remains there today. Residential construction spending regressed to 1996 levels during the recession and has not recovered.

Hard to imagine a similar picture today if wide-ranging transportation, energy, and communications infrastructure project were underway.

Yes, but EJ's premise was that these energy efficiency "investments" would reduce energy use and cost and therefore be the equivalent of a "tax cut" in that they leave more money available for other spending. Therefore, it seems the poster had a very good point. While we'd be headed in the right direction (vs pissing the money away) it would not yet have had much opportunity to return energy savings dividends. Doubly so when you factor in the realistic slow pace of any government project.

For that reason I have to assume that we'd still be in just as big of a "gap" at this point in time. Besides, if one borrows $1T for these projects when rates are low and has to pay it back later when rates are high (due to the money printing) it would reduce or eliminate most of those savings, wouldn't it?

The problem with love of Keynesian theories on stimulus is that he didn't intend us to just do the deficit spending part of it. He expected us also pay it back during the good times. We never did and of course never will.

How about a theory on eliminating non-productive government spending like constant wars (there's $1T right there, with no interest!), garrisons world-wide, welfare and other entitlement spending for an undetermined number of illegal aliens, taxpayer subsidized education of foreigners, etc? (out of state tuition doesn't begin to cover it)

What about per capita GDP vs total GDP? If GDP stagnates but we engage in policies to reduce the number of unproductive residents and citizens, doesn't that allow us to raise the GDP relative to the population?

I mean as long as we're engaging in pipe-dream ideas of what politicians will do, why not go full bore into the other side of the equation besides "spending is good"?

[Slimprofits]

Re: Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

related to EJ's latest

Hussman on why the Fed's next set of 'tools' will not work: http://www.hussmanfunds.com/wmc/wmc110912.htm

In short, neither economic theory nor established economic evidence provides any basis for the belief that further monetary intervention and distortion would ease any binding constraint on the real economy at present. This does not, of course, rule out the possibility of speculation grounded in superstition and a misguided impulse to reach for yield, but the Fed's ability to weave yet another set of Emperor's Clothes is justifiably deteriorating.

[Ghent12]

Re: Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

1. Drastically reduce military spending.
...
All probably meaningless ideas unless we get society to actually wake up.

Political realities must be observed. Otherwise you're just spinning your wheels. Depending on what you mean by "drastic," it either ain't gonna happen or it's already happening.

[DSpencer]

Re: Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

yeah - thats part of the plan.

got a better one?

Well I'm a person using the internet, so of course I think I have a better plan!
Military spending should be drastically reduced. I agree on that part. I just don't see why we should continue paying people to do different jobs they may not be suited for. Especially ones that involve potentially deadly outcomes on a large scale if they are done wrong.

I might be missing something regarding the repair of roads and bridges. I spend most of my time in the Columbus/Dayton/Cincinnati Ohio area. The roads are constantly under construction. However, they typically don't seem to be in disrepair to begin. Maybe they are fine because they are fixed preemptively but I'm never able to fully convince myself of that.

I don't understand why we can't pay for our oil using money and have to revert to a barter system?

Re FICA - so if people pay more into SS, do they also get more out? Doesn't that just potentially enlarge and delay the problem?

To avoid criticizing without offering alternatives, here is my very brief counter-plan:

1. Drastically reduce military spending.
2. Simplify the tax code. Eliminate special interest loopholes in the process. This includes popular ones like home mortgage interest deduction.
3. Eliminate other forms of corporate favoritism and anti-competitive regulation.
4. Start some form of means testing for SS. Treat it as welfare for the elderly. Stop paying it to wealthy people.
5. Reduce the size and scope of government regulatory agencies and red tape. No more cracking down Amish farmers who want to drink raw milk, etc.
6. Stop the war on drugs.
7. Enforce existing laws on fraud and other white collar crime.
8. Incentive people to get off welfare systems. Make them into a truly last-ditch safety net.

All probably meaningless ideas unless we get society to actually wake up.

[Slimprofits]

Re: Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

Front page of WSJ today: Fed prepared to act

http://online.wsj.com/article/SB1000...LEFTTopStories

http://seekingalpha.com/article/2922...policy-options

According to the latest from Jon Hilsenrath at the WSJ (widely acknowledged as being Ben Bernanke’s journalist of choice to communicate with the public) the Fed is now considering three different policy choices:

1) Operation Twist – “One step getting considerable attention inside and outside the Fed would shift the central bank’s portfolio of government bonds so that it holds more long-term securities and fewer short-term securities.”

2) Cutting interest on reserves – “A second step under consideration at the Fed, one getting mixed reviews internally, would reduce or eliminate a 0.25% interest rate the Fed currently is paying banks that keep cash on reserve with the central bank.”

3) Language alteration – “A third step Fed officials are debating would involve using their words to make their economic objectives and plans for interest rates more clear.”

[lektrode]

Re: Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

Bravo. Pick any two from that list to implement and we'd be far better off.

ok - pick 2?

[lektrode]

Re: Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

Am I understanding this correctly:

Soldiers who were trained to shoot rifles will be brought home to build high speed rail and nuclear power plants?

yeah - thats part of the plan.

got a better one?

[DSpencer]

Re: Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

1: close ALL the .mil bases on foreign soil (cept those securing vital/strategic traderoutes/resources) and BRING OUR TROOPS HOME
2: nobody gets laid-off - any of them who wants to work gets re-deployed to REBUILD ***OUR*** INFRASTUCTURE
3: 1st project: fix the roads and bridges, build-out a high-speed rail network
4: 2nd project: immed and _massive_ build-out of appx 500 nuclear power stations, as fast as they can krankem out
5: tell the arabs: we have a 'new deal' for you: we will trade 1barrel for 1bushel of corn/wheat whatevahs - or?
you can EAT YOUR OIL
6: levy the FICA tax on _all_ income, every last dollar, from every source, until the socsec acct balances

adding: 7: this (#6) would allow the .gov, aka WE The People to rebuild a capital base, so that WE DONT HAVE TO PAY INTEREST to the 'federal' reserve/oligarchs to finance projects that keep the rest of us employed.

there - does that leave any oxen 'ungored' ?
because we need _all_ the oxes gored.

Am I understanding this correctly:

Soldiers who were trained to shoot rifles will be brought home to build high speed rail and nuclear power plants?

[dcarrigg]

Re: Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

1: close ALL the .mil bases on foreign soil (cept those securing vital/strategic traderoutes/resources) and BRING OUR TROOPS HOME
2: nobody gets laid-off - any of them who wants to work gets re-deployed to REBUILD ***OUR*** INFRASTUCTURE
3: 1st project: fix the roads and bridges, build-out a high-speed rail network
4: 2nd project: immed and _massive_ build-out of appx 500 nuclear power stations, as fast as they can krankem out
5: tell the arabs: we have a 'new deal' for you: we will trade 1barrel for 1bushel of corn/wheat whatevahs - or?
you can EAT YOUR OIL
6: levy the FICA tax on _all_ income, every last dollar, from every source, until the socsec acct balances

adding: 7: this (#6) would allow the .gov, aka WE The People to rebuild a capital base, so that WE DONT HAVE TO PAY INTEREST to the 'federal' reserve/oligarchs to finance projects that keep the rest of us employed.

there - does that leave any oxen 'ungored' ?
because we need _all_ the oxes gored.

Bravo. Pick any two from that list to implement and we'd be far better off.

[lektrode]

Re: Illusion of Recovery – Part I: Print, spend, and wait has officially failed - Eric Janszen

whooo... dc!
thats one of yer best eye've seen to date! (as they say out here: get all chikin-skin, la'dat = goosebumps)

and while i think salnrich makes very good sense with a number of his points, it's quite evident that The US could not have accomplished whats been done without the collective resources represented by the 'commonwealth' of the states acting as a whole

the problem however, IMHO - (que stuck/broken record) is that the political aristocracy, bought-off by entrenched financial interests, et al - has sold We The People down the river to buy the votes of genl'y the most-vocal minority/fringe vs the majority of The Rest of Us...
whether its the FIRE brigade, corporate welfare, or simply entitlements supporting welfare-babies, as they seem to be mushrooming all over the place (even in NH ;) or gov unions (why? when they have civil service rules/protections against political turnover or retribution) and all else that causes/feeds the out-of-control buracracy (forgive my lazy spelling) that groweth exponentially...

i may not have my thoughts as clearly laid out as you guys (and wish i could type even 1/2 as fast vs halfassed) - but you get my drift

and i'm with you 100% on this: I will fight the nobility as our forefathers did.
for they are intent on re-creating here in the new world all that was abandoned in the old.

We need to just agree that some pieces of public infrastructure were/are good for a country. Next someone will argue that we should privatize the air force or something. It's absurd.

One cannot speak in hypotheticals about what would be if governments never existed or did anything. It might be a paradise in the mind's eye, but the 'what-if' idealism of a libertarian (or anyone else for that matter) is not grounded in reality. Nobody can know what would happen would there have been no Panama Canal built by the .gov or no interstate system etc.

I'll not buy the argument that the private sector would somehow make a better Panama Canal. If left to "market forces" it would never get built. Businesses who saw the advantage in more expedient shipping were thrilled that the nation built it, I guarantee. There are also geopolitically strategic reasons for needing that canal.

That's why the military got the job done. The army corps always has done these bigger jobs. Companies like Elliott Dredges certainly worked to complete the project, but on government contracts. This is okay. It is not the end of the world or a terrible distortion of a perfect market. University of Chicago microeconomics is not the answer to all of the woes of the world.

When has a private company ever taken on a large, somewhat risky project without government leading the way? Libertarian tendencies lead toward the explanation that the whole reason entrepreneurs should get oodles of cash is that they take risk. Yet one has to see how risk-adverse the private sector really is. This is also okay. Governments exist as the defenders, insurers and everything-else of last-resort. It can partner with the private sector to get things done. They can actually even work together towards a common goal (believe it or not). There is no dichotomy between private and public sector survival. One does not benefit as the other dies. I promise. Efficient government, sensible government, etc. are things one can argue for. Arguing that it should be done away with entirely is foolish and absurd.

Let me put it this way: when the $#!t hits the fan, will citizens want the U.S. Army or a Chicago School economist and a talking head from the Cato institute backing them up? Does anyone think that the average private weapons cache would even be enough to stop a single old surplus T-44? Thought games to prove how absurd it is to argue to privatize everything are easy to play.

As to your specific points, Sal&Richard:

#1: The panama canal was never a private project. The project, began by the French after the Suez Canal success, was taken over by TR's signing of the Hay–Bunau-Varilla Treaty. It may have been questionable whether Panamanians ever consented after they declared independence, but it was no private company that did this.

#2: Without the interstate system we would surely expend less energy today. We would also be a lot more urban and communiarian (as urban dwellers generally are on average). Moreover, trillions in GDP would be lost. But yes, things would probably be a whole lot more 'sustainable' as the progressives see it. Who knows what would happen in that world. Ask Russia, they never got a proper one built...it would probably look a lot like that, only with far more people.

#3: Sure, the dam probably wouldn't be built today unless it had major public political support over environmental concerns. This is likely an issue that will have to be dealt with as we move forward. I personally support the production of pebble bed reactors which suffer the same fate. At some point we need to go with what works and not what is politically expedient. But it was built when both the power and the work were needed. It could be done again today.

#4: Now you get into "wealth-envy." I'm sick of this argument. It literally sickens me. Whenever one stands up for not the poor (food stamps; welfare etc.) and not the rich (bailouts of banks/insurance cos./reductions on estate tax etc) one is made out to be "envious of wealth." What if one is not envious of wealth but rather valuing of work?

#5: What if I don't personally want billions? What if I want the middle class to be able to make twice what they do if they work hard, earn it, and don't inherit a trust fund? Am I a communist? I don't think so. Take the concept of wealth envy somewhere else. One may find sympathy for it in the house of lords. I'll not honor it on this side of the pond. What if it's my personal belief that a soldier is worth 10 tax-dodging bankers and should be paid accordingly? This I see as the grand battle facing us as middle class citizens in America.

There are many talking heads that believe it's okay to 1) get rich by managing a corporation to the brink of bankruptcy, 2) destroy 80% of all shareholder value, and 3) rob people with misleading and fraudulent products. They argue that the "talent" is worth the investment. Then they say that the public must bail them out (and they donate to make sure the politicians hand out the public money). Then they say the money they made shouldn't be taxed because they 'worked hard'. Then they argue that their children should be rich in perpetuity from generation to generation so we must lower the estate tax. Their children then never work a day in their lives and continue to fight for lower taxes on their trust funds. It's a sad joke.

Calling it wealth envy is akin to saying that an anti-cannibalist has flesh envy. It's a broken system and a bad idea. Many among the richest in the US have been saying the same thing. But the talking heads say, "what do billionaires know about what's good for them?" It's a sad, sad joke.

I will fight the nobility as our forefathers did. There will even be allies among the billionaire class that fight the nobility. They will not win.

[metalman]

Re: Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

1: close ALL the .mil bases on foreign soil (cept those securing vital/strategic traderoutes/resources) and BRING OUR TROOPS HOME
2: nobody gets laid-off - any of them who wants to work gets re-deployed to REBUILD ***OUR*** INFRASTUCTURE
3: 1st project: fix the roads and bridges, build-out a high-speed rail network
4: 2nd project: immed and _massive_ build-out of appx 500 nuclear power stations, as fast as they can krankem out
5: tell the arabs: we have a 'new deal' for you: we will trade 1barrel for 1bushel of corn/wheat whatevahs - or?
you can EAT YOUR OIL
6: levy the FICA tax on _all_ income, every last dollar, from every source, until the socsec acct balances

adding: 7: this (#6) would allow the .gov, aka WE The People to rebuild a capital base, so that WE DONT HAVE TO PAY INTEREST to the 'federal' reserve/oligarchs to finance projects that keep the rest of us employed.

there - does that leave any oxen 'ungored' ?
because we need _all_ the oxes gored.

[lektrode]

Re: Illusion of Recovery – Part I: Print and pray has officially failed - Eric Janszen

1: close ALL the .mil bases on foreign soil (cept those securing vital/strategic traderoutes/resources) and BRING OUR TROOPS HOME
2: nobody gets laid-off - any of them who wants to work gets re-deployed to REBUILD ***OUR*** INFRASTUCTURE
3: 1st project: fix the roads and bridges, build-out a high-speed rail network
4: 2nd project: immed and _massive_ build-out of appx 500 nuclear power stations, as fast as they can krankem out
5: tell the arabs: we have a 'new deal' for you: we will trade 1barrel for 1bushel of corn/wheat whatevahs - or?
you can EAT YOUR OIL
6: levy the FICA tax on _all_ income, every last dollar, from every source, until the socsec acct balances

adding: 7: this (#6) would allow the .gov, aka WE The People to rebuild a capital base, so that WE DONT HAVE TO PAY INTEREST to the 'federal' reserve/oligarchs to finance projects that keep the rest of us employed.

there - does that leave any oxen 'ungored' ?
because we need _all_ the oxes gored.

The transfer payments to the poor, many of them armed veterans, is the "bread" part of the circuses. Seriously, do you want 50 million angry, hungry people rising up against the evil __________ who have held them down all these years? The alternative to transfer payments is civil war.

The fact is, if you really want to take a step back and look at the big picture... we can produce all our country needs now (using oil) with a very small portion of the population actually working. What do you want to do with all the "surplus labor"?

With the organization a functioning government provides, we can at least take the extra labor and build stuff that the rest of us can use and enjoy. Skilled labor may never be this cheap again in the U.S. Interest rates will also never be this low again. If there was ever a time to borrow 10 trillion and make the country a better place to live, now is the time. We even still have oil to burn for the job.

Of course, that is only a short term step. Long term, I think we should focus on decreasing population size in the United States and most problems will work themselves out. I think this can be accomplished by increasing inflation (check) and strict immigration policies. The job problem will work itself out as well with less people and more work (less oil) in the future.

But make no mistake, transfer payments to the poor make the United States a tolerable, dare I say "nice" place to live.