Barry Ritholtz, CEO at FusionIQ, talks about austerity being the wrong decision for the United States. He speaks on Bloomberg Television’s” Bloomberg Surveillance.


12 Nov 2012

Category: Economy, Really, really bad calls, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

5 Responses to “Ritholtz: Austerity is a Recipe for Recession”

  1. ndmaster says:

    What’s wrong with a recession? Barry, are you jumping on the Fed’s bandwagon thought process that the business cycle can be controlled? What we need is a good recession that gets rid of bad debt, not one that brings more bailouts. Although, it’s not going to happen.

  2. Syd says:

    Nearly half of the spending cuts recommended in the Bowles-Simpson plan (in terms of dollars) were enacted already last year.

    http://www.offthechartsblog.org/three-charts-on-the-coming-budget-debate/

    AFAIK, Congress should cancel the sequestration cuts and negotiate further. I would like to see the military budget cut significantly over ten years, offset by more spending on infrastructure upgrades at home.

    On the tax side I hope the Bush tax cuts on capital gains and dividends are allowed to expire. For that matter, tax investment income the same as regular income. I hope the top income tax bracket goes back to 39.5% from 35%; if it does households in that bracket would still get the benefit of the lower rates on their income below that level.

  3. DeDude says:

    @ndmaster;

    Interesting term “bad debt” it is always thrown around without any explanation of how its defined and how you identify it. What makes some debt “bad” and other debt “good”?

    Recessions are supposed to happen when you have below average unemployment. Otherwise they cause more damage than the minimal good they can produce.

  4. ndmaster says:

    @dedude. Hmmm, bad debt, how do I define it? Well, how about a banker’s definition: non-performing loans. How about in corporate terms: junk bonds of very low price because no interest has been paid on it in months or years. How about in personal terms: a mortgage that joe six pack can no longer afford, but he cannot get rid of because he is underwater. Give me a break.

    The purpose of a recession is to get rid of excesses. Whether that is marginal businesses, marginal debt or bubbles. Since the illustrious Fed and our government stepped in and stopped the last one in its tracks, we haven’t really had a recession (by my definition, which is pretty widely held) in over a decade. Keynesianism is or should be dead. We cannot get the second half right (like Barry said in the video).

  5. realgm says:

    Bad debt is something when you need to borrow money to do something stupid that would not generate any positive economic return (e.g. the stupid war on terror…a war on concept that will never end).

    Good debt would provide liquidity for business to do productive work while taking risks (it can turn bad and not generate results). It may not always work for the business, but it would do something that may have positive return. Like building borrowing money to build new facility that can produce things and provide positive return. It may or may not work out but the borrower would bare the risks.

    Unfortunately, the US has been making more and more bad debts while advertising it as good debt that would generate growth in the economy. Stop screwing around in the middle east and get involve in other countries’ issues would be a good start.