The reason why there will be little growth is because there is so much bad debt in the system that it will be impossible for the economy to grow faster than the amount of interest/writeoffs related to that debt. We have more debt than Japan had — except globally this time — and they still haven't worked through all their bad debt 20 years later. If they are going to stop massive deflation, then they have to issue even more bad debt, which will add even more time with little recovery.

My position on this has been very consistent. My first impressions about Obama back when I really started paying attention in 2006 was that he was going to become President, that he would have a very rational and good idea about how to fix a lot of the country's problems, but that the amount of debt we had would undermine all efforts and that he would be forced to abandon his plans and improvise. Thus, even though I associate with his professed ideology nearly 100% when it comes to how to manage a Post-WWII economy, I strongly disagree with his defense of the current system…as the Post-WWII paradigm has been eclipsed.

Even more to the point it's dangerous because the underlying things that matter are still getting worse in a way where there should be a breaking point again in a few months…and we'll be unable to react.

As for the point about trying it and see if it works: I wasn't advocating that we do try it and see if it works, what I meant was that he has a core set of underlying principles that he seems to be trying to actually implement. Thus, it gives results about his principles. On the other hand, what have the GOP principles since Reagan been? The only area they have been consistent in both word and deed was deregulation…but they didn't push the appropriate monetary or fiscal policy needed to support said deregulation, so it just turned into a massive debt bubble. Clinton had no underlying principle at all, so can't really say anything about what he showed worked or didn't.

The good governance thing is hard to determine. Congress is as dysfunctional as ever and a lot of the opposition ideas are jokes. To me it seems like Obama seems that he has good intentions but then it goes through the grinder of his inner circle then out to Congress then through the press then back and it's nothing like the genesis of it. Whether that's his plan or not I dunno.

I meant to comment on this earlier:
He does want to permanently change the balance but guess what — if it works then it'll work and people should like it, and if it doesn't work (and we limit the amount of corruption, etc) then people can say “well we tried to do it and it didn't work.”
Well, that's all fine and good if you're agnostic on the policies or at least believe there's a possibility that they'll work, but none of the explanations for the rationales behind the policies make any sense to me and then I see the ridiculously rosy predictions that the potential success is based on and I can't see any reason to take a 'wait and see' attitude. Even in normal times, if someone was pushing through programs that I disagreed with, I'm not going to sit back and be quiet until I see how they work out- and somehow I doubt you would if someone was pushing through a radically right wing economic program and you thought that was going to be disastrous.

I don't see any possible way to get around any of this through pro-growth policies. It seems to me that it'll take a combination of massive contraction in government, price deflation and low operating margins.
The first sentence I really don't get (I get that progrowth policies aren't going to miraculously fix things quickly, but I don't see why growth can't be stimulated at all) and the second sentence, again, this is where I see you advocating things that aren't at all what Obama is doing so I don't see why you're expressing support for the current course.

I'd still really like to hear your take on the good governance/ transparency type of stuff. Do you really see anything positive happening in that regard? Even on the decision making process where we were told that Obama would listen to contrary views, it doesn't appear to me that he does anything but pay lip service to that idea at best. He makes people feel that they've been listened to, then he ends up doing what he originally would have done anyway. I say this in regard to domestic economic policy mainly- I do see where he's probably made decisions on military stuff based on what the generals are telling him. Anyway, I'm interested in hearing your take on it.

I meant temporary in the same way that you used it for the tax cuts. If you remember I was always very skeptical of the idea of the stimulus in general and outright opposed the final bill. On the flip side, I said if they wanted to tackle some of these problems, it should be coordinated over the next 10-20 years as a major rebuilding effort that was pitched as anything but temporary. So no, I don't support “temporary” spending at all and Obama's projections about their affect on growth and hence tax receipts are plainly ridiculous.

I'd go even one step further and say that a huge problem with the budget is that each time the people at the top change, they push their pet projects and those get embedded into the budget and then never spoken of again.

The fact of that matter is that it's become clear that even if Obama's vision is right, there is not the economic nor political room to implement it. I'm trying to figure out how to present the post, but the conclusion is that it is very likely that in the next 10 years of the most realistic best case scenario, the US, EU and Japan will suck up every single cent of global economic expansion in debt issuance. Japan may very well be at 250-300% debt:GDP, the US and EU will be 150-200% and emerging economies will have a decade of credit crisis and be completely destroyed.

But the private sector is even in worse shape. In a year or two, once the commercial real estate and next wave of residential defaults happen, the private sector will be eviscerated.

I don't see any possible way to get around any of this through pro-growth policies. It seems to me that it'll take a combination of massive contraction in government, price deflation and low operating margins. I'd say realistically speaking government needs to be cut in half but corporate profits will fall even more than that. The government policies that are in place will need to be pro-efficiency, not pro-growth. That means helping setup alternative energy sources and such — which private industry won't want to do because there won't be much money in it since there will be no profit margins, each increase in efficiency will just drive the price lower instead of profit higher.

This is fundamentally the problem: all the debates are set up in a way that assumes that growth is a given, and it's just how you manage it. There is nothing that's setup for a time where the population is rapidly aging, and the most commonly used natural resources are quickly dwindling in supply. So I'm going to be insane and say that what makes most sense is a pro-contraction policy with massive debt writeoffs — and then in that framework figure out the government/private sector balance.

In your second and third paragraphs, you seem to be making the mistake of assuming that I'm defending the GOPs actions over the last cycle- I'm not. But I DO see this administration doubling down on the spending (regardless of whether or not you call it temporary- which I don't believe- and regardless of whether or not there's been some bipartisan agreement about necessity for some of it, because I don't agree with that.) And I think we're being led over the cliff economically- the policies are so anti-growth that I can't see how we're not going to prolong and deepen the recession or tip it into depression.

As far as Obama's actions matching his words on believing that government can work well, how so, exactly? They posted a website on the recovery but the data's not going to go public till next year now. Biden gives a press conference on how the stimulus spending is going and even the AP reports on misstatements of fact. And have they ever started posting bills online for five days before passage? I haven't heard anything about that lately but when they were ramming huge and important bills through, they said there wasn't time for that (not even time for the legislators themselves to read them.) Can you give examples of where you DO think Obama's improving the way government works, because I just don't see it.

And the part where I said that acting against principle is a feature not a bug applies when the policies are ones that you don't agree with ideologically. I'm not saying that it's good for politicians to say one thing and do another, but when that does happen and it's portrayed as something exceptional, and you know that the people who politically back that person will hold him to the fire for it being an exception rather than the rule, then you aren't as concerned about it getting out of hand as you are when the person enacting that policy actually believes in what he's doing as a general principle (he has no constraint on doing it ad infinitum.)

It's not that I say that it was a feature for Bush to overspend- I didn't mean it in that way or to defend his administration and the previous Congress. What I meant though is that I feel it's why conservative voters didn't take to the streets in protest, although you certainly did hear grumbling and even some of the pundits who normally would be water carriers turned on Bush over things like the Medicare expansion. So people did complain, but again from where I sit, no one felt that Bush wanted to radically shift the public/private balance in the way that Obama seems to desire.

I still don't understand how you can say that acting in line with your ideology is bad, as opposed to contrary to it. Yes, Obama believes the government can be a positive force and is very consistent in that message, and his actual actions reflect that. Again, other than highlighting the shared sacrifice he is pretty good (economically) about that. Is it a “power grab?” Depends what you mean by that. He does want to permanently change the balance but guess what — if it works then it'll work and people should like it, and if it doesn't work (and we limit the amount of corruption, etc) then people can say “well we tried to do it and it didn't work.”

The GOP tactics are WAY more of a naked “power grab” because they rile up people with anti-government messages and say the government can't do anything, but yet they are responsible for 80% of the increases over the last 30 years. The very foundation of conservatism is to be skeptical that any expansion of government power will be temporary or rolled back…I think it's unbelievable that anyone can believe that the tax cuts were supposed to be temporary. Remember “deficits don't matter?”

So the GOP spent out the wazoo, greatly expanded government power, hired terrible people to run things, performed awfully and then say that it's because government can't work because of some magical reason. Is it because government really can't work in those things, or is it because they were incompetent? Who knows! They acted completely contrary to their message.

I really don't see how you can justify your position, especially on a thread where you've been complaining that the focus has been too much on politics and not enough on policy…but then justify the GOP actions by saying that it has a “feature” of all these implicit assumptions and secret triggers and that it was all temporary even though none of that was expressed. If it really was temporary, how come conservatives didn't rally to Obama's side and say “no no, remember, Bush said those were temporary. It's a good thing that the tax cuts are expiring because that was the plan?” Instead they attacked him.

And about Kosovo (I assume you meant Kosovo since Bosnia only saw very light action) that actually did change some liberal opinion. I remember reading a lot of people (and felt this way personally) that if Kosovo — a tiny, well occupied, relatively stable region country — still was having problems, that no way could we think we could nation build in Iraq. I agree that Iraq was more of a liberal pursuit, but again at the time, some people explicitly said so and said the problem was that Bush was being inconsistent. One of the top GOP guys (I forgot who, a Reaganite) said Bush was the worst President he'd seen, because he took the worst Liberal characteristics and the worst Conservative ones, and merged them to be something far worse than even a die hard Liberal.

I don't remember anyone being all that concerned about the debt or the deficit prior to Obama being elected.

Then you were not paying attention.

I find it offensive that the Left has to convince itself, yet again, that the only reason anyone would oppose their Egalitarian desires is due to some combination of ignorance and malice. You and others on the Left talk about being the people of ideas and open exchange, and the Right only being able to demonize their opponents, but I think the pot is calling the kettle black right now.

I define Communism as Marx did in the Communist Manifesto.

So, I have provided my definition. What is your answer? Although, strangely, I would think you would be more inclined to provide YOUR definition, rather than use someone else, but in this case I amusing the 'real' definition, if you will, rather than someone's interpretation, so that should make it easier to reply.

And how can you say ''neither one of those' to the earlier statement? What a complete cop-out! Those are your own words. Please then tell me what exactly it is that CS views with horror and you do not in your statement?

Well, maybe you missed that this was actually the main point I was trying to make- that these problems are so serious that we need to stop focusing on politics 24-7 and start actually discussing the policy.

Sorry I couldn't help you. But I think the media is playing it up more than is the actual case. You know, the Republicans come up with this nonsense and the media jumps on it without checking in with the typical American. Not that the media has ever played anything up…. I think most Americans just roll their eyes at whatever the Republicans come up with next. After all…. what HAVE the Republicans done for Americans lately?

I have been reading this blog since at least January 08, and I don't remember anyone being all that concerned about the debt or the deficit prior to Obama being elected.

Just saying…

Actually, you did imply that the economy was not screwed up before Obama took office. You implied it by not putting Obama's handling of the economy in the larger historical context. You implied it by not acknowledging or indicating you are aware, that Obama's economic policies, to date, have been developed in response to and in an attempt to fix an economic crisis that is, in large part, the result of disastrous policy choices over eight years of the Bush presidency. I am not arguing here that all of Obama's decisions in the first 100 days have been perfect — far from it (although we would probably disagree on where he's gone wrong). This particular argument we're having right now is not about the rightness or wrongness of Obama's policies. We can have that discussion, and I'd love to. But we can't have that discussion if we do not begin with the understanding that Obama is trying as best he can to fix someone else's really, really, really horrifyingly bad economic and political decisions. And we do not have that understanding if you do not indicate that you understand it.

I had no intent of stating that these problems began under Obama (which is why I didn't state that, even though you chose to infer it) but I do believe that his policies are going to be disastrous and have begun making a very bad situation worse.

Whether you had the intent or not, that is the impression you created. And I'm sorry, Christine, but the fact of not stating that these problems began under Obama does not absolve you of responsibility for implying that these problems began under Obama by precisely that fact that you did not mention the previous administration at all.

So, since the deal that I offered is off the table as you are apparently unable to read my comments without inferring things that are not correct about my opinions, how does it feel to be on the recieving end as I judge you to be a blind partisan or syncophant since you haven't mentioned whether or not you've reasoned through the Obama economic plans to determine if they make sense or not?

Well, and not meaning to sound too cute by half here, but I don't have a strong feeling one way or the other about that — and that's mostly because you are so straightforward about telling me that you are calling me a blind partisan or a sycophant so I might think about how it feels. When you tip your hand like that, I know you're only calling me those names because you want to ask me how it feels, and so I feel neither angry nor pleased.

There are certain areas of the country where “socialism” (and whatever derivative of that) is used to scare people. I think the South, for instance, is strongly opposed to “socialism” because for them it means welfare and supporting the poor African Americans…. Which of course plays into race fears that blacks are lazy, worthless and are leeches on society. Then for other people there are ties of socialism to communism which play on other fears.

When people hear “socialist” their fears (whether race related or communist Soviet Union or whatever) start to bubble up. It's essentially two people hearing the same statement made by someone and interpreting it in two different ways.

Americans want their government to protect them. Not just from threats externally, but from threats internally, too. And one of those threats is financial instability. Americans have come to expect some sort of safety net if they fall on hard times. And of course there's social security which helps people with their finances in retirement.

The majority of the American people don't trust Republicans on domestic issues (according to all the pundits during the election season) and when the Republicans' solution to an issue is to attack someone else and sit around the campfire coming up with a new name to call them, even more Americans are going to run from the bullies known as Republicans. CAn you imagine where we'd be if the Bush administration had gotten its way with privatizing social security? The stock market would have gone up more, but it probably would have crashed even harder as millions of Americans sold their stocks, hoping to get something back…. and the Republicans call to nationalize businesses (which would have wiped out all the shareholders) would have wiped out the savings of millions of (more) people.

You can call Republicans whatever you want, including “Republic Nazi Party”. However at this point I think the best and scariest term to use for a Republican is simply “Republican”. Last year all the kids wore scary Halloween masks of Bush… This year if the kids want to be frightening they can just wear a sign that says, “Republican”.

Neither one of those. I did not say, nor do I agree, that the U.S. is becoming a more democratic socialist state. Almost all functioning economies are mixed economies of some sort or another, with the extremes on either end being communism and fascism.

The economies and governments of countries like Norway, Denmark, Sweden, France, Germany, and most of the other Western European countries can accurately be called democratic socialist. The U.S.? Nowhere near. There is no evidence that Obama wants to turn the U.S. into Sweden, nor could he even if he did want to, and especially nor could he do so in 100 days for freakin' god's sake. A little common sense would help here.

If you believe that democratic socialist countries are totalitarian hellholes, thus by extension believing that Norwegians, Danes, Swedes, the French, Germans, Spaniards, Italians, etc., etc. all are living in hell on earth, then you go, guy. Believe what you believe. Go for it. I, however, do not believe that. Are countries like Denmark, France, Germany, and on our side of the ocean, Canada, better to live in than the United States? In some ways, I think they are. In other ways, not as much. I do, however, think that Americans can learn and benefit from some of the economic and social features of Western European-style democratic socialism. Nor do I understand why some people are so, so, incredibly terrified of the word “socialism” or “democratic socialism.” There's nothing to be scared of. To the extent democratic socialism works for us as a nation, we will hopefully have the wisdom to go in that direction. To the extent it doesn't, we won't. What are you scared of? I am far more scared of the ways in which constitutional protections and freedoms were compromised by the previous administration — and in ways that will be very hard to undo — than I am by the thought that someday, there will be no such thing as women and men with otherwise treatable forms of cancer dying because they don't have health insurance and the only hospital anywhere near them that provides low-cost or no-cost care for people without health insurance has to shut down that program for lack of funding. Somehow, the idea that no one has to die of cancer because they don't have health insurance does not upset me, even if I do have to pay higher taxes.

Furthermore, I have to wonder if you are not deep down inside a true believer in full collectivism for the common good (or to call it by its rightful name, Communism).

Before I can answer that question, AustinRoth, you will have to tell me how you define Communism. Do you define it as Stalin did, or do you define it as J. Edgar Hoover and Bull Connor and George Wallace did?

What I said is that I do not regard the idea of a democratic socialist state with horror.

I think Obama's politics are heads and shoulders above Bush in nearly every way (with a few exceptions). I saw this thread more about politics rather than policies, it's a lot more iffy if all his policies are…and that's what you keep bringing up when other people are talking about politics.

I highlighted the phrase in this paragraph which shows why you are unable to read my comments without reading your own interpretations into other parts of my thinking. What you are stating there is what you inferred, not what I implied. I had no intent of stating that these problems began under Obama (which is why I didn't state that, even though you chose to infer it) but I do believe that his policies are going to be disastrous and have begun making a very bad situation worse. What's more important though, is that even if other people don't believe that, I would like to have actual discussions about the topics instead of people deflecting all attention from the worsening situation in order to avoid having to look at this administration with even a modicum of critical reasoning. If there are logical reasons to support the current policies, I'm open to being persuaded, but the lack of any discussion at all would suggest to me (if I were to attempt mindreading as you do) that most people have no clue as to whether or not these policies could work and they're completely going on blind faith.

So, since the deal that I offered is off the table as you are apparently unable to read my comments without inferring things that are not correct about my opinions, how does it feel to be on the recieving end as I judge you to be a blind partisan or syncophant since you haven't mentioned whether or not you've reasoned through the Obama economic plans to determine if they make sense or not?