Tom Toles:
American Canibalism
Source: Washington Post

Category: Really, really bad calls, Taxes and Policy

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.

19 Responses to “American Cannibalism”

  1. MayorQuimby says:

    The only bubble I see is the anti-austerity one. Enough! Yes there are limits to what we can spend. No we haven’t reached them. The whole debate is irrelevant as it depends upon FUTURE growth the finance present deficit spending. The concept that we can print our way out is foolish to be kind. At any rate – the bond market will humble us all and amke both sides look foolish in the end – you can count on it.

  2. RW says:

    Did Americans engage in cannibalism?

    Not all, mainly just the elites who convinced themselves it was a virtue.

  3. PeterR says:

    After the next global class war, the question may no longer be a joke IMO.

    A bumper sticker seen in The Hamptons years ago:

    “Eat the Rich.”

  4. AtlasRocked says:

    5 years in: With little expansion in the GDP, let’s take a look at what is organic growth, and what part of the GDP got put on the nation’s credit card.

    GDP increase………………….2008-2012: +2.1 trillion
    Increased gov’t spending ….2008-2012: +2.58 trillion
    New Debt:…………………….. 2008-2012: +6 trillion

    We just got $6 trillion put on the nation’s charge card, in return we got $2 trillion of growth.
    http://www.usgovernmentspending.com/spending_chart_2008_2012USr_14s1li111mcn_
    http://measuringworth.com/m/datasets/usgdp/
    http://www.usgovernmentspending.com/spending_chart_2008_2012USb_14s1li011mcn__US_Gross_Domestic_Product_GDP_History

    • Anonymous Jones says:

      A few questions.

      What is “organic” growth?
      Why did debt increase so much more than spending?
      Are you assuming GDP increase would have been zero (or a nominal amount) without increased spending/new debt? Why have you picked that baseline (zero) rather than, say, -$8trillion, or +$8trillion? How do you know and what is your methodology in arriving at what you know?
      Does the government really have a “charge card”? And why you would invoke an analogy (“charge card”) that brings to mind personal finances when we are talking about a nation not only with a sovereign currency but also with a somewhat closed economy where there is a clear correlation between income and spending (where is no such thing for an individual or family)?

      It’s not that you haven’t picked out numbers that are interesting. They *are* interesting. But I doubt they support the confidence I suspect you have in your analysis.

    • bear_in_mind says:

      Please do tell what would have happened to GDP had the Federal Government allowed all insolvent financial institutions to fail?

      • AtlasRocked says:

        The economy would have contracted to organic levels of demand, the fraud of all the debt would have been exposed, and the actors the perpetrated the fraudulent schemes would have, hopefully, jumped out of windows, or be doing time in jails. Obama declined to prosecute the FCIC report for reason, folks: To preserve the fraud supporting the scam.

        There is no system even devised by man or nature that grows geometrically forever. Our finance system is not capable of such geometric growth either.

        Eventually the system eats too much of whatever is feeding it, it contracts, and a balance is reached. All we did since Reagan is keep borrowing money to give the illusion of sustained growth, the proof is here, simply observe the GDP added per unit of debt added, it’s almost always below 0:

        http://market-ticker.org/akcs-www?post=190174

      • willid3 says:

        so what we need to do is figure out how to shrink the population?of course we have it figured out int the US, we will price health care so high, and cause so much health care inflation that people will stop going to the doctors, and that will lead to fewer and fewer people. and the genius of it all, is that those that desperately need it will be the ones in favor of cutting it.

      • victor says:

        Reply: we don’t know; but we do know what “happened to GDP had the Federal Government allowed all insolvent financial institutions to fail”. It grew modestly, sub par and the insolvent financial institutions are still insolvent save for accounting gimmicks (toxic assets/toxic prices, QE 3 or is it QE 4 now?, code word for printing money).

  5. Biffah Bacon says:

    Why privilege “organic” demand over the demand necessary for sustenance of human life, for example? Had the economy contracted and the Bush and Obama administrations simply let the world burn (the Andrew Mellon approach) even more people would have been bereft of the financial wherewithal to support themselves. It is wasteful, foolish, politically and socially disruptive.

    Why organic rate of demand instead of natural-is that a Whole Foods libertarian thing? Are there cage free cruelty free organic rates of demand, for example? http://www.motherjones.com/mixed-media/2013/01/whole-foods-john-mackey-conscious-capitalism-book-review

  6. end game says:

    AtlasRocked: Gibberish, and for support you give us a link to a blog that self-proclaims it is the “Truth” with every other word underlined. What are you going to quote next, Spider Man or Wonder Woman?

    The point of the cartoon is simple: We should spend now, while the economy is weak, and cut later, when the economy is stronger. The data supporting this is absolutely overwhelming. That’s why Keynes Hicks ISLM is textbook orthodoxy taught as the standard model in 96% of universities. Everything else, including your comment, is pretty much unsupported conjecture … the deficit “hysteria” that has cannibalized us.

    Your “no system devised by man grows geometrically forever” is a straw man argument. No one is arguing that we should be increasing deficit or debt forever, only that our spending should be counter-cyclical.

    Your comment that “all we did ‘since’ Reagan is keep borrowing money” is major revisionist history. Reagan himself increased the debt impressively… why exempt him? And aren’t you forgetting a certain president in the ’90s that governed over surpluses? Don’t you remember the headlines in 2000 that worried that all the Treaury bonds were going to be retired?

    • AtlasRocked says:

      I INCLUDED Reagan. Here’s a summary for you of the debt-based economic illusion of GDP growth:

      ………..increase…perGDP
      carter…..43%……..20%
      reagan….66%……..30
      reagan…..62%……..33
      bush I……48%……..32
      clinton…..28%……..22
      clinton……11%………9
      W.Bush…..33%……..23

      You do the typical liberal tap dance: Folks take the time to gather the numbers to show it’s all false, and you keep talking about how good it’s working. Well here’s a history test for you, worth $50:

      Keynesian Beauty Contest
      $50 gift certificate for the winning example:
      Keynesian stimulus was used in the
      country _____ in the years ______,
      during a __ recession/__ depression,
      then the economy turned around within 2
      years, and then produced ___ years
      of lasting growth WITHOUT A WAR after this.
      The increased tax revenue was enough to
      pay off all the deficit the stimulus
      had created within ______ years.

  7. AtlasRocked says:

    Remember how stimulus is supposed to create growth by “multiplying” the money spent by the gov’t? The money the gov’t spends will be re-spent and re-spent from one citizen to another and “grow” the GDP.

    Well, the money multiplier is still below 1 – this is a sick, sick economy. Look how it fell from Reagan’s 2nd term, through Bush, Clinton, W, and with Obama – it cratered. We’re DIVIDING our money now, sort of proving the old axiom “you don’t multiply wealth by dividing it up among the people”.

    http://research.stlouisfed.org/fred2/graph/?s1id=MULT

    • What stimulus?

      ‘Cause I know don’t mean those extended UE bennies and tax cuts, as we both know that stimulus ends the moment that the spending stops.

      Thats the advantage of infrastructure builds, which leaves behind something for society to build upon.

      • AtlasRocked says:

        I have never supported either spending nor under taxing, Barry. My posts are consistent on this.

        But if you’re going to criticize taxes, at least use the terms correctly to avoid intentionally misleading, as the democrats do on this: CUTTING marginal tax rates doens’t mean there is a tax cut for that person or for the economy as a whole, the person may make more money the next year and pay MORE taxes even with a LOWER MARGINAL TAX RATE.

        The liberal maligns such a marginal tax rate cut, which can manifest a net tax increase, as a tax cut. and they cheer a tax INCREASE – WHICH MAY REDUCE REVENUE, A NET TAX LOSS. But the country – and the individual, and all who he buys from, benefit when total revenue goes up. the idea is not to punish, it’s to raise NET revenue.
        THE NON PARTISAN observer calls a NET tax increase a tax increase, and a marginal tax cut a marginal tax cut, not a tax cut.

        Now which president raised taxes more, Bush or Obama? Bush did!! The democrats have lied about him cutting taxes. He cut MARGINAL TAX RATES, not taxes. Bush RAISED TAXES 4X MORE PER YEAR THAN OBAMA:

        year ……”federal
        …………..revenue”…………change…..change/year
        2002……..3299……………….57%……..+8%
        2008……..5170

        2010……..4710………………..7%……….+2%
        2012……..5022
        http://www.whitehouse.gov/omb/budget/Historicals

        Do your readers a favor Barry – inform them that tax rate cut CAN and HAS resulted in increased tax revenues in some cases.

        And I don’t mind saying – Bush’s economic growth was based entirely on increases in gov’t debt, as was Bush I, Clinton, Reagan’s. Increased gov’t debt is our enemy – it converts the economy and the ctizens to DEPENDING on gov’t revenue, it does LITTLE or NOTHING to grow the private sector organic economy, history is clear on this (see the 1937 FDR relapse) No stimulus or long term debt accrual of the gov’t has turned around any gov’t and paid back the debt and AVOIDED WAR. NONE.

      • AtlasRocked says:

        Little gov’t spending goes to infrastructure builds, that is a bait-n-switch argument, Barry.

        Liberals DEFEND gov’t spending as “infrastructure” or “helping the poor”, but little of the bail out money built proven-ROI investments (if the private sector isn’t bulding it already, it’s proof that it is probably very low ROI, otherwise they would be building it already, right? why would any businessman or company not jump immediately on a high-ROI idea? ), and most gov’t benefit spending goes to the middle class, not the poor.

  8. victor says:

    Everybody knows or should know that our current recovery is due, in great part to the monetizing of the economy by the dynamic duo: the Fed and the US Treasury. Nobody knows where austerity (if you can call the sequester austerity) coupled with never ending QE’s will lead to, predictions abound, new territory. But the QE river of money reaches mostly the people closest to it and leaves the working stiff in Peoria largely unaffected except via the now tired theory of the trickling down economy. Thus inequality continues to increase and historically it has always been resolved at one (flash) point either by revolutions or by taxation and redistribution (reforms). Look at the transition from slave based societies to serfdom and on to capitalism and then, abortively to communism; all underwent either reforms or revolutions.