The Rain in Spain
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15 responses to “The Rain in Spain”
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Government spending in tough times probably isn't the worse thing in the world, but it needs to effective. I had an early morning conference with the CEO of a tech company who will be submitting a proposal to one of my clients this week. He was bemoaning the fact that the Recovery Act broadband program has been an anti-stimulus because it has been so slow to make any decisions. It's tied up the capital market. I've heard that from others as well.
So far, the program has been a big failure.
TMT
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TMT,
Thanks. Have heard similar things about the stimulus as a confused mess.
PG -
Peter, you and Krugman may be right about the European Union — I suspect you are — but you're in total denial about the budget deficits. I guess I'll have to start posting more on the topic. Within 20 years, the whole concept of the democratic-capitalist welfare state will collapse on a scale as cataclysmic as the collapse of Soviet communism. I fear what will replace it.
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As for deficit spending, you are quite correct. Deficit spending by government can counteract the contraction in spending by business and consumers. But you and the Krugmanites seem to forget the other side of the coin: that governments should run surpluses during the good years to balance out the deficit spending in the bad years. Oops. Since 2000, we have forgotten to do that. Indeed, with entitlements swelling, we won't see another budget surplus again in our lifestimes.
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Peter:
Interesting observations.
Krugman is right that forcing every nation-state into unified Euro but he is off by a few scale increments.
Spain was NOT chugging right along, some Regions in Spain were doing well, others were not.
Think Regional Banks and Regional Economies.
Think SubRegion Banks and SubRegional Economies.
Think Community Banks and Community Economies.
Think barter currency at the Village and Neighborhood scale.
Think sweat equity barter at the Cluster and Dooryard scale, just as happens in many Households (the Unit scale.)
The settlement pattern, the governance structure and the economy must reflect the organic structure and scale of human civilization.
Globalization, nation-state Uber Alles and the Commonwealth’s ‘the state knows best’ widens the wealth gap and thus distorts true market economics and welcomes in dictatorships from the right and from the left.
Did you spend too much time in MainStream Media looking for villains? Jim Bacon has a sound argument. EMR has a different perspective. So do you. We do not know who is more right at this point.
The tragic possibility is that we are all right: The end of civilization as we know it unless there are Fundamental Transformations.
EMR
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But you and the Krugmanites seem to forget the other side of the coin: that governments should run surpluses during the good years to balance out the deficit spending …
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Yea, right. How are they supposed to do THAT?
If government actually had a surplus there would e a steady drumbeatof calls to reduce taxes. There is no legal way for the governmet to set aside surpluses in a rainy day fund except for the most conservative investments.
Therefore surpluses are the worst kind of drag on the economy: no capital gain from havng spent the money on infrastructure, and no ROI from the investment either. Plus you have taken investable money out of the hands of the private side.
The only thing you can do with a "surplus" is spend down previous debt, which means that it isn't a surplus at all, and besides if you followed the Bacon Rx for government there would be no debt to begin with.
I can't beleive I'm hearing you make such a claim, because it is so discordat with everything else you preach.
RH
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The end of civilization as we know it unless there are Fundamental Transformations.
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It could be worse: we might get EMR style fundamental transformtion AND the end of civilizationn as we know it. They might even be the same thing.
RH
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Jim Bacon,
Oh no! You're going to post more about deficits? talk about unitended consequences!
pg -
Paul Krugman stopped being an economist years ago. He's a professional politician and Obama apologist now. Very little of what he says can be taken seriously (for the record, I feel the same way about Newt Gingrich). These guys have stopped being serious and have become entertainers. You might as well ask Geraldo Rivera what he thinks.
Deficits are more of a symptom than the disease itself. The disease is a societal lack of personal accountability. Decades of no exercise and lots of cigarettes and now you feel sick? Big government will bail you out. Forgot to save any money during the years you worked and now you're broke? Big government will pay for your retirement. Unemployed, unwilling to work the jobs available in your hometown and unwilling to go where the jobs exist? Big government will take care of you. Can't make your farm profitable so you'll have to sell and do something else? Big government will subsidize you. Spend way beyond your means and run up a small fortune in debt? Big governemnt will let you walk away from the debt. Kids failing out of school but you can't be bothered to meet with the teachers or attend the PTA meetings? Big government will pay you to take care of the kids then pay to incacerate them.
I watched a show on television last night – prison wives. One woman met a convicted murderer (life, no parole) through a pen pal program. Married the guy. She and her 3 kids from a prior marriage move from town to town as the guy gets transferred from prison to prison. Welfare, food stamps and Section 8 housing. She has a hard time keeping a job because she moves so much.
PIIIGS = Portugal, Iceland, Ireland, Italy, Greece and Spain. If you reads this whole article, you'll see that Germany is slipping back into recession too. Meanwhile, one the biggest banks in France consideres the collapse of the Euro inevitable.
Obama's philosophy is the European model. High taxes, big deficits, high unemployment, lots of entitlements. Only one problem – the European model doesn't work. It's more complicated than deficits but it's simple to see it doesn't work.
Peter's point on globalization is right. Good to see Peter in such tight agreement with Pat Buchanan. But where is Obama on that …. ?
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Speaking of broken governance …
Good to see that the dysfunctional behavior is widespread. I was living in Charlottesville in the run up to this revenue sharing agreement. The city was going to annex parts of the county in some kind of bizarre game of Risk played by the equivalent of drunken 12 year olds.
Now it's almost 30 years later and the city and county are fighting with a bill in … the General Assembly. I sincerely hope that all of the NoVa politicans will abstain from voting on the grounds that local issues should be solved locally.
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Can't make your farm profitable so you'll have to sell and do something else? Big government won't let you.
RH
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Sissy Spacek claims Virginia as home, pushes film industry
Today's WAPO
Another happy camper.
RH
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RH,
To be fair, Texan Spacek has lived in the Charlottesville area for a long time. One of her children went to VCU. SHe tries to help the state.
Peter Galuszka -
Sorry. That was poste in the wrong spot anyway.
I didn;t know that she had "adopted" Virginia.
RH
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Hey RH,
Sort of like me. I am obviously not a "Virginian" but I have sort of adopted it. Like Bacon. No Virginian. Born in Connecticiut.Navy Brat. Like me.
PG
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