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Galbraith: The danger posed by the deficit ‘is zero’

Discussion in 'Political Discussion' started by Real World, May 13, 2010.

  1. Real World

    Real World Moderator Staff Member

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    :wha: :ugh:

    Galbraith: The danger posed by the deficit ‘is zero’

    James Galbraith is an economist and the Lloyd M. Bentsen Jr. chair in government and business relations at the University of Texas at Austin. He's also a skeptic of the prevailing concern over America's long-term deficit. With many people now comparing America's fiscal condition to Greece, I spoke with Galbraith to get the other side of the argument. An edited transcript of our conversation follows.

    EK: You think the danger posed by the long-term deficit is overstated by most economists and economic commentators.

    JG: No, I think the danger is zero. It's not overstated. It's completely misstated.

    EK: Why?



    Read his reasoning here:


    Ezra Klein - Galbraith: The danger posed by the deficit ?is zero?
  2. khayos

    khayos Rookie

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    Well, if anyone tries to hold us to repay our debts, we'll just nuke 'em
  3. PatriotsReign

    PatriotsReign On the Roster

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    His explanation is easily explained by the fact that Galbraith is a huge believer of Keynsian economic theory which states that gov't should "spend, spend, spend" during recessions.

    For him to say there is any threat would go against the fundamentals of his work and that of his peers.

    Ask the same question to a conservative economists. I GUARANTEE you they will not say "there is zero threat"...because the fact is, Europe is proving exactly the opposite of what Galbraith is saying.
  4. Real World

    Real World Moderator Staff Member

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    I agree with, and understand his point about Greece being different, since it no longer has a sovereign currency to manipulate. His notion that country's with their own currency can run up debts more freely, or safely, is correct. However, the notion that there is "zero" danger, is outright laughable. If that principle were sound, then the US could tell everyone to stay home, or not pay taxes, as the fed could simply print all the money it needs. Furthermore, the interest on the debt is paid annually. Therefore that money has to come from taxpayers. I just found his logic absolutely mind-boggling. If gubmit spending exessive, or unmitigated amounts of cash were without recourse, then why not print money to the point of bailing out anyone and everyone? Am I missing something here?
  5. PatriotsReign

    PatriotsReign On the Roster

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    No, nothing at all. But he would NEVER want to dis the current administration AND he actually believes unmitigated spending is the right thing to do!

    But then again, keep in mind that Galbraith had no idea we were headed for disaster back in 2006. :rolleyes:
    Last edited: May 13, 2010
  6. khayos

    khayos Rookie

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    His theory completely exempts borrowing from foreign governments. If the debt and the bonds were applied soley to US citizens, I can see a fringe reasonability -- it'd also be total isolationalism.
  7. sdaniels7114

    sdaniels7114 Rookie

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    Think of how sweet your life would be if the interest rate on your mortgage was 1%

    Think of how sweet your life would be if every time you paid on your BoA Visa card you could turn around and 'tax' BoA for like 30% of that payment.

    The government collects money from employed people and gives it to unemployed people and then taxes some of it back from the unemployed.

    The government gets 18.4 cents for every gallon of gas you buy and then it and only it decides if its gonna spend the money on road repair.

    And in a pinch the government can just whistle up a few billion by turning on the printing presses for a while, of course excessive use of that leads to a bad place, but still getting to print money anytime you want?

    I don't agree with this guy who says there are no limits at all, but thinking of the government's finances as just a larger version of a person's doesn't get you anywhere.
  8. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    Actually, it's too early to tell, but Europe was struggling royally until it announced a $1 trillion rescue package and the markets started soaring. Thus, at least at this moment it appears that deficits are helpful. Europe was actually for more than a year far more conservative than the U.S., and that did them no good, so I'm not sure what you're talking about.
  9. PatsFanInVa

    PatsFanInVa PatsFans.com Supporter PatsFans.com Supporter

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    That's okay Patters. He doesn't know either :)
  10. PatriotsReign

    PatriotsReign On the Roster

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    HUH????:confused:

    Can you be more specific please Patters?

    First, you say Europe was struggling before the rescue package (last week) and then you wrote "and the markets are soaring"? Hello? So, then you believe Europe is now fine & dandy and everything's "back on track"?

    Are you serious with this analysis? I'll tell you straight up that it make absolutely no sense whatsoever.

    Patters Reasoning/Conclusion: Europe and markets are crashing due to soaring deficits. Massive Bailout approved, markets come back...DEFICITS ARE GOOD.

    Care to try again?
  11. Mrs.PatsFanInVa

    Mrs.PatsFanInVa PatsFans.com Supporter PatsFans.com Supporter

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    #24 Jersey

    Don't even bother, Patters.

    PR attended that school of "nothing much matters and so what if it did."

    Doesn't matter what he tells you "straight up," "upside down," or "inside out." He's got nothing to back up his assertations and he's got nothing to contradict yours.

    Ya know how I know? Coz he says so......repeatedly.

  12. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

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    Wonderful we just have a bailout and rpint money and everything will be wonderful, perhaps we can ask the goverment to print enough money so we all become billionaires we won't have to work and can love happily ever after.......pass the pixie dust please....
  13. khayos

    khayos Rookie

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    What's the point of this post? To devalue another poster?
  14. PatriotsReign

    PatriotsReign On the Roster

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    AWS kyayos...ever heard of it?

    Stands for Angry Woman's Syndrome....MrsP has issues with me. But I'll admit, I like the attention.

    Although I've told her repeatedly that I have her on "Ignore", I guess she INSISTS upon commenting on my posts regardless of the fact I can't even see what she posts....so go figure.:bricks:

    I haven't commented upon one of her posts in a month (since I placed her on ignore). Yet she'll constantly comment upon my posts as soon as she sees one...
    Last edited: May 14, 2010
  15. Mrs.PatsFanInVa

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    #24 Jersey

    My, my, my....what a selective reader you are, khayos.

    Let me help you out some - broaden your horizons, so to speak.


    PR has told us all repeatedly that the truth doesn't matter, no one wins, no one cares, and it's all just opinion, anyhow, so why bother? If you'll notice, I even included his post where he says so.

    I was merely trying to save Patters some time. What's the sense in arguing with someone who not only thinks, but states, that truth is unimportant and facts don't matter?

    And for a dude that claims to have me on "ignore" he sure spends an enormous amount of time responding to things I've said or heaping that phony sounding praise of his on people who he thinks might be flattered into becoming his allies in this "unimportant" debate he says doesn't exist.

    Maybe he keeps harping on the OCD thing he pulled outa his butt for obsessive reasons of his own?
    Last edited: May 14, 2010
  16. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    So our last three Republican Presidents were Keynesians (all three - yes, including Reagan -increased the size and spending of the government) and Bill Clinton was the actual fiscal conservative?
  17. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    The key phrase in your post is "at least at this moment". Yes, if one is living only for the moment, then what Europe did last week is a success.

    Throwing sugar at a kid gets him a sugar high for a few moments, then there's a crash.

    Same thing with throwing money at a situation without simultaneous austerity measures and higher taxes. Same thing with willy-nilly tax cuts without austerity measures.

    In this way (not all ways) economics IS like physics. You can't naturally changed the laws of gravity.

    What Europe did last week will come back to bite them big time.

    In the meantime, we better raise the age for social security for folks who are currently under 50 and who have time to adjust their expectations. I'm 45 and if the gov't raised the early soc sec age for me from 62 to 65, and the normal ret age (NRA) from 67 and 2 months to 72, then I would agree with it totally. In the meantime, LOWER the ss tax from 6.2% to 3% and make it a tax on all (not just under $106,800 workers' incomes). This would be a boon for employers (who pay the other half of FICA) and reward WORKING people. The trust fund babies can easily deal with the extra 3%, although I'm positive the whining would be operatic.
    Last edited: May 14, 2010
  18. PatriotsReign

    PatriotsReign On the Roster

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    This isn't a "Liberal vs. Conservative" discussion as far as who is/was liberal or conservative. It's about whether or not deficits are dangerous.
  19. Mrs.PatsFanInVa

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    #24 Jersey

    Once again.....in case we didn't believe it when he said it, PR shows us that the truth really doesn't matter - at least not to him, anyhow....and he doesn't seem to care how many of you he sucks in - as long as he can make you look like you're as big a fool as he is.

    And make no mistake, someone who blatantly lies - and leaves a paper trail no less - is a fool - and those who continue to believe whatever he says - even after it's pointed out to them that he's got a real problem with truth telling - are even bigger fools for letting him continue to hoodwink them.

    From 4/29/2010

    New England Patriots Forums - PatsFans.com Patriots Fan Messageboard

    From 05/04/2010

    http://www.patsfans.com/new-england...igal-aliens-protesting-page2.html#post1814178

    Someone's got a HUGE problem here, and it isn't me......and his uncreative, garden-variety, childish-brand lying-when-you-know-you'll-get-caught bravado is the very least of it.
    Last edited: May 14, 2010
  20. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey


    I firmly believe out of control deficits and debt are dangerous.

    The only President in the last half 50 years who actually did something about it was Bill Clinton.

    So far, Obama is off to a bad start in that regard, but he did have to conduct triage on a badly wounded patient. Somehow, people have forgotten the manure sandwich of an economy he was handed on day one.

    The proof in the pudding will be whether or not he PIVOTS to being a deficit cutter now that the economy seems to have stabilized.

    That is what I'm watching and what I'll be judging him on in the long run.
    Last edited: May 14, 2010

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