Friday assorted links


2. Some people imagine a smarter version of what Trump said, but not one of them would have said it just as Trump did, and put their name on it.

I, for instance, would be happy to look at debt to GDP ratios, or debt to national wealth ratios, but that's not what Trump did. He said government debt "was reduced" by what is in private citizens pockets.

That is a dangerous idea, essentially casting in stone the old warning that current debt is future tax, to be taken/paid later.

But wait, if we only owe the government debt to ourselves, and our wealth in the stock market has gone up more than that, then he is right!

@Fu Manchu - as the Manchus found out in the Qing dynasty, it's all about fear of foreigners. Americans could easily pay off all their debt by selling their assets to the Chinese, but that would ming (sic) having Chinese overlords.

Bonus trivia: even after nearly 300 years of being in China, the Manchus were considered foreigners, despite the queue being an accepted "Chinese" hairstyle. Imagine dat! Queue in line boys and girls for Ray's erudition...

Red China's fascist regime is racist:

I support Representative Bolsonaro's presidential run. Retake the lost territories, raise the tariffs and cut the debt!

The Manchus, foreigners for 300 years. Well, they were conquering outsiders, after all.

One wonders the same about the Mexicans...

Dangerous tautology?

Sort of. If we have run a debt since 1835, some of those dollars are still there, and mostly inflated to insignificance.

Maybe the economists have a model for how much debt can be eaten by inflation and how much will still weigh, in the future, as significant.

I see that the debt stood at $2B in 1900. I think that is something we'd now call chicken feed, and leave on the tab.

Debt can either be repaid or repudiated. Inflation is a mechanism that creates a continuum of possible outcomes between these two end points.

Not seeing the danger of which you speak.

People finding "sense" in the statement are not rushing up to pay their share. In fact, Tump combines an idea that capital gains reduces debt with a call for lower capital gains tax. Hard to make that math work.

Further in the weeds, people living in every year since 1835 have managed to neither repudiate or repay, so that is a rather netherworld claim.

Perhaps their ghosts will settle.

US government debt has always been repaid. Often the repayments are financed by new borrowing.

Beyond that, you're riding a Ponzi idea that could be indefinitely kicked down the road as long as the population continued to expand.

Sounds like you're the one peddling dangerous ideas.

LIFO accounting is the only thing that makes sense.

Is this tweet and bullshit chart something a PhD would pass off as worthwhile?

That sounds like something Obama would think but is sufficiently shifty as not to say. Liberals would see stock market gain money as future taxes receipts. The liberals, if Hillary had been given her turn, were planning to nationalize 401K's and IRA's.

I'm pretty sure President Trump knows there is no right of offset (Google that) between and with stock market investors and the holders of the unsustainable national debt. Maybe, he was saying elucidating the positive, psychological and private wealth effects of soaring stock prices.

Anyhow, Krugman here is almost (it is impossible) stupider than his election night comment as to markets NEVER recovering.

First, the chart is a non sequitur relative to the bullshit tweet.

Is there a key to the chart? I think the national debt rise was $9 or $10 trillion in the timeframe, to (rounded) $20 trillion. The chart doesn't communicate that 2009 stock prices were at extremely low levels (Dow about 8 or 9,,000 to over 22,000), while the debt increases were from already unsustainably high levels. The Truth and Math are difficult if not impossible for Nobel-laureate hacks.

Did President Trump actually say that? What was the context? I'm thinking Krugman is lying.

Right, the stock market chart is a trough to peak (?) data series.

The strong growth in the debt is due to the Bush tax cuts that occurred after the great recession -
so in a way it is a peak to trough chart. The deficit as a share of GDP was at a peak of 10% in 2009 and declined to some 3% of GDP over the next 7 yeas.

You get a very different picture if you change the dates -- so why start in 2009?

It is a meaningless comparison.

that is suppose to be before the great recession.

Now you tell us! I just sold part of my portfolio, dang it.

Did the tax cuts cause the growth, or the recession, or both?

I choose "both."

The strong growth in the debt is due to the Bush tax cuts that occurred after the great recession – so in a way it is a peak to trough chart. The deficit as a share of GDP was at a peak of 10% in 2009


Those damned time traveling tax cuts!

"Did President Trump actually say that? "

Josh Marshall over/misquotes, so ignore the caption, go for the actual statement.

#2 - To a degree, Trump is right and Krugman is wrong: money is green, as Trump says. The big debate about the sustainability of the Fed deficit is all about how smooth a transition between debt and equity, if you think about it. Worse case, to pay off any Federal debt, Americans could sell off their assets to foreigners. It would be a 'hard landing' but it would work. Ricardo equivalence and all that (or it's opposite).

All of a sudden pk thinks absolute debt levels matter

I think he is just pointing out how high the markets climbed under Trumps illustrious predecessor, far far outpacing the growth in the total Federal debt. Meaning Obama massively dropped the deficit according to Trump that is.

It's interesting that he thinks no further

His position is now that the president doesn't matter to the economy

Ray, you are missing the key point here. There is no gain until the stock is sold; until then it's all paper profits (of which I have a lot of right now :-) ). When one looks at the retirement money moving into index funds and essentially being locked up one can see one of the significant drivers of the market increase. I can buy and sell all I want within my IRA but until it's cashed out it is neither a profit or a loss.

That is a good note.

And even as we start to withdraw from our retirement savings, we don't expect it all to be taken by Trump.

True, if you're counting on some big jump in government revenues from capital gains, it has to be considered that a couple of bad BLS reports in a row can probably wipe out a big portion of those gains, so they ought to be considered....a little contingent.

If buy and sell, then you definitely have a profit or loss, even in an IRA. The IRA simply allows you not to recognize the gain/loss on your tax return and prevents you from taking out any cash without paying tax and, if you're not retired, a penalty.

@Alan Goldhammer - thanks for that note, though keep in mind that if you hold your stocks (basket) for at least ten years, at no point in stock market history has a basket of stocks fallen into negative territory, and that includes the Great Depression. Simply put, paper profits become real profits in at least about ten years. And, debt and equity are interchangeable, as I said upstream, meaning if the US Federal debt spirals "out of control" it simply means we'll have Chinese overlords owning our assets, in exchange for 'forgiving' (retiring) our debt.

Bonus trivia: "Many men smoke, but few man chew!"

A positive review of Knausgaard's "Autumn"

4. "On November 18, 2016, ten days after Donald Trump won the Presidential election, graffiti appeared on a Brooklyn Heights playground named after Adam Yauch, a founding member of the Beastie Boys. Yauch, who died in 2012, was Jewish; a vandal had spray-painted two swastikas on the equipment and, beneath them, had written, “Go Trump.” The incident received national attention not just for its hateful nature but because it happened in a liberal enclave."

Reminds me of how they were shocked that the most hoaxes hate incidents after the election occurred in liberal Oregon. I wasn't.

" To me, though, one of the most disturbing aspects wasn’t the swastikas themselves but the fact that they had been drawn incorrectly—one was backward and the other was misshapen. Apparently, the person engaging in hate speech didn’t know what a Nazi swastika looked like."

That same thing happened to famous hate crime victim Morton Downy Jr:


1. There is a question about an old boat. When you have replaced every plank, is it the same boat? Or, if you just pull off planks, at what point does it stop being a boat?

Trump hopes to pull enough planks to scuttle the boat, and that you'll blame the shipwright.

Levin fails to note that the real effect of Trump's moves is that hospitals will not be paid more often, and more people will be refused to be seen by doctors.

The GOP heath care plan is to fire a million workers or more in health care and ration health care.

Death is freedom from suffering. Bullet to the brain.

The boat was already leaking. Pulling off a few more planks simply accelerates the process of sinking. It's repeal by other means.

Heh, is that in the Navy manual? In response to leaks ..

I'd like to see Levin's take on:

Both suggest (in ways more complicated then this sentence) that if you cut the money going directly to the insurance companies it will be made up through subsidies to buyers and chicanery. It doesn't seem to be a popular take given all the hullabaloo but as with anything that Trump has a hand in it's hard to tell where reality ends and hype begins.

The so-called Lithuania is a legitimate part of Russia. Russia developed it, make it rise from semi-barbarism. An independent "Lithuania" was a Wilsonian invention with no basis on history or the international law to weaken Russia. Soon or later, Lithuania will join the Russian fatherland again. Russia and Brazil will retake their lost lands and made their fatherlands whole again.

I just told you, never go full retard, man!

He probably cut and pasted from the utterances of one of the characters in Anatoly Karlin's comboxes.

#6 It would be terribly chaotic. NAFTA needs to be renegotiated for sure...huge changes in the global economy have happened since its enactment, but withdrawal is not the answer to the anachronistic holdovers.

Global trade has gotten freer and NAFTA trade restrictions need to be reduced to keep up???

I had not realized that both Mexico and Canada have freer trade with the EU than the US, so if Trump nukes NAFTA, both may simply import goods duty free from the EU instead of paying WTO tariffs on imports from the US.

The US consumers will have no choice but pay higher prices for imports that have been coming from Mexico and Canada. For food products, Trump is acting to bankrupt competing producers in the US by starving them of workers. Although Sessions was trying to increase the supply of slave labor by boosting private prison populations and promoting forced labor for private profit, restoring the Southern replacement for slavery.

And Trump nuking NAFTA will certainly increase Mexico and Canada efforts to complete TPP with all members but the US ratifying the deal.

For some countries and some industry sectors yes. For others no. And let's not forget about the numerous unfair industry protections that were put in place on both sides. Furthermore, regardless of who else Canada and Mexico may choose to do business with, nothing changes the fact that their economies are still fundamentally joined at the hip to the US, if for logistics alone than no other reason, which it isn't.

The supposition that "nuking" NAFTA as you call it would be more disadvantageous to the US than Canada or Mexico is patently false. They would feel enormous pain, especially now more than in the past because their economies are doing quite poorly now. I am not in favor or "nuking" NAFTA like I said. It needs to be renegotiated and there is more positive still then negative to the agreement.

It needs to modernized.

#2: "If the question is when markets will recover, a first-pass answer is never."

I was already very dubious of his Keynesian credentials before he made that statement, but his stock went through the floor and he lost all credibility for me and others after he did. He let partisanship and politics cloud his academic and intellectual judgment, something that is happening a lot more these days. Krugman is now officially a hack. He has no credibility left IMO.

And yet he still has a job, and an endless supply of links from Ty Cowen.

Tells you something about "economists."

Your post date should be 1999.

#1 - folks should not waste any time ready Levin's piece and go straight to Jost who really highlights what is at stake and the likely outcome. Though it appears that the policy makers in the White House want to force Congress's hand, it's been well documented over the past four years that the Republican leadership has no plan other than repeal. Maybe, just maybe, we should go back to pre-ACA days and see what happens.

That should be the first step. Stop the bleeding and then see what you can do to make it better.

5: The graph is interesting but raises at least two questions: how much of that increase during the USSR years was caused by an influx of Russians? And as for the post-breakup population decrease, how does that compare to say the former East Germany's population, and the other Baltic republics? I.e. tear down a wall, and a lot of people will flee, either people who'd been wanting to get out all along or Russians deciding to re-patriate themselves.

The decline is indeed largely due to emigration, which is why Eastern populations have fallen with TFRs similar to those in the West.(Yes, I'm aware of exceptions like France, Ireland, ect) Nevertheless, it is quite puzzling why the TFRs in places like Lithuania fell so faster after the Soviet collapse. One would think they would celebrate their freedom by having more kids.

how much of that increase during the USSR years was caused by an influx of Russians

In Lithuania, next to zero.

#1 "Trump Executive Order Expands Opportunities For Healthier People To Exit ACA"

Yes. But the escape of most young, healthy (un-subsidized) people from the ACA has already been happening and is inevitable given the disadvantages of being stuck there. The main escape route, of course, is to take a job with an employer with a self-insured health plan. You jump into a better risk pool and the employer plan is exempt from costly ACA coverage mandates. Trump's order adds more escape routes, but most affected people were eventually going to find an exit even without the changes.

@Slocum - not if they are independent contractors who have a number of different clients. My two daughters were in that situation for several years and relied on the ACA for insurance.

If they were low enough income, the ACA isn't a bad deal. If not, there are alternatives even for independent contractors, for example:

Yeah, employers force workers with health problems onto SSDI.


No, there's no free lunch. But there are vastly better deals for young healthy workers than the Obamacare exchanges. It makes no sense (and is deeply unfair) to try to force a small number of captive young-and-healthy folks to provide the subsidies for the old and sick while the rest of us avoid the problem by being on employer plans. The exchanges are becoming de-facto high-risk pools. On the ACA If you're not getting a subsidy, you're getting the shaft.

By the way, conservatives want premium increases every year because those with the preexisting condition of not wanting to commit suicide must be punished for getting older every year.

Either, the only way a 25 year old never pays the health care costs of someone 55 years old is a bullet to the brain, probably at age 30, 35 at the latest.

In general, 55-year-olds are much wealthier than 25-year-olds. Why on earth would we want poorer 25-year-olds to subsidize much wealthier 55-year olds? Because some day those 25-year olds will be older and wealthier and then someday it will be their turn to benefit from financial abuse of the younger generation!?

#3 is paywalled. Opioids taking out the disabled?

Not pay walled, just mining reader info to sell.

But it misses the point: Obamacare reduced the need to go on SSDI to get health care without it costing State taxpayers.

After increasing SSDI numbers every year until 2013, since the Democratic governor expanded Medicaid, the absolute number on a SSDI has fallen because the working poor get their health care paid for with Federal money and they can keep working, and Kentucky welfare people don't need to get people on SSDI to control their budgets.

3 fails to note the positive effect of Obamacare in cutting the demand for SSDI to get on Medicare.

While Medicare is delayed two years, SSDI application delays result in retroactive grants that reduce that waiting time, and in the meantime, medical bills are not being paid, or are being paid out of State budgets. Thus State welfare offices have significant incentives to get people on SSDI. Obamacare Medicaid expansion means immediate Federal payment of medical needs of the older working poor to keep them working.

While Kentucky was a State with high rates of people on SSDI and growing in number from 2010 to 2013, the Democratic governor expanding Medicaid resulted in the highest rate of increase on Medicaid, and an absolute reduction in the number on SSDI in 2016.

And Medicaid expansion plus the mental health mandates of Obamacare allows the opiate problem to be seen as a medical problem instead of criminal problem in States that expanded Medicaid.

On the other hand, in States that did not expand Medicaid, judges send the mentally ill to prison where taxpayers pay high costs to warehouse people without the evil government run socialized medicine. When your only option is a hammer, every problem is a nail.

Interesting. Please elaborate.

Unfortunately, one state does not a story make.

Between December of 2010 and 2014 Kentucky did have an increase in the number of people on SSDI, as did every state that bordered Kentucky except West Virginia. Between 2014 and the end of 2016 Kentucky did have a reduction in the number of SSDI recipients. But so did every bordering state.

I used the table 8 data.

Trust me, I was really hoping the data would point to a beneficial side-affect of Obamacare. Alas, not to be.

#2 "Trump is not entirely wrong on this one."

A dog whistle.

In respone to this?

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