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Blackvegetable

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Antifa
Vegas » 14 Jan 2022, 6:12 pm » wrote: Are you pissed because he knows more than you about economics?
Help him with the distinction between "Real" and "Nominal"



 

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Blackvegetable

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LibDave » 14 Jan 2022, 4:51 pm » wrote: Okay, lets try this AGAIN!

Your numbers do not match my numbers. My data comes from 2 sources, both of which agree but are presented differently. My 1st source is FRED.gov (Federal Reserve Economic Data). 2nd source is BLS.gov (Bureau of Labor and Statistics). So first lets figure out why our data differs now that you've finally been so kind as to provide your own data.

Where did you get your numbers?
I provided you the link.


There are 2 sources for the Federal Budget Deficit.


OMB and CBO.


Nod.
 

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Blackvegetable

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LibDave » 14 Jan 2022, 6:24 pm » wrote: 2. The government's fiscal year goes from October to October, whereas the balance sheet data is normally for January 1. Furthermore, the budget for a fiscal year is decided prior to October 1 (normally) and continues in effect through October well into a POTUS' first year in office (normally). However, there have been exceptions. Obviously this means on transition years one must attempt to figure out what portion of that deficit is attributable to which POTUS or Congress. So using 1993, 2001, 2009, and 2017 is problematic and a HORRIBLE manner (the worst) to assess the level of deficit attributed to the POTUS leaving office over his entire term in office. Obviously, even taking an average of every year they were in office would be better. Critical thinking would require adjusting their first and last years INTELLIGENTLY to determine that portion actually attributable to them, then doing an average. For instance in Clinton's case on his 2nd day in office he passed tax increases for the PREVIOUS year! People who had already filed at the first of the year had to redo their taxes!!!! It was referred to as a retroactive tax increase. They also increased spending prior to October of his first year in office (BY A LOT!!!) since the Dems had control of the HoR, Senate, and POTUS. There was no impasse so they didn't have to use the CR passed without Bush's approval any longer. This must be taken into account in order to assess the true tendency of a POTUS or Congress to deficit spend.

3. (cont'd).
Stop, braindead ****.

The deficit is determined as of Sept. 30 every year, to coincide with the US fiscal calendar.



 

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Ike Bana

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Liberalsarescum » 13 Jan 2022, 3:28 pm » wrote: More then likely as economy's go up and down all the time but with the current conditions I can see it occurring  again . I have seen it go up and down from the 70s
Yep, up and down, just like Trump's little pecker every time a pornstar or a 12 year old wanders aimlessly into the room.
 

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Ike Bana

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Any of you economic geniuses ready to take a stab at telling the rest of us exactly what this crash is gonna look like. What the underlying and obvious precipitating factors are gonna be? Or are we just musing about another stock market correction?
 
Last edited by Ike Bana on 14 Jan 2022, 7:50 pm, edited 1 time in total.

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StrictlyCashNCarry

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Wow, another insult.  You showed him!

:rolleyes:  
 

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Ike Bana

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StrictlyCashNCarry » 14 Jan 2022, 7:49 pm » wrote: Wow, another insult.  You showed him!

 
Yeh...like the alt-right **** hereabouts never pitch around any insults, or racial and homophobic slurs.
 

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StrictlyCashNCarry

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IkeBana » 14 Jan 2022, 7:53 pm » wrote: Yeh...like the alt-right **** hereabouts never pitch around any insults, or racial and homophobic slurs.
"homophobic"  lol  

no such thing
:rolleyes:  

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Vegas

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Giant Slayer
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Blackvegetable » 14 Jan 2022, 6:26 pm » wrote: Help him with the distinction between "Real" and "Nominal"

He seems to know it just fine. You are asking deflecting questions as always. 

Prove that you aren't. 

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LibDave

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Blackvegetable » 14 Jan 2022, 6:28 pm » wrote: I provided you the link.

There are 2 sources for the Federal Budget Deficit.

OMB and CBO.

Nod.
Yes, once you gave me your numbers I was able to find what numbers you were wanting us to look at.  Still the analysis remains correct.  You can't just take their last year in office and say "this is representative of this president's deficit".  Even taking a mid-term year as the example would be better.  Best is to determine what deficit they were responsible for and what deficit the party in Congress is responsible for (or give some credit or blame to both the sitting POTUS and the Party in charge in Congress).  This should be done for the deficit each contributed for each year in office.

If you would like I can do just that for the span you listed and determine the average deficit for each POTUS and Congress.  Of course I can give my reasoning for any adjustments from the straight up numbers on record for the nation as a whole due to Congress and the POTUS.
 

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Blackvegetable

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LibDave » 14 Jan 2022, 8:03 pm » wrote: Yes, once you gave me your numbers I was able to find what numbers you were wanting us to look at.  Still the analysis remains correct.  You can't just take their last year in office and say "this is representative of this president's deficit".  Even taking a mid-term year as the example would be better.  Best is to determine what deficit they were responsible for and what deficit the party in Congress is responsible for (or give some credit or blame to both the sitting POTUS and the Party in charge in Congress).  This should be done for the deficit each contributed for each year in office.

If you would like I can do just that for the span you listed and determine the average deficit for each POTUS and Congress.  Of course I can give my reasoning for any adjustments from the straight up numbers on record for the nation as a whole due to Congress and the POTUS.
You can't just take their last year in office and say "this is representative of this president's deficit"
remember the original condition.


Focus.

 

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Blackvegetable

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Vegas » 14 Jan 2022, 8:01 pm » wrote: He seems to know it just fine. You are asking deflecting questions as always. 

Prove that you aren't.
He's never posted it.



 

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Blackvegetable

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StrictlyCashNCarry » 14 Jan 2022, 7:49 pm » wrote: Wow, another insult.  You showed him!

Image

I'm direct.

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LibDave

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3. A particular case of significant influence with regards to your "technique" was the use of 2001 data. Off-hand one can see George W. Bush consistently ran deficits of about $500 Billion on average:

133 + 421 + 555 + 596 + 554 + 574 + 501 + 1017 = 4351

Looking at the first and last elements we see a marked difference on both sides. The first year was mostly the result of whatever came before Bush in the October 2000 Congress for the first 9 months of his term. Additionally 9/11 occurred during the last 4 months of his first year. I don't have the time to figure out how much each contributed. But I would surmise that Clinton's time likely was 3/4 responsible and then 9/11 should be accounted for as not due to Bush's deficit tendencies. In such cases without a deeper dive it suffices to just "punt" this data element as unreliably representative and difficult to determine. Removal of the 1st years data likely won't affect the reality much. We can just assume years 2 through 8 will give us a good estimate of his deficit tendencies.

From news accounts of the day during this first year (not including the SS Trust Fund money) there was a decrease in the surplus. The surplus went from +237 to +126. The news accounts I found indicated this was due to an additional +200 Billion in emergency funds spent in the month following 9/11 to "combat the threat of terrorism". So without that his surplus would have been +$337B. Instead his surplus was $101 Billion less than the prior year. Also we aren't counting the contributions of SS Trust Fund since we are attempting to determine Bush's propensity for deficit spending. All in all I would therefore estimate his first year Bush related deficit at around +237 -133 + 101 ~ $205B. This includes 200 billion for the War on Terror. So this would mean his first year his debt increased by +5Billion excluding WOT and $205 if you charge Bush for the WOT money. I wouldn't be averse to just removing the 1st year entirely as I see it as somewhat of a hybrid combined with an anomaly. Hard to separate out. It is best to use a 7 year average as a result. A $5B deficit would help his numbers appreciably but I think using the other 7 years is fair.
 
Last edited by LibDave on 15 Jan 2022, 12:31 am, edited 1 time in total.

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LibDave

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Proceeding to his last year data there seems to be a conspicuous rise in his deficit average. During the 6 years of 2002 through 2007 he averaged right around $500B or so. Then suddenly a jump to $1T. From the record we remember this number includes a $768B loan for the financial industry. This loan was put ON THE BOOKS in 2008 giving an unrealistic deficit. These loans were paid back in their entirety in 2009. So these loans were taken OFF THE BOOKS during Obama's 1st year deficit. This results in a MUCH CLEARER PICTURE of the change in deficit spending from Bush to Obama. Essentially this last number for Bush should rightfully be 1017 - 768 = $249B. Adjusting for this for Obama's numbers you get for Obama's first year a whopping 1885 + 768 = $2.66T. But of course this too wasn't necessarily entirely his budget through Sept. And he was dealing with a chaos in the financial markets. The Bush loans were never intended to solve the problem. They were intended to give the next president time to figure out what to do.

Bottom line is, we should probably throw out 2009 altogether because it is likely beyond anyone but GOD to sort out who should be credited with what in regards to this period of deficit spending. And even if one could do this, I wouldn't consider it representative of Obama either as dealing with the financial crisis I'm sure took center stage to any consideration of short term deficit spending. So I would give Obama a pass on this first year number. After all it doesn't seem to represent his remaining year deficits. So I would punt the $2.66T deficit as an anomaly.

Additionally there were an average of $111B/year in expenditures for the WOT. I won't bother giving Bush or Obama a break on this. But one could argue both Bush and Obama have this omitted. This is traditionally the norm during times of war. After all we don't want to chastise presidents for defensive expenditures DURING A WAR. But I won't belabor this point and not adjust their numbers in this regard.

What we are left with is:

Bush 421 + 555 + 596 + 554 + 574 + 501 = $3.201T over 6 years this is $533.5B/year.
Obama $1.65T + $1.23T + $1.27T + $0.672T + $1.88T + $0.327T + $1.42T = $8.452T Over 7 years this averages $1.21T/year.
 
 
Last edited by LibDave on 14 Jan 2022, 10:04 pm, edited 2 times in total.

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LibDave

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By the way, Obama's numbers appear erratic at elements 4 & 5 due to the sequestration and government shutdown. Government workers were sent home then reimbursed in the following years expenditures. So elements 3 and 4 (e.g. 0.672T & 1.88T) should be averaged. For our purposes it doesn't affect the final calculation. Elements 6 & 7 are likewise odd-looking due to debt ceiling crisis and government shutdown shifting expenditures into the later year.

Bottom line, Bush deficits were around $534 Billion/year while Obama more than doubled that at $1.21T. Which of course everyone expected would be the case since Obama never even pretended to be a deficit Hawk while W. Bush at least pretended.

Both Bush and Obama should be given some credit for $111B/year for the WOT (I didn't extend them this courtesy). One also should probably assess what was due to the POTUS and what was due to Congress. Bush passed an initial Budget agreement. Then Congress took control and from there on out the government was mostly funded with CR's. But that means the CR's repeated his initial budget. So I would still give him shared credit and blame.

Obama likewise had unprecedented control of BOTH houses of Congress initially. So he got EVERYTHING he wanted initially. After 2010 just like Bush the Republicans were able to control at least 1 house of Congress and it went the CR route basically. But like Bush it was his budget which was continued.

As one can see it isn't quite so simple a task to just spout out, "2001 Clinton, 2009 Bush, 2017 Obama". Lots of groups other than the POTUS have a say and they all have their own interests and people paying them off.

Clinton got an extra year with retroactive tax increases & expenditures.  During his last 6 years he had Literally ZERO influence on the government expenditures. For all intents and purposes Clinton was castrated his last 6 years in theory. It must have been in theory when one considers all the skirts he was foisting himself upon. Any honest investigation will result in the Republican Congress and the Contract with America as being responsible for the return to sane government fiscal policy. But I'll leave that for others to calculate.  To see what transpired during these last 6 years read G. Stephanopoulos' inside account of the Clinton years. 

I hope this gives you a better idea of what it means to do critical thinking and overcome confirmation bias. Put any hopes and expectations you have for a desired outcome aside and seriously examine what exists in the data before you. Examine all the influences encountered evenly. Only then make a conclusion as to the reality. Often if you don't feel you can blindly apply without bias then do several calculations with the differing variables and you will end up with a spread of plausible assessments. Anyone within that spread just indicates they had a different take on things which might not be the same but within the realm of honest judgement.

 
 

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LibDave

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This wasn't even an exhaustive deep-dive. Any serious critical thinking on the subject would have to include emergency FEMA expenditures for Hurricanes and other such things. Should at least LOOK at theses to determine whether a POTUS' tendency should be adjusted. And I haven't really gone in depth into each passed budget to determine how it was influenced by whatever party in Congress and the particular POTUS in office. Except to say, clearly Clinton had ZERO input into the balanced budget. Stephanopoulos is a conclusive read in this regard (VERY GOOD accounting of the Clinton years from an insider). This is what I was expecting and anticipating you were in the process of presenting. It made little sense for me to present it for you not knowing what accounting technique and data you were using and not being able to read your mind as to what your assessment even was. Without you expressing your analysis I didn't know if you were blaming Bush or Obama for 2009, etc. You just said, "Post my data, you can't do it. I challenge you." I was thinking, "Post my (meaning your) data? Okay BV wins I can't read minds". In the future do your own critical thinking if you're able and have the time. I asked nicely and patiently waited for you to do so. In response I was met with nonsensical and unwarranted vitriole for not being able to read your unstated positions and thoughts.
 
 

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LibDave

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I didn't touch on and apparently neither did you the payments on the debt. As the debt grows future Presidents must pay more to finance the debt. Essentially the earlier deficit spending is partly passed on to later presidents and influences their ability to have lower deficits. This isn't such a big deal with low debt/GDP ratios in which the increase in the earlier POTUS' debt is in line with increases in GDP. For instance if DEBT/GDP remains constant the penalties to the later POTUS are minimal. However, Obama took the DEBT/GDP from 62% to over 110%!!!

I also didn't address the manner in which the debt is financed. A 30 year treasury note will NORMALLY pay a much higher yield. This is because increases in inflation present a higher risk to a long term lender. Lenders actually lose buying power if the yield ends up being lower than the realized inflation rate. It is much harder to predict inflation 30 years out so lenders (e.g. bond purchasers) need to get a higher yield in case a later government is particularly irresponsible. Long term Treasuries carry additional advantages for the government so the Treasury would prefer to issue long term bonds and is normally willing to offer a higher yield as an incentive. The reason being if the government has to rollover the entirety of its debt every 2 years (as an example) then if inflation rates rise suddenly it can literally bankrupt the nation when they go to issue new Treasuries in an effort to rollover the debt and the terms are no longer as favorable. With 30T in debts even a 3.3% rise in yields represents additional government outlays of $1T/year. This comes right off the top and must either be made up for with additional taxes (not much more room they can go and it doesn't get them more wealth - Laffer curve and M.E.) or printed. This is in fact the nightmare hyperinflation scenario.

Due to increased spending under Obama purchasers of Bonds became uneasy about the future inflationary prospects. As yields began to increase Obama's Treasury Secretary began issuing shorter term bonds (They couldn't even sell 30-year and 10-year bonds to the private sector). So they started refinancing the maturing long term debt with shorter term bonds. While these 6-month, 2-year, and 5-year bonds were cheaper, they also leave us more vulnerable to short term rises in inflation. Very scary. So while this doesn't come into our calculation much at all, it is something to consider as to whether this is something the analyst condones or not. Trump began reversing this and attempted to extend the bond terms. But much of our debt remains short term. This is another reason the Fed is currently not able to use the Prime Interest rate tool to help curb inflation. Doing so might be as bad as the hyperinflation and would have a much sooner onset. In the long run just about anything is better than hyperinflation though.
Last edited by LibDave on 14 Jan 2022, 11:48 pm, edited 2 times in total.

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LibDave

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While on the subject, the government would prefer to sell Treasury bonds to American Taxpayers. This is often a source of confusion to people.  If the government prints a Treasury bond and sells it to your momma she gets an IOU from the US government to reimburse her in say 30-years the cost of the bond plus some extra for her troubles. So she takes $ bills out of her account and transfers them to the government. So how much has the money supply been increased? The answer is not a dime. Money already in the economy was just moved from momma to Uncle Sam. So the deficit spending of the Congress doesn't result in more dollars in the economy (and therefore no affect on inflation) until 30 years has elapsed. Let the Congress 30 years out worry about the extra inflation.

Sort of the same thing occurs when China buys our debt. It results in trade deficits as China no longer has the dollars to go back into circulation buying our goods. Essentially they send us tons of "stuff" like TV's and Computers and Massage Parlor Hookers and we send them boat loads of paper Treasuries. China does this because just as when momma buys them, there is no increase in the money in circulation.  China just finances the over spending by Congress.  This keeps inflation down and allows China to continue to flood our markets with cheaper consumer goods.  It allows the trade imbalance to persist to the benefit of our consumers but at a cost in jobs to our workers.  So essentially our congressman would rather bribe us with "free stuff" which isn't really free because many don't correctly identify the culprit when they lose there jobs, or get their wages competed down, and when inflation tears us a new arse hole.  So strategically it is better to have momma purchase the Treasuries.  When it gets paid back it stays within the country rather than going abroad where it can affect our stance in the world. Sort of like owing a family member isn't as risky as borrowing from the bully across the street leering at your sister.  This is why you will sometimes see it listed as domestic and foreign debt. Foreign debt is often used as a "reserve currency" for foreign currency stabilization. Interesting huh. hmmmm????
 
Last edited by LibDave on 15 Jan 2022, 12:51 am, edited 1 time in total.

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LibDave

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But if the Treasuries aren't sold then the Government sells them to the Federal Reserve. The Federal Reserve then prints the bills we know as dollar bills (in reality they just add numbers to the US Governments account at the Federal Reserve bank). If someone wants actual dollars for the numbers in their account the FR always insures the banks have a ready supply of actual hard currency. The FR will print more at a moments notice if a bank gets low due to increased withdrawals into hard currency. Note however if the Treasuries are sold to the FR then this is what we often refer to when we say the government is PRINTING MONEY. Even though most isn't printed, just entered into a computer ledger, it has the same affect as printing and will result in inflation.  When you see a headline stating the FR is buying up Treasury Bonds this is "PRINTING MONEY".

So why would the Treasury sell them to the FR (the "FR is the buyer of last resort"). Perhaps because investors don't like the yields because they anticipate higher inflation. And perhaps the Treasury doesn't agree and refuses to pay so much for the loan. No different than when we look for a loan to buy a house. If the interest is too high we decide not to borrow. Treasury is no different. Why wouldn't the FR just raise the rates? That is in fact what they should do to lower inflation (one of their tools). Well in the current state of affairs they can't without bankrupting the government with increased interest on the debt. Especially if much of the debt is short term and will soon have to deal with the contemporary state of the bond market. So I was definitely concerned and didn't support Obama's move to shorter term debt. I would have preferred they just stop overspending. But that was a pipe dream.

Currently the Prime Interest Rate is artificially at 0 to help lower the load due to interest on the debt.  This precludes the Fed from using this a weapon to fight inflation.  The federal reserve ratio is also at infinity (there is none).  Essentially this means the banks no longer have to have ANYTHING (deposits) backing up the loans they make.  You may hear a reference to QE2 (Quantitative Easing) which describes this FR policy of no deposits backing the loans.  If a bank thinks they can make a buck on a loan they just add the numbers to the borrowers account and essentially the money supply is increased at will.  This can result in very reckless lending practices by banks since it costs them nothing up front to roll the dice.  It can potentially drive inflation hard and get out of control quick.  Normally the RESERVE RATIO is like 10 or something.  Meaning for every 10 dollars they loan out they must have a deposit in an account of at least 1 dollar.  RR of 50 means they can lend $100 out when you place another 2$ into your account (even that seems risky).  But no ratio AT ALL!!!????  

 
 

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