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01-21-2011, 01:06 PM   #1
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Paul Ryan IS the moral hazard

U.S. State Bankruptcy Weighed by Republicans Blocking Aid - Bloomberg
QuoteQuote:
Closing the door to U.S. aid may further stress states facing more than $140 billion in budget deficits next fiscal year, according to the Center on Budget and Policy Priorities, a Washington research group. Fewer than half of state retirement systems had assets to pay for 80 percent of promised benefits in their 2009 fiscal years, according to data compiled by Bloomberg. They now face the end to federal stimulus payments granted two years ago to help them cope with the deepest recession in 80 years.

“We are not interested in a bailout,” Representative Paul Ryan, a Wisconsin Republican and chairman of the House Budget Committee, said at a Jan. 6 forum in Washington.

“Should taxpayers in Indiana, who have paid their bills on time, who have done their job fiscally, be bailing out Californians, who haven’t,” he said. “No, that’s a moral hazard we are not interested in creating.”

Representative Devin Nunes of California introduced the Public Employee Pension Transparency Act last month, co- sponsored by Ryan and Darrell Issa of California, that requires more reporting details from state and local pensions and prohibits federal bailouts of states.
They really do want to make us a third world nation...... not that they actually have a brain to know it.
US States filing bankruptcy.. now that sends a positive message to the world re: our gov.... NOT


Last edited by jeffkrol; 01-21-2011 at 01:12 PM.
01-21-2011, 01:31 PM   #2
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Playing Devils Advocate here.


You allow a state to declare bankruptcy and they are allowed to abolish all contracts with the unions thus allowing them to get out from the monster retirement contracts that are sinking their budgets. The threat alone should be used to force renegotiations of these contracts. Either that or RAISE TAXES to make up for the shortfalls.
01-21-2011, 01:46 PM   #3
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QuoteOriginally posted by gokenin Quote
Playing Devils Advocate here.


You allow a state to declare bankruptcy and they are allowed to abolish all contracts with the unions thus allowing them to get out from the monster retirement contracts that are sinking their budgets. The threat alone should be used to force renegotiations of these contracts. Either that or RAISE TAXES to make up for the shortfalls.
The fed could just as easily just pick up the tab...... it's all smoke and mirrors.
01-21-2011, 01:50 PM   #4
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QuoteOriginally posted by jeffkrol Quote
The fed could just as easily just pick up the tab...... it's all smoke and mirrors.
Haha, exactly, just print more money, the value of the dollar is only a perception at this point in history.

01-21-2011, 01:51 PM   #5
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QuoteOriginally posted by jeffkrol Quote
The fed could just as easily just pick up the tab...... it's all smoke and mirrors.
How? Raise the debt limit forever? Raise taxes? where is the money going to come from?
01-21-2011, 01:51 PM   #6
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QuoteOriginally posted by pxpaulx Quote
Haha, exactly, just print more money, the value of the dollar is only a perception at this point in history.
They have been printing "excess" money for a "long long time"... seems the dollar is just fine and inflation practically nil.
Apparently we are currently in a "exception" (one of historically many) to classic economic theory.. go figure.
https://www.pentaxforums.com/forums/political-religious-discussion/130161-mon...in-simple.html
I'm trying to come up w/ a MMT slogan..
OUR house it not your house......... no I'll get it.
Deficits don't matter has too much bad mojo associated with it.
01-21-2011, 01:55 PM   #7
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QuoteOriginally posted by pxpaulx Quote
Haha, exactly, just print more money, the value of the dollar is only a perception at this point in history.
The value of the dollar is that you need to pay your taxes in dollars. Try "to perceive" it as useless and you'll end up as Wesley Snipes
But, seriously, read this:
http://www.levyinstitute.org/pubs/ppb_111.pdf
and follow the other discussions we had on this forum on MMT and such
This, for example:
https://www.pentaxforums.com/forums/political-religious-discussion/129341-mod...ry-theory.html

01-21-2011, 02:01 PM   #8
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As San Francisco struggles under ballooning pension and health care costs, the city’s retirees will receive unexpected cost-of-living bonuses totaling $170 million. The city’s anticipated budget deficit for the coming year is $360 million.

http://www.nytimes.com/2011/01/21/us/21bccola.html?_r=2
01-21-2011, 02:07 PM   #9
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QuoteOriginally posted by gokenin Quote
How? Raise the debt limit forever? Raise taxes? where is the money going to come from?
You haven't been paying attention have you.......
QuoteQuote:
A monetarily sovereign government has the exclusively unlimited power to create its sovereign currency. Monetary Sovereignty is the foundation of economics. It is as fundamental to economics as arithmetic is to mathematics.

The United States is monetarily sovereign. It has the exclusively unlimited power to create the dollar. China, Canada, Australia and Japan are monetarily sovereign. They have the exclusively unlimited power to create their sovereign currencies.
http://rodgermmitchell.wordpress.com/2010/08/13/monetarily-sovereign-the-key...ing-economics/
01-21-2011, 02:10 PM   #10
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Not bailing out states would probably hurt the super rich worse than increasing the top marginal tax rate to 39.6%.

The super rich who pay the high tax rates are the ones holding the muni bonds that will be wiped out by bankruptcy.
01-21-2011, 02:13 PM   #11
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QuoteOriginally posted by jeffkrol Quote
do we then eventually end up here?

The Reserve Bank of Zimbabwe said the new notes that includes 50 trillion, 20 trillion and 10 trillion would be released for the "convenience of the public," according to statement released Thursday.

Zimbabwe to print first $100 trillion note - CNN.com
01-21-2011, 02:15 PM   #12
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The bottom line is all levels of government need to wake up and realize they have to live within their means. Start looking at all the programs and fluffy stuff they spend OUR money on and trim the fat. They can start chipping away at the small stuff and eventually it starts to add up. Get their house in order before they go after my wallet with their porkfat covered hands.....
01-21-2011, 02:31 PM   #13
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QuoteOriginally posted by gokenin Quote
do we then eventually end up here?

The Reserve Bank of Zimbabwe said the new notes that includes 50 trillion, 20 trillion and 10 trillion would be released for the "convenience of the public," according to statement released Thursday.

Zimbabwe to print first $100 trillion note - CNN.com
No,(EDIT: sorry, I thought this was Mike). Hyperinflation in Zimbabwe occurred because the country's productive capacity was crippled by the misguided land reform.

See, for example,

MMT: Fear of Hyperinflation naked capitalism

QuoteQuote:
The claims of hyperinflation awaiting the US or the UK seem hyperbole at best, misinformation and deception at worst. Hyper-inflation has very specific pre-conditions in foreign currency obligations and a loss of tax revenue and productive resources. ‘Printing money’ alone doesn’t get you there. So, it simply isn’t credible to claim that Hyperinflation in the US or the UK is in the offing now or anytime in the immediate future.

Last edited by skyredoubt; 01-21-2011 at 03:35 PM.
01-21-2011, 02:41 PM   #14
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QuoteOriginally posted by johnny9fingers Quote
The bottom line is all levels of government need to wake up and realize they have to live within their means. Start looking at all the programs and fluffy stuff they spend OUR money on and trim the fat. They can start chipping away at the small stuff and eventually it starts to add up. Get their house in order before they go after my wallet with their porkfat covered hands.....
Except that you enjoy these programs every day, without even being aware of it. Bad spending should be cut - agreed. We can start with spending for bombs killing people. I think it is something like 3-4 billion a week in Afghanistan.
And I agree we should cut taxes further in this climate.
01-21-2011, 03:23 PM   #15
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QuoteOriginally posted by johnny9fingers Quote
The bottom line is all levels of government need to wake up and realize they have to live within their means.
Actually .... no. AND is counter productive to creating a robust financial society.
QuoteQuote:
Right now, the real policy debate is whether we need fiscal austerity even with the economy deeply depressed. Obviously, I’m very much opposed — my view is that running deficits now is entirely appropriate.

But here’s the thing: there’s a school of thought which says that deficits are never a problem, as long as a country can issue its own currency. The most prominent advocate of this view is probably Jamie Galbraith, but he’s not alone.

Now, Jamie and I are, I think, in complete agreement about what we should be doing now. So we’re talking theory, not practice. But I can’t go along with his view that

So long as U.S. banks are required to accept U.S. government checks — which is to say so long as the Republic exists — then the government can and does spend without borrowing, if it chooses to do so … Insolvency, bankruptcy, or even higher real interest rates are not among the actual risks to this system.
http://www.creditwritedowns.com/2010/07/misunderstanding-modern-monetary-theory.html
QuoteQuote:
There is no reason to cut Social Security benefits or Medicare now, with effect in the future, in order to avoid the theoretical possibility that some combination of policies might at some time in the future give us the economic conditions of post World War I Germany.

Those conditions were desperately resource-constrained.

In the actual world we live in, government does not have to "persuade the private sector to release real resources." In the actual world, the private sector has already released those resources by the tens of millions of people.

All the government has to do, in the actual world, is mobilize those resources, which it does by issuing checks, preferably to pay people to do useful things.

There is no reason why this should be considered "costly." Done correctly, in economic terms it amounts simply to the reduction of the waste that is associated with unemployment.

Nor is it necessary, when the government issues a check, that it issue a bond to "borrow" the money behind that check. The check creates money in the first place. (Yes, it does this from thin air, by changing numbers in bank accounts.)

Operationally, this is a free reserve in the banking system. The reason the government issues a bond later, is that the banks like to have a higher rate of interest than they can earn on reserves, and the government likes to oblige them.

Last edited by jeffkrol; 01-21-2011 at 03:29 PM.
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