How are we going to pay for all this shit?

Reagan reversed a 35 year decline in the debt to GDP ratio.

Lustylad has made numerous claims about how that is the best way to judge our economy. Remember, you posted the extended numbers!

Your ignorance on this has already popped up and been slapped back down once in this thread...you want to go for an Exacta?

Jesus..I feel like the Grinch having to explain that Santa isn't real. Originally Posted by WTF

what was the average? and you know the full list shows numbers far higher at times that 50% for a single year. and years way before Reagan where it was 50% or greater. like 1960/61/62.


%


your argument it "was going south" doesn't hold water. it averaged 34%. from 1969 to 1979. 37% going back to 1960. Reagan averaged 39%. Originally Posted by The_Waco_Kid

Are you really this dense? From a high of 119% in 1946 it slowly ticked down until REAGAN took office. He took it from 31% back UP to 50%.

What part of that don't you understand? It is in black and white. You compare it

You are comparing 1988 to 1960,61,62 when it was tracking DOWN. Like I said Reagan REVERSED the trend of the ratio going down to it going up.

I feel like you would try and ski up a mountain with your inability to track an incline vs decline






1946 $269 119% Truman's 1st term budgets & recession
1947 $258 103% Cold War
1948 $252 92% Recession
1949 $253 93% Recession
1950 $257 86% Korean War boosted growth and debt
1951 $255 74%
1952 $259 71%
1953 $266 68% Recession when war ended
1954 $271 69% Eisenhower's budgets & Recession
1955 $274 64%
1956 $273 61%
1957 $271 57% Recession
1958 $276 58% Eisenhower's 2nd term & recession
1959 $285 55% Fed raised rates
1960 $286 54% Recession
1961 $289 52% Bay of Pigs
1962 $298 50% JFK budgets & Cuban missile crisis
1963 $306 48% U.S. aids Vietnam, JFK killed
1964 $312 46% LBJ's budgets & war on poverty
1965 $317 43% U.S. entered Vietnam War
1966 $320 40%
1967 $326 40%
1968 $348 39%
1969 $354 36% Nixon took office
1970 $371 35% Recession
1971 $398 35% Wage-price controls
1972 $427 34% Stagflation
1973 $458 33% Nixon ended gold standard & OPEC oil embargo
1974 $475 31% Watergate & budget process created
1975 $533 32% Vietnam War ended
1976 $620 33% Stagflation
1977 $699 34% Stagflation
1978 $772 33% Carter budgets & recession
1979 $827 32%
1980 $908 32% Volcker raised fed rate to 20%
1981 $998 31% Reagan tax cut
1982 $1,142 34% Reagan increased spending
1983 $1,377 37% Jobless rate 10.8%
1984 $1,572 38% Increased defense spending
1985 $1,823 41%
1986 $2,125 46% Reagan lowered taxes
1987 $2,350 48% Market crash
1988 $2,602 50% Fed

Tiny - You might want to check the 530% I highlighted. It would mean Turkey exports more than its entire GDP lol.

Never mind, I just looked it up - Turkey's GDP will be roughly $740 billion this year. Last year exports were $170 billion and external debt was around $450 bn. So exports as a % of external debt would have been 38%. Originally Posted by lustylad

You're right Lusty Lad. I pulled that number from Bloomberg, which shows Turkish exports at $215.6 billion in October, and 2.270 trillion USD over the trailing 12 months. And yes, that is dollars, not Turkish Lira. But Bloomberg MUST be wrong. As you pointed out, it's an absurd number.

What's happening in Turkey is fascinating. Over the weekend the Turkish president, Erdogan, pledged more rate cuts. (Right now inflation officially is around 21% YoY and the benchmark interest rate is 14%.) The lira promptly fell from about about 15.7 to the dollar to 18.3. Then today, after the stock market closed, Erdogan announced the government will make up for losses incurred by holders of lira deposits, if the lira's decline against hard currencies exceeds the interest income! The lira promptly went from 18.3 to the dollar to 12.3! It's corrected a bit and now is at 13.5.

The government has already raided the commercial banks, scrounging hard currency to intervene in forex markets to prop up the lira. Now it's going to compensate depositors so they can't lose money, in dollar terms, if the lira goes the wrong way. Depositors are going to be able to make one way bets, 14% annual returns if the lira stays stable, with "0" potential for loss, in dollar or Euro terms?

I don't have the background in economics like you to know if this is truly insane, but it sounds like it. I've got a hunch this could backfire hugely.

It's going to be interesting to see how the Istanbul stock market opens tomorrow -- again it was already closed, after closing "limit down" earlier today, when Erdogan made the announcement. And more interesting to see what the lira finally settles out at. Will the Turks be looking at hyperinflation and a worthless currency? Or is Erdogan up to something that may actually work? The currency traders seem to think the latter.

You and Tiny can come back in here and ridicule me with an "I told you so!" post in the event that high inflation persists into 2023.

However, I respectfully request that you guys give the issue time to crystallize before telling me in so many words (politely, of course!) that I'm totally full of shit!

. Originally Posted by CaptainMidnight

Ha! Tell you I told you so? Unlike LL, who actually knows what he's talking about, if I'm right it will be sheer luck. And you've converted me from a true believer / inflation hawk to an agnostic anyway.

.

One thing that's very useful to watch is the movement of the breakevens and the forwards in response to what might reasonably be construed as changes likely to affect inflation expectations.

There's an easy way to do this, as the St. Louis Fed (among others) puts out a data compilation that tracks the market values of TIPs vs. nominal debt securities.

For instance, current trading indicates expectations that the average inflation rate over the next 5 years will be about 2.65%:

https://fred.stlouisfed.org/series/T5YIE

But now look at traders' inflation expectations for the 5-year period beginning 5 years from today. That is called the "5-year, 5-year forward" inflation expectation rate:

https://fred.stlouisfed.org/series/T5YIFR

The interesting thing here is that trading in TIPs securities reflects expectations that whatever inflation we may experience during the next 10 years will be "front-loaded" into the very near future.

Much has been written about "prediction markets" and how they are likely to be more accurate than any individual "expert" or forecaster. These markets, more than anything else, act like a prediction market for inflation.

Note also that participants in these markets are not Robinhood/Reddit/WSB Gen Zers or Millennials playing with covid relief money. Many are big-money players balancing, counterbalancing, or hedging risks in loan or other portfolios.

Of course, the bond markets may be wrong, and sometimes are. But they do have a way of sniffing out problems before anyone or anything else.

(I wrote the above three months ago in another forum, editing only to change the current interest rate forecasts shown in the links.)

. Originally Posted by CaptainMidnight

Another very interesting post. I want to bookmark it in the browser on my desktop but am wondering what a colleague will think if she clicks on one of my favorites and gets transported to a hooker board.

It looks like the St. Louis Fed has taken all the work out of coming up with consensus inflation estimates, made by people who actually have money in the game.

I've produced a lot of forecasts for project economics that incorporate commodity strip prices as the basis for price forecasts. And I tell people what you tell me. If you're looking at an oil and gas project for example, it's tough to come up with a "better" forecast than what you get from NYMEX oil futures. You've got big oil companies, refiners, airlines, banks, hedge funds, etc. participating in the market. And they're smarter than I am.

He will be forced to raise rates! But who knows what basically a Dictator will do.

https://indianexpress.com/article/ex...dogan-7674039/

He will be forced to raise rates! But who knows what basically a Dictator will do.

https://indianexpress.com/article/ex...dogan-7674039/ Originally Posted by WTF

Not necessarily. Argentina, Brazil, Zimbabwe and Venezuela have experienced long periods of inflation at much higher levels than what Turkey's experiencing now. I'm not sure what interest rates were like in those countries though. There's an election coming up in 2023 and the consensus is that Erdogan will get his ass kicked.

Well he is a Dictator....so he could keep rates low and declare himself the winner like Trump tried to.

no, it's normal for you. only the Very Skeptical Munchman pulls the liar game more than you. Originally Posted by The_Waco_Kid

That made me laugh so I gave you a “like”.


BAHAHAHAHA

Are you really this dense? From a high of 119% in 1946 it slowly ticked down until REAGAN took office. He took it from 31% back UP to 50%.

What part of that don't you understand? It is in black and white. You compare it

You are comparing 1988 to 1960,61,62 when it was tracking DOWN. Like I said Reagan REVERSED the trend of the ratio going down to it going up.

I feel like you would try and ski up a mountain with your inability to track an incline vs decline






1946 $269 119% Truman's 1st term budgets & recession
1947 $258 103% Cold War
1948 $252 92% Recession
1949 $253 93% Recession
1950 $257 86% Korean War boosted growth and debt
1951 $255 74%
1952 $259 71%
1953 $266 68% Recession when war ended
1954 $271 69% Eisenhower's budgets & Recession
1955 $274 64%
1956 $273 61%
1957 $271 57% Recession
1958 $276 58% Eisenhower's 2nd term & recession
1959 $285 55% Fed raised rates
1960 $286 54% Recession
1961 $289 52% Bay of Pigs
1962 $298 50% JFK budgets & Cuban missile crisis
1963 $306 48% U.S. aids Vietnam, JFK killed
1964 $312 46% LBJ's budgets & war on poverty
1965 $317 43% U.S. entered Vietnam War
1966 $320 40%
1967 $326 40%
1968 $348 39%
1969 $354 36% Nixon took office
1970 $371 35% Recession
1971 $398 35% Wage-price controls
1972 $427 34% Stagflation
1973 $458 33% Nixon ended gold standard & OPEC oil embargo
1974 $475 31% Watergate & budget process created
1975 $533 32% Vietnam War ended
1976 $620 33% Stagflation
1977 $699 34% Stagflation
1978 $772 33% Carter budgets & recession
1979 $827 32%
1980 $908 32% Volcker raised fed rate to 20%
1981 $998 31% Reagan tax cut
1982 $1,142 34% Reagan increased spending
1983 $1,377 37% Jobless rate 10.8%
1984 $1,572 38% Increased defense spending
1985 $1,823 41%
1986 $2,125 46% Reagan lowered taxes
1987 $2,350 48% Market crash
1988 $2,602 50% Fed Originally Posted by WTF

are you so dense that you actually thinck that Reagan is solely responsible for the debt and its increase beyond 50% of Debt to GDP by every president since Reagan?


is that your claim?



you have yet to prove this because you can't.

are you so dense that you actually thinck that Reagan is solely responsible for the debt and its increase beyond 50% of Debt to GDP by every president since Reagan?


is that your claim?



you have yet to prove this because you can't. Originally Posted by The_Waco_Kid

If you say so.

are you so dense that you actually thinck that Reagan is solely responsible for the debt and its increase beyond 50% of Debt to GDP by every president since Reagan?


is that your claim?



you have yet to prove this because you can't. Originally Posted by The_Waco_Kid

All I've said is that Reagan started this nonsense. Mind fucked a whole generation of robots whose only mantra is "Cit taxes. Cut taxes!".

Each presiding President is responsible for continuing the Reagan playbook.

Bush Sr tried to reverse it but you guys voted him out!

I left it out and was going to get back to it and will.

First let me congratulate you on finally coming around to what I've been saying.

Reagan did raise taxes on the middle class and poor with his entitlement rate increase.

All he did was spend more on the military.

So for a quick wrap.

He lowered the tax rate. Increased the entitlement taYox rate. Increased defense spending. Increased gross debt. Fooled a bunch of folks into thinking that slight of hand was some sound accounting.

We now have a bunch of IOU's in SS/Medicare. Hege Debt. And a bunch of folks that still do not understand cutting taxes when they are already low is not a good thing if you care about the debt. Originally Posted by WTF

WTF, respectfully, sometimes I think you've fallen for the Progressive line that the top 1% should not only pay 40% of the income tax, they also should pay for everyone's retirement and medical care. They don't have enough money to do that, of course.

Social security and Medicare are good deals for most people. They take out more, after inflation, than they put in. The exception are the high income earners who, unlike Joe Biden, don't game the tax system. They pay the Medicare tax on all their employment and self-employment income, much more than they'll ever get back in benefits. But you seem to believe payments for social security and Medicare should be counted the same as the income tax and sales taxes and property taxes in determining how progressive the tax system is. I don't buy that.

Are you saying the 70% maximum tax rate when Reagan came to office was low? Well, I guess that fits with your belief expressed in another post that tax rates should be set at rates that will milk the most money possible out of the taxpayers.

I don't believe that Reagan's any more guilty of some kind of slight of hand with SS/Medicare than anyone else. What you're saying doesn't make a lot of sense. Presumably the IOU's are government securities owned by the Social Security and Medicare trust funds. If you don't want them owning IOU's, then you're saying they shouldn't be building up reserves for baby boomers, but rather just shuttling money from people who are currently paying into the system to retirees. And that, as you know, would be a recipe for disaster.

WTF, respectfully, .

Are you saying the 70% maximum tax rate when Reagan came to office was low? Well, I guess that fits with your belief expressed in another post that tax rates should be set at rates that will milk the most money possible out of the taxpayers.

I . Originally Posted by Tiny

No, I did not say that...

May I respectfully suggest you do more reading on just what Laffer espoused concerning his Curve.

This is the second time you have erroneously misstated what I've said...well actually what Laffer said.

The most efficient rate is one that workers think fair and the tax income ideally pays our bills.(my words)


https://www.thebalance.com/what-is-t...nation-3305566
Dr. Laffer admits that "The Laffer Curve itself does not say whether a tax cut will raise or lower revenues."1 Instead, it shows that if taxes are already low, then further cuts reduce revenues without boosting growth. Politicians who claim tax cuts always raise revenues in the long-term misinterpret the Laffer Curve.

WTF, respectfully,

I don't believe that Reagan's any more guilty of some kind of slight of hand with SS/Medicare than anyone else. What you're saying doesn't make a lot of sense. Presumably the IOU's are government securities owned by the Social Security and Medicare trust funds. If you don't want them owning IOU's, then you're saying they shouldn't be building up reserves for baby boomers, but rather just shuttling money from people who are currently paying into the system to retirees. And that, as you know, would be a recipe for disaster. Originally Posted by Tiny

There has been a huge transfer of wealth in my lifetime.

Partly done , and forgive me for this simplified explanation , by this mix and match of entitlement with the Budget.

Let's just say....and indulge me for a second. That you raise this huge surplus by raising the entitlement tax rate.

Were you to have left it alone and asked the American public to increase taxes to pay for let's say added military spending. They would have had a choice of higher taxes but more military spending. Fair enough right?

Or you could have said to the American public we are going to build up this huge surplus in your entitlements and instead of raising taxes on the annual budget side....we are going to borrow the excess and pay it back. Ok John a public might be ok with that.

What hasn't been explained was the reality. The reality is that when entitlement surpluses are no longer, when in fact entitlement still have plenty of money in those programs, it just is no longer running a surplus. Then folks that spent all that money on military are instead of realizing that NOW we will need to raise taxes on the annual budget side are now instead of doing that are going to want to cut promised benefits.

That my frien is a transfer of wealth from retirees to the military industrial complex.

That is what has and will happen.

Please feel free to ask me questions but let's not say I've said something I haven't. Just ask me what I mean by such and such...

...we definitely should be seeking the sweet spot to maximize revenue. Originally Posted by WTF

Please feel free to ask me questions but let's not say I've said something I haven't. Just ask me what I mean by such and such... Originally Posted by WTF

Ok, I'll play!

You said you want the federal government to maximize its tax revenues. So do you support policies that will increase income/wealth inequality?