@mld-woody said:

Why do politicians decide what to do with the economy instead of economists?

That's a good question Woody.

Communist economists are running our economy and politicians know they can depend on the Federal Reserve to print all the money politicians want to make the people somewhat happy. And of course we have China and Japan giving us loans. One of the great things about loans from gooks and the Fed printing money is that as the dollar devaluates Uncle Sam pays the interest on our loans with cheaper money. Unfortunately for us cheaper money means the price of everything goes up, but our individual income doesn't go up. See what I mean?

Anyway, I'm off topic, this thread is about France and the Eurozone.

No, one more thing. China is happy to lend us money because that makes the USA devaluate the dollar even faster which hurts us and the whole world. The end game is we all have to learn to speak Chinese.

OK back to Europe. Since I'm such a mental midget when it comes to Europe and a hopeless romantic when it comes to communism I'd like to refer you to a superlative analysis of where Europe (including France and Greece) is going. Be sure to read at the link to Buchanan and watch the video as well. In a nut shell nationalism and war are going to consume Europe.

http://www.evilconse...eluctant-Update

Economists excel in telling what already happened.

In effect, they are professional Monday Morning Quarterbacks.

Greece has no money. None. If it can't get a government together to pass the second round of cuts in the next 3-4 weeks, the second round of bailout money doesn't come. And then they not only don't have any money, they stop getting bailout money, and the whole thing goes to shit.

This is not the same problem that exists in France, or in the United States, which is why it's ridiculous to suggest that we're Greece.

But I'm not sure I want to start talking politics with another person who just gets up and hates "libs" for a living. It's not that interesting.

@heckofajobbrownie said:

Oh, there's no positive spin for what's going on in Europe. It's more like, "Would you like to have genital herpes or AIDS?"

But the United States isn't Greece, as much as the Romney campaign and the right would like to dream. France isn't even Greece.

Oh contraire messhure ... Greece is connected to france is connected to spain is connected to italy, by the hmmm, wait for it.... the euro right? And WE are connected by guess what.... (watch your FRONTLINE episode 4)

stock derivitives concocted by Goldman Sacs in Greece, Stanley Morgan in france......

There is a real debate about the least worst way to get Europe through this mess, and the austerity debate - at least at an economic level - isn't one that has much to do with the "free goodies for voters" trope. It's about how you best get your economy out of an enormous hole.

yes but it was /is the "free goodies " (standard lib policy) that started the whole mess to begin with, the riots in greece ..... ya put a positive spin on it heck! ( aah ummm well... David Axlerods response)

France's Hollande may roll back spending promises

(Reuters) - France's Socialist president-elect Francois Hollande may use a summer audit of state finances to water down his generous campaign promises rather than risk a backlash from financial markets against stubbornly high deficits and rising debt.

Advisers say he could even freeze some spending if the review turns up any nasty surprises, soothing investors who are worried he has become the figurehead for a fight against German-imposed austerity in the euro zone.

Hollande, due to take office next week after toppling President Nicolas Sarkozy in Sunday's election, dismayed analysts with his campaign spending promises, such as hiring 60,000 school staff and creating 150,000 state-aided jobs.

France already has one of the highest levels of public spending in Western Europe, at around 55 percent of GDP, and has not balanced its budget since 1974.

But Hollande, a 57-year-old graduate of France's elite ENA civil service school, together with other Socialist leaders has already been discretely preparing the ground to play a more cautious game.

"There are certainly deficits, things hidden in the shadows," Jean-Marc Ayrault, the Socialists' parliamentary leader and a candidate for prime minister, said of the audit.

"We will discover the reality and strike a balance between fostering growth and making the necessary efforts to reduce the debt."

Those close to Hollande are now urging him to use the review by the country's top audit body, the Cour des comptes, as a justification for lowering his growth forecasts for the euro zone's No.2 economy, widely seen as too optimistic.

More at: http://www.reuters.com/article/2012/05/08/us-france-spending-idUSBRE8470QE20120508

@runyon27 said:

I am opposed to anyone paying more taxes until the government can prove they are better stewards of our tax money. And if taxes should be raised then probably should be on everybody, and I see no reason that by the end of the yr after filing taxes that at least most tax payers can contribute $100 or something. When money is allocated to fix tennis courts, build/repair turtle crossing and other junk then I would say the stimulus was unfocused. It was rushed together, there was no strategy to it. The stimulus would have been the PERFECT opportunity to upgrade infrastructure, which includes roads, laying fiber optic cable, I would have even supported it used for high speed rail project. Put is was a mish mosh of stuff with no clear roadmap on how to best use the money.

Well, let's get some facts in here. You seem to want to focus on the stories that people ran with, like turtle crossings, usually that amounted to something like .0001 percent of the cost of the bill and is something a Congressman snuck in there. Let's leave that for Sean Hannity.

$275 billion of the stimulus was tax cuts. Did you like that part?

Aid to states and local governments to prevent layoffs: $58 billion.

Education/job training: $48 billion

Energy: $41 billion.

Furthermore, $98 billion was spent on exactly the infrastructure projects you mentioned. $8 billion for high speed rail. (I actually didn't like HSR funding in there.) Roads got $27 billion. Fiberoptic cable got $7 billion. Smart electricity grid upgrades got $11 billion.

So you're saying you wanted more spending on that type of stuff? I would probably agree with you. But you have to know that a lot of these projects aren't up and ready to go, and wouldn't be "stimulative" in the traditional sense. They're longer term. (This is the problem with HSR funding.) In fact, if you read the Larry Summers memo that got leaked recently, he was basically making the case that there were only something like $225 billion in projects that were ready to go. And they were concerned because they were saying that the size of the stimulus had to be much bigger than that. Some wanted over a billion. The political people said that was a non-starter. They ended up with an $850 billion target figure, and filled the hole with tax cuts, which aren't as stimulative as spending, and aid to the states. They ended up with $787 from Congress.

Here's what he wrote:

"But it is important to recognize that we can only generate about $225 billion of actual spending on priority investments over next two years…This total, however, falls well short of what economists believe is needed for the economy, both in total and especially in 2009. As a result, to achieve our macroeconomic objectives—minimally the 2.5 million job goal—will require other sources of stimulus including state fiscal relief, tax cuts for individuals or tax cuts for businesses. All three of these areas, however, raise tradeoffs because they are not as economically effective as stimulus, do not represent a down payment on a campaign promise (with the exception of the Making Work Pay credit), and do not have a lasting impact on the economy beyond protecting against a deep recession."

Now, Congress is always filling a hole with a leaky bucket. On balance, I think it's been remarkably well run. I've got a good friend who actually tracks all of this spending for the GAO. You can pick out your turtle crossing stories all you like, and it's important to make sure the spending goes where it was supposed to. But considering the size of the thing, it's actually been pretty well run.

I think the problem for Obama is that while it helped, it didn't turn the economy around enough, or meet their projections, which were based on faulty data. Few people feel the difference.

@westside-steve said:

Do you think Greece France and Spain should be doing a lot more deficit spending?

Also how much more debt ydo you believe would be beneficial for us and when do you foresee that tide turning

WSS

We should be spending billions on infrastructure investments. We can borrow money cheaply. Greece and Spain can't. They're fucked, especially Greece. France isn't Greece.

@runyon27 said:

I am opposed to anyone paying more taxes until the government can prove they are better stewards of our tax money. And if taxes should be raised then probably should be on everybody, and I see no reason that by the end of the yr after filing taxes that at least most tax payers can contribute $100 or something. When money is allocated to fix tennis courts, build/repair turtle crossing and other junk then I would say the stimulus was unfocused. It was rushed together, there was no strategy to it. The stimulus would have been the PERFECT opportunity to upgrade infrastructure, which includes roads, laying fiber optic cable, I would have even supported it used for high speed rail project. Put is was a mish mosh of stuff with no clear roadmap on how to best use the money.

Plus we could hire lower wage non union workers to do most of that and put more americans back to work but.....

WSS

@heckofajobbrownie said:

I'm not saying the stimulus was perfect, but the idea that the "whole package was pure crap, it was an unfocused pile of garbage" is ridiculous. What parts of it do you think were pure crap?

As for this: "The left could probably sell tax increases a whole lot better to the American public if they came out and said, look, we are going to cut 1.5 trillion or more out of the budget, we agree it needs to be done, but in turn we request a tax increase to help us through this."

...Isn't that sort of what the President did? Except they were offering more than 1.5 trillion. You just seem to disagree that the wealthy are the ones who should be taxed. You'd rather the people who don't pay any federal income tax - the poor, the lower middle class - get taxed instead.

I am opposed to anyone paying more taxes until the government can prove they are better stewards of our tax money. And if taxes should be raised then probably should be on everybody, and I see no reason that by the end of the yr after filing taxes that at least most tax payers can contribute $100 or something. When money is allocated to fix tennis courts, build/repair turtle crossing and other junk then I would say the stimulus was unfocused. It was rushed together, there was no strategy to it. The stimulus would have been the PERFECT opportunity to upgrade infrastructure, which includes roads, laying fiber optic cable, I would have even supported it used for high speed rail project. Put is was a mish mosh of stuff with no clear roadmap on how to best use the money.

Also how much more debt ydo you believe would be beneficial for us and when do you foresee that tide turning

WSS

As for this: "The left could probably sell tax increases a whole lot better to the American public if they came out and said, look, we are going to cut 1.5 trillion or more out of the budget, we agree it needs to be done, but in turn we request a tax increase to help us through this."

...Isn't that sort of what the President did? Except they were offering more than 1.5 trillion. You just seem to disagree that the wealthy are the ones who should be taxed. You'd rather the people who don't pay any federal income tax - the poor, the lower middle class - get taxed instead.

@heckofajobbrownie said:

Let's just agree to disagree then. You guys both seem to be against the entire concept of fiscal stimulus, which is bizarre. There isn't a strain of economics - except perhaps the bizarre one Ron Paul believes in - that doesn't believe in the idea of fiscal stimulus during economic downturns. We have all sorts of mechanisms to make recessions less harsh, and shorter, and to make people's lives better. They cost money, but they're worth doing if done correctly.

One of the points of widespread agreement you'll find in the Frontline special, on both the left and the right, is that we were certainly headed towards a global depression had the Bush team and later the Obama team not taken the steps they did. They didn't always make the right choices, but this was also unprecedented stuff and they were basically making it up as they went along, and usually with little time to decide what to do. All those decisions will all be studied for years and years.

As for the links, the point of showing that Bush believed in stimulus and Republicans voted for it en masse, and as recently as a few years ago, is to point out the hypocrisy of Republicans and their current complaints about fiscal stimulus.

And no, John, I don't agree that there's no real difference between the parties. There are countless differences. They may be closer to each other than the opposing parties in France or Germany or places like that, but they're hardly the same.

Fiscal stimulus done properly can be a useful tool. In fact you will see that Republicans in general begrudingly accept this at the beginning of Obamas term with the stimulus package. However, that whole package was pure crap, it was an unfocused pile of garbage. It was typical liberal production, lets give away a whole bunch of money without any real rhyme or reason and hope is helps. This is why people here are sick of what the Fed government is doing. Then when one group tries to curb spedning the other side offers up like 200 million or something and act like they have done something really great. The left could probably sell tax increases a whole lot better to the American public if they came out and said, look, we are going to cut 1.5 trillion or more out of the budget, we agree it needs to be done, but in turn we request a tax increase to help us through this. But instead what we get is rich people you need to pay more money(while about 48% of eligible tax payers pay no fed income tax). Even tho the very rich pay the largest share of the taxes already. And whether you like it or not, we are heading down the path of Greece, Spain, Ireland etc when it comes to our debt situation. The people in Greece have been coddled too long as is most of Europe and now they are reaping the cost of all that government love. Deny the plebians their bread and you will have riots on your hands.

@heckofajobbrownie said:

I would agree that a lot of the Bush war/security policies were continued by Obama, but some weren't. Which did you want to see repealed?

Some I like, it's just that - to some people - it is now OK. When Bush was in the driver's seat however, it was a war crazed, oil driven maniac.

I'd like to start with repealing the government's ability to capture and indefinitely detail a US citizen with out charge. In short, reinstate the spirit - I don't want to get involved in a technical discussion of what the definition of 'is' is - Writ of Habeous Corpus (sp).

To me this is the most aggregious element of an already overreaching government intrustion. If effect, one can be detained for 'thought', not necessarily 'action'. Political prisoners, if you will.

There might be some difference in the 'sizzle' but the fundamental piece of meat is the same, IMHO.

Why shouldn't I believe there has been no better confirmer of Bush's policies and practices than Barak Obama? I don't agree with lots of what Bush did but, it appears to me, Obama has rubber stamped - or aggrivated and extended - those practices.

Material differences are really few and far between.

One of the points of widespread agreement you'll find in the Frontline special, on both the left and the right, is that we were certainly headed towards a global depression had the Bush team and later the Obama team not taken the steps they did. They didn't always make the right choices, but this was also unprecedented stuff and they were basically making it up as they went along, and usually with little time to decide what to do. All those decisions will all be studied for years and years.

As for the links, the point of showing that Bush believed in stimulus and Republicans voted for it en masse, and as recently as a few years ago, is to point out the hypocrisy of Republicans and their current complaints about fiscal stimulus.

And no, John, I don't agree that there's no real difference between the parties. There are countless differences. They may be closer to each other than the opposing parties in France or Germany or places like that, but they're hardly the same.

Republican believe this too. Just not when a Democrat is president. You might remember>>

I do remember. It was wrong then and it's wrong now.

The question I have is, "What happens to government spending once the downturn or recession has been reversed?"

Answer: it increases because, among other things, there is an assumption that tax revenues will increase and - well - our money is really their money - regardles of which Party is in 'power'.

Like Heck hinted at but would never admit, there isn't all that much difference among the 2 major partys any way.

@heckofajobbrownie said:

No, you increase government spending during a downturn or a recession to help get you out of the downturn or recession, which helps you get out of debt.

Republican believe this too. Just not when a Democrat is president. You might remember this. Or this.

0

Heck, I realize you think that I will dissolve into tears because you found something stupid did george w bush did.

Sorry, I thought that was a horse shit plan then.

At one time everyone thought the sky rocketing housing prices would continue forever.

Therefore debt meant nothing.

Maybe you and Friedman think there is a bubble right around the corner that will bring us all back to square 1.

I would guess that the truth is much more cynical.

Pretend that we can afford to give everybody everything and after the election?

Who cares?

And by the way people are miserable. A couple hundred bucks 1 way or the other won't buy happiness, just votes.

WSS

Republican believe this too. Just not when a Democrat is president. You might remember this. Or this.

Or, simplified: Austerity cutbacks = lower income = lower spending = lower investment = lower tax revenue = slower economic growth = larger budget deficits = even bigger problem that you had when you started.

The flip side, of course, is the enormous debt load, and all of the problems that creates. Both must be addressed at once. It's the worst problem to have.

But all of these countries are in different situations. It's extremely complex. I'm just saying you shouldn't read the news about the French election and warp it so it fits into Steve idea # 3, which is that voters like free shit.

Yes, Sarkozy took a hit because of austerity cutbacks, which make people miserable. Yes, Obama is facing some of the same problems dealing with a barely improving economy and growing deficits. But the approach America has taken - spend government money capitalizing banks, spend on stimulus/tax cuts, and lower the price of money to stabilize the economy instead of cutting back and making the problem worse - is proving to be the right course. Costly, but right. The problem is getting a deal with the back half: lowering spending on entitlements, mostly health care, in the long run, and reforming the tax code.

They've fiddled around with this during the whole "grand bargain" episode, but couldn't come to an agreement. That's what needs to happen, and it's not going to happen in an election year. And the rightward shift of the Republican Party, with its freshly-minted Tea Party faction, who subsist on economic fairy tales, make compromise all the more difficult.

Spend now on safety net measures, invest in infrastructure and education, and get health care spending under control and reform the tax code. That's the game.

Or just talk about cutting rich people's taxes and sing America the Beautiful a lot.