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Originally Posted by WhiskeyYourTheDevils
Four years is a long time - you better believe that once the Euro-zone either gets their act together or kicks the can further down the road, the dollar will come under a ton of pressure from investors. The only reason it has remained strong this long is that it is a relatively low risk buy, compared to other alternatives.
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Why is the euro zone in such a pickle right now? In large part because of austerity programs in places like Greece, Spain and Portugal.
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Originally Posted by WhiskeyYourTheDevils
Isn't that what everyone is suggesting? A mix of spending cuts and tax increases . . sounds like austerity to me.
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Sort of... the Democrats are proposing to increase taxes where they won't dampen the economy - on the wealthy. It's basically the Republicans who are proposing austerity and the Democrats who are trying to get them to see reason.
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Originally Posted by WhiskeyYourTheDevils
Arguably? I'm telling you that right now, we are no where near where we were predicted to be (by top economists, politicians, academics, and policy advisers) based on the amount of money we threw into the system. I know I wasn't told we'd still be at 8% unemployment at the end of 2012. This stimulus was a failure.
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This is absolutely 100 percent incorrect. The economy was contracting by 9 percent and hemorrhaging 800,000 jobs a month in the fourth quarter of 2008 and has been growing and creating jobs ever since the stimulus was enacted. The stimulus was absolutely a success. To suggest it wasn't requires you to willfully ignore the facts.
The experts you cited simply
did not realize the economy was contracting so quickly when Obama took office. Which is why the level of stimulus spending was not sufficient to sustainably jump start the economy.
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Originally Posted by WhiskeyYourTheDevils
Since 2007, spending has increased an average of 6.7% per year compounded. We never returned to pre-stimulus/bailout spending levels. The increases in spending, beginning in 2008, will have resulted in a net cost of nearly $2.5T by the end of the year, even though the actual "stimulus" was less than $1T.
But lets just ignore "stimulus" items for now. Over the last four years, spending on pensions has increased an average 5.7% per year. Spending on Defense increased 5.4% per year. And spending on health care increased over 6% per year. Those are not sustainable levels, and revenues will never be able to keep up with that. The Bush and Obama presidencies have been brutal to our economy. Keynesian policy does not work in reality.
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Again, no one is suggesting that spending isn't too high, so this is a strawman you're laying out here. But if Keynesian policy doesn't work in reality, why has Greece's GDP been shrinking by 25 percent since austerity was implemented, while the U.S. and other economies have been growing? Even the Chinese, Indians and South Koreans implemented Keynesian stimulus policies to maintain their level of GDP growth through the crisis, which worked very well (until their exports started to suffer due to stagnation elsewhere).
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Originally Posted by WhiskeyYourTheDevils
What number are you thinking? How much do you think an individual should be forced to put into a "retirement plan" per year? $7,000 per year should be more than enough. A person who works 40 years making 6 figures would have paid close to $300k into Social Security, money they could have probably invested and turned into closer to $1M. They retire at 62 and probably have about 15 - 20 years left. They receive ~$1500/month in benefits, $18k per year, so probably only get back $250 - $300k if their lucky? I'll take my $7k per year invested at a conservative 5% per year for $845k after 40 years. I'm already taking a net loss of $545k in this case.
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I don't know the exact number. What I know is that Social Security is soluble for decades (or would be if Congress didn't keep raiding the trust fund), and can be made soluble for several more decades by raising the payroll tax cap. The idea you appear to be suggesting - that people should be setting up their retirement by investing in the stock market - is simply not feasible for most people, who know nothing about the stock market. Social Security is one of the most successful government programs ever - it has all but eliminated elderly poverty. Prior to Social Security, elderly poverty in America was something like 80 percent, if I remember correctly. It's baffling why so many people keep advocating privatizing it.
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Originally Posted by WhiskeyYourTheDevils
I'm not talking about the deficit, I am talking about spending levels.
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I know what you're talking about, but I get the impression you're looking at the massive deficits and blaming them exclusively on spending, when revenues are also far below the long-term average as a percentage of GDP.
