Greenspan warns about deficit

Discussion in 'Politics, Religion, Social Issues' started by Ugg, Nov 19, 2004.

  1. Ugg macrumors 68000

    Ugg

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    #1


    In other words, gw's first act out of the gate must be a serious effort to reduce the deficit. Without that effort, there will be less foreign investment and interest rates will skyrocket.

    Bloomberg article
     
  2. IJ Reilly macrumors P6

    IJ Reilly

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    #2
    Decoding Greenspan's characteristically cryptic remarks, we're hurtling headlong into the deep poop. Perhaps now that the Guru of Greebacks has made his opinion known, we will at least hear fewer Pollyanna remarks from Republicans about how deficits don't really matter and it's all going to work out fine in the end.
     
  3. miloblithe macrumors 68020

    miloblithe

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    #3
    I guess now's the time in my life to go start earning Pounds, or Euros.
     
  4. Xtremehkr macrumors 68000

    Xtremehkr

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    #4
    Claim vs. Fact

    Link

    Though they have backed off on this lately.

    What can I say, the President is a liar.

    Again, he's lying.

    George, I thought you are a religious man, do you know what is going on?

    I'm speechless, it goes on. What kind of crazy plan does this man have?
     
  5. Xtremehkr macrumors 68000

    Xtremehkr

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    #5
    Though the theory that this is a plan to kill the government as we know it has been floated for quite a while now. Which would make us the only advanced country on earth that operates without a government, I wonder how that will work out, given the essential role government has played in the development of the nation. Given what most Bush supporters know, they would not have a clue as to what or how government has done this and are only looking at it from the perspective that they have been promised more wealth as a result of less government.

    If it works, there will be another very hard lesson learned because greed has a tendency to eat itself. Hopefully it doesn't lead to another great depression.
     
  6. Xtremehkr macrumors 68000

    Xtremehkr

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    #6
    Well, the guy is under indictment for possible felonies, this is just a little fib.
     
  7. Xtremehkr macrumors 68000

    Xtremehkr

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    #7
    Deny, deny, deny.
     
  8. Xtremehkr macrumors 68000

    Xtremehkr

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    #8
    Truth!? we don't need no steenking thruth!
     
  9. Chip NoVaMac macrumors G3

    Chip NoVaMac

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    #9

    I take this the same way I hear the arguments that gas prices are not at an all time high when adjusted for inflation. I count myself as some of the Americans that is seeing a shrinking of my buying power.

    The property taxes have gone up to 300% what I was paying 12 years ago. My income has just been able to keep up with inflation (outsourcing of jobs, jettisoning of "older" more "expensive" workers are among the causes). Even if I didn't own a home, escalating home pricing has pushed up rents to a point that I would be hard pressed to do better than my mortgage right now. But if the values continue the way they are, I will hard pressed to keep up.

    Double digit increases in healthcare cost each year take even more from the take home pay. Saving grace are the low interest rates on cars and homes.

    My rant is towards those that in government that don't take fiscal responsibility in government spending. You can't have increased spending with tax increases or fee increases elsewhere, or spending cuts in other areas. You can't have decreased taxes without cutting spending or increasing fees elsewhere.

    Finding places to cut is hard. Does it make sense to me in my area to subsidize public transportation for those that are earning over $60K a year, when I don't even see that? And others would say that education and health services for illegal immigrants is a wrong way to spend our dollars. Or the handouts to big business (like the NBA, MLB, & NFL, or any "employer" looking to move an area), when they can afford the burden themselves? Just pick your cause.

    Greenspan has been IMO, been a very strong voice in our economy. Now that his time is drawing near on leaving, I worry. Clinton and Bush, both owe a lot to him.
     
  10. tristan macrumors 6502a

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    #10
    Currency movements are much more complex than this and Greenspan should know better. It's not the budget deficit - European countries have more debt as a percentage of GDP. Its not the trade deficit - we've had that for ages, including during the boom of the 90s.

    The main reason that the dollar is down is because we dropped interest rates to 1%, and the Europeans didn't. There's no free lunch - you can't just say "okay, now we don't pay interest anymore" and expect the world to keep loaning you money, especially when the UK's happy to give you 4% on your money.
     
  11. Desertrat macrumors newbie

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    #11
    Why is the federal budget deficit brought into this thread? It has zilch to do with the current account deficit...

    The irony of Greenspan's statements here is that his policies have directly contributed to the ease of our spending ourselves into this current account deficit.

    For those who after two years have finally noticed the decline in the relative value of the dollar against foreign currencies, you ain't seen nuthin', yet. When China gets full standing in the world trade deal (Old Timer's lapse on the name of the group), the renmimbi must float. When that happens, look out.

    To bring the fed deficit into it, note that foreign central banks are starting to bow out of buying our treasury notes/bills/bonds. When they actively start to sell, in quantity or as India has done, again: Look out.

    "Good" currencies are those of countries which export commodities or food or both...

    'Rat
     
  12. IJ Reilly macrumors P6

    IJ Reilly

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    #12
    And here I thought Greenspan's word on the subject would settle the question in favor of fiscal responsibility. Just kidding, really. I knew we'd hear the same voices explaining how the runaway deficit really isn't an issue. That's right, it can only hurt us we fail to keep the faith.
     
  13. skunk macrumors G4

    skunk

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    #13
    Or stop printing money...
     
  14. IJ Reilly macrumors P6

    IJ Reilly

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    #14
    Apostate! I'm not one of those "bring back the gold standard" people, but raising interest rates is one way of insuring that less new money gets printed, so it more or less amounts to the same medicine.
     
  15. skunk macrumors G4

    skunk

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    #15
    I've a good mind to report you! ;)
     
  16. Ugg thread starter macrumors 68000

    Ugg

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    #16
    Oops, in a hurry to enjoy some rare Humboldt sunshine this am....

    The budget deficit and the current accounts deficit are connected so it's almost impossible to talk about one without the other. It would be interesting to know what percentage of federal and state expenditures are spent on imports. I bet it's a lot larger than we would like to think and this has a huge impact on the current accounts deficit and since few government entities have balanced budgets, contributes to the budget deficit as well. Here in CA, Arnie has been a big proponent of outsourcing state contracts. While it may cut expenditures it is also going to cut state income by reducing income tax.

    The massive subsidies given by the government to support the oil industry, thereby subsidizing cheap oil, only make it that much less necessary for the US auto industry to create cars that are competitive on the world market. I sometimes think that it would have been better to let Chrysler sink and true competitiveness take over rather than encouraging mediocracy in US industry. These examples of government support of industries that either overextended themselves or simply made gross management errors show that government intervention only increases budget deficits, mostly through lost income, and encourages current account deficits by encouraging the consumer to look overseas for a better and less expensive product. The airline industry is next in line for massive federal bailouts, they are somewhat protected though by the US policy of not allowing foreign carriers to operate domestic flights. Another sign of protectionism.

    Of course, if the government demanded more accountability from US corporations when it comes to boardroom and accounting shenanigans it would have to spend a heck of a lot less and its income would be a lot bigger. THat ain't gonna happen with gw out to make his mark on the world so look for Greenspan's cryptic remarks become reality.
     
  17. Desertrat macrumors newbie

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    #17
    "The massive subsidies given by the government to support the oil industry, thereby subsidizing cheap oil..."

    Such as?

    Note that while the government guaranteed the loans to Chrysler, it never had to follow through. Iacocca managed to get Chrysler turned around without needing further assistance; all loans from private entities were repaid.

    As for cars in general, Hondas made in the U.S. have less warranty work done than those made in Japan. Foreign-made cars have less warranty work done than most U.S. made cars, generally--but there are fewer mechanic's bills for American made cars in the hands of second and third owners. Ford/GM/Chiseler generally stuff lasts longer--but for Toyota. :) (My '85 Toy 4WD PU owes many thanks to AutoZone, though.)

    "...government intervention only increases budget deficits, mostly through lost income..."

    I'll take that out of context and comment that it's inevitable and always. :D

    "Of course, if the government demanded more accountability from US corporations when it comes to boardroom and accounting shenanigans it would have to spend a heck of a lot less and its income would be a lot bigger. THat ain't gonna happen with gw out to make his mark on the world so look for Greenspan's cryptic remarks become reality."

    Hey, "government" intervened :) to demand quarterly instead of annual reports. That's caused more shenanigans than most anything else imaginable.

    'Rat
     
  18. IJ Reilly macrumors P6

    IJ Reilly

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    #18
    More...

    http://www.latimes.com/business/la-fi-greenspan20nov20,0,6416835.story
     

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