POLITICAL ISSUES

[texaspackerbacker]

Again, you aren't seeing it right. Wether a corporation leverages a project to create a bigger gain or an individual leverages a stock buy, there is no difference, I simply used stock leverage because its easier to understand and explain. Corporations generally leverage a much higher percentage, but the point is the same.

What you are describing in gov't handouts is actually called the velocity of money, not the keynsian multiplier. And gov't spending is fine, but gov't handouts are no different than if the original owner of the money kept it. The big difference is when its taken from an individual who might invest/build with it cuz now you have stopped a real asset from being created (and maybe jobs too) which has repurcussions for years to come. A handout simply has a velocity factor which is minimal in a net gain sense, and negative in a long term real asset factor. Leaving it in the hands of the original owner would be a better net gain.....unless we are printing or borrowing said money in which case I stand by either debasing the dollar or removing money from the normal credit markets, either way, a net negative effect.

My point is the gov't doesn't create jobs, they don't create wealth (other than infrastructure), and they take money from the people who do with nearly every tax dollar (not to say no taxes are good, a state run police and military and judicial for instance must be funded to properly run a capitalistic society)

The terminology generally is "margin" when it is purchasing stock and "leverage" when it is a corporation borrowing money for various types of investments. You are correct, though. It is the same thing--debt--just like when the government borrows. The only difference is that government never has a problem paying its debt because it prints the money. And no, that ISN'T inflationary as long as growth outstrips debt increase.

You seem to be making the same flawed assumption that many tax and spend Dem/libs make when you are thinking about government spending--be it for "handouts" or anything else. You would be correct if it was merely tax dollars out/money from the government in. However, that is NOT the way it is, and it is the major JUSTIFICATION for deficits. You CUT taxes, or at very least, leave them level with additional spending, and the Multiplier Effect--which indeed IS what I described--will cause greatly enhance income, demand, production to meet the demand, jobs, more income, more demand, more production, more jobs and income, and so on. That is far more than just the Velocity of Money concept, which is basically just a wash and a transfer of wealth.

Nobody is suggesting government "creates" jobs or wealth. Government merely stimulates the consumers and producers in the free enterprise capitalist system to create jobs and wealth--as described above.

When compassion coincides with self-interest, there is no logical reason not to be compassionate. NOT to be compassionate in that circumstance in vindictiveness, and serves to encourage the wrongheaded liberal class warfare advocates.

[texaspackerbacker]

Ziggy's point was that the terrorist attacks in Madrid and London were motivated by the fact that the Spanish and British governments were participating in the "coalition," and that the attacks were intended to create an even strong popular opposition to the war in those countries. What exactly are you objecting to in that view?

You're probably right that the terrorists were motivated to sway public opinion. And it's to the Spaniard's (especially) eternal disgrace that they caved so quickly and completely to terrorist pressure.

The IRaq War was a bad misstep in the fight against terrorism. But it certainly became a centrally front even if it was of our own creation.

It's important to keep in mind that terrorists are not active in Europe because of United States policy. I know you didn't state that, but some may take that implication.

There's nothing we can do about Europe. If they don't want to send troops to Afghanistan, its probably because they figured out that they can get away with it. But I think the European governments are far more vulnerable to terrorism than we are, and our expending greater efforts than us to combat it domestically.

Hell yeah, the attacks on Spain and Britain were motivated by their following of America's lead in the coalition. And what did the God damned WIMP Spanish do? They POSITIVELY REINFORCED the damned terrorists by electing an Obama-esque government that cut and ran from the enemy. The Brits at least showed some backbone.

The terrorists are more active in Europe for two reasons: One is that Europe is less tough and harsh than we are--unless there is some Euro-Gitmo that I haven't heard about. The other is merely geography. The damn Muslims are closer and have easier access to Europe, as well as a bigger existing population in the European countries going back to colonial times.

Harlan, in the words of Ronaldo Maximus, "There you go again" with the "Iraq was a bad misstep in the fight against terrorism" crap. How can you make such a LUDICROUS statement in light of the virtually 100% success we have had in preventing acts of terror since 9/11? This is NOT a rhetorical question. An answer would be appreciated!

[Harlan Huckleby]

But I'm sticking to my guns that to paint it as nothing other than shameless caving--which all commentaries in the US press did, and which your initial comment did--is sadly mistaken since it completely obscures the other side of the coin.

There is no other side of the coin. The Spanish responded to a terrorist attack by retreating from the burden of fighting terrorism at its source. There is no excuse for them not helping to stave off the Islamists in Afghanistan.

Zapatero has consistently declared his support for a strong front against terrorism, albeit through the U.N.

Well sure, they are working fervently against terrorism as it applies to their immediate threats.

Screw the U.N. They are clearly not up to the job of combatting terrorism. "Strong front" and "U.N." in the same sentence is claptrap.

I understand Bush is a terribly ineffective international leader. That in no way excuses Spain's selfishness and cowardice. They are not children acting-out because of a bad parent.

[Harlan Huckleby]

Harlan, in the words of Ronaldo Maximus, "There you go again" with the "Iraq was a bad misstep in the fight against terrorism" crap. How can you make such a LUDICROUS statement in light of the virtually 100% success we have had in preventing acts of terror since 9/11? This is NOT a rhetorical question. An answer would be appreciated!

I don't see how you can make any connection whatsoever between our successes in preventing terrorist acts and the war in Iraq. The war in Iraq has been a training ground for Al Qaida.

I agree that the War in Iraq is important in the long term course of events, we do not dare leave behind a country that is hospitable to terrorism. It's important psychologically that we appear to be gaining the upper hand there. We would be better off today if we had either not invaded Iraq, or had mustered the necesary resources before invading.

[texaspackerbacker]

Just when you seem to be making some headway toward good sense, Harlan, your irrational Bush-hate again rears its ugly head.

[Kiwon]

...a strong front against terrorism, albeit through the U.N.

[Harlan Huckleby]

Just when you seem to be making some headway toward good sense, Harlan, your irrational Bush-hate again rears its ugly head.

I truly am not a Bush hater. I have defended him as much as crticicized him. The IRaq saga seen in its entirety shows a poor job by his administration, and the buck stops at the top.

I am glad that the last year has worked out better than I could have imagined. It shows that the administration has learned from past mistakes.

[texaspackerbacker]

Harlan, in the words of Ronaldo Maximus, "There you go again" with the "Iraq was a bad misstep in the fight against terrorism" crap. How can you make such a LUDICROUS statement in light of the virtually 100% success we have had in preventing acts of terror since 9/11? This is NOT a rhetorical question. An answer would be appreciated!

I don't see how you can make any connection whatsoever between our successes in preventing terrorist acts and the war in Iraq. The war in Iraq has been a training ground for Al Qaida.

I agree that the War in Iraq is important in the long term course of events, we do not dare leave behind a country that is hospitable to terrorism. It's important psychologically that we appear to be gaining the upper hand there. We would be better off today if we had either not invaded Iraq, or had mustered the necesary resources before invading.

No further reason or justification should be needed beyond the indisputable FACT that terrorism in America has been prevented. If you walk through a minefield and don't get blown up, do you decide to walk back by a different route because you aren't convinced that the way you made it through was the best way to go?

If you insist on justification or reason, though, it's the same one I have cited probably a dozen times in this forum alone: AL QAEDA, ACCORDING TO ITS OWN WORDS, MADE IRAQ THE CENTRAL FRONT IN THE WAR. THEY HATED THE IDEA OF A FREE REPRESENTATIVE DEMOCRACY STANDING THERE AS AN INFECTIOUS EXAMPLE IN THE MUSLIM WORLD SO MUCH THAT THEY PRIORITIZED SCREWING UP IRAQ OVER THE EMINENTLY MORE DIFFICULT TASK OF HITTING AMERICA AT HOME.

How can you continue to dispute such an obvious link? This, again, is NOT a rhetorical question.

[bobblehead]

Actually, this is an irrelavent point but since we are belaboring it, the difference between margin and leverage is nil to a finance person, whether the margin is 10% or 90% we call it leverage, whereas the layman tends to think of 10% as a margin buy and 90% as a leveraged buy. Both buys are leveraged, but one much more so. Clearer, all margin buys are leveraged, but a buy that is significantly leveraged wouldn't be called margin. The calculations on return (or loss) are identical.

As for your tax in spend out analogy, the problem is you think it works the same both ways and I disagree and statistical evidence is on my side. When you raise taxes it has a deflationary effect on the economy, we agree there. Where we disagree is gov't spending and again, things like a bogus stimulas check don't stimulate the economy in the long term. For about a quarter it may bump the economy and stimulate revenues to the gov't and pay for itself, but only in the short term. The money still was "created" by the govn't if it wasn't taken out of the tax base and that doesn't create real long term assets....Oh, I guess you are agruing that once it is spent it ends up in the hands of creaters or doers and then stimulates, but again, you have either debased the dollar or reduced supply in the capital market thus negating any gain.

The only way deficit spending is justified is using it as a stabalizer for the economy, smoothing out peaks and valleys by spending, then paying off said deficit....so far the deficit has NEVER been reduced since we started running one, it was near zero at the end of the clinton years (thanx to gingrich) and the economy THRIVED. And I guess the actual HARM in a normal standing debt is minimal cuz the economy will outgrow it eventually, but we have debt in unfunded liabilities (and securities) that is growing yearly as measured against GDP. In english, we are going deeper in debt every year while our income is growing by less than that amount.

Now if you put in a social program like welfare with net spending of say....10 billion per year and it increased by EXACTLY the same as GDP every year that would be acceptable to me, but we don't put such safeguards in therefore your presumption that compassion coincides with self interest I reject. And even in said situation it would have to be cut every time govn't put in a NEW spending program to remain solvent (or taxes would have to be raised).

Anyway, I'm tired now, night.

[Harlan Huckleby]

AL QAEDA, ACCORDING TO ITS OWN WORDS, MADE IRAQ THE CENTRAL FRONT IN THE WAR. THEY HATED THE IDEA OF A FREE REPRESENTATIVE DEMOCRACY STANDING THERE AS AN INFECTIOUS EXAMPLE IN THE MUSLIM WORLD SO MUCH THAT THEY PRIORITIZED SCREWING UP IRAQ OVER THE EMINENTLY MORE DIFFICULT TASK OF HITTING AMERICA AT HOME.

So, your theory is that the bad guys have been drawn to Iraq to face a trap of sorts, a killing field where we've been able to mow them down.

I don't see us in a war of attrition against the terrorists. I see little tactical value to the hurt we've inflicted against the handful (perhaps a couple thousand) of foreign fighters in Iraq. They got plenty more where they came from.

It IS important from a propoganda standpoint to defeat them, that is part of the the longterm struggle.

We are not "tying them down in Iraq." The terrorists are not like Hitler's armies committing troops to the eastern front. They are a small, mobile force. They can and have redeployed to Pakistan as we've driven them out of Iraq.

Iraq has had zero, nothing, nada to do with the terrorist ability to strike at the U.S.

[texaspackerbacker]

Actually, this is an irrelavent point but since we are belaboring it, the difference between margin and leverage is nil to a finance person, whether the margin is 10% or 90% we call it leverage, whereas the layman tends to think of 10% as a margin buy and 90% as a leveraged buy. Both buys are leveraged, but one much more so. Clearer, all margin buys are leveraged, but a buy that is significantly leveraged wouldn't be called margin. The calculations on return (or loss) are identical.

As for your tax in spend out analogy, the problem is you think it works the same both ways and I disagree and statistical evidence is on my side. When you raise taxes it has a deflationary effect on the economy, we agree there. Where we disagree is gov't spending and again, things like a bogus stimulas check don't stimulate the economy in the long term. For about a quarter it may bump the economy and stimulate revenues to the gov't and pay for itself, but only in the short term. The money still was "created" by the govn't if it wasn't taken out of the tax base and that doesn't create real long term assets....Oh, I guess you are agruing that once it is spent it ends up in the hands of creaters or doers and then stimulates, but again, you have either debased the dollar or reduced supply in the capital market thus negating any gain.

The only way deficit spending is justified is using it as a stabalizer for the economy, smoothing out peaks and valleys by spending, then paying off said deficit....so far the deficit has NEVER been reduced since we started running one, it was near zero at the end of the clinton years (thanx to gingrich) and the economy THRIVED. And I guess the actual HARM in a normal standing debt is minimal cuz the economy will outgrow it eventually, but we have debt in unfunded liabilities (and securities) that is growing yearly as measured against GDP. In english, we are going deeper in debt every year while our income is growing by less than that amount.

Now if you put in a social program like welfare with net spending of say....10 billion per year and it increased by EXACTLY the same as GDP every year that would be acceptable to me, but we don't put such safeguards in therefore your presumption that compassion coincides with self interest I reject. And even in said situation it would have to be cut every time govn't put in a NEW spending program to remain solvent (or taxes would have to be raised).

Anyway, I'm tired now, night.

Bobblehead, you are continuing to make a bunch of false assumptions and premises.

First of all to belabor that admittedly irrelevant point, MARGIN implies a blend of equity and debt working together for a stock purchase. It's a legal requirement. Leverage i.e. corporate debt--like when an individual goes to the bank and gets a personal loan, does NOT require equity. It is purely borrowing--either secured or unsecured--100% of the amount needed for whatever project or use the loan is for.

The fundamental disagreement we seem to have is that you think money spent must be "paid for" with tax increases. It does not.

You also stated that deficit spending is only justified for short term smoothing out or whatever, and you bemoaned the fact that debt in this country has never been substantially reduced. That, however, is NOT a bad thing. The great majority of corporations are the same way. Most individuals through the prime years of their lives have long term mortgages. There is simply NO NEED to even consider paying off government debt. In fact, it would be deleterious on a bunch of levels if it ever happened.

You also were factually wrong in stating that debt has increased faster than GDP. Not even close! If that ever happened, yes, then it would be inflationary. But it hasn't happened for more than short periods, and it won't happen unless taxes are stupidly raised. And there is a good and valid reason WHY you simply don't see debt rising faster than growth--it's that old standby, the Multiplier Effect. That is why in your $10 billion example, no safeguard is ever put in. It's virtually automatic--no safeguard needed.

And taxes NEVER have to be raised. I would like to see an economic model run assuming no taxation, no government revenue whatsoever--purely debt financing--extended and "paid off" by more debt. I bet it would work just fine.

[bobblehead]

I'm trying to politely let you out of this, trust me, I'm a financial professional, any margin buy is called a "leveraged" position be it 1% or 100%. Your simply not right on this.

What you say is true, but you are dismissing the other part which is also true, you are legally required to put up certain percentages (and required by said broker) on margin buys, but they are still leveraged. When a corporation puts money into a project they to can leverage any percentage of it they wish, we don't refer to it as "investing in the project on margin" but that is still what it is. Margin refers to the percentage that is borrowed, while leverage merely means SOME is borrowed. the only relevance is where the fulcram is (to make a true lever analogy)

As far as debt not outpacing GDP you aren't including unfunded liabilities, I am. 59 TRILLION at last count from the front page of USA today about a week or 2 ago.

edit: http://www.usatoday.com/news/washing...l-budget_N.htm

Pension and health payments for gov't employees. The real amount that the SS trust fund should be going up by. The liability of people paying into medicare vs. the payments being made out. The numbers are staggering. According to the article we have a national shortage (read debt) of $500,000 per household in this country. No amount of tax cutting or spending cutting can catch us back up, only cutting the benefits they promised us, and no politician is gonna do that until the first check doesn't clear.

[bobblehead]

Ok, click on this bad boy and tell me how good you feel about our govn't spending lots of money and putting in compassionate social programs.

http://www.ncpa.org/iss/bud/2003/pd103003a.html

my favorite line:

This means that in order to ensure the government will keep its promises, we need to have $50 trillion on hand right now, invested at a rate of return of about 6 percent. Since we don't, the overall obligation will grow through time.

or this link:

http://www.theatlantic.com/doc/200401/littlefield

my favorite line from it:

The implications are profound: by 2050 the very nature of the federal government may be radically different. At the extremes the country has two basic options. One is to retain Social Security and Medicare as broad middle-class entitlements, maintain Medicaid, hold defense spending near present levels (about 3.5 percent of GDP), and keep the rest of the government at its current size. In this scenario federal spending would grow from 19.5 percent of GDP today to 39.7 percent in 2075, resulting in a government proportionally larger than Germany's or France's. To fully cover a U.S. government of this size, lawmakers would need some way to permanently increase tax revenue by 70 percent a year—beginning today.

[Tyrone Bigguns]

I'm trying to politely let you out of this, trust me, I'm a financial professional, any margin buy is called a "leveraged" position be it 1% or 100%. Your simply not right on this.

This is the best thing i've read in a while.

A conservative who actually understands econ trying to educate a conservative who only thinks he does...and the finance guy is being rebuked.

I woulda thought you might have learned when he refused to acknowledge the correct meaning of the "money multiplier."

Bobble, you will quickly find that you know very little compared to Tex. His years spent in the army and selling real estate far outweigh your education and experience.

Good luck!

[Freak Out]

Thank you Mr. Gates. I don't agree with all the things he has done but he knows when some incompetent need to go.

June 6, 2008

2 Leaders Ousted From Air Force in Atomic Errors
By THOM SHANKER

WASHINGTON — The Air Force’s senior civilian official and its highest-ranking general were ousted by Defense Secretary Robert M. Gates on Thursday after an inquiry into the mishandling of nuclear weapons and components found systemic problems in the Air Force.

The Air Force secretary, Michael W. Wynne, and the service’s chief of staff, Gen. T. Michael Moseley, were forced to resign after the inquiry found that the latest in a series of incidents reflected “a pattern of poor performance” in securing sensitive military components, Mr. Gates said at a Pentagon briefing.

So deep and serious are the problems, Mr. Gates said, that he has asked a former secretary of defense and of energy, James R. Schlesinger, to head “a senior-level task force” to recommend improvements in the safekeeping of nuclear weapons, delivery vehicles and other sensitive items.

In office 18 months, Mr. Gates has made accountability a central theme, firing senior Army officials after disclosures of shoddy conditions at Walter Reed Army Medical Center and pushing into retirement other generals closely associated with a faltering strategy in Iraq.

But never before has a defense secretary simultaneously ousted a service secretary and a service chief. Mr. Gates said he had taken the action because the investigation identified “a lack of effective Air Force leadership oversight” and found that “the Air Force has not been sufficiently critical of its past performance.”

“Mistakes are not acceptable when shipping and controlling sensitive, classified parts” of the United States’ nuclear arsenal, Mr. Gates said. “Our policy is clear. We will ensure the complete physical control of nuclear weapons, and we will properly handle the associated components at all times. It is a tremendous responsibility, and one we must not, and will never, take lightly.”

Mr. Wynne’s only comment was a statement issued Thursday, in which he said, “Recent events convince me that it is now time for a new leader to take the stick and for me to move on.”

The inquiry involving the Air Force was an effort to determine how four high-tech electrical nose cone fuses for Minuteman nuclear warheads were sent to Taiwan in place of helicopter batteries. The mistake was discovered in March — a year and a half after the mistaken shipment.

Mr. Gates made clear that most troubling was that the inquiry showed how little the Air Force had done to improve the security of the nuclear weapons infrastructure even after it was disclosed last year that a B-52 bomber had flown across the United States without anyone’s realizing that it was carrying six armed nuclear cruise missiles.

Mr. Gates, whose military service includes a year as an intelligence officer within the Air Force’s nuclear program, emphasized that neither incident posed a danger of a nuclear mishap.

Nevertheless, he said, the inquiry made it clear that the Air Force had suffered for years from a loss of expertise in handling nuclear materials. He acknowledged that the Air Force had taken steps to improve the situation, but he said that more must be done to fix “structural, procedural and cultural problems.”

Mr. Gates, 64, served as deputy national security adviser and director of central intelligence under the first President George Bush. He has repeatedly said that he plans to retire from government service at the end of the Bush administration, but there has been speculation that he may be asked to stay on by either a President McCain or a President Obama after January, to help guide the Pentagon while the country is at war.

Pentagon officials said General Moseley, in his role as a member of the Joint Chiefs, met Thursday with Adm. Mike Mullen, the chairman, who supported the decisions for both officials to retire.

The errors in handling nuclear weapons components constituted more than just an indication that the cold-war-era focus on these powerful weapons had become fuzzy. They have also put the Bush administration in a difficult position, as the United States is struggling to prevent nuclear technology from spreading to nations that do not have it and has criticized North Korea and Iran for their nuclear ambitions. American officials have even spoken strongly to Russia for not sufficiently safeguarding its stockpile.

After the incident with the nose cone fuses was discovered, Mr. Gates told the Air Force and Navy secretaries to conduct a comprehensive review and a physical site inventory of all nuclear and nuclear-associated material equipment across their respective programs. Adm. Kirkland H. Donald, director of Navy Nuclear Propulsion, led the investigation, and gave his report to Mr. Gates last week.

Senator Carl Levin, the Michigan Democrat who heads the Senate Armed Services Committee, applauded Mr. Gates’s move.

“Secretary Gates’s focus on accountability is essential and had been absent from the office of the secretary of defense for too long,” Mr. Levin said in a statement. “The safety and security of America’s nuclear weapons must receive the highest priority, just as it must in other countries.”

Mr. Gates said his actions Thursday had been wholly driven by Admiral Donald’s inquiry, and were not related to other embarrassments that have plagued the Air Force over recent months.

Among the troubles has been an inquiry into contracts for the Air Force’s flying stunt team, the Thunderbirds, which found that a $50 million contract to promote the Thunderbirds had been tainted by improper influence and preferential treatment. No criminal conduct was found, but three officials were subjected to administrative penalties.

Mr. Gates has also expressed frustration about some Air Force actions on weapons procurement, budgets and execution of the mission in Iraq and Afghanistan, his aides said.

The Air Force has more than doubled the number of armed Predator and Reaper hunter-killer aircraft over Iraq and Afghanistan since early last year, but aides to Mr. Gates say he is still not satisfied with the number of surveillance aircraft in the war zone.

The ouster of the top Air Force officials is similar to Mr. Gates’s moves in March 2007 after disclosures of shoddy conditions at Walter Reed, when he forced Francis J. Harvey to resign as Army secretary, a day after a decision that the two-star general in charge of Walter Reed would be relieved of command.

Mr. Gates also decided last year not to recommend either the reappointment of Gen. Peter Pace as chairman of the Joint Chiefs or that of Gen. John P. Abizaid as commander of American forces in the Middle East. Both men were closely associated with early military policy for Iraq.