Feb 20th 2012, 19:45 by M.S.
IN THE video clip my colleague posted of Paul Ryan arguing with Tim Geithner, Mr Ryan points to the inexorable rise in US government debt starting in 2023 projected by the administration's proposed budget and warns incredulously, "That's Europe." I'm having trouble thinking of another statement that is so wrong in so many different ways.
The European Union has lower government debt levels than America. Gross government debt in the 27 nations of the EU was 80% of the region's GDP at the end of 2010; in America gross federal debt at the end of 2010 was 94% of GDP. Furthermore, government debt is growing more slowly as a percentage of GDP in the EU than in America, because pretty much every nation in the EU is implementing austerity measures. The general government deficit in the EU-27 in 2010 was 6.6% of GDP. In America the federal deficit in 2010 was 9% of GDP.
Mr Ryan clearly thinks Europe is an economic basket case. Obviously, there is a grave economic crisis underway in the euro zone, and many European countries' economies contracted in the fourth quarter of 2011 while America's grew solidly. But it makes no sense to attribute the EU's poor relative economic performance to higher debt levels or higher deficits, because the EU has lower debt levels and lower deficits. The euro-zone crisis is in fact largely due to persistent current-account imbalances between member economies caused by differences in competitiveness, and the unwillingness of the more competitive countries to subsidise the less competitive countries, as would happen between states in America. But regardless of what you think the cause of the euro-zone crisis is, it doesn't make sense to attribute it to phenomena that don't exist, or to warn that America is in danger of becoming Europe if it keeps running such high deficits when in fact the way for America to become Europe would be to immediately and drastically cut its deficits.
Moreover, as my colleague explains, the reason the Obama administration's budget shows projected debt levels curving inexorably upwards after 2023 is pretty much entirely because of health-care expenses on Medicare and Medicaid. Medicare and Medicaid expenses will start to blow out the US government's budget from 2023 due to the impact of baby-boom retirees and the explosive growth in medical costs in America. Will this make America more like Europe? No. European countries do not spend more on government-provided health care than America does. They spend less. In 2009, according to OECD data, the US government spent $3,800 per citizen on health care. The German government spent $3,242. The French government spent $3,100. The British government spent $2,935. America is richer and should be able to afford more, but even as a percentage of GDP, US government spending on health care is comparable: 8.3% in America to 8.9% in Germany, 9.2% in France and 8.2% in Britain. And what of those wastrel Italians? They spent...7.2% of GDP. (In America, unlike Europe, government spending amounts to less than half of total spending on health care; when you add in private spending, America spent 17.2% of GDP on health care in 2009, while rich European countries were in the 11-12% range. And unlike rich European countries, we don't cover anywhere near all of our citizens. But that's a different subject.)
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Not only that, US government health-care spending is rising faster than European government health-care spending. It's rising faster even measured as a percentage of GDP. From 2001-2009, US government health-care spending went from 6.3% to 8.3%. In Germany it went from 8.3% to 8.9%, in France 8.1% to 9.2%, in Italy 6.1% to 7.2%. Only in Britain, where New Labour launched a deliberate campaign to grow the National Health Service to levels more comparable to other wealthy economies, did spending rise faster than in America, from 5.8% to 8.2%. Again, because America's long-term debt problems are driven by government health-care spending, we would be in better shape if we looked more like Europe, not less.
I don't expect Paul Ryan to conclude from all this that the reason why Europe is in a recession is that they're not doing enough deficit spending and loose monetary policy to stimulate their economy, and that it's a good thing America has run massive deficits for the past three years or we might not be seeing the cautious recovery we're seeing. It would be nice if he did conclude this, because it's true, but I don't expect him to. But I do think he ought to stop waving at a fantastic vision of a Europe that doesn't exist when he needs a bogeyman for whatever point he's trying to score in an argument.
In this blog, our correspondents share their thoughts and opinions on America's kinetic brand of politics and the policy it produces. The blog is named after the study of American politics and society written by Alexis de Tocqueville, a French political scientist, in the 1830s
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The US Dollar is the reserve currency of the world, and will remain so for the foreseeable future. Hegemonic powers of the US is well above any other sovereign nation. The US economy is 3 times the size of the next largest economy. The yardstick used to measure other countries' economies cannot conceivably be used to measure that of the US. Comparing Germany or China to the US is like comparing Azerbaijan to Russia or Bangladesh to India.
As long as the US is capable of military and technological dominance, it should be able to issue as much debt as it likes and do as much deficit-spending as it would like.
The only true too-big-to-fail entity in the world today is the US.
The most exceptional thing about the US is the status of its currency. The most wise economic decision the US ever made is when FDR moved the country out of the gold standard, paving the ground for the dollar to become the reserve of the world.
As long as the dollar is the reserve, the US can and should issue more debt and spend more on deficit. Comparing the US to Greece or Italy is just nonsense.
"and the unwillingness of the more competitive countries to subsidise the less competitive countries" really???!! this just goes to show how socialistic the EU is.
I'm certain Mr. Ryan did not have fiscally responsible Germany in mind when he made his statement. He clearly meant "basket cases" like Portugal, Spain, Italy, Greece, and Ireland.
Way to go out of your way to get upset, M.S.
Why are you certain what he had in mind, and how can you know what he "clearly meant"?
Fiscally responsible Germany has single-payer healthcare.
Fiscally responsible Germany has high-speed rail.
Fiscally responsible Germany is extremely union-friendly.
Fiscally responsible Germany has cap-and-trade laws.
The difference between Germany and the "basket cases" of Europe is not government policies, but competitiveness.
If Paul Ryan admires fiscally responsible Germany, he would've switched parties.
If you read the article, you will find that he is challenging the ignorant rhetoric of "basket case" applied to even countries like Italy. But more important is the objection to the equivalent of calling the US a basket case when a state like California or Indiana may be bankrupt and claiming to mean only those states.
This time, you are engaging in rhetoric.
All Ryan means, is, that at some point debt becomes a problem of a magnitude that threatens to destroy even rich economies. At present we are seeing this in Europe.
It makes little difference why lenders have decided to stop lending to Europe (or bits of it). The point is, that once they stop we are all in trouble. It is by definition a 'debt' problem.
Ryan is justified to say 'this is Europe'.
I think what the article is saying is that European countries, taken as a whole, won't actually face the problem that Paul Ryan is discussing with Tim Geithner. That's because European countries are controlling their healthcare costs in a way that US isn't right now.
By not coming to agreement Mr Ryan is part of the problem, but so are the others not agreeing, including Mr Geithner and Mr Obama. Perhaps this demonstrates the weakness of a political system where you have checks and balances but no sense of responsibility.
The real problem is that governments spent huge amounts of money in the welfare state(Europe), wars(USA) and bailouts for trying to save mediocre enterprises. http://webinlaweb.blogspot.com/
Hey Ryan, how about imposing the same Medicare and Social Security cuts on those over 55 that you think are fair for those 54 and under?
After all, we have a huge debt problem right now. As a result of a 30 year whine for income tax cuts. How about giving those who voted for small government on the revenue side what they deserve on the spending side, and allowing those coming after to decide for themselves?
And by the way, the U.S. is better off than Europe on these issues -- demographically.
We are in the shape we are in due to self-inflicted wounds. Or rather wounds inflicted by the entitlement of Generation Greed, which they intend to be received by those coming after in government (as has already occured in the private sector and many cases in the family).
Why would Ryan kill his own plan?
What?? The Economist defending Europe???
I didn't expect that...
Until recently, both Europe and America were in the hospital with critical cardiac distress.
While America seems healthy, because they've already been released and are bsck chowing down on a big double cheeseburger and fries as we speak, Europe seems sicker, because they are still in the hospital getting a double bypass. It's terrible for the Greeks at the moment, but I hope they can look forward to a bright future when the structural reforms pay off. Europe's austerity shows they're taking their diet seriously! I hope it's sustainable...
Hopefully our dear Yank friends will be joining them in the gym soon.
I don't want to think about how the rest of the world will suffer if America lands in the hospital with another crisis like the last.
"and the unwillingness of the more competitive countries to subsidise the less competitive countries,"
Each coin has two sides! What about that: The unwillingness of the less competitive countries to catch up and become more competitive instead? In such a case, subsidies are not required and Europe is more competitive as a whole compared to the rest of the world. On the other hand, if there were such subsidies, there wouldn't be any incentive to catch up, right? The problem is called moral hazard and you should know that! Obviously, you don't! How embarrassing!
I also thought that was a very strange, un-Economist-like way of examining the Euro-periphery's competitiveness problem. In some respects these peripheral countries are not competitive because they simply don't have some of the resources that the wealthier nations do (Greek agriculture is comparatively limited in terms of crop variation from what I understand - just as an example), but many of the problems are ones that are within their power to fix, but they have chosen, for decades now, a path that is not sustainable.
The rest of the post is fine though.
A lot of these strings on health care are appropriate in terms of the debt. But fundamentally, the US pays more often much more and gets less with the current system than other developed countries. Rationing can be a really good thing when you are talking about, as we mostly are, spending large amounts of other people's money on treatments that won't help, and can often seriously degrade people's life.
There are only two good arguments for the current system in the US.
I have never seen any numbers on this, but it could well be that wealthy Americans have a significantly longer life expectancy than say wealthy French people, and so the extra cash we spend is in fact working for some people.
RR sometimes makes the argument in various ways that the US is just culturally or politically ill-suited to the various systems that provide more bang for the buck in other developed countries. This could also be true. But it is a pretty depressing argument to make, because there is an important sense in which healthcare is an important factor in economic efficiency. It doesn't matter much if it is government spending or private sector spending. If you have one company that pays 17% of its revenues on building maintenance, and a competitor pays 10%, the long-term result is pretty obvious. Even short term, how many jobs that aren't coming back were sent abroad because, after all the other factors had been accounted for, of the projected cost increases in health care?
I should have said not "good" arguments, but rather ones that could valid, though very immoral in the first case, and pretty economically damaging in the second.
Not exactly. Americans are unhealthier than Europeans because of cultural reasons so adopting a European health care system will not give the US European outcomes. But I think there's things we can do about legal barriers to better efficiency. E.g., patent reform, medical licensing reform, tort reform, and even negotiating emergency care prices (because emergency care is legally mandated). But assuming we did all that, we'll simply be paying market price for health care and any further intervention would be distorting market signals. We'd still be spending too much on health care just as I think we spend too much on iPods but I don't think that's something we want government to regulate. We can still heap social scorn on say, 80-years who get chemo just as we rightly demonized Leona Helmsley for leaving $12 million to her dog. Having children also helps people to be more frugal.
Lets not forget that a big part of US healthcare costs are legal in nature. We sue each other far to often and for far too much. The court system does not check meritless claims as well in the US as it does, say, in the UK.
Likewise, the US subsidizes much of the costs for new drug development. There is a free rider problem here. Also, simple fixes such as better warning labels would prevent tens of thousands of health problems for each new blockbuster drug without hindering profits.
For the people Ryan and his like are trying to keep befuddled, Europe is a bad socialistic place full of snotty waiters, or so they've heard from their friends.
He is either an idiot or being dishonest, but since everybody knows Europe is a socialistic hell full of empty churches, he and the rest of the usual suspects get re-elected for pandering to the ignorance and prejudice of their base.
U.S.E! U.S.E!
Go Europe! The epicentre of civilisation and awesomeness!
A curiosity. Here in the US, we've got $15.4T of Federal Debt, but another $1.1T of State Debt and $1.7T of County/Municipality Debt. (usdebtclock.org) Do the European nations issue debt at the local geographies as well?
If I look at the debt clock site for too long I just get depressed, but if you've never gone, it's worth a look. If you like crying over spilled milk, turn it back to how things looked in 2000... I'm not sure if this disproves an often heard claim that lowering taxes will lower the deficit or that spending money on the military will make the economy grow, but we seem to have done a lot of both during the last decade.
As for medical spending, the only thing that might bring down costs are low cost testing centers that can send data via the internet and cheap airfare to Costa Rica.
Toss in $13.2 T for Households...
Toss in $11.5 T for Businesses...
Toss in $13.7 T for the Financial Sector
Toss in $2.3 T for Foreign
We end up - as a country - with a Debt/GDP of 354.9%
(as of 9/30/11)
The good news is that we are down from 380.7% at the end of 2009.
Regards
"Do the European nations issue debt at the local geographies as well?"
Yes.
Central government, state government, local government and social security liabilities are all consolidated to general government debt (Maastricht Treaty).
So general government debt in european parlance is the total public debt.
http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1&...
But a lot of this debt is owned domestically within the US. For example if someone takes a loan to buy a house, then a US commercial bank provides the loan. When that commercial bank needs to raise money, then will issue bonds that is purchased by US businesses or financial sectors.
So lending money from your left pocket to your right does increase the total amount of your debt in a sense, but a NET debt ratio is much more relevant.
The 354.9% only counts Federal Public Debt.
If one wants to use Total Federal Debt, add another 32.8% to the 9/30/11 totals, 387.7%
Add another 31.5% to the 2009 totals, 412.2%
Regards
But a lot of this debt is owned domestically within the US.
Do you mean the $2.5 Trillion of gov't debt to SSA that Congress wants to weasel out of?
For example if someone takes a loan to buy a house, then a US commercial bank provides the loan.
Those loans should come from deposits.
But households haven't been good at paying off that debt.
Many re-fi to pay for cars, credit cards, etc.
A house is an illiquid asset, and as we have seen the value of the house (or any asset) can drop, and some people have responded by playing "jingle mail".
When that commercial bank needs to raise money, then will issue bonds that is purchased by US businesses or financial sectors.
They need to print and sell stock.
Tier I ratios, capital ratios, etc.
Regards
Regards
Question: Will the percentage of American dollars spent on healthcare go down once ACA goes fully into effect?
Are there any links for this?
Thanks people of TE.
My recollection is that the projections were that total healthcare spending would NOT go down in the near term with ACA in effect. Total spending was projected to be something like 1% higher, which may sound bad, until you realize that a lot of people are going to get substantially higher quality health care out of the deal, as well as reduced medical bankruptcies and a greater level of financial security for all of us. (sorry, can't find the link off hand, but it was in one of the later CBO analyses...)
Then in the out years (beyond the 10 year window), the bill is projected to reduce total health care spending substantially, in the form of reduced Medicare expenses, basically by limiting hospital reimbursement rates and initiating the IPAB to establish medical effectiveness standards to reduce costs. It is reasonable to assume that those measures will in fact save money, but it would be overly optimistic to believe they will keep doing so at the projected rate indefinitely. After a certain amount of time forcing the cost curve to bend ... it may become less pliant.
Short answer: No. If you believe the projections, which were rigged to begin with, then I have some real estate to sell you. See the CLASS program which they abandoned for an example--fiscally unsound from the beginning but billed as a deficit reduction method b/c it paid in premiums for years before paying out (never mind that they would never be enough to pay costs).
On a less related note, do you think the politicians (Republican ones, mainly) making such negative references to foreign countries harm the American relationships with the said countries? I am not sufficiently versed in the intricate world of diplomacy, but I would imagine that the French or the Chinese would take it very badly if a Republican were to become president in 2012 and remember that the said Republican was bashing them all throughout the campaign trail.
Lack of tact or maturity, another reason not to vote Republican for the next 10 years.
A few days ago Santorum claimed 10% of Dutch deaths were due to euthanasia, and half of those were involuntary. He also claimed elderly Dutch wear bracelets with "do not euthanize me", and are fleeing to foreign hospitals.
All of which caused quite some indignation in the Netherlands. (Euthanasia accounts for only 2% of deaths here. Only the patient is allowed to choose euthanasia, and only under special conditions. In addition, the patient is never under any financial pressure in the Dutch system.)
Such a negative and ignorant reference on a moral issue is far more sensitive than a financial one, but the Dutch government does not voice itself in foreign election campaigns. There would be a protest if Santorum repeats it if he is elected.
I think few Europeans will care about or bother with this statement by Paul Ryan. At the same time, they'll politely ignore any advice from American financial secretaries on sustainable public finances. So foreign relations won't be damaged, but US influence would be greater if the US were a creditor nation with a solid budget.
M.S.,
Thank you for those links on the debts.
Regards
To be fair, Mr. Ryan was being lazy and saying Europe instead of Greece. Most Americans don't know the difference and consider all of Europe to be a liberal socialist utopia.
Edit: post removed
utopia or shitopia?
Judging by what most Americans think of Europe I think the latter is more apt...
Well it's a utopia for "liberal socialist pink commies" but a shitopia for everyone else. Also, I've never heard shitopia before and will have to start using it now.
Thank you, MS!
You fight two catastrophic 10-year wars and see how big your deficit is.
But the two wars only cost ~2tt total in the past 10 years, which comes to approximately 200bb per year. Add veterans' benefits and you go up to maybe 300bb per year.
This article states that the US spends approximately 17.5% of its GDP on healthcare and if the US could get its expenditures down to the European norm 11.5%, then it could have saved ~900bb in 2011.
Now I'd rather waste money on healthcare rather than on unnecessary wars, but 900bb is still 3 times larger than 300bb. So the US really should either adopt European style rationing of medicine as the DEMs want or cut Medicare and let poor and old people die as the GOP wants.
Either method works...
This article states that the US spends approximately 17.5% of its GDP on healthcare
This is spending by the federal gov't and the private sector.
The federal gov't spends 8.3%, the 9.2% is spent by others.
If consumers want to spend it on health care, that is their choice.
Regards
For what it is worth, nothing prevents anyone in Europe (at least in France) from getting treated in the private sector. Not only will the public single payer actually pay for procedures carried out in private clinics, but there are also a wide range of private health insurance schemes available to absolutely everyone.
The only "rationing" (I use quotes because it is very limited in scope) is the result of the public sector not covering part or all of a treatment. It is always possible to seek no-waiting-list, not-paid-for-by-the-single-payer, gold-plated treatment, either through paying out of pocket, or purchasing all sorts of cheap, complementary insurances. Mutuals are quite popular, in this respect.
It would be nice if this whole "rationing" slur be phased out of the debates about healthcare coverage.
"If consumers want to spend it on health care, that is their choice."
So if you think that the private should continue to be free wasting money on inefficient healthcare, then the GOP solution to cut all government healthcare is the only option left.
I thought you were a Democrat?
"It is always possible to seek no-waiting-list, not-paid-for-by-the-single-payer, gold-plated treatment, either through paying out of pocket, or purchasing all sorts of cheap, complementary insurances. Mutuals are quite popular, in this respect."
-----
Yes but if you don't dip into private insurance then the public sector is still indeed "rationing." Most types of socialism is rationing by definition, and the fact that in France people are also allowed to purchase private coverage in addition to their government rations doesn't change this fact.
Most types of economic activity are rationing by definition. And all of politics.
"Most types of economic activity are rationing by definition. And all of politics."
-----
That's just factually incorrect... There may be elements of rationing in practical capitalism, but capitalism is fundamentally NOT rationing.
"If consumers want to spend it on health care, that is their choice."
Those without care don't have much of a choice if the alternative is to die. As an interresting side note vet (the dog and cat kind) costs in the US, costs that bear none of the bugaboos of government, legal or insruance bugaboos has been keeping apace with human costs. Now since this is a completely private market, it says something interesting about medical care cost dynamics.
The main difference in the expenditure is market power, not rationing. In Canada and Europe, the government is the near-monopoly buyer (but not provider) of heath care services. It negotiates its prices with private providers (drug companies, doctors, labs, pharmacies...) on that basis. No surprise, prices are lower that way. For example, the doctor's fee for a visit here is $28.
The only part of the system the government directly runs is the hospitals, which treat people on a sickest-first basis.
There is rationing of a sort, I suppose. You can't get a government-paid scan without a doctor's request, though you can pay for it yourself. Same goes for specialist visits. But poor health care is the #1 way for a government to get chucked out of office, so they work really hard on keeping service levels up.
Frankly, it's a lot like Kaiser Permanente, writ large.
"So the US really should either adopt European style rationing of medicine as the DEMs want or cut Medicare and let poor and old people die as the GOP wants."
Same thing.
"Frankly, it's a lot like Kaiser Permanente, writ large."
By that logic public housing is a lot like private housing and community colleges are a lot like Harvard.
Reminds of me the failed ObamaCare pilot program to copy the Mayo Clinic at other clinics. Apparently, copying Tiger Woods won't turn you into a Tiger Woods.
"...capitalism is fundamentally NOT rationing."
Given that the ability of a community to provide goods and services isn't infinite, pricing mechanisms in capitalism determine who receives said goods and services, and who doesn't.
Whether goods and services are rationed by a government or rationed by the market, either way they're rationed.
"So the US really should either adopt European style rationing of medicine as the DEMs want or cut Medicare and let poor and old people die as the GOP wants."
Same thing.
---------------
You are aware that life expectancy in most Western European countries is higher than in the US, right?
The more relevant point is that consumers in Europe have the choice of not spending on private health care because they expect it to be provided by the State or through a State managed insurance scheme.
Efficiency is somewhat important especially if you go into debt due to your inefficiency.
I thought you were a Democrat?
There you go again....
Calling people names.
It is obvious that your comprehension is challenged.
I've stated I'm an independent.
Actually a Marxist....
A Groucho Marxist...
"I'd never join a group that would have me as a member."
---
Keep up the good work of your distortions.
Regards
Capitalism allows the MARKET to dictate who gets what good. Things are not equal in capitalism.
Governments RATION things (nearly) equally among each individual. For example under the NHS system, everyone gets the SAME portion of goods; aka rationing.
Also I don't know what the various dictionary definition of rationing is, and I don't really feel like looking it up, but if you're going to label a free market distribution of wealth as 'rationing', then there's no point for that word to even exist.
Normally rationing refers to a government (nearly) equally distributing goods among the population.
Who cares what you are?
Control for race and American life expectancy is up there with Europe's. Control for obesity too and Americans may actually live longer.
Modern Troll wrote:
There may be elements of rationing in practical capitalism, but capitalism is fundamentally NOT rationing.
Capitalism is a form of rationing, based on price.
Regards
So basically you repeated what Faedrus said but ignored my rebuttal.
Ok cool... I'm glad you're not the one calling the shots in America...
Modern Troll wrote:
Who cares what you are?
Obviously YOU care what I am.
Along with what anyone else is.
So you can stereotype in your silly replies.
(Don't attack the issue at hand, attack the person.)
Regards
Allow the South to secede and problem solved. So easy.....
No I labeled you a Democrat because I thought you were one, but you were seemingly advocating for a Republican solution so I thought I was pointing out your contradiction.
---
Trust me, I don't actually care about what you are.
Before you make absolute pronouncements regarding economics on a website about economics -
You may want to first actually study economics, so that you appear somewhat knowledgeable about the subject.
Actually I did study economics and I have a very good understanding if it.
You were just proven wrong and can come up with nothing more than an ad hominem attack against me.
Ok cool.... I hope more people like you enter the US government....
Seriously you Americans can come up with all the logical fallacies you like on the TE message boards but it doesn't change the fact that you live in a shitty, rapidly deteriorating country.
I can't wait until your monetary system blows up when the Euro is fixed and China releases its RMB. The resulting money printing to finance America's unbearable debt will obviously devalue the USD, cause massive inflation to the US, and significantly degrade the standard of living in the US.
I can't wait...
"...I don't know what the various dictionary definition of rationing is, and I don't really feel like looking it up..."
That's not a rebuttal.
Rather, it's acknowledgement of personal ignorance.
Ordinary dictionaries =/= economic dictionary or economic terms, so yes it was a rebuttal.
But of course you Americans are not smart enough to realize this, so you resort to ad hominem attacks when you have no other content to say.
And just to elaborate for you dumb dumb Americans, I stated what 'rationing' often refers to in economic terms. You choose to take a literal definition of 'rationing' from ordinary dictionaries to try to disprove my point.
See another straw man argument. Just when I thought Americans couldn't get any dumber....
"I can't wait until your monetary system blows up when the Euro is fixed and China releases its RMB."
Why doesn't China do so now?
Because China still has the bamboo curtain over it and wants stability in its monetary system until the curtain is slowly released piece by piece.
Most analyst predict 5-10 years, but I honestly didn't expect you Americans to know this fact...
"But of course you Americans are not smart enough to realize this..."
Most would consider this an ad-hominem argument. However, you then wrote:
"...so you resort to ad hominem attacks when you have no other content to say."
So, how it this sentence not a logical fallacy?
Again, not all parts of a post must be part of the argument. For the 394023 time, I can make a logical argument and then stick a personal insult at the end that was not the part of the argument. I've explained this to you 309523 times, but it seems like your pea-brain cannot grasp this concept.
(See I just inserted another personal attack at the end of a logical argument that was not a part of the argument.)
So for example if you made a logical argument then called me an idiotic troll at the end, then your argument would still be logical. The personal insult would not be a part of the argument.
Your earlier post was an ad hominem attack because you had no other content except for a personal attack in that post.
I am so glad that people like you exist in America.... Down with the USA!
"The resulting money printing to finance America's unbearable debt will obviously devalue the USD, cause massive inflation to the US, and significantly degrade the standard of living in the US."
You write this with a sense of certainty. However, you then wrote, in explaining why China doesn't allow the RMB to float now:
"Because China still has the bamboo curtain over it and wants stability in its monetary system until the curtain is slowly released piece by piece." And -
"Most analyst predict 5-10 years..."
So, given that China feels that it needs to wait before floating the RMB, doesn't this indicate that China feels a lack of certainty?
Or, that it feels that helping to bring about "massive inflation" in the US isn't in its best interest?
"So, given that China feels that it needs to wait before floating the RMB, doesn't this indicate that China feels a lack of certainty?"
Again, you try for a straw man argument. China feels the need to wait because it does not have strong capital (and legal) controls within China right now. But once China establishes such controls then it is quite certain that the RMB will become one of the major reserve currencies and steal lots of reserve currency share from the USD.
This straw man/inconsistent comparison wasn't even close to being logical and was pretty bad even for you...
"Again, not all parts of a post must be part of the argument." And -
"So for example if you made a logical argument then called me an idiotic troll at the end, then your argument would still be logical. The personal insult would not be a part of the argument."
Have you ever studied debate Modern, or is this your personal opinion on how to build a case to further your ideas, and within a public space?
Yes I have studied debate.
And wow another ad hominem attack with no content. Awesome...
"Or, that it feels that helping to bring about "massive inflation" in the US isn't in its best interest?"
Of course the act of bringing about massive inflation in the US ALONE is not in China's interest, but it's impossible to allow the the RMB to float without causing massive inflation to the US.
Allowing the RMB to float will significantly increase the purchasing powers of China's domestic consumers and of its companies for overseas acquisitions, so the benefits far outweigh the downside.
Also I'm going to stop responding to you because trying to teach logic to you is like trying to teach nuclear physics to a 7 year old and it's really not worth my time....
Actually, these aren't attacks Modern. I'm just trying to get a sense of how you put together your thoughts.
Anyway Modern, gotta run. Nice chatting with you.
BTW, something is only an ad hominem attack if I tried to use personal qualities to discredit what you say.
So for example if i said "Faedrus is a stupid idiot so he doesn't understand America's debt problem.", then such a statement would be an ad hominem attack because I was trying to discredit you using your personal qualities.
But instead if I said "Faedrus does not understand America's debt problem because of XYZ, which makes him an idiot", then such a statement would NOT be an ad hominem attack.
In the first case I was trying to discredit what you say by labeling you a stupid idiot. In the second case I logically discredit you and then label you a stupid idiot.
Get the difference?
Converse you can say:
"Modern doesn't know what he's talking about because he's an idiotic troll." would be an ad hominem attack.
"Modern doesn't know what he's talking about because of XYZ, which makes him an idiotic troll." would not be.
Get it?
Actually Modern, however you want to define it, your posts appear to be particularly abusive of people.
It's really beyond the pale for TE posts, but whatever.
Anyway Modern, gotta run.
Sorry I didn't realize I was suppose to be nice to people on the anonymous parts of the internet. What motivation do I have to do so?
Let's face it, insulting people is sometimes fun, and unlike in IRL, you can only practically do it on the internet without any negative consequences.
Get it? See logic wins again.
BTW it's not how I choose to define 'ad hominem attack', but rather it's the definition accepted by almost everyone. (everyone except for the few misinformed) Don't you see the logical sense between the widely accepted definition over your definition?
.
An ad hominem attack is suppose to be a logical fallacy, and your definition of 'ad hominem attack' would result in no logical fallacy.
Wow, the first time I've ever seen 44 replies to a single post, I figured it must have been a very interesting and enlightening argument. Instead I see the biggest troll yet in my years on the Economist blogs!
"Sorry I didn't realize I was suppose to be nice to people on the anonymous parts of the internet. What motivation do I have to do so?
"Let's face it, insulting people is sometimes fun, and unlike in IRL, you can only practically do it on the internet without any negative consequences."
Actually Modern, it's just an issue of common courtesy.
Folks use the TE comments section to debate economics and politics (although other subjects are sometimes broached as well) in a courteous, non-contentious fashion.
When one resorts to personal attacks, ad-hominem or otherwise, those who engage in such attacks are called out, or ultimately ignored completely.
If you want to insult people, for whatever reason, this isn't the place to do it.
In the meantime, I would suggest that insulting people on the internet (or anywhere else for that matter) is not healthy, whatever your motivation.
"If you want to insult people, for whatever reason, this isn't the place to do it."
Oh common I am hardly the only troll on this website. Actually I'd say that 95%+ of the posters here are trolls, and maybe 20%+ actually insult people.
"In the meantime, I would suggest that insulting people on the internet (or anywhere else for that matter) is not healthy, whatever your motivation."
How is it not healthy? I don't ever insult people IRL because then people won't like me as much. But occasionally I do enjoy insulting people anonymously over the internet and there are no negative consequences.
Almost everyone sometimes generates enjoyment from bashing others. So how is it not healthy?
It's a first for me too. Pretty amazing.
I don't deny that I'm a troll, but anyone who understands logic would be forced to agree with my logical and factual arguments over Faedrus'.
So why do people here agree with Faedrus? Because you're Americans who feel insulted so you band together against the anti-American guy out of nationalism, and because most Americans do not understand logic at all.
Also this hatred for logic thing in America is really the root cause for all of your problems. Imagine if Congress stopped bickering and started to logically compromise; how much better would America if such a thing happened?
Oh well... enjoy your inevitable continued gridlock regardless of whom is elected president....
Good post, M.S.
I do think you are only stating half the truth when it comes to the causes of the current crisis within the Euro zone. Indeed, competitive, wealthy, thrifty "northern" members (I use quotes because there are also not-so-northern nations doing quite well, such as Slovenia and Slovakia) have been reluctant to subsidise their wayward neighbours.
But this reluctance can be easily understood, and indeed considered legitimate, when one sees how slowly, reluctancly and, in the case of Greece, dishonestly some of the troubled members have gone about restoring *some* competitiveness, which is the other half of the truth that is left unsaid in your post.
And I am not talking about imposing growth-cancelling austerity at a time of sluggish economic activity, which is most likely destructive, but more about the entire previous decade wasted with wages and entitlements outstripping productivity. Not to mention the obvious book-cooking in the case of Greece.
Currency-sharing is a two-way street.