President Biden: The NEW one and only politics thread

On that economy / GDP poll. ... It's not that simple.

Most people (including most of the people on here) don't understand that GDP isn't "the broadest measure of the economy" (what that said) the way people experience "the economy."

This administration has been running massive budget deficits, running up a trillion dollars of new debt every 100 days. We don't get anything from that tha tmost people would perceive as "the economy." GDP is positive if our government borrows billions of dollars and pisses it away -- in any and all ways. Even absent the kinds of actual supply meets demand activity that most people actually consider "the economy." On top of that, the experience of half the country is that prices have skyrocketed on them, and they can't make ends meet. Record numbers of people are working multiple lower-end service jobs (which also gets reported as "look at all the jobs we are creating, why don't people get how great they are doing?").

The bottom line is, we have gone from a fantasy of an economy to the absurd, because that game of running up debt and a central bank monetizing it for as long as we can be reckless by "printing money" was pushed to the limit with the pandemic as an excuse. The result was that asset bubble prices as the "inflation" the debt monetization was causing, spilled over into the prices of just about everything taking off, and the central bank felt pressured to raise their overnight borrowing rate, which now has our government borrowing. ... and twice as much money as a year ago, going to paying interest on our debt (which also gets passed off as positive GDP but isn't a measure of the economy as people perceive it -- they are focused on their own well beling).

People aren't crazy. They may not understand what a "recession" means (and it means a gazillion different things to the people who supposedly know what it means), but they know what they are experiencing. ... if you take away the trillions of dollars of borrowing and spending. ... our GDP is negative. Our "economy" has been stagnant at best, and in retraction lately (just using the BLS' numbers that break out the effect of all of the debt / spending). And on top of it, the cost of living for more than half of the people in this countr yhas gotten to the point where they are really struggling. So a pollster calls and they aren't answering about the Kafka world some of you are talking about, they are giving what they are experiencing.

 

Of course. Monetize debt so that politicians can do populist crap that borrows from the future to wastefully piss away that future growth today. ... and what you need to do is price fix the most important price there is -- the cost of money -- to make it so people can borrow way beyond what they would if they were bearing the cost because an actual market wasn't allowing that borrowing so cheaply. When you price fix rates. ... everyone avails themselves to the "free money" to one degree or another, whether it is Elizabth Warren, or Delta Airlines putting itself into massive debt to buy back stock to drive up its stock price or Joe Palooka driving a $55,000 truck he shouldn't have ever been put near. All of that is misallocation of capital that actually makes our economy fragile. It creates a house of cards where you need to keep enabling escalating mounts of debt.

Think about ALL of the consequences of having done that for so long (with alot of what we are facing today, being due to the radical debt monetization that was the response to the financial crisis rather than allowing the excesses they had caused in the first place by selling this fantasy, to correct themselves). So now, the central bank is backed into a corner. "Inflation" as people perceive it, is killing people, so they have to make a show of dealing with it, and they raised short-term interest rates (even as they use things like reverse repos -- things that 99 percent of people don't understand, and still have a huge balance sheet of debt securities they bought, to counteract the effects of their "inflation fighting" because it would absolutely crash our economy if they did what they need to do). ... As a result of that, we went from a 3 percent 30 year mortgage that put people into homes they couldn't have afforded to a 7.5 percent 30 year mortgage rate. And millions of people are now effectively locked into those homes they never would have been able to afford and our housing market is locked up (keeping prices through themoon ) and a new generation of people trying to start their lives have no chance of ever affording a home. I can go on and on. At the end of the day, though, THOSE people get that phone call from a pollster. ... and they are borrowing against a credit card to buy groceries, they can't buy a home, they are working an extra job. ... and so yeah, they say we are in a recession or that GDP is negative or whatever people on here are fixated on. But those people aren't nuts. What is crazier to me is the people who are convinced that everyone else is an idiot who doesn't understand how great everything is. ... when it clearly is not.