I dunno what a market worshiper does when the market refuses to behave in an ideologically pure fashion. Rethink basic premises? Fuhgeddabahtit!
RtO, on the other hand, drawing on the real experience of the Great Depression has warned since its beginning that deflation is the worst thing that can befall an economic system, because no one knows how to control or reverse it. The Republicans forced deflation on us, and the Democrats and the technocrats at the Federal Reserve don't know how to reverse it.
Heaven knows they've tried:
Bond investors are signaling they expect the Federal Reserve to lose its battle against disinflation, even after inundating the U.S. economy with more than $3 trillion in the past five years.Reality was a long time in getting the market's attention. Gold went up crazily from 2009, just as it was supposed to do according to radical theory if deficits were large and growing. For reasons unclear to RtO, around six months ago, the whole world decided that was a mistake; and gold has crashed.
This coincided with the slowdown (but not reversal) of the rate of growth in US fiscal deficits, but that hardly seems adequate to explain it.
In percentage terms, its fall has been only somewhat less than the stock market's collapse in 2008-9.
This week was time for legislators to discuss spending. I saw no evidence that any of them -- certainly not the radical right -- was aware of what is going on.
You might suppose, in the abstract, that people who elevate the purported wisdom of the market above all merely human understanding would listen when the market speaks. You would be wrong.
"A fundamental belief of Tea Party..."
ReplyDeleteSome believe that, some don't. It's not a fundamental belief.
"This coincided with the slowdown (but not reversal) of the rate of growth in US fiscal deficits, but that hardly seems adequate to explain it. "
Because? Have you done the math? Have you considered lower global economic growth? Lower global employment? Continued disarray of global financial markets outside the US?
Or are you just trying to paint a group as evil without bringing any new, useful, or accurate information to the debate?
There's unanimity among the Partiers at the other version of RtO. And somebody has been moaning for five years about skyrocketing deficits and demanding that the government quit doing anything, else the bogeyman of inflation would get us.
ReplyDeleteWhip Inflation Now!
It's whipped. Be Here Now, as we used to say.
No new information? I thought I pointed to a story about the cratering of TIPS. Maybe you knew that but I guarantee you it wasn't known among the Partiers in my neighborhood.
For reasons unclear to RtO, around six months ago, the whole world decided that was a mistake; and gold has crashed.
ReplyDeleteEnergy.
It's been in the headlines recently.
BTW, as is your wont Harry, you erect a strawman. The fundamental belief of the Tea Party is that the central government is far too large and powerful.
And it is worth remember that Krugtron the Invincible insisted that large deficits would lead to inflation. Well, until 2008, anyway.
I hadn't realized was in the Tea Party.
Oh, check the dictionary. "Yet" and "eventually" are different concepts.
'The fundamental belief of the Tea Party is that the central government is far too large and powerful.'
ReplyDeleteI said that, didn't I: 'inflation is inevitable if government deficits are large.'
Te Prtiersalso predicted other bad outcomes: seizing their guns, for example.
Delusions all the way down.
I said that, didn't I: 'inflation is inevitable if government deficits are large.'
ReplyDeleteNo, you didn't. (Size & Power) != cash flow
Oh, and make links your friend. Te Prtiersalso looks like either an excellent password, or a cat typing.
That's what Google thinks, too.
You know who never said (Size & Power) != cash flow? Anybody in the Party.
ReplyDeleteSomehow, a $12 T deficit was OK but a $17 T deficit is going to be a disaster. Except, of course, you are correct. A $17 T deficit in a $17 T economy is manageable.
It would be a pity if at this point I had to provide links to inform anyone what the Party has been saying, since they have been working so hard to tell us.
Now you are trying to rewrite recent history.
A $17 T deficit in a $17 T economy is manageable.
ReplyDeleteIf the deficit was to stay at $17T, you would be right. But it won't.
The TP argument is that the federal government is too centralized, too powerful, and it is running up debt that will eventually become too large to service.
Then what?
I understand their argument, They are wrong.
ReplyDelete