Which American President Cut Taxes For 98.6% Of Working Families?

[hblask 1]

I think that Sheiky will win this bet but for a different reason - money quotes from article that I linked.The raging debate now is when -- not if -- the Fed's massive printing is going to spark a huge round of "inflation" forcing up interest rates. The fears are unfounded.The key to sorting this endgame out is simple: Financial deleveraging constitutes deflation by definition.Household debt via bankruptcies, foreclosures, credit-card defaults, and walk-aways is falling faster than the Fed is "effectively printing." I use that term because the Fed can print all it wants; if the money just sits as excess reserves, the velocity of that money will be zero and it won't affect the economy or prices.Moreover, savings are rising, banks have little impetus to lend, and consumers and businesses are reluctant to borrow.Thus, the most likely result of Ben Bernanke's printing-press operation will be to drag the "job-loss recovery" out for another decade, just as happened in JapanDeleveraging the most leveraged economy in History

All excellent points, and one of the reasons I almost didn't take this bet. When the government goes on a money-printing binge (figuratively) like it has, inflation is the first, most likely result. It can be avoided by destroying the economy, too, but I guess I'm too much of an optimist to believe we'll have a Japanese style lost decade. It wouldn't surprise me, but I'm betting (literally, apparently) on a combination of the two -- double-digit inflation below the levels of third world countries, offset only by the weak economy. I think we'll clear our bad debt much more quickly than the Fed expects, and we'll get back to business.I've seen a lot of predictions of a commercial real-estate meltdown that will make the residential one look like little league, and that could certainly cause enough economic damage to keep inflation in check. But the arguments for the commercial RE meltdown weren't that persuasive to me. It looks like a problem, but not a catastrophic one.

[El Guapo 8]

If Obama gets all the things he wants passed, it will lead to the biggest economic destruction by any administration ever, even worse than FDR's extensions of the Great Depression. Unless Obama seriously cuts spending, but something like 40%, the US will be in double digit inflation within the next 12 months. His time to show fiscal responsibility is running out, and instead he continues to spend like a drunken sailor. And that's just the mid-term effects. The real effects of his wet dreams will be felt by the next generation, the way we are now feeling the effects of SS and Medicare/Medicaid.

There is no way this happens, in this time frame. Right now the fed has done everything to fend of deflation. We cannot lower interest rates anymore. Deflation is a larger spiral, and harder to get out of. The fed has lots of ways to fight inflation. If they stay ahead of it with rate cuts, inflation will be stifled for years.Also to have inflation, people need to have the money, and be willing to spend it on goods. This stimulus package has released less than 1/4 of the funds, it will be spread out over the next couple years. I am personally afraid of 5 - 10 years from now. We will be in deflation for the next 6-18 months.

[Sheiky 0]

Which, going back to an argument me and Henry had a while ago, is why inflation is not just a 2 variable measure of the amount of money in circulation V the amount of goods and services produced. From someone who obviously reads/believes a lot of monetarist ideas (or maybe it just seems that way via your belief in the Austrian school) it's surprising that you've either never come across MV=PQ or chose to ignore it at any rate.

[Sheiky 0]

I think that Sheiky will win this bet but for a different reason - money quotes from article that I linked.The raging debate now is when -- not if -- the Fed's massive printing is going to spark a huge round of "inflation" forcing up interest rates. The fears are unfounded.The key to sorting this endgame out is simple: Financial deleveraging constitutes deflation by definition.Household debt via bankruptcies, foreclosures, credit-card defaults, and walk-aways is falling faster than the Fed is "effectively printing.” I use that term because the Fed can print all it wants; if the money just sits as excess reserves, the velocity of that money will be zero and it won’t affect the economy or prices.Moreover, savings are rising, banks have little impetus to lend, and consumers and businesses are reluctant to borrow.Thus, the most likely result of Ben Bernanke's printing-press operation will be to drag the "job-loss recovery" out for another decade, just as happened in JapanDeleveraging the most leveraged economy in History

I think the article is confusing cause and effect in Japan and reaching the wrong conclusions over the prospects for the US economy. It's a fallacy to link aggressive monetary policy > Japan's lost decade. IMO, every economic situation is different and even though many have simmilarities, you cannot make such board assumptions and generalisations ('Japan became indebted, we're becoming indebted, therefore, we are Japan) because there are so so many other factors to take into account. I think he's confusing cause and effect by proclaiming that aggressive monetary policy caused the situation in Japan. Imo, it didn't. It was a result of the situation, just like cheering at a football match is the result of a touchdown, the touchdown isn't a result of the cheering. Given the situation, I think it's clear that aggressive monetary policy is the correct course of action. Japan entered a deflationary spiral because they were caught in a liquidity trap, not because of overly aggressive monetary policy. Indeed, there are those who believe policy was no aggressive enough and the whole situation could have been averted had they acted more vigorously. When deflation occurs, the real value of debt rises. This was a massive factor in the great depression and I think it's absolutely correct to make sure it is not a factor in creating another one. Anyway, If the fed have to chose between the lesser of two evils (which I think is far from the case), then I think 1990s Japan would be the choice every time.

[akoff 0]

I've always thought referring to refundable tax credits as tax cuts was pretty silly, and from the comments on the article the AMT thing seems to not be that impressive either. I just find it fun to post stuff like this in FCP and see what retarded replies I can get from AKoff and Sal Paradise.

Sorry to let you down, I have been away the last two weeks clearing my head...and screwing up my golf swing. i glanced at your original post and decided it was to dumb to comment on...plus i am relaxed now and not all edgy. I will be catching up on some work for a day or two and then see if I can catch up on the forum. Spent two weeks at the shore speding money like a sailor on shore for the first time in months...things continue just like they always have, poor people and working people suffer the most from Democratic intervention. Lucky for me I am not in that catagory...continue on trolling.BTW how is the Health Care bill doing? sorry little off topic there.