economy

[tands]

Venzella used to be one of the more wealthy SA countries thanks to the oil wealth, now it is impoverished, with citizens barely getting adequate food and medicine.  The exodus to FL is not a completely new thing. Young people with the ability to leave did years ago. Desperation in Venzella is probably increasing over recent years, so flow may be increasing to.  I wouldn't expect to find a lot of truth on the WWW.  What passes for proof is pretty flexible, people are more willing to believe memes that agree with their preconceived notions.

I don't believe anything you say JR. Not a word.

Earlier this year, the United Nations Program for Development placed Venezuela among the countries with the highest Human Development Index, surpassing most Latin American countries. Since 2013, Venezuela has also decreased infant mortality rates, heart disease HIV/AIDS rates, according to the World Health Organization.

Venezuela currently has the second lowest rate of homelessness in Latin America, with only 6.68 percent of its population being unhoused, Habitat for Humanity reports. At 5.6 percent, Peru has the lowest rate of homelessness in the region.

Maduro’s progressive education policies have made Venezuela rank sixth in the world in terms of enrollment in primary education and has increased its coverage of secondary education to 73 percent of the population. His policies have also made Venezuela a country with the highest literacy rates in Latin America, with 95.4 percent of the population knowing how to read and write, the U.N. reports.

https://www.telesurtv.net/english/analysis/4-Gains-Maduros-Venezuela-Made-That-Mainstream-Media-Ignores-20170413-0026.html

 

[tands]

You just stated that you are unable to determine what is true unless you're drinking. Now you're implying telesur isn't credible, but your expats are. How do you know?

ROTFL...

In any case, none of this rises to a level that I think their government needs to be overthrown and their country and people destroyed by civil war, so we can pick over their carcasses and steal their oil. I'd rather have single payer health care and leave them to their own business.

https://twitter.com/search?q=%23nancypezombie&src=typd

This reminds me of trying to share my opinion on the Venezuelan situation. I have first hand encounters with many many many Venezuelans who have left their country because of the horrible conditions there. I make it a point to ask them what's going on there and it's not pretty. Some would argue that it's just an excuse for war and, although I can't say I know what the outcomes are or the intentions of some, I definitely can't stand there and ignore the fact that real human beings are actually talking to me face to face and telling me stories that are real. Unless it's some deep operation to convince the minds of all Floridians to support the Government's decision to help.......hmmmm

It really makes me think about what "proof" really means . I guess I'll just trust the one in my alcohol from now on.....

 

[tands]

I thought you were referring to this-

In vino veritas is a Latin phrase that means "in wine, truth", suggesting a person under the influence of alcohol is more likely to speak their hidden thoughts and desires.

https://en.wikipedia.org/wiki/In_vino_veritas

So is it the US dreaming up excuses or is it those trying to get Assad out of power to give the US an excuse????........

It's possible some cooperation is happening between the US Govt and the rebels to coordinate the false flags. If so, that would mean someone over here is greenlighting poison gas attacks on Syrian civilians to make a US attack on assad politically feasible.

 

[tands]

You're attempting the Chewbacca defense?

A Chewbacca defense is the name in the United States given to a legal strategy in which the aim of the argument seems to be to deliberately confuse the jury rather than to factually refute the case of the other side.

...

Cochran
    ...ladies and gentlemen of this supposed jury, I have one final thing I want you to consider. Ladies and gentlemen, this is Chewbacca. Chewbacca is a Wookiee from the planet Kashyyyk. But Chewbacca lives on the planet Endor. Now think about it; that does not make sense!

Gerald Broflovski
    Damn it! ... He's using the Chewbacca defense!

Cochran
Why would a Wookiee, an 8-foot-tall Wookiee, want to live on Endor, with a bunch of 2-foot-tall Ewoks? That does not make sense! But more important, you have to ask yourself: What does this have to do with this case? Nothing. Ladies and gentlemen, it has nothing to do with this case! It does not make sense! Look at me. I'm a lawyer defending a major record company, and I'm talkin' about Chewbacca! Does that make sense? Ladies and gentlemen, I am not making any sense! None of this makes sense! And so you have to remember, when you're in that jury room deliberatin' and conjugatin' the Emancipation Proclamation, does it make sense? No! Ladies and gentlemen of this supposed jury, it does not make sense! If Chewbacca lives on Endor, you must acquit! The defense rests.

https://en.wikipedia.org/wiki/Chewbacca_defense

ROTFL... .

.

 

[tands]

Assad has held onto power against all odds for decades, thus he is not dumb. Gassing civilians is the best excuse the US could dream up to attack him, a war he would not survive. Since he's not dumb, he didn't do it. Either time.

It was those trying to get him out of power, to provide the US govt with an excuse, so we would attack assad for them.

...

It's possible some cooperation is happening between the US Govt and the rebels to coordinate the false flags. If so, that would mean someone over here is greenlighting poison gas attacks on Syrian civilians to make a US attack on assad politically feasible.

 

[tands]

Feel free to try again anytime.

ROTFL...  ;D

 

[tands]

It's possible

I do feel I have to ask that you try to make a better effort to understand what you're being told, before you respond, though. At the least, you'll make a better impression for yourself, and people reading will find it helpful too, I'm sure.

 

[JohnRoberts]

Back on topic (economy) Fannie just reported an $6.5B loss, and taxpayers are expected to bail them out with another $5B or so.

This loss is a consequence of the tax law change (many large businesses had huge balance sheet write downs as the future value of income offset  deductions falls with lower tax rates).

It appears we are no closer to getting Fannie and Freddie out from under government conservatorship (since 2008). I recently reported some movement toward resolving this but apparently not happening fast enough to avoid another multi-billion dollar treasury hit. IMO this needs to be privatized and taxpayers relieved of the liability.

JR

 

[Script]

I do feel I have to ask that you try to make a better effort to understand what you're being told[

Huh!

 

[JohnRoberts]

Another news tidbit about a topic we have discussed in the past, student loan debt. Right now students are prohibited from using bankruptcy to get relief from student loan debt. The standards to qualify for bankruptcy relief now are too high of a hurdle for most.

Trump is considering easing those restrictions (actually not enforcing them) which he could actually do without new law.

Of course every action has unintended consequences, so making it easier to scrub off student loan debt will discourage new lending. Since I have argued before that lending was too easy in the past causing market distortions this may not be a bad  outcome.

JR 

 

[JohnRoberts]

Reportedly a lot of margin buying contributed to the severity of the recent stock market correction.  There are already restrictions on individual margin debt but apparently some modern derivatives circumvent that.

The pursuit of higher return will often lead to bad investing decisions, and not understanding what you are buying is never a good idea.

JR

 

[tands]

If I remember right, that was what led to Black Monday (Tuesday was just as bad, no doubt), nobody could meet their margin and the whole thing went tits up.

 

[tands]

Just looked it up..

On October 28, "Black Monday", more investors facing margin calls decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 38.33 points, or 13%. The next day, "Black Tuesday", October 29, 1929, about 16 million shares traded as the panic selling reached its peak.

 

[JohnRoberts]

If I remember right, that was what led to Black Monday (Tuesday was just as bad, no doubt), nobody could meet their margin and the whole thing went tits up.

I wasn't alive back then but as I posted margin debt has been significantly restricted since then.  Borrowing money to buy stock, is a little like borrowing money to go to las vegas and gamble. It allows you to lose more money than you have, never a good thing.  Kind of like buying a bigger house than you can afford with no down payment, betting that the price will go up forever. Home prices and stock markets never go up to the sky.

Stock brokers love to loan money in margin accounts as an easy source of extra profit. They use the borrowers stock holdings as security for these loans, so they will (almost) always get paid back. If they see an given investor's bets going bad, they have him pony up more cash (a margin call) for the loan security, or force the sale of his remaining stock to get his leverage ratios back to something manageable. Of course forced selling of falling stocks can trigger more price drops and more selling. The fact that many hedge funds and institutional portfolios make pretty much the same bets, can increase the risk of contagion (everybody standing on the same side of the boat is never good). 

In a low interest rate environment investors are always looking for ways to juice return, but as I shared, margin debt based investing is already restricted. What appears different this time is derivative investment vehicles, that effectively created leveraged bets. Investors who didn't understand what they had invested in were shocked to see some derivatives evaporate overnight. These derivative instruments had to sell huge baskets of their holding to clear off their underlying leveraged obligations.

There is always a element of risk in markets, these leveraged derivatives deserve more inspection, but this is not a problem for conservative investors who know (or think they know) what they invest in. I have worried about this before, but many today are investing in stock market indexes which "should" diversify the risk, but I worry that massive buying of indexes cause a rising tide that lifts weak companies too that don't suffer the price discipline of individual trading. We are probably not near a tipping point yet for this failure of price discovery, but I like to look way out into the future.

So yes it was different this time, but kind of the same...  For the record we were way past due for a normal correction and retraced back probably more than half of that dip (buying opportunity... two of my three recent purchases are up since I bought them  8)  ).

This was far from a systemic risk, but a simple correction. Volatility is still a little subdued (not normal). We typically don't see the bubbles caused by the increased central bank liquidity until after they burst. Central bankers are trying to withdraw liquidity gracefully to prevent popping them so hopefully they will deflate slowly over time.

JR 

 

[dmp]

Reportedly a lot of margin buying contributed to the severity of the recent stock market correction.  There are already restrictions on individual margin debt but apparently some modern derivatives circumvent that.

The pursuit of higher return will often lead to bad investing decisions, and not understanding what you are buying is never a good idea.

JR

On top of investors buying on margin, which is at a historical high (it typically hits a high late in bull markets) a lot of gains of the last 10 yrs has been propelled by stock buybacks. Guess where companies were getting the money to buyback their shares? I read recently nearly all buybacks have been financed by debt. And that debt gets more expensive in a rising interest rate environment.

The 10 yr treasury rate has been climbing, approaching 3%, with a lot of supply coming in the next year. Yields go up when there is more debt for sale and less demand.
The Republican fiscal lunacy is going to possibly have the US run a trillion dollar deficit in 2018 and going forward, after the taxcuts and recent spending bill, which showed no semblance of fiscal restraint.  Add to this the Fed's end of QE which means the Fed is letting the assets unwind, adding to the supply.
It will be really interesting. Higher debt and higher interest rates can be a vicious cycle that blows up really quickly.
But then again, every time in the last 30 yrs it looked like rates had bottomed out and would start climbing they crashed again. At some point they will hit bottom though, because 0% is the floor.

 

[JohnRoberts]

On top of investors buying on margin, which is at a historical high (it typically hits a high late in bull markets)

Historical high dollar amount... no data for percentage wise back in roaring 20s.

Many younger investors have seen a stock market that only goes up for the last decade.  Ignoring the great recession in 2007-8 the market has only gone up since the early 80's. We haven't had a decades long bear market since the 60s (when I first dabbled in the market).

The combination of a market that only goes up (rewarding buy the dips), with low volatility and cheap interest rates has fueled a lot of ignorant overconfidence . 

a lot of gains of the last 10 yrs has been propelled by stock buybacks.

There is nothing wrong with stock buybacks within reason. It is an alternate way to return profits to the company's owners (stockholders). I have written about this before too, and AFAIK one company was notorious for this particular flavor of financial engineering. For years IBM shrank their number of shares outstanding to artificially inflate their P/E despite sagging earnings growth but any investors fooled by this gamesmanship deserve what they get. Coincidentally after a long drought IBM finally reported some actual top line growth last quarter. This is why fundamental stock analysis looks at more than one stock metric.

Guess where companies were getting the money to buyback their shares? I read recently nearly all buybacks have been financed by debt. And that debt gets more expensive in a rising interest rate environment.

Not only that but the recent tax law change has started to limit how much of that debt interest can be deducted from taxable income.  Laws often have perverse unintended consequences, but discouraging too-easy borrowing seems like a good idea to moi.

Another factor that influenced stock buybacks over the last decade was a questionable (negative) future business outlook. Executives were nervous about making massive investments in plant and people, with future costs and regulatory burden hard to predict with any certainty. The easy call was to plow business profits into stock buybacks that routinely had a favorable effect on stock metrics.

The recent change to the tax law about deductibility of interest is kind of payback aimed at the offshore conversions often done with borrowed money, but even Dell that was taken private domestically (with borrowed money) is regretting that decision now and may go public again to reduce debt that is no longer deductable. 

The 10 yr treasury rate has been climbing, approaching 3%, with a lot of supply coming in the next year. Yields go up when there is more debt for sale and less demand.

yup... Yield goes up as bond prices fall.

I still do not own any bonds and don't plan to buy any soon, even though I am too old to play in the stock market (and sleep well, but beer helps me sleep some).

The Republican fiscal lunacy is going to possibly have the US run a trillion dollar deficit in 2018 and going forward, after the taxcuts and recent spending bill, which showed no semblance of fiscal restraint. 

"such an economic policy would be sheer lunacy"
synonyms: folly, foolishness, stupidity, silliness, idiocy, madness, recklessness, foolhardiness, imprudence, irresponsibility; informalcraziness
"the lunacy of gambling"

I have already opined on this. The Republican strategy is to accelerate economic growth that will increase tax revenues and reduce deficits. Of course the future hasn't happened yet so for now just a theory/plan.

I will not put words in your mouth (i really hate when people do that to me) but I  do not accept the arguments that we should accept a new normal of below trend GDP growth. The long term average is higher than we've enjoyed recently. 

Add to this the Fed's end of QE which means the Fed is letting the assets unwind, adding to the supply.
It will be really interesting. Higher debt and higher interest rates can be a vicious cycle that blows up really quickly.
But then again, every time in the last 30 yrs it looked like rates had bottomed out and would start climbing they crashed again. At some point they will hit bottom though, because 0% is the floor.

Yes, I remain worried about unwinding this grand experiment, but Powell testified today before congress and he appears to be staying the course of slow and steady contraction. That said other regions of the world are still easing and this liquidity is fungible, so may not reach crisis point any time soon. Talking heads seem fixated on 3% but that seems like just another number.

The real third rail argument that nobody is willing to touch is entitlement spending.  I'm glad I am old (and not stupid), but mostly old and lucky.  Entitlements will blow up eventually and so far nobody has the cojones to seriously address them.

JR

 

[dmp]

I have already opined on this. The Republican strategy is to accelerate economic growth that will increase tax revenues and reduce deficits. Of course the future hasn't happened yet so for now just a theory/plan.

Well it is hard to see a coherent Republican strategy since they 100% opposed stimulus when Obama was President. At the time, the recession that started under GWB was sending unemployment shooting up to 10% and the GDP declined several percent. Since GDP is 70% consumption, when consumers stop spending, GDP is hit hard. And demographics is fundamental to GDP (less people working , lower GDP).
Economists seemed to agree that stimulus spending when the economy is on a downturn makes sense. 
While the GWB white house was happy to bail out the big banks (wealthy capital holders), the Republican Congress under Obama fought tooth and nail for austerity (when the economy was still trying to make it back to full employment).

Now, the economy is strong, employment is high, and the idea of deficit spending is really hard to understand. The Republicans put into law a budget that raises spending by hundreds of billions of dollars, after cutting taxes by what, a trillion?
For the Government to get more revenue from this is IMO delusional. It is more likely we'll see a recession this late in the business cycle, with rising interest rates and high debt levels.

But again, it seems a lot of the policy of Republicans is just meant to increase returns on capital and decrease taxes on the wealthy. They serve the 3%, country be damned.  All the lip service to GDP, wages, and trickle down economics seems to be just playing politics.

I will not put words in your mouth (i really hate when people do that to me) but I  do not accept the arguments that we should accept a new normal of below trend GDP growth. The long term average is higher than we've enjoyed recently. 

Not sure who argues for that. Economists may try to explain it. 

Yes, I remain worried about unwinding this grand experiment, but Powell testified today before congress and he appears to be staying the course of slow and steady contraction. That said other regions of the world are still easing and this liquidity is fungible, so may not reach crisis point any time soon. Talking heads seem fixated on 3% but that seems like just another number.

The real third rail argument that nobody is willing to touch is entitlement spending.  I'm glad I am old (and not stupid), but mostly old and lucky.  Entitlements will blow up eventually and so far nobody has the cojones to seriously address them.

JR

It is sheer lunacy to cut revenues, as Republicans have done since Reagan, without decreasing spending. If not for the Reagan, GWB, and now Trump tax cuts, the Government would not be in massive debt with a looming gigantic deficit.  The fiscal irresponsibility is stunning. As I've posted before, spending is inline with historical figures ( ~20ish% percent of GDP). Revenue has been historically low, due to the tax cuts, mainly on the very wealth.
And the Republican deficit has an added threat by increasing the supply coming into the bond market, threatening to bring up interest rates faster than can be tolerated by the economy.

 

[JohnRoberts]

Well it is hard to see a coherent Republican strategy since they 100% opposed stimulus when Obama was President. At the time, the recession that started under GWB was sending unemployment shooting up to 10% and the GDP declined several percent.

Ah you are talking about all those shovel ready projects.

Since GDP is 70% consumption, when consumers stop spending, GDP is hit hard. And demographics is fundamental to GDP (less people working , lower GDP).

The wealth that consumers spend must come from somewhere, otherwise we could just print piles of money for  every consumer to spend and enjoy economic nirvana.

Economists seemed to agree that stimulus spending when the economy is on a downturn makes sense. 

And economists are often full of sierra.  Over decades of modest stimulus programs during shallow recessions, the economists deluded themselves that they somehow turned around the economy with stimulus (we're from the government and we fix stuff).  In fact (In my strongly held opinion) The economy was due to bounce back on it's own after clearing away the dead wood, thanks to the recession.  In line with this delusion, economists figured that if a little stimulus fixed a small recession, a lot of stimulus should fix a big recession... bzzt.  Government stimulus is like a sugar high that does little to no longer term good.

While the GWB white house was happy to bail out the big banks (wealthy capital holders), the Republican Congress under Obama fought tooth and nail for austerity (when the economy was still trying to make it back to full employment).

opinions vary about those characterizations that sound like team politics. Obama's austerity led to a near doubling of sovereign debt (from $10T to $19T).

Now, the economy is strong, employment is high, and the idea of deficit spending is really hard to understand.

I am already on record of opposing the personal tax cuts, while I feel the business tax reform was neccesary

The Republicans put into law a budget that raises spending by hundreds of billions of dollars, after cutting taxes by what, a trillion?
For the Government to get more revenue from this is IMO delusional. It is more likely we'll see a recession this late in the business cycle, with rising interest rates and high debt levels.

We are way past due for a recession (dead wood is building up). Like a market correction is healthy so are modest recessions (unless you are a weak company).

But again, it seems a lot of the policy of Republicans is just meant to increase returns on capital and decrease taxes on the wealthy. They serve the 3%, country be damned.  All the lip service to GDP, wages, and trickle down economics seems to be just playing politics.

class warfare screed...

Not sure who argues for that. Economists may try to explain it. 


It is sheer lunacy to cut revenues, as Republicans have done since Reagan, without decreasing spending. If not for the Reagan, GWB, and now Trump tax cuts, the Government would not be in massive debt with a looming gigantic deficit.  The fiscal irresponsibility is stunning. As I've posted before, spending is inline with historical figures ( ~20ish% percent of GDP). Revenue has been historically low, due to the tax cuts, mainly on the very wealth.
And the Republican deficit has an added threat by increasing the supply coming into the bond market, threatening to bring up interest rates faster than can be tolerated by the economy.

Increasing taxes and regulation will not grow the private economy.

We will have to agree to disagree about whether this plan to increase GDP growth will work.  The future hasn't happened yet and I have been wrong before (I thought Hillary would win.  : )

JR

 

[dmp]

Ah you are talking about all those shovel ready projects.

You don't need to put words in my mouth - especially when they come off as sarcastic. I'm talking about just about everything Republicans did from 2010 to 2016. All the sky is falling rhetoric about the debt/deficit comes off as incredibly hypocritical today (all except Rand Paul, who seems to be a bit of a nut but at least has principles).

The wealth that consumers spend must come from somewhere, otherwise we could just print piles of money for  every consumer to spend and enjoy economic nirvana.

Well, now that is actually a correct factual statement. Which is exactly why stagnant wages is such a important problem. Again, 90% of people in the labor force are working for wages. When the cost of health care and housing is increasing faster than wages it bodes ill for the future. 
If we actually want a healthy, vibrant economy, policy should focus on getting wages growing again (and yes, this might come at the expense of corporate profit margins and stock returns).

And economists are often full of sierra.  Over decades of modest stimulus programs during shallow recessions, the economists deluded themselves that they somehow turned around the economy with stimulus (we're from the government and we fix stuff).  In fact (In my strongly held opinion) The economy was due to bounce back on it's own after clearing away the dead wood, thanks to the recession.  In line with this delusion, economists figured that if a little stimulus fixed a small recession, a lot of stimulus should fix a big recession... bzzt.  Government stimulus is like a sugar high that does little to no longer term good. opinions vary about those characterizations that sound like team politics.

So why massive deficit spending and stimulus in a strong economy with nearly full employment? Republican lunacy - we're getting there...

I have no idea what 'sierra' is slang for, but it sounds like a negative. Economists are not good at predicting the economy - no one really is. Economics is a science of analyzing the economy. It becomes so embroiled by team politics and op-eds that people lose the distinction between the science and the partisan screeds.
I find it really interesting and would suggest a good understanding of greats: Smith, Marx, Keynes,  Friedman, etc. Leave the politics aside while you develop a broad understanding of the great economists.
 

Obama's austerity led to a near doubling of sovereign debt (from $10T to $19T). I am already on record of opposing the personal tax cuts, while I feel the business tax reform was neccesary

This is just partisan mud slinging - not based on anything real. Obama didn't do anything to cause the increase in debt. This is the worst of Republican talking points , since it is a flat out lie. The recession started under GWB and revenue declined with it. Declining revenue leads to an increased deficit. Spending increases during recessions as well without any policy changes because more people are unemployed, more people claimed disability, etc...   
If people can't be bothered with the facts because it conflicts with their opinions, there is no point in even discussing anything. I guess that might be a necessary characteristic for Trump supporters though, since he tells lies on almost a daily basis.
http://www.politifact.com/personalities/donald-trump/statements/byruling/false/

The deficit had been setup by the GWB tax cuts in 2001 (again aimed at favoring capital with the cap gains low tax rates). This had the country setup for a financial disaster at the next economic downturn. Remember the last budget surplus and what the Republicans did with it?

A revenue neutral tax reform would have been one thing (i.e. lower the corporate rate, raise revenue elsewhere to make up for it), but the Republican's did a massive tax cut that was the most tilted to the very wealthy in history. That is a fact.
And they have set the country up for a fall even worse the GWB did.

 

[JohnRoberts]

You don't need to put words in my mouth - especially when they come off as sarcastic. I'm talking about just about everything Republicans did from 2010 to 2016. All the sky is falling rhetoric about the debt/deficit comes off as incredibly hypocritical today (all except Rand Paul, who seems to be a bit of a nut but at least has principles).

Well, now that is actually a correct factual statement. Which is exactly why stagnant wages is such a important problem. Again, 90% of people in the labor force are working for wages. When the cost of health care and housing is increasing faster than wages it bodes ill for the future. 
If we actually want a healthy, vibrant economy, policy should focus on getting wages growing again (and yes, this might come at the expense of corporate profit margins and stock returns).


So why massive deficit spending and stimulus in a strong economy with nearly full employment? Republican lunacy - we're getting there...

I have no idea what 'sierra' is slang for, but it sounds like a negative.

Military slang for sh_t that we were not supposed to say over the radio...  Like get your "sierra" together (example of a radio communication not a personal suggestion).

Economists are not good at predicting the economy - no one really is. Economics is a science of analyzing the economy. It becomes so embroiled by team politics and op-eds that people lose the distinction between the science and the partisan screeds.
I find it really interesting and would suggest a good understanding of greats: Smith, Marx, Keynes,  Friedman, etc. Leave the politics aside while you develop a broad understanding of the great economists.

Wealth of nations is probably my favorite economic text (heavy on data light on theory), while not an easy read.

I would add Hayek and perhaps others to your short list of influential economists but lets not pretend it was a mutual admiration society where they all agreed with each other. There were some strong disagreements between them. Classic economist joke, if you want to hear three opinions, ask two economists.  8)

  This is just partisan mud slinging - not based on anything real. Obama didn't do anything to cause the increase in debt. This is the worst of Republican talking points , since it is a flat out lie. The recession started under GWB and revenue declined with it. Declining revenue leads to an increased deficit. Spending increases during recessions as well without any policy changes because more people are unemployed, more people claimed disability, etc...   
If people can't be bothered with the facts because it conflicts with their opinions, there is no point in even discussing anything. I guess that might be a necessary characteristic for Trump supporters though, since he tells lies on almost a daily basis.
http://www.politifact.com/personalities/donald-trump/statements/byruling/false/

The deficit had been setup by the GWB tax cuts in 2001 (again aimed at favoring capital with the cap gains low tax rates). This had the country setup for a financial disaster at the next economic downturn. Remember the last budget surplus and what the Republicans did with it?

A revenue neutral tax reform would have been one thing (i.e. lower the corporate rate, raise revenue elsewhere to make up for it), but the Republican's did a massive tax cut that was the most tilted to the very wealthy in history. That is a fact.
And they have set the country up for a fall even worse the GWB did.

I respect your above average grasp of economics (not your team politics). Please forgive my self taught college dropout economic musings. I have not seen anything remotely resembling fiscal discipline from either party in Washington (both are afraid of the touching the third rail of politics).  Rand Paul sticks to his libertarian ideals (a good thing) and is slightly less of a court jester than his father was. I appreciate his being a little more realistic than his father, but it may take the Pauls another generation to get practical enough to be effective in office. 

Economics is called the dismal science, and I am uncomfortable calling it any kind of science. It seems more akin to philosophy with a heavy dose of BS (baker sierra).  Science obeys strict physical laws, while economic laws seem more like suggestions about human behavior that can only be parsed out of large scale studies statistically.

JR