Comments on: Was Cheney Right? Do Deficits Matter? http://themoderatevoice.com/26904/was-cheney-right-do-deficits-matter/ An Internet hub with domestic and international news, analysis, original reporting, and popular features from the left, center, indies, centrists, moderates, and right Wed, 30 May 2012 17:49:45 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: Jim_Satterfield http://themoderatevoice.com/26904/was-cheney-right-do-deficits-matter/comment-page-1/#comment-175201 Jim_Satterfield Thu, 05 Mar 2009 03:28:08 +0000 http://themoderatevoice.com/26904/was-cheney-right-do-deficits-matter/#comment-175201 One thing to consider when looking at whether the traditional worries of crowding out are still valid. We currently deal in numbers so large for some financial transactions that they dwarf the U.S. deficit. One of them is the current value of outstanding derivatives. Multiple articles I found place this at over a quadrillion dollars. Other estimates from just a couple of months ago were placing this at $596 trillion to $694 trillion. Assumptions, old models and tradition somehow just seem to be failing to keep up with what the <i>private sector</i> is doing that dwarfs government effects. I question whether or not Mankiw and other conservatives adequately account for those kinds of huge numbers in the private investment market. One thing to consider when looking at whether the traditional worries of crowding out are still valid. We currently deal in numbers so large for some financial transactions that they dwarf the U.S. deficit. One of them is the current value of outstanding derivatives. Multiple articles I found place this at over a quadrillion dollars. Other estimates from just a couple of months ago were placing this at $596 trillion to $694 trillion. Assumptions, old models and tradition somehow just seem to be failing to keep up with what the private sector is doing that dwarfs government effects. I question whether or not Mankiw and other conservatives adequately account for those kinds of huge numbers in the private investment market.

]]> By: greenschemes http://themoderatevoice.com/26904/was-cheney-right-do-deficits-matter/comment-page-1/#comment-175159 greenschemes Wed, 04 Mar 2009 21:51:41 +0000 http://themoderatevoice.com/26904/was-cheney-right-do-deficits-matter/#comment-175159 Let me sum up what he wrote in that report.<br><br>Deficits create a savings shorfall. People and government stop saving when we have budget deficits.<br><br>This translates to a transfer of wealth. Talking point during the last election.<br><br>When there is a transfer of wealth and savings by both private citizens and Government falls off then we end up with a trade deficit. <br><br>More wealth transfer........less savings.....................<br><br>End result................Recession...........or worse.<br><br>Moral of the story........our deficits are eating up our capacity to save banks use savings to lend money. The reason this all transpired. The massive price of gasoline and oil that sucked the wealth out of every country and to the middle east.<br><br>End of story.<br><br>Conclusion............Defictis are bad.......bad.........bad. Let me sum up what he wrote in that report.

Deficits create a savings shorfall. People and government stop saving when we have budget deficits.

This translates to a transfer of wealth. Talking point during the last election.

When there is a transfer of wealth and savings by both private citizens and Government falls off then we end up with a trade deficit.

More wealth transfer……..less savings…………………

End result…………….Recession………..or worse.

Moral of the story……..our deficits are eating up our capacity to save banks use savings to lend money. The reason this all transpired. The massive price of gasoline and oil that sucked the wealth out of every country and to the middle east.

End of story.

Conclusion…………Defictis are bad…….bad………bad.

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