Well, we’re both guessing, but if you want something stronger, I might suggest something I saw on another website: “borrow and squander.”

Cheers.

I like the concept you’re going for with “something for nothing”, but I feel that it actually lacks some strength when it comes to establishing a label. I sense that phrase being contorted into a defense argument that would allow them some benefit. I guess it just seems a bit amorphous. There’s nothing amorphous about “tax and spend”.

Subconsciously I can’t resist the use of strong words in relation to today’s conservative politics and policies. Perhaps something like “waste and reward conservative” is simpler but remains strong. And utilizes verbiage that is common and relevant to these corrupt and hypocritical times. I suppose I won’t be chipping in for research either.

The exact right term, I guess, is the one that rings truest and has the largest cognitive impact on the greatest number of people. That takes research, of course, and I’m sure not gonna pay for that.

“Squander” may be the right word, but it rings a bit wrong to me because it’s too strong. It seems to me that the beauty of “tax and spend” is that these are everyday words with deep roots in the brain’s verbal center. For that reason (and I could definitely be wrong), “something for nothing” feels better to me.

Or even just “squander conservative”. That’s brief enough.

http://www.californiaprogressreport.com/2008/03/avoiding_realit.html

http://www.ft.com/cms/s/0/c6e08210-34c7-11dc-8c78-0000779fd2ac.html

http://business.smh.com.au/shock-for-world-trade-as-china-exports-fall-20080710-3d5z.html

If “goodbye” means you will not be back to grace our board, I regret that decision. You have added much here, especially when explaining the way markets work in ways the rest of us don’t understand or, at least, don’t fully understand.

You will be missed.

I first started pressing you on the topic of “deficits don’t matter” because I thought there would be one of two outcomes. The most likely, I thought at the time, was that you would simply not answer. What I hoped for, however, was that you would acknowledge that very high deficits do lead, at the very least, to hyper-inflation that causes economic and social disruption on a massive scale. I thought we could then explore exactly how much of a deficit was too much, go over historical precedents in the way deficits destroyed powers like Spain and Rome, etc.

I was looking forward to the possibility of a great conversation in which I could learn something. “Learning something” is how I define great conversations.

I think my jaw must have dropped when you said:

Repeating myself, sometime in the future, there will be a monetary dislocation and hyperinflation that will render government defecits irrelevant. The mint’s printing presses will be fired up, just like post WWI Germany, and there is good evidence the world’s monetary system will collapse within the next 50 years.

I really didn’t believe my eyes. Here you were saying that deficits don’t matter because the human misery caused by monetary systems collapse was no big deal, and you used Weimar Germany as an example of that. It was such a “no big deal” that you called it a “bump in history.”

I suppose I should have realized at that time that there was something very wrong with the conversation, since you took a genuine expression of mine hoping you got some rest as “condescending.” I’ve looked back over that statement of mine several times, and have no idea how you read condescension into it. You must have been very upset at that point for some reason I don’t understand.

I started asking for clarification because I just really didn’t believe that you could mean that the misery caused by monetary dislocation, caused by deficit spending and government borrowing, was not big deal, especially as it relates to the rise of Adolph Hitler after Weimar. Stunningly, you didn’t repudiate what you said, just saying you find “economic meltdowns fascinating.”

I’ll discount your last message. The final bit is petulant and can only have been from someone so angry that he lost control.

I have learned something from all this I didn’t expect to learn. I have worked with big business for more than 22 years, now, often at the board level. I believe in a capitalistic system modified by the governors of widespread suffrage and vigorous journalism. Such a system works well, and I have often been at odds with those who believe the worst of businesses and businessmen and women. Many times, I have been your defender both publicly on threads here and privately in e-mail exchanges among the scrogues, though not lately, I admit.

I’m beginning to wonder, however, if Jesus of Nazareth didn’t have it right. Perhaps there’s some basic human mechanism that short-circuits the heart when the brain starts to accumulate great wealth. Maybe capitalism really does have the seeds of its own destruction implanted deeply within it. Maybe greed, by itself, ensures the rise of Hitlers, Lenins, Maos, and the like.

And, no, Jeff, those are not my role models. My role model in cases like these is probably FDR, who managed to preserve our capitalist system by restoring balance with democracy and oversight when many wanted to tear capitalism down and start over.

Good luck to you, and fair sailing in whatever endeavors you choose.

I never, ever said that human suffering was fascinating. You’reagain putting words in my mouth. I was describing the market actions as fascinating, much like any good scientist would view any abnormal phenomena. Whatever, despite what will happen in the future, the free market system will prevail, and that’s what’s important.

I’m glad you have compassion, even while you’re beating me up. I guess we’ll just have to agree to disagree.

I’ve endured enough intolerance, and closed mindedness from the progressive crowd…..Y’all make the religious right look like open minded people. Progressives have an elitist attitude, and don’t even realize it. Progressives think they are just a little smarter than the rest of the mob, and a little better than the everyone else. Progressives look at the glass as being half empty. The real object of your quest is for raw power. You want to run things your politically correct way, no real dissention allowed…..kind of like Lenin, Stalin, and your other role models. The negativism of y’all could make one go crazy. Look at yourself in the mirror…..Every bit of bad behavior that you accuse conservatives of is mirrored by you….Every single bit……….

Good Bye.

Jeff

Jeff

You and I will just have to disagree. You don’t think deficits matter because, even though they lead to hyper-inflation and conditions in which billions of people may encounter untold suffering, that’s all perfectly OK with you. I believe deficits matter precisely for that reason. I find it difficult … nay … impossible to treat human misery so cavalierly.

Thank you for reminding me why it’s worthwhile to fight people like you. For your sake, it might be a good idea to hope that people like I am win, because you don’t want people like Lenin winning. I’m sure many in the Russian upper-class thought they would weather the storm, too. But the mob has a funny way of dealing with people who think dreadful human suffering is “fascinating.”

I have compassion, however, and I hope that never happens to you.

One has to remain dispassionate if one is willing to put themself at risk. I view economic meltdowns as fascinating, catalytic events, just like I looked at the Oct.19, 1987 stock market crash, the currency dislocation of 1991, and the market crash after 911. Detachment allows one to survive and learn from such an event.Many lessons can be learned from market crashes.

And, yes, I hope to personally weather any storm, and profit if possible.

As far as the unwashed beggars comment, that was hitting below the belt, as I have great empathy for the poor, and believe very strongly in charity. I’ll match my charitible record with that of anyone….and it’s not charity out of guilt, but out of kindness.

Jeff

Let me just be sure I understand what you’re saying.

First off, are you saying that monetary dislocations in the primarily agrarian societies of 200+ years ago are equivalent to monetary dislocations in primarily urban societies of today? I can buy that a yam farmer in the wilds of New Guinea might not notice an international monetary crisis, but I would find it harder to make that argument for a factory worker in Des Moines. I know people who lived through the Great Depression, and I can assure you that they would not say that the Great Depression didn’t matter. And as dislocations go, the Great Depression was far better than, say, the food crisis in Biafra.

And are you saying that an economic meltdown in the 21st century is likely to be more like the Medici failure than like Weimar Germany? Why would this be so? What part of today’s interlinking world economic system more resembles Medici Italy than Weimar Germany?

Jeff, I have to say that, when you say deficits don’t matter because economic meltdowns don’t matter, it sounds to me like you’re saying something to the effect that, as long as you, personally, weather the storm, the only inconvenience will be having to smell the unwashed beggars in the streets thrusting their children at you in the hope that you’ll provide a morsel of food that might let them live another day.

By all means, let’s hasten that day. Let’s eliminate taxes completely and borrow until we make it a reality.

Sorry, but I am just a bit sensitive these days.

I gave the example of post WWI Germany, because it was the most recent big scale meltdown. Yeah, it was a clusterfuck, but that’s the only dislocation I’ve seen with such enormous consequences. Other dislocations have had minor effects such as the Holland Crisis, the Bank of England Crisis, the Medici failure, and 7 others I’ve studied. Is there risk with a dislocation? Absolutely….even a fool could see that. However, the monetary system, overleveraged as it is, has gone beyond the tipping point, and this isn’t just in the USA. Seriously, I’ve never seen easier, cheap money being offered in my life. There’s more liquidity being pumped into the system every week, and this is a concerted effort by all the central banks(lowering the value and purchasing power of their money) My mentor, who’s in his 90’s and seen it all, hasn’t seen anything like this either. Yet, despite all of this potential for dislocation, I remain firmly bullish on the prospects of the USA. We still are the gold standard everything else is measured by. Another way to look at it is that we’re too big to fail. The average US citizen will be affected in the pocketbook by a monetary dislocation, but like always, will emerge on top.

Although I might seem heartless to some, a detached, dispassionate viewpoint is a necessary element for successful trading.

As to whether it would matter or not…….It depends on whether you are long or short. As I’ve said before, it’s every man for himself. I don’t like human misery any more than anyone else, but one must accept that there will be a certain amount of misery at any given time. Pragmatism is a necessity for these times.

Jeff

I didn’t mean at all to be condescending. You said you were tired. I really wanted you to have a good long rest. That’s all.

I think you have contradicted yourself, though, if I fully understand what you are saying. You first say that deficits don’t matter. I deliberately used a reductio ad absurdum response to see if what you say is true in all cases. You have responded that deficits, when high enough, lead to hyper-inflation, and you use Weimar Germany as an example.

Now, as you know, Weimar Germany fell to political extremism in the form of the Nazi Party. It might also have fallen to the communists. It could have gone either way, but it was probably going to go one way or the other. Economic suffering was so intense that political moderation was a very remote possibility.

In the case of the Nazis, I think we all know what happened. Mass murder; maybe 50 million deaths. Destroyed industry bases. Economic dislocation on a meta scale. We could expect the same thing of a future international monetary collapse, only this time, the world has nuclear weapons.

And you say this wouldn’t matter? Really, it wouldn’t matter? This is what you’re saying?

The forced transfer of wealth exists in the form of the Earned Income Credit.

You said:
“Many of our wealthiest citizens produce nothing and never have. Some of the hardest working, smartest and most productive people I have ever met live modest lives, and that puts it mildly. I’m sorry, but I’m being asked to set aside what I know – know – from over 20 years as a working adult in favor of dogma that bears almost no resemblance to reality.”

A plurality of our wealthiest citizens have produced a lot, since inheritors are being replaced by producers. The Forbes 400 list gives good evidence of this.

Hard working is a virtue thjat I respect and admire. However, there is a difference between working hard, or working smart, and be willing to accept risk. Risk takers earn every penny they make.

JS retorted in a very condescending manner, “I hope you get a good long rest”

I’ll say it again, defecits don’t matter. We have to pay taxes for services, and should pay those taxes. “Rend unto Caesar…..” Repeating myself, sometime in the future, there will be a monetary dislocation and hyperinflation that will render government defecits irrelevant. The mint’s printing presses will be fired up, just like post WWI Germany, and there is good evidence the world’s monetary system will collapse within the next 50 years. The monetary system started it’s trend towards collapse in 1971, for that matter. However, it is the law that we must pay taxes, and all good citizens should be law abiding and pay taxes. If you chose not to pay taxes, that’s your business, but I’ll continue to reluctantly pay mine with complaints attached.

If I borrow money, personally, I will keep my word and pay it back. That’s just good business.

International monetary collapses have happened before during 1400’s, 1600’s, and 1800’s. History tends to repeat itself and during those times, people still went to work, and the crops got planted. A collapse is just a bump in history.

Jeff

I hope you get a good long rest. To the best of my ability to interpret what you way, though, I still don’t think you’ve answered my most recent question. If deficits don’t matter, then all of us should get to pay no taxes, n’est pas? We can just borrow it all, can’t we?

This is a canard, an article of rhetoric and ideology (and occasionally intentional misdirection) masquerading as fact.

It falsely associates the following: wealth = productive and unproductive = poor. It insists that I believe that people have what their abilities and efforts merit.

Which, of course, is hogwash. Many of our wealthiest citizens produce nothing and never have. Some of the hardest working, smartest and most productive people I have ever met live modest lives, and that puts it mildly. I’m sorry, but I’m being asked to set aside what I know – know – from over 20 years as a working adult in favor of dogma that bears almost no resemblance to reality.

Honestly, I’d give anything to live in a society where the productive were truly unleashed and the willfully unproductive left to their own devices. I don’t lose a lot of sleep over those who have no interest in making something of themselves. But what of those who are industrious, creative and relentless in search of a break who never get one?

Of course, this means we’d have to do something about people who are born into wealth and live unproductive lives, wouldn’t we?

As far as taxes are concerned, we all need fire,police, local services, schools, etc. We should all pay some taxes, even the poor. My arguments, which have been misconstrued, are about the excessive taxes certain segments of society are forced to pay, and the forced transfer of wealth from the productive to the unproductive. I think the 14th amendment would agree with me if tested properly. Before you label me as a heartless SOB, it is the duty of government and society in general to provide for the truly needy, the mentally and physically handicapped.

Defecits and government debt are one thing, private debt is a whole other animal. The disconnect between government debt and demonetization might take a generation or so to set in. Not knowing the timeframe,, meanwhile, we need to be good citizens and pay our taxes, live lives of thrift, and save assets in whatever form we think will hold value. I spend as much cash on things that will hold value, as my budget will afford. I buy expensive art, yet use coupons at the grocery store. I pick up nickels on the street, as a nickel is more than the interest on a dollar for a year. Pennies turn into dollars, which can ve converted into real assets. I’m a strong believer in thrift.

If you sign a note agreeing to pay, and borow and borrow, then don’t pay it back….you’ve broken your word and that’s a bad thing. When it comes down to it, a person is as only as good as his word. Although it’s a rare commodity these days, I still believe in the concept of honor, and paying one’s debts. I regularly borrow lots of money to carry my positions, and always make sure the nargin loan gets paid first, win or lose….that’s just good business practice.

Jeff

PS:

Seriously, I’ve gotta get some sleep.

Thanks for your input. I’d really like it if you’d address a point I made earlier. If deficits don’t matter, then we should have to pay no taxes whatsoever, right? We can just borrow and borrow and borrow and never pay it back, can’t we?

Arthur Burns made a great case about the irrelevancy of defecits, and Friedman basically agreed with Burns in principle. I respected those guys and would never fade them, the same being with Paul Volcker. Although I disagree with Burns(his expansive monetary policy) and Friedman’s rationale, their expected outcome is supported by my models and systems.

As long as all of the industrialized nations run defecits, the defecits become irrelevant in the long run. If I was a member of the general investing public, I’d probably respect the word of a leading economist like you do. However, I prefer to make money and generally like to fade guys like Greenspan. So far it’s worked, but past performance is no guarantee of future results.

The investing public doesn’t really make money in equities, aside from capturing the upward drift of the market if they actually buy and hold. As for the investing public investing in the safety of bonds, holding anything with a maturity longer than 6 months is tomfoolery.

As for Buffett….he has several huge operations that book trades in tax havens for the sole purpose of evading US taxes. While it’s perfectly legal to do what he does, it’s certainly not in the spirit of progressive economics, and flies in the face of what he preaches.

What the public really doesn’t get, and I’ve said it before, it’s all just a big game. How one plays the game, (and everyone is playing it whether they know it or not) will decide whether they prosper or fail.

Ultimately, hyperinflation, devaluation, and monetary dislocation will make government defecits irrelevant. You heard it here first.

I’ll be glad to discuss this further, but just got back from a trip a few hours ago, and am quite jet lagged.

Jeff