The KGB Oracle Forums General Public Discussion (SPECIAL ACCESS) KGB Political Debate Central Please Read: The choice 2012

The only reason massive cuts might cause recession, is because the money being used was created by the Fed - so if the Fed was no longer injecting the stimulus in that manner.. a temporary recession may ensue.

However, the long term health would be a lot better. Its kind of like kicking a heroin habit. At first the addict feels miserable. Then after they get over that really shitty part, they are 1000x better off.

Our fiscal habits are slowly killing us, and we are always in danger of overdose. A short, needed correction is a small price to pay for long term health.

More like another lost decade and recovery is by no means guaranteed.

Again, you assume that if we go through all the pain eventually system will self-correct and we will reach "better days". Have you considered that we might end up wrecking the country and never getting past "Step 2. ???" into prosperity.

What happened to Obama balancing the budget like he said he would in 2008? What happened to cutting the debt?

You do realize that Obama hasn't done anything the help the situation right? Numbers don't lie... we are spending $4 billion a day. Now how can you justify this? Are you going to be one of those people that have to be standing in a pile of ruins before you realize we should have done something sooner? The way you keep spewing off, it seems that way. Obama didn't get it done in 4 years, you have to be off your rocker if you think another 4 years will be any better.

IT'S TICKING...
http://www.usdebtclock.org/

Nope, because historically in a generally free market - the scenario you talk about has never, ever happened.

The natural tendency of people is to "do", and in an environment where they are not forcibly prevented from "doing", work happens and goods are produced and services provided. These goods and services are traded, which happens most efficiently and reliably when an abstracted token of value we usually call currency is stable and sound.

The concept that a economy that was returned to sound fundamentals, where major idiotic distortions introduced by govt were removed, would somehow find itself in a permanent depression is completely alien to me.

Most of the money being spent that is at the heart of this discussion is the functional equivalent of paying people to dig holes and fill them back up. Its wasted productivity. If it wasnt wasted, the govt wouldn't have to subsidize it. Obbviously the military is an exception and falls under a different type of argument - in that case, its just as simple as if we stop occupying countries we dont need to maintain a huge force capable of occupying a country. I would keep Naval and Air Force and R&D spending for example, but how many standing divisions of Heavy Armor and Artillery do we really need if we arent going to be fighting the Soviets on a huge European battlefield?

Free markets have a much better track record than govt intervention at creating value, and long term growth. Created value is ultimately what drives economic growth. Eliminating non value-add activities, and economic distortions simply frees up those resources to start pursuing activities that actually add value.

GOP and Bush happened. I am starting to think Romnesia must be an epidemic on the right.

You do understand if I apply your "logic" and Romney gets somehow elected, it will instantly become his fault? I hope even you can see flawed logic here.

Derid, when you say "historically happened", what exactly are you referring to?

I can think of a number of historical examples where economies outright collapsed, usually it take 20+ years to get back to recover and has a high chance of autocrat coming to power. I think your worst-case scenario is overly optimistic.

I think post-WWI Germany is very likely scenario if US economy is allowed to collapse so you can start building your ideologically pure economy.

Nah, post WW1 Germany took place because of the insane punitive measures the French imposed on the German economy. Trying to imagine that the same would happen here, even though the distorting and limiting factors on our economic fundamentals had been *reduced seems like a nonstarter.

/tangent
This is a bit tangential, but while we are talking about WWW1-WW2, its worth noting that when discussing military interventionism and adventurism WW2 is often brought up. (Not particularly directed at you sinij since you aren't a military interventionist afaik) Interventionists often ask non-interventionists "yes but what about WW2, we had to fight that didnt we?". And the answer is always "well, yes but WW2 was different" sometimes its pointed out we were attacked etc.

The truth is, we were obligated morally to fight WW2 because we basically caused it with our inane, unnecessary and unwarranted involvement in WW1. For no particularly good reason, we injected ourselves into WW1, which unlike WW2 *was just another example of European political stupidity - and handed the Brits and French a victory at great cost to ourselves. The results of this meddling was the French punishing the everlasting shit out of the Germans, leading to the downfall of the Wiemar Republic and the continual state of Mideast strife that is the result of the Brits breakup and partition of the Ottoman Empire - and they were likely insane with their handling of that quite deliberately to ensure that strife would keep the former Ottoman areas weak for the foreseeable future. We are still, as the now preeminent Western power, dealing with the blowback from that to this day.
/end tangent


Recessions happen all the time, the one experienced from turning the flow of ill-created Fed bloat off would not likely be particularly harsh or long. It would be a simple occurrence of a process of adjustment. Overall productivity and value would go up, simply because the burden on the economy overall would be lessened.

If you want to talk about "when has this occurred" - well, its the natural state of things during any time where massively boneheaded govt interventions arent manifesting themselves in the form of thing like the Great Depression, or the recent Great Recession. Typically, in most times in most places, things improve where the govt is not committing some colossal blunders. There are always anomalies and quirks, but the type of govt interventionism we have that we are talking about reducing has never in any way been shown to smooth out those quirks - so there should be no reason to keep them.

back to the point.

a recession would definitely happen if the cuts took place all at once. if you do 5% a year, you could ease ghe pain.

however, as derid points out, the money we are spending isnt "real". its borrowed or printed as debt.

the economy is being propped up by this govenment spending. call it an entitlement bubble.

oh when i say welfare i mean all welfare. i also prefer a flat tax- no funny business. put ghe entire tax lawyer profession out of business

I would support flat tax if first 25K of all income (inflation-adjusted) was excluded from any taxes.