A thread for Democrats Only
POSTED BY: THGRRI
UPDATED: Sunday, September 6, 2026 15:36
VIEWED: 755368
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Quote:Based on? Dartboard guess?
Paul Krugman warned to not get carried away with over-estimating the cost of a Trumpian trade war. He wasn't willing to risk his reputation by giving a dollar value. The closest he would go is a formula ...
Quote:Whereas it costs $71,000 per year to incarcerate someone; approximately $60,000 for four years of "free" tuition (board and supplies extra!) at a state university; and about $650 billion (per year) or about 2% of real GDP per year in various Federal "welfare" programs (SNAP "food stamps", CHIP, EITC, SSI etc).
But it's only $158,000 per job per year.
*****
Aside from "jobs", re-instating manufacturing at home would have a beneficial effect on our national economic and financial security. It would eliminate our dependence on other nations including potential competitors/ enemies for "goods", improve our balance of trade, and bolster the value of the dollar which- right now - is resting on nothing but hot air.
It would reduce crime and drug dependence at home, and provide people with a well-founded sense of security and meaning. (That is why I'm always talking about MEANINGFUL jobs ... not McJobs.)
We do not "need" to be "competing" in the international labor market nor do we "need" to be adopting automation ... THOSE efforts are all for the benefit of the corporation. We need to be asking ourselves ... Is our economy run for the benefit of the people? Or are people run for the benefit of the wealthy? It is a CHOICE, not an inevitability.
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Pity would be no more,
If we did not MAKE men poor - William Blake
"The messy American environment, where most people don't agree, is perfect for people like me. I CAN DO AS I PLEASE." - SECOND
America is an oligarchy http://www.fireflyfans.net/mthread.aspx?tid=57876
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Quote:
Originally posted by 1kiki:
If you can find where Krugman got his figures then you'll know what his '3% of real income' meant. And not to harp, but 'profits' aren't 'income' either. Though what businesses consider 'income' is subject to interpretation. "The real issue is what goes into that income number. ...About the best you can do is try to compare apples to apples — from one quarter to the next, or one company to another. But even that takes a bit of digging." nbcnews 'Income' for families and individuals is much easier to determine, since we have fewer categories for exclusion.
THUGGER admits it's not about RUSSIA !!! and is, in fact, a witch hunt. "Trump better be innocent of any wrong doing, anywhere, anytime."
Krugman used GDP, not "real income" in June and he explained it with a diagram at www.nytimes.com/2018/06/17/opinion/thinking-about-a-trade-war-very-won
kish.html
Quote:Not that the following will change anybody's mind, from the same place:
I’ve always ended up being really sorry when I let my political feelings override what my economic analysis says. And simple trade models, while they do say that trade wars are bad, don’t say that they’re catastrophic.
To do this right, we should use one of those computable general equilibrium models I mentioned above. These suggest substantial but not huge losses – 2 or 3 percent of GDP. What I’d like to do is offer a bit of intuition about why those losses aren’t bigger, then explain why a trade war would nonetheless be highly disruptive.
To do this, I’ll exploit a dirty little secret of trade theory: while ultimately stories about trade have to be general equilibrium, that is, they must make sure that you’ve kept track of all markets simultaneously, trade policy analysis using partial equilibrium – ordinary supply and demand – usually gets you more or less the right answer.
Quote:
The U.S. currently exports about 12 percent of GDP. Not all of that is domestic value added, because some components are imported. But there’s still a lot of the economy, maybe 9 or 10 percent, engaged in production for foreign markets. And if we have the kind of trade war I’ve been envisaging, something like 70 percent of that part of the economy – say, 9 or 10 million workers – will have to start doing something else. And there would be a multiplier effect on many communities now built around export industries, which would lose service jobs too.
. . .
O.K., there’s no certainty that any of this will happen. In fact, I still find it hard to believe that we’re really going to go down this path. But I also don’t have any plausible stories about what’s going to make Trump stop, or induce other big players to give in to his demands.
The Joss Whedon script for Serenity, where Wash lives, is Serenity-190pages.pdf at www.mediafire.com/folder/1uwh75oa407q8/Firefly
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It’s a good thing America's foreign debts are in domestic dollars, not foreign currency.
Here’s the script: start with a country that, for whatever reason, became a favorite of foreign lenders, and experienced a large inflow of foreign capital over a number of years. Crucially, the debt thus incurred is denominated in foreign currency, not domestic (which is why the U.S., also a recipient of large inflows in the past, isn’t similarly vulnerable – we borrow in dollars.)
At some point, however, the party comes to an end. It doesn’t matter much what causes a “sudden stop” in foreign lending: it could be domestic events, like appointing your son-in-law to oversee economic policy, it could be a rise in U.S. interest rates, it could be a crisis in another country investors see as being similar to you.
Whatever the shock, the crucial thing is that foreign debt has made your economy vulnerable to a death spiral. Loss of confidence causes your currency to drop; this makes it harder to repay debts in foreign currency; this hurts the real economy and further reduces confidence, leading to a further decline in your currency; and so on in The Loop of Doom.
The result is that foreign debt explodes as a share of GDP. Indonesia came into the 90s financial crisis with foreign debt less than 60 percent of GDP, roughly comparable to Turkey early this year. By 1998 a plunging rupiah had sent that debt to almost 170 percent of GDP.
How does such a crisis end? If there is no effective policy response, what happens is that the currency drops and debt measured in domestic currency balloons until everyone who can go bankrupt, does. At that point the weak currency fuels an export boom, and the economy starts a recovery built around huge trade surpluses. (This may come as a surprise to Donald Trump, who appears to be levying punitive tariffs on Turkey as punishment for its weak currency.)
Is there any way to short-circuit this Doom Loop? Yes, but it’s tricky. http://web.mit.edu/krugman/www/MINICRIS.htm You need a government that is both flexible and responsible, not to mention technically competent enough to implement special measures and honest enough to carry out that implementation without massive corruption.
That, unfortunately, doesn’t sound like Erdogan’s Turkey. Of course, it doesn’t sound like Trump’s America, either. So it’s a good thing our debts are in dollars.
More at www.nytimes.com/2018/08/11/opinion/partying-like-its-1998.html
The Joss Whedon script for Serenity, where Wash lives, is Serenity-190pages.pdf at www.mediafire.com/folder/1uwh75oa407q8/Firefly
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Quote:
Originally posted by second:
At some point, however, the party comes to an end. It doesn’t matter much what causes a “sudden stop” in foreign lending: it could be domestic events, like appointing your son-in-law to oversee economic policy
Yep. That or quantitative easing. Doesn't matter which.
Do Right, Be Right. :)
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Quote:6ixStringJack, policy recommendations for future crises ought to flow from our best analytical shot, not from ideological preconceptions. But who among Trump voters/defenders can really do actual economic analysis rather than lazily depend on their own GOP approved brand of highly imaginative preconceptions?
Originally posted by 6IXSTRINGJACK:Quote:
Originally posted by second:
At some point, however, the party comes to an end. It doesn’t matter much what causes a “sudden stop” in foreign lending: it could be domestic events, like appointing your son-in-law to oversee economic policy
Yep. That or quantitative easing. Doesn't matter which.
Do Right, Be Right. :)
The Joss Whedon script for Serenity, where Wash lives, is Serenity-190pages.pdf at www.mediafire.com/folder/1uwh75oa407q8/Firefly
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Quote:So, how does this not apply to the US dollar???
Originally posted by second:
It’s a good thing America's foreign debts are in domestic dollars, not foreign currency.
Here’s the script: start with a country that, for whatever reason, became a favorite of foreign lenders, and experienced a large inflow of foreign capital over a number of years. Crucially, the debt thus incurred is denominated in foreign currency, not domestic (which is why the U.S., also a recipient of large inflows in the past, isn’t similarly vulnerable – we borrow in dollars.)
At some point, however, the party comes to an end. It doesn’t matter much what causes a “sudden stop” in foreign lending: it could be domestic events, like appointing your son-in-law to oversee economic policy, it could be a rise in U.S. interest rates, it could be a crisis in another country investors see as being similar to you.
Whatever the shock, the crucial thing is that foreign debt has made your economy vulnerable to a death spiral. Loss of confidence causes your currency to drop; this makes it harder to repay debts in foreign currency; this hurts the real economy and further reduces confidence, leading to a further decline in your currency; and so on in The Loop of Doom.
The mind just boggles on your rock-solid (but erroneous) assumption that the USA will always be a welcome currency and debt. You imagine that other nations would have to sell their currencies in order to buy dollars to repay their debts; a future in which foreign nations unload Treasuries and refuse dollars just doesn't compute with you. But there is one thing that has always held true: All "universal" currencies come to an end sooner or later.
And there are ALREADY several nations which are not only de-dollarizing but are also moving off the SWIFT, and that includes China, which has built an entire alternate financial structure with the goal of replacing the dollar, at least in their non-USA transactions.
The fact that the USA is awash in debt isn't necessarily a big standout from other nations, since the Central-Bank-debt model has been the basis for western financial arrangements for decades, if not centuries.
*****
EDITED TO ADD ...
The question is: what would make US dollars, or US Treasuries, unacceptable for world trade or world investment?
The two need to be considered separately, because although they're related, they're controlled in different ways and serve different functions. I THINK that the fundamental attraction to US Treasuries is that they are a USD-denominated investment. In other words, the fundamental driver is the US dollar as a trade and reserve currency. HOWEVER, Treasuries themselves also have a "value" outside of the fact they can serve as a convenient repository for excess USD: having to do with interest rates etc.
*****
So, what are the "legs" that hold up the value of the American dollar and the American Treasury, and how do they compare to other nations?
AMERICAN TREASURIES
It is no secret that all governments sell their bonds (debts/ promises to pay) into foreign markets, and that foreign buyers buy these bonds to diversify their holdings. Foreign banks and foreign investors also hold many foreign currencies If we were to look at "which nation owes who what?" we should examine "foreign" holdings of each nation to see where their currencies and debt instruments are located. Well, this is a new area for me, but I did a "quick" scan of Japanese Bonds and British Gilts. Although the Japanese government is famously awash in debt, approximately 90% (of roughly $10 trillion as USD) of government bonds are held within Japan. So Japan owes foreigners roughly a trillion dollars-worth of yen. https://asia.nikkei.com/Markets/Capital-Markets/Foreigners-holding-nea
rly-10-of-Japanese-government-bonds
And although Britain is widely considered to be "the banking capital of the world", I estimate (from the bar chart) that less than 30% of $
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Quote:
Originally posted by second:Quote:6ixStringJack, policy recommendations for future crises ought to flow from our best analytical shot, not from ideological preconceptions. But who among Trump voters/defenders can really do actual economic analysis rather than lazily depend on their own GOP approved brand of highly imaginative preconceptions?
Originally posted by 6IXSTRINGJACK:Quote:
Originally posted by second:
At some point, however, the party comes to an end. It doesn’t matter much what causes a “sudden stop” in foreign lending: it could be domestic events, like appointing your son-in-law to oversee economic policy
Yep. That or quantitative easing. Doesn't matter which.
Do Right, Be Right. :)
The Joss Whedon script for Serenity, where Wash lives, is Serenity-190pages.pdf at www.mediafire.com/folder/1uwh75oa407q8/Firefly
And who among Democrats could do the same?
You should probably notice a pattern here, Second. I rarely disagree with your take on the GOP. My only issue with you is that you're foolish enough to believe the Democrats are somehow any better.
Do Right, Be Right. :)
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Quote:It is not about better. Which is better? Chocolate or Vanilla? It is about personal preference. Your choice is either a chocolate cone or a vanilla ice cream cone or the very rare cone that got dropped on the floor and they give it to you for free because it tastes like grit or dirt.
Originally posted by 6IXSTRINGJACK:
And who among Democrats could do the same?
You should probably notice a pattern here, Second. I rarely disagree with your take on the GOP. My only issue with you is that you're foolish enough to believe the Democrats are somehow any better.
Do Right, Be Right. :)
In America there is only two political flavors, call them R and D. I checked on how many third party office-holders (neither R or D) are in America, today. It is 24. Out of 100,000 elected positions. Your choice, should you decide to make one, is really either R or D. And I am sure R is very different from D. What is your preference? Or would you rather neither vote nor eat an ice cream cone at this time?
https://en.wikipedia.org/wiki/Third_party_officeholders_in_the_United_
States
Personally, my preference to avoid the GOP is like dogs ought to avoid chocolate.
https://xkcd.com/1706/
The Joss Whedon script for Serenity, where Wash lives, is Serenity-190pages.pdf at www.mediafire.com/folder/1uwh75oa407q8/Firefly
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Quote:I am from Texas and we ain't taking any petroyuan for our natural gas or crude. China will pay in U.S. dollars or else we are not selling to them. Obviously the day will come when Texas reservoirs run dry, but until then no petroyuan, only dollars.
Originally posted by SIGNYM:
https://www.forbes.com/sites/billconerly/2013/10/25/future-of-the-doll
ar-as-world-reserve-currency/#76a78362e065
The ONE THING that has propelled the dollar into reserve status is the USD as the PETRODOLLAR. Since 1973 until recently, oil sellers have universally agreed to accept only US dollars for oil; thus, you could ALWAYS get something of value for the dollar, even if it wasn't from the USA directly! However, China is working mightily hard to replace the petrodollar with the gold-backed petroyuan, at least for its own oil purchases, and since China is the largest oil importer it has considerable say in what happens in the oil market.
Well, I have to stop this on-the-fly research and analysis for now. There still needs to be an accounting of the derivatives market and the BIS.
"The messy American environment, where most people don't agree, is perfect for people like me. I CAN DO AS I PLEASE." - SECOND
America is an oligarchy
The Joss Whedon script for Serenity, where Wash lives, is Serenity-190pages.pdf at www.mediafire.com/folder/1uwh75oa407q8/Firefly
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Quote:
Originally posted by second:Quote:I am from Texas and we ain't taking any petroyuan for our natural gas or crude. China will pay in U.S. dollars or else we are not selling to them. Obviously the day will come when Texas reservoirs run dry, but until then no petroyuan, only dollars.
Originally posted by SIGNYM:
https://www.forbes.com/sites/billconerly/2013/10/25/future-of-the-doll
ar-as-world-reserve-currency/#76a78362e065
The ONE THING that has propelled the dollar into reserve status is the USD as the PETRODOLLAR. Since 1973 until recently, oil sellers have universally agreed to accept only US dollars for oil; thus, you could ALWAYS get something of value for the dollar, even if it wasn't from the USA directly! However, China is working mightily hard to replace the petrodollar with the gold-backed petroyuan, at least for its own oil purchases, and since China is the largest oil importer it has considerable say in what happens in the oil market.
Well, I have to stop this on-the-fly research and analysis for now. There still needs to be an accounting of the derivatives market and the BIS.
"The messy American environment, where most people don't agree, is perfect for people like me. I CAN DO AS I PLEASE." - SECOND
America is an oligarchy
The Joss Whedon script for Serenity, where Wash lives, is Serenity-190pages.pdf at www.mediafire.com/folder/1uwh75oa407q8/Firefly
lol... You sure you took an economics class before you went into business?
The upside about your requirements is that I'm sure if you asked for Billions in US Dollars for flood relief in Houston when that time comes they'll just go ahead and send you a few Trillion.
I'm sure China will be more than happy to accommodate you as well, since they'll be using USD as toilet paper.
Do Right, Be Right. :)
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