Obama proposes cuts to social security and medicare

[notorious bum]

Michael Hudson preaching real economics once again on Democracy Now(without all that there "fuzzy math"). Full video interview in link.

http://www.democracynow.org/2011/8/2...wrangling_wall

We welcome you both to Democracy Now! Michael Hudson, what about this vote? What does it mean?

MICHAEL HUDSON: Well, it’s an anti-stimulus package, primarily. The feeling among the Democrats that I’ve spoken to, I’ve never seen them so depressed. And what depresses them so much is that the irony is it could probably only be passed under a Democratic administration. Yves Smith has called it a "Nixon goes to China moment in reverse." And that’s because only a Republican could have made an opening to a communist country and not be accused of communism. Only a Democratic president could have drawn along a Democratic Congress in supporting a law that is going to essentially ad tax deflation to the debt deflation we already have in the economy.

AMY GOODMAN: What does that mean, "tax deflation to the debt deflation"?

MICHAEL HUDSON: That means that the government is going to be sucking money out of the economy. Normally, government is supposed to provide the economy with money, provide it with purchasing power. By government running a deficit, this is what, traditionally, for 5,000 years, in every country, has supplied money. And now the government isn’t going to do it. There’s a kind of junk economic belief that governments shouldn’t run a deficit, and yet it’s by running a deficit that an economy expands. That’s what injects the purchasing power in it. That’s why a few years ago Mr. Obama had the $700 billion stimulus package. The idea was government spending will stimulate employment and make it more than it otherwise would have been, and you stop the unemployment.

Right now, the economy is shrinking. It needs some kind of spending to overcome the shrinking. And since the government can’t supply the credit, that means that the economy is going to have to rely on commercial banks. And they’re going to charge interest. And it means that all of the growth that does occur in the economy is basically going to be paid to Wall Street, not to the people who produce the wealth, not to industry or its employees. The economy is going to shrink. Industrial corporations will shrink. Real estate will shrink. And the government isn’t doing anything to prevent this shrinkage into a deeper and deeper recession.

[Ksandra]

Lowering the minimum wage will lower the unemployment rate. And all those economists will have their data and jump for joy.


That data doesn't mean dick for the people that actually have to survive that way. I think people underestimate how low people would be willing to go to have a job. And that lowness is not a good quality of life. It's just barely above surviving.

Again, that is not, by any means, what we should be striving for as Americans.


And again, those jobs that people would be getting are just more retail. More retail = more products being made/bought in China. Still no manufacturing jobs. Still not improving our economy. Still not creating exports. Still means jack shit to anyone that's not rich.


Oh but the unemployment would go down! That looks so good on paper.

[hey]

That data doesn't mean dick for the people that actually have to survive that way. I think people underestimate how low people would be willing to go to have a job. And that lowness is not a good quality of life. It's just barely above surviving.

It means quite a fucking lot to those that are unemployed.

Just barely surviving > not surviving.

[Ksandra]

It means quite a fucking lot to those that are unemployed.

Just barely surviving > not surviving.

You're just so short sighted it's ridiculous. You realize that when you work you lose a lot of government aid. I bet you'd make a lot more on welfare than you would doing it your way. Those unemployed would probably stick to that which means more money being taken from the government, and the current employed getting paid less.

[hey]

You can't collect unemployment forever.

[Tyche]

The government doesn't just provide monetary support in the form of unemployment.

[Ksandra]

You can't collect unemployment forever.

ok, now stop. read my post again. Process it.

hint,

Spoiler: show

unemployment checks =/= the only kind of welfare

[Tyche]

At my old job, the amount I paid in child care almost superseded my net income. If I would have quit and applied for food stamps and child care assistance, I probably would have come out better. I don't really know if that's relative to the ongoing argument that I haven't really read, but it seems to be.

[Ksandra]

At my old job, the amount I paid in child care almost superseded my net income. If I would have quit and applied for food stamps and child care assistance, I probably would have come out better. I don't really know if that's relative to the ongoing argument that I haven't really read, but it seems to be.

ya this is exactly my point. also hey must have forgotten about section 8. This is something that is already happening even with the current minimum wage. a lot go on section 8/foodstamps/child assistence simply because they'll be able to get more money that way, then they would in a retail job. And you can stay on it for forever.

Why the fuck would anyone work for $4 an hour if they can get paid $10 for doing nothing and getting government aid?

[hey]

Why the fuck would anyone work for $4 an hour if they can get paid $10 for doing nothing and getting government aid?

They won't. And guess what? If they don't, then wages won't drop that low.

Why the hell do you think that wages would magically drop to 5 cents/hour in the absense of a minimum wage? Just because there is no government enforced minimum wage does NOT mean there is no market enforced minimum wage. If someone can make more money doing nothing, they won't accept $4/hr, and thus no company would pay such wages, because if they tried to, they would have no employees.

[Alarial]

They won't. And guess what? If they don't, then wages won't drop that low.

Why the hell do you think that wages would magically drop to 5 cents/hour in the absense of a minimum wage? Just because there is no government enforced minimum wage does NOT mean there is no market enforced minimum wage. If someone can make more money doing nothing, they won't accept $4/hr, and thus no company would pay such wages, because if they tried to, they would have no legal employees.

Fixed it for you.

[Ksandra]

They won't. And guess what? If they don't, then wages won't drop that low.

Why the hell do you think that wages would magically drop to 5 cents/hour in the absense of a minimum wage? Just because there is no government enforced minimum wage does NOT mean there is no market enforced minimum wage. If someone can make more money doing nothing, they won't accept $4/hr, and thus no company would pay such wages, because if they tried to, they would have no employees.

because those that are currently working are less likely to quit. As others said you guys keep talking data without ever taking the human effect into account.

And it means no jobs being created. It is already happening hey, thinking it's not going to magically happen when you take away minimum wage is ridiculous.

And again people will survive on an insanely low income. That does not mean they should have to when there are other options.

You want people to barely survive. I want us to not be China, and give people a good quality of life.

[solanis]

At my old job, the amount I paid in child care almost superseded my net income. If I would have quit and applied for food stamps and child care assistance, I probably would have come out better. I don't really know if that's relative to the ongoing argument that I haven't really read, but it seems to be.

thank you tyche, that's a great example of the backward-bending supply curve (the one I've linked FIVE TIMES and gotten scoffed at as numberz) in action.

[volcanicweather]

This minimum wage debate needs to die, you guys are just spinning your wheels right now.

As much as people like to trash on solanis because of the way he conveys his messages to everyone (i.e. dickmode) if you look past this he is making some valid points. Maybe it's because I'm an independent and can put political bias aside but I don't think he's being as horribly villainous as some people are painting him out to be.

What's amazing me is how serious things are about to get in this country and how oblivious people are to the changes which will be happening in the next 5 years. I was speaking with a group of people the other day, college educated and my age (mid 20's) and I was the only one who even knew they were trying to raise the debt ceiling. The amount of oblivious Americans to what's going on in the world and what will dramatically affect their lives is scary.

The budget cuts made as a result of the debt ceiling "deal" will suck money out of the economy, consumers will lose jobs, consumers will spend less and make less frequent trips to the store (it's already happening - http://www.tns-us.com/news/gas_price...ave_strong.php), companies will start bleeding as sales figures plummet and will look to outsource even more to reduce costs, etc etc.

We are about to go through some very rough times and not to get all doom and gloom but to pull a page from the book of solanis now is the time to invest in making yourself as marketable as possible without breaking the bank. Learn a relevant foreign language, get certified in a topic related to your expertise, or even just join a club/organization based around your profession (or desired profession) and network. Especially for people like myself with little experience and our devalued degrees anything to differentiate us from our peers can only help. With depressions come peril but also opportunity and if there's one thing I learned from back in 2009 at my first job it's to get a head start before the rest of the pack gets a scent of the fresh kill.

[Kurokikaze]

Relevant:

[Drex]

Fixed it for you.

Hey guys, some people steal stuff so everything should be price-fixed at $0.
Letting illegal actions dictate market policy is stupid.

Why the fuck would anyone work for $4 an hour if they can get paid $10 for doing nothing and getting government aid?

Why do people take unpaid internships ($0 OMG THEY'LL STARVE) or pay money for an education or do ANYTHING after they're born besides sign up for welfare at the adequate age and use it til they die?

[kuronosan]

What's laughable to me is the outstanding number of people who say that the Republicans are just trying to fix what Obama screwed up.

Wisdom.

[Dimmauk]

I like how the cost of living or even the cost of having a job has increased, but wages haven't increased proportionally. We work more for less, and it's getting worse.

[Rhinox]

That's why we need to keep our rich folks happy.

Maybe they'll make it rain.

[Day]

Shit we can't even get a trickle, someone wake me up when they start makin it rain!