Comment by bequanna
Comment by bequanna 3 days ago
How do we know this is the bottom?
Comment by bequanna 3 days ago
How do we know this is the bottom?
>I’m not sure why that is and I don’t want to start a political debate
I'm late to the party and am willing. It's becsuse we cut taxes a lot during GOP terms but no one has the balls to raise taxes back up. Thars pretty much the one bit of respect I have for HW Bush despite it being the nail in the coffin for re-election. But for the most part, GOP appeals to business, and the easiest talking point is to make them pay less taxes (though this line has blurred since Citizen's United).
That's really the gist of it. Politicians (on both sides of the aisle) need to know when to raise taxes in good times and not coast on the benefits. That way tax cuts can happen as relief in harder times. Instead we're headed to hard times and nearing default levels in the US debt. In other words: we're cooked.
Things do tend to get better, but the time scale can vary. It's hard to tell whether we're deep into a recession, or we're just starting to walk into a depression. You never really know which it is in the first year.
> Since 1953 10 out of 11 recessions happened when republicans held power
I used to think this was because the party that represents the ruling class didn't know what they were doing.
Now I think these economic collapses and ensuing fire sales are not accidents, they know exactly what they're doing.
Recession are a natural part of the business cycle though. Like it's good to have them, Democrats not allowing a recession to occur just makes the next bubble even bigger. And all kinds of inefficient businesses are allow to zombify when the resources could be used elsewhere.
Now, the bigger problem is that you're supposed to raise taxes during the boom so that you can run deficits during the recession to recover quickly. Unfortunately we run deficits during the boom so that the crash is even bigger as well ...
Just because recessions do happen, does not mean that its good to have recessions, not does it make them necessary. Popping bubbles can be contained and not blow up the entire system if we have proper regulations, for instance.
> Democrats not allowing a recession to occur just makes the next bubble even bigger. And all kinds of inefficient businesses are allow to zombify when the resources could be used elsewhere.
This is honestly just horseshit. Both parties want to avoid recession, its just that one of them believes in established economic theories and is successful; while the other one is steeped in crackpot economics which have failed repeatedly.
> Popping bubbles can be contained and not blow up the entire system if we have proper regulations, for instance.
Perhaps we have a different definition of recessions but to me you cannot pop a bubble without a recession. How does the bubble deflate without a decrease in nominal GDP? The recession doesn't need have effects lingering for years/decades but one needs to occur.
> Both parties want to avoid recession
I mean in name only. Republicans pretty consistently just cut taxes while shifting government spending from poor to wealthy which really just causes a recession since the marginal propensity to spend of the wealthy is lower (hence ballooning SNP500 while weaker retail spending; wealthy's savings goes into SNP500 while non-wealthy cut back on consumption).
> its just that one of them believes in established economic theories and is successful
Which economic theory do the Democrats believe in? Any real theory has upsides and downsides and I just never either of the two major parties acknowledge or implement the downside (which is always required for the upside).
Large social nets are about redistributing wealth so everybody is (within a _very_ large range) equal but Democrats don't actually do this; they just give money to the bottom individuals without taking from the top which just means the future poor generations have less as they have to repay with interest to the original wealthy generations (and inheritors).
Have you ever read Yonatan’s article on Shock Wealth and how the ruling class is incentivized to cause shocks?
https://medium.com/newco/your-financial-shock-wealth-4845e6d...
it isn't, but the post-covid inflation and subsequent rates increase has caused something like a recession, just not everywhere at once - so you see sectors busting and coming back, but overall kinda-sorta chugging along economy.
now what happens if the rates won't go down much from here might just be everything slowing down all at once and then they'll drop the rates to 0 again, so it'll get better... two years later.
You don’t know until unemployment and GDP numbers are released. Generally when the fed starts making successive rate cuts, the economy is doing poorly. Since 1953 10 out of 11 recessions happened when republicans held power. So maybe that is also why I think we have a little way to go before things get better. I’m not sure why that is and I don’t want to start a political debate. Things will get better. They always do.