Do you think a budget deficit is good or bad for the economy?

[Liam]

Well whatever happens I'm sure that it will be, ummm, interesting.

[uofom3]

The most comedic part about the quote in my sig is that the people who read it tend to erroniously assume it is not referring to them...

As for this thread, it's do it in the ass Berkeley gay. It's the typical political know it all thread found on r3v meant to stir up a little shit under the guise of "opening people's eyes." We know, you took some community college class and your professor explained his thoughts to you and made you do a homework assignment and now you know better than everyone else. We envy you and we're all impressed...

Eh, and I don't really fit in with the Berkeley crowd anyways. Most of them morally object to my profession.

Anyways, carry on. Enjoy your thread.

mi kommunity coleg klases wur prety hard o k, wi kant al be lern-ed.

[uofom3]

End of the day, all politicians will screw you in the ass and not do what they say. Their only concern is re-election.

Deficits are actually good for the stock market, and good for the economy - even in the long run.

go to finance.google.com and compare the graphs over the years since WW2 laid over the graph of when we have had budget deficits and surplus. Generally, better markets are when we are running a deficit. Why? Becuase the "G" in the general economic equation is higher which coincides with larger output and growth. Think of the country as a business - there is a healthy amount of leverage that a company should take on or else it isn't actually taking advantage of all of its resources. A country/family/etc. is no different. Debt isn't the devil, but it is when it's not planned and out of control My high school economics class told me this - I never went to community college.

Halen is correct. The gov. took in about 500 billion in revenue from taxes in I this filing year. This year... they are going to net about 450 billion. I bet several people can guess where that 50 BILLION went...

This isn't a flame thread. If you don't get it or want to participate - fine. It will die off. If you want tits, look at the favorite picture thread. This isn't even a slam on the current administration because alternatives would be equally worthless.

This will matter a hell of a lot more to the people here when you get a paycheck and go, "FUCK!? where did 30% of my paycheck go?!"

[Hallen]

Yes, that's true.

However, this puts a lot of economic control in the hands of the government. Leveraging money is much better done through the banks and the fed.

My take on things having to do with deficit spending is a bit different.

The government always wants to force inflation in order to insure that their debt is always going down in real terms. That's the only way that government can "leverage" the debt. Yes, it is money spent in the economy, but it is also a method outside of the fed for introducing more money into the economy which causes "inflation" which is good for the government, but not really good for anybody else.

Look at it this way, if you have an investment that is returning 10% interest, wow, that's very good. But if the government is inflating the money supply at a rate of 5% per year, well, your 10% investment is now a 5% investment. Not so hot. But, the reverse is also true for the government's debt. They just "bought" a bunch of stuff with dollars that are going to be worth less very shortly. They make out, but the rest of us end up paying. This type of thing is dangerous in the long term for government to be doing. Historically, every government has always tried to make their money go further by either shaving gold off of coins, revaluing paper money that is based on a gold standard (look up how it became "Pounds Sterling"), or by inflating the money supply. That's why we have the fed handle the money supply. Deficit spending is simply the government doing an end-around on us and the fed.

If however, the fed decided to deflate the money supply, your investments and saved money would be worth more over time instead of less. It would be good for you, but bad for the government (which in the end, becomes bad for us because of deficit spending). Of course there are also problems with having enough money to transact business without a huge curtailing of available capital. But I think there is enough lending power in the banks (when they are not in the kind of trouble they are in now) that it wouldn't be as much of a problem as they make it out to be.

Yes, it is more complicated than that and there are a lot more factors at play. But that is why this stuff is so hard to control... yet the government keeps trying to control it. So instead of damping out the peaks, government has a tendency to cause massive over-shoots of the peaks and valleys. Just like we are seeing now.