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Congratulations, you just figured something out that your predecessors didn't in 8 years: war is expensive, and so is letting the banks get so big that we have

Congratulations, you just figured something out that your predecessors didn't in 8 years: war is expensive, and so is letting the banks get so big that we have to bail them out. Alas, we can't play the same game from 2000: 5.6 trillion dollars. That would have been much easier. Now, others suggest you are wrong about the importance of the debt: http://www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html http://www.nytimes.com/2012/01/02/opinion/krugman-nobody-und... -- but let's accept your assertion that the debt is currently too high. I started to type out a big reply, but my startup is more important than correcting you. ;) But the main problem is that we don't have the jobs. Without the jobs, we don't have income to tax. Decreasing wages (business friendly) doesn't increase the tax base. Decreasing environmental regulations punts the problem down the road -- eventually, we have to clean the problems up, and deal with the increased health problems as the companies that caused the problems declare bankruptcy. (Look at the superfund sites history for some of the problems.) Inflation was not considered in your solution, and you should at least address it: inflation isn't even necessarily bad, as Krugman writes. http://www.nytimes.com/2012/04/06/opinion/krugman-not-enough-inflation.html http://www.nytimes.com/2012/04/06/opinion/krugman-not-enough... There's a much bigger problem. The world doesn't need more of what we're selling. The more we save, the fewer jobs that are created. The less we save, the more precarious our financial situations are when crises happen like 2008. (Let me remind you that starvation is a root cause for revolution, and civil war is indeed possible in the US.) Inflation is painful, but it is a key portion of the way out. The second piece is reducing military R&D to 10%, killing all non-naval bases outside the country, accepting that we will have to rebuild the military in the case of crisis and that Israel and Taiwan may have trouble without us. Allow Japan to rebuild its military -- that will help keep China at bay. Slashing military R&D will release some incredible engineers to innovate outside the military sphere. We then drastically cut homeland security and accept a few more terrorist events every decade. Keep the water aquifers and nuclear bases safe, but the return on investment is poor. If everything else stays constant (even accepting an increase in health care costs), we are well on the way to bringing ourselves to paying off our war debts, at the least. I suggest that this needs to happen when the economy is stronger, not weaker, mind you, else we may cause a larger crisis than we solve.

robomartin 14y ago
I read Krugman's articles you posted. I disagree. He is known to be a far left-wing ideolog. I am not discussing this from an ideological perspective but rather a mathematical perspective. I detest both the Democratic and Republican parties for what they've done to us over the last, say, fifty years. They both have blood in their hands. I recognize that looking at this mathematically takes time that many of us don't have. I couldn't sleep last night and was too mentally tired to program, so I blew an hour playing with numbers in Excel. I don't expect everyone to do this. However, having said that, I would urge you and others not to jump at conclusions before taking the time to quantify them. This is about arithmetic. It's fine to have beliefs, we all have them, but at one point you have to fire-up a spreadsheet and verify --in some form-- if what you believe adds-up. Yes, I did not include inflation. I also didn't include interest. I also did not include mortality rates. Or the reduction of the workforce. Or the increase in retirees in proportion to working Americans. Or the erosion of the industrial base due to our increasing costs and the reality that manufacturing in the US is nearly impossible today. And so on. In other words, there are a lot of additional factors that could be added to the model in order to try to get more realistic numbers. Admittedly my calculations are only an approximation of the simplest possible model. The way I look at it is that it provides a first-level sense of proportion of the problem. It's the start of a conversation and the exploration rather than the final solution. I understand this and so should others. As a first approximation it shows a really grim picture of what we've done to our country in the last fifty years. This is not about this administration or the prior. This is about bad decision making for a long, long time. Krugman's use of the debt situation after WWII to justify his point of view is plain old bullshit with a cherry on top. The economic expansion we had after WWII is without precedent. The US was the manufacturing capital of the world. We made everything. Countless industries rose and flourished. From aircraft to electronics and beyond. The world went from the "technological dark ages" if you will into a pretty fantastic era of invention, development and expansion. And, as I said, the US was at the center of that. That is not the situation we have today. China is the center of attention. China is where jobs are going. China is where you manufacture stuff. We can't even attempt to manufacture an iPhone in the US. You could not do it. And, believe me, I know, I owned an electronics manufacturing company for twenty years. Finally said "fuck it", shut it down and focused on the software portion of our business. Eventually you get sick and tired of contracts always going to the Chinese because they come in at half your price and there is no way to compete. So, Krugman is absolutely wrong and is using typical ideolog spin to create and justify an alternate reality. Words are easy. Numbers are hard and they don't lie. I'd like to see him (and anyone else who wants to propose any kind of a solution) publicly post a spreadsheet with a solution to the problem. Then we can evaluate his ideas from a mathematical perspective, all ideology aside. I'd like to see him start a manufacturing business in the US, hire nothing but unionized workers with ridiculous pay and benefits, comply with all rules and regulations and succeed. He couldn't do it. He wouldn't know how. And he'd quickly discover that his ideology sounds great in NYT articles but is utter bullshit where the tire meets the road. Just nice-sounding words, not reality. A lot of this talk is analogous to basic physics approximations "let's assume that a cow is a uniform sphere of milk moving in a vacuum". That's all well and fine, but a cow isn't and it certainly does not move in a vacuum, so the real answer will be a little different and far more complex to arrive at. So is the case for my simple exploration of the numbers. It is useful in that it provides a simple answers to get a rough idea of where we might be. It isn't useful because, well, it's a cow and it isn't moving in a vacuum. Yet, Jedi tricks are not real, so the problem requires a real solution. As for your proposal to slash military spending and homeland security, etc. That's fine and dandy. I want all of our military bases on foreign soil shut down. All of them. And I want our military to be cut in half. And, of course, no more financial aid to any country --not one. But, guess what, if you look at the numbers --what an asshole! always wanting to look at real data!-- that would be a good step, but not a solution at all: http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2011.png http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY... If you cut the entire Defense Department in half you are only addressing about 9% of total spending. Look at the chart. The bulk of our spending is in entitlements and the wonderful "Discretionary" slice. According to my simple spreadsheet model we'd have to cut our spending in HALF for FIFTY YEARS in order to get back to even-Steven. HALF for FIFTY YEARS. Even if I was 100% off you'd have to cut 25% of our budget for the same fifty years. In other words, focusing on military spending will do almost zero to fill the hole we have dug ourselves into. Finally, there's the assertion that the main problem is that we don't have jobs and that is the key issue. OK, I'll agree. Here's the problem, where do jobs come from? And why are jobs created? I just closed a pretty nice manufacturing operation about two years ago as my large customers started to default on contracts. Guess what, I am not re-opening that venture. No fucking way. I am done with manufacturing. Why? Can't compete. Why? Taxes, costs, unions, regulations, bullshit, lawsuits, etc. Those jobs are not coming back. Not unless we get our shit together and become uber business-friendly. This does not mean going down to third word wages. It does mean getting the government monkey off our backs so we can do what we know how to do best: innovate and produce. You say that you are part of a startup. Presumably a software startup. Rest assured that what you are doing is a hundred, no, a million times easier and cheaper than playing with physical product. There's a reason why companies like YC don't touch hardware startups: the probability for failure is far greater and the cost to achieve critical mass is at least a thousand times higher than for software. Most people who have only touched software as a means to earn a living don't develop a sense of just how tough things can be in other segments of the economy, and, in particular, in the industrial and consumer manufacturing segments. Software is great. I am focusing on that 100% today. However, a typical software business doesn't employ the numbers of people that industrial and manufacturing enterprises employ. And, frankly, it is far easier to outsource and find great talent around the world. You have industrial companies like GE who employ some 300,000 people. And there are many examples like that. I could go on, but I have to get back to coding. Bottom line: Government should only spend the absolute minimum required to run our affairs and nothing more. They should be out of social programs, healthcare and other crap. They are the managers of our store, and that's all they should be spending money on. We have given them too much leash and now we are paying the consequences of our inattention. Any discussion of this topic really needs to be backed-up by an accompanying economic model showing that the conclusions are mathematically possible. I went through a rough first approximation. I'd love to see someone smarter than me show me what a more refined model looks like and how the problem can be solved in half the time and with half the cuts. Mathematically, not ideologically.

robomartin 14y ago

I read Krugman's articles you posted. I disagree. He is known to be a far left-wing ideolog. I am not discussing this from an ideological perspective but rather a mathematical perspective. I detest both the Democratic and Republican parties for what they've done to us over the last, say, fifty years. They both have blood in their hands. I recognize that looking at this mathematically takes time that many of us don't have. I couldn't sleep last night and was too mentally tired to program, so I blew an hour playing with numbers in Excel. I don't expect everyone to do this. However, having said that, I would urge you and others not to jump at conclusions before taking the time to quantify them. This is about arithmetic. It's fine to have beliefs, we all have them, but at one point you have to fire-up a spreadsheet and verify --in some form-- if what you believe adds-up. Yes, I did not include inflation. I also didn't include interest. I also did not include mortality rates. Or the reduction of the workforce. Or the increase in retirees in proportion to working Americans. Or the erosion of the industrial base due to our increasing costs and the reality that manufacturing in the US is nearly impossible today. And so on. In other words, there are a lot of additional factors that could be added to the model in order to try to get more realistic numbers. Admittedly my calculations are only an approximation of the simplest possible model. The way I look at it is that it provides a first-level sense of proportion of the problem. It's the start of a conversation and the exploration rather than the final solution. I understand this and so should others. As a first approximation it shows a really grim picture of what we've done to our country in the last fifty years. This is not about this administration or the prior. This is about bad decision making for a long, long time. Krugman's use of the debt situation after WWII to justify his point of view is plain old bullshit with a cherry on top. The economic expansion we had after WWII is without precedent. The US was the manufacturing capital of the world. We made everything. Countless industries rose and flourished. From aircraft to electronics and beyond. The world went from the "technological dark ages" if you will into a pretty fantastic era of invention, development and expansion. And, as I said, the US was at the center of that. That is not the situation we have today. China is the center of attention. China is where jobs are going. China is where you manufacture stuff. We can't even attempt to manufacture an iPhone in the US. You could not do it. And, believe me, I know, I owned an electronics manufacturing company for twenty years. Finally said "fuck it", shut it down and focused on the software portion of our business. Eventually you get sick and tired of contracts always going to the Chinese because they come in at half your price and there is no way to compete. So, Krugman is absolutely wrong and is using typical ideolog spin to create and justify an alternate reality. Words are easy. Numbers are hard and they don't lie. I'd like to see him (and anyone else who wants to propose any kind of a solution) publicly post a spreadsheet with a solution to the problem. Then we can evaluate his ideas from a mathematical perspective, all ideology aside. I'd like to see him start a manufacturing business in the US, hire nothing but unionized workers with ridiculous pay and benefits, comply with all rules and regulations and succeed. He couldn't do it. He wouldn't know how. And he'd quickly discover that his ideology sounds great in NYT articles but is utter bullshit where the tire meets the road. Just nice-sounding words, not reality. A lot of this talk is analogous to basic physics approximations "let's assume that a cow is a uniform sphere of milk moving in a vacuum". That's all well and fine, but a cow isn't and it certainly does not move in a vacuum, so the real answer will be a little different and far more complex to arrive at. So is the case for my simple exploration of the numbers. It is useful in that it provides a simple answers to get a rough idea of where we might be. It isn't useful because, well, it's a cow and it isn't moving in a vacuum. Yet, Jedi tricks are not real, so the problem requires a real solution. As for your proposal to slash military spending and homeland security, etc. That's fine and dandy. I want all of our military bases on foreign soil shut down. All of them. And I want our military to be cut in half. And, of course, no more financial aid to any country --not one. But, guess what, if you look at the numbers --what an asshole! always wanting to look at real data!-- that would be a good step, but not a solution at all: http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2011.png http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY... If you cut the entire Defense Department in half you are only addressing about 9% of total spending. Look at the chart. The bulk of our spending is in entitlements and the wonderful "Discretionary" slice. According to my simple spreadsheet model we'd have to cut our spending in HALF for FIFTY YEARS in order to get back to even-Steven. HALF for FIFTY YEARS. Even if I was 100% off you'd have to cut 25% of our budget for the same fifty years. In other words, focusing on military spending will do almost zero to fill the hole we have dug ourselves into. Finally, there's the assertion that the main problem is that we don't have jobs and that is the key issue. OK, I'll agree. Here's the problem, where do jobs come from? And why are jobs created? I just closed a pretty nice manufacturing operation about two years ago as my large customers started to default on contracts. Guess what, I am not re-opening that venture. No fucking way. I am done with manufacturing. Why? Can't compete. Why? Taxes, costs, unions, regulations, bullshit, lawsuits, etc. Those jobs are not coming back. Not unless we get our shit together and become uber business-friendly. This does not mean going down to third word wages. It does mean getting the government monkey off our backs so we can do what we know how to do best: innovate and produce. You say that you are part of a startup. Presumably a software startup. Rest assured that what you are doing is a hundred, no, a million times easier and cheaper than playing with physical product. There's a reason why companies like YC don't touch hardware startups: the probability for failure is far greater and the cost to achieve critical mass is at least a thousand times higher than for software. Most people who have only touched software as a means to earn a living don't develop a sense of just how tough things can be in other segments of the economy, and, in particular, in the industrial and consumer manufacturing segments. Software is great. I am focusing on that 100% today. However, a typical software business doesn't employ the numbers of people that industrial and manufacturing enterprises employ. And, frankly, it is far easier to outsource and find great talent around the world. You have industrial companies like GE who employ some 300,000 people. And there are many examples like that. I could go on, but I have to get back to coding. Bottom line: Government should only spend the absolute minimum required to run our affairs and nothing more. They should be out of social programs, healthcare and other crap. They are the managers of our store, and that's all they should be spending money on. We have given them too much leash and now we are paying the consequences of our inattention. Any discussion of this topic really needs to be backed-up by an accompanying economic model showing that the conclusions are mathematically possible. I went through a rough first approximation. I'd love to see someone smarter than me show me what a more refined model looks like and how the problem can be solved in half the time and with half the cuts. Mathematically, not ideologically.