Amsterdam is cool

“His focus is on decreasing taxes and state expenditures to limit the budget deficit. However, contrary to what Walker states on his website, this will not lead to job creation.”

What’s your evidence for this? What is the source of jobs? How does wealth get created? What is the cause of the current economic downturn?

It is possible that the FED and too much government intrusion - too little freedom - has caused the current crisis? Have you seen the take over of car companies, the highest deficit in history, the world-record spending? Does this constitute “balance?”

“Tax decreases in times of crisis do not lead to an increase in spending but to an increase in savings instead. Walker still adheres to the economic policies of cutting back. That is old politics which will lead to failure.”

How does saving constitute “cutting back?” Where do savings go, under the mattress? No, they go into investments, which are used to fund new innovation and job creation. Furthermore, allowing people to save instead of taxing and spending would be something NEW. Maybe government should give it a try.

Do you have any idea how an economy works??? It is really quite simple. If businesses have to give more money to the government, they have two options. Fire people because they can’t afford them or raise their prices. If you raise prices, then less people will demand your goods and services, so again, the business has less money and has to fire people! Big government is never the answer to creating jobs. We should cut the government spending a great deal to get rid of the deficit, and cut taxes on businesses and individuals. If businesses have more money they can reinvest in the future. What does that do? Oh ya, it creates jobs!!!! Scott Walker’s ideas are the ones we need in Wisconsin. We have had a tax and spend governor for the past two terms. If you think that he has done a good job, then vote for Barb Lawton, considering they are in the same administration. But, if you want someone who will actually make a difference in this state, and a person who will create new jobs, and keep taxes low, then vote for Scott Walker. I want a job after I graduate, and I know if the government keeps raising taxes and spending more, we will be worse off than California!

Nice job you Euro-socialist; go away…!

Lawton cannot create jobs or be a steward for the economy. She does not no how to do that, and even if she did it would not be a legitimate function of a provincial government in a FREE society.

We have huge problems in Wisconsin. Namely we have grown government to the point where it is not sustainable with the prevailing wages of the people here. We have created a monster that has now started to devour us because we don’t have the resources to feed it anymore.

We are in a huge hole, and Mrs. Lawton represents the school of thought that we should keep digging.

Let’s just raise taxes some more. That is always the answer isn’t it?

Hahaha gotta love American paranoia for European approaches to anything… “go away you Euro-socialist!” class guys, class. Why don’t you learn more about other countries before you critique? Learning where they are on the world map would be a good first step…

Oh and you think the current crisis has been caused by too little government involvement? I think it’s quite clear that a lack of supervision allowed American financial innovation to get just a little out of hand… thanks for the world wide economic downturn guys. Perhaps it’s our turn to say “nice job!”

“I think it�s quite clear that a lack of supervision allowed American financial innovation to get just a little out of hand”

What’s your evidence? The entire money supply is controlled by the FED and every aspect of the banking industry is controlled by government. The negative interest rates, which are the primary cause of the crisis are a function of the FED, not “financial innovation.”

The negative interests rates are not the so much the cause as they are the outcome the crisis. The financial innovation I’m referring to here would be the mortgage-backed securities (which, in case you’re still lost, stem from the spectacular increase in subprime lending over the past decade). It’s the bundling of those mortgages and the ratings they received from American credit rating agencies that are the roots of this crisis. That brings me to point two… American financial markets have always been less regulated than European ones, which is quite a well known fact. So, if you catch my drift, the lack of regulation of American financial markets is the problem here. While we’ll never now if this crisis would have been fully prevented with more regulation, I think it’s fair to say regulation would have done more good than harm in this situation. Whether the FED controls the money supply, darling, is therefore quite besides the point.

Wow what a reaction. Great story Lars, and a plug on the Lawton thing. Wisconsin would be better served politically, if the leading party understood economics. But as you can see this state has too many lawyers and less incentives for any business to stick around. The best recomendation you made was part of Wisconsins history. That is, we are a kind people, and had you looked at history, we have many generations of European people since our founding. That was when you take a politician at face value and believe in words spoken. “What you see is what you get” kept Wisconsin politics open and honest for decades. Not any longer. The Govenor position is the last stop for career politicians. Does’nt it show?

Let me put it simply: LACK of REGULATION. As in, no regulation of subprime lending, etc… American financial markets are more open to risk-taking, which is why this subprime lending started, and therefore the lack of regulation to halt these type of developments is the problem. Perhaps you should look up the definition of regulation in the dictionary; regulation and intervention are not one and the same, though you use them interchangeably. Perhaps this is causing the confusion? And YES, obviously the FED controlling the money supply is important in the whole scheme of economics (duh), but it’s not relevant to the development of subprime lending itself and mortgage backed securities. That development is financial innovation… So you can go on and on about basic economical facts like I’m backwards, but that’s not what I was discussing and therefore the information is irrelevant. As for negative interest rates: I know what they are, and of course the policy leads to trouble. You claimed, however, that they caused the current crisis, which is simply not true. They can cause problems in the future, yes, but they didn’t start this crisis. So yet again: irrelevant info. Seriously, if you think I’m talking out of my ass why don’t you just google it? It ain’t that hard you know…

1:50, so you want to call it intervention instead of regulation?

I agree, government intervention caused the crisis. We need to get rid of it: no more manipulation of the money supply, no more taxpayer bailouts, no more regulating (a type of intervention) of banks (dictating who they must loan to, what reserves they must have, etc).

Also, 1:50 makes no arguments for his claim that FED interest rates are irrelevant to the crisis. Previous posts gave reasons that the FED’s manipulation of the money supply and negative interest rates was one of (if not the primary) cause of the crisis. 1:50 did not refute those reasons.

I am amazed by the lack of economic knowledge some comments portray. I am trying to read up on the discussion started here, and I am amazed. To state that negative interest rates caused the crisis is just false. The negative interest rates are a CONSEQUENCE of the crisis. The FED put back the interest rates to soften the effects of the crisis, to stimulate investments. So the whole story of negative interest rates being harmful to the economy might very well be true (look at Japan and the liquidity trap they were stuck in for years for instance) but that is by no means related to the CAUSE of the crisis. Any attempt to claim otherwise is just blatant nonsense. Furthermore, this is not a matter of opinion, it is a fact. If you go to the FED website and graph the interest rate developments over the past years, you will notice that it is AFTER the crisis fully emerged that interest rates went to nearly 0. If you start mixing up different time frames and throw in some nice sounding economic terms, you do create confusion, but fortunately that doesn’t mean you’re right. It just means you don’t understand what you’re talking about.

8:17, you may be amazed, but that is not an argument for anything. Saying that something is “blatant nonsense” is not an argument, nor is restating your conclusion that negative interest rates are a consequence.

Interest rates were effectively negative in 2004-2005 when the FED had them set below the rate of inflation, at one percent. This was before the crisis and played a major part in stimulating over leveraging, especially in the housing market. When this bubble came crashing down in 2007.

1.45: That still isn’t a valid argument for your claim the the interest rates were a cause of the crisis. Looking at the interest rate trend as it developed over the past few years you are right to say that interest rates were at 1% in 2003/2004. However,if we look at the trend this is right after the 2001=2002 recession. As you may know it is normal that in times of recession interest rates are brought down to stimulate the economy. There is nothing ambiguous here, this method is used for centuries and is simply a result of supply and demand on the market. You would potentially be right in claiming that these interest rates were the cause of the crisis, if it were not the case that interest rates went up quickly from 1% in 2004 to over 5% in 2007. It wasn’t until the second half of 2007 that the credit crunch fully emerged and, completely in line with economic theory, you see a sharp decline in interest rates declining from 5.5% to 1% in just one year. The fact that interest rates were 1% in 2003 I am not contesting, but contrary to your claim this wasn’t an over-stimulation of the market, but rather the normal relation between the 2001 recession and interest rate development. Interest rates tend to follow the main economic trends, but always take a couple of periods to adapt.

A recent study, “The EU vs. USA,” was completed by a pair of economists— Fredrik Bergstrom and Robert Gidehag— for the Swedish think tank Timbro. It found that if Europe were part of the U.S., only tiny Luxembourg could rival the richest of the 50 American states in gross domestic product per capita. Most European countries would rank below the U.S. average.So what is Europe’s problem? “The expansion of the public sector into overripe welfare states in large parts of Europe is and remains the best guess as to why our continent cannot measure up to our neighbor in the west,” the authors write. In 1999, average EU tax revenues were more than 40% of GDP, and in some countries above 50%, compared with less than 30% for most of the U.S. The world needs a prosperous, growing Europe, and its relative economic decline is one reason for growing EU-American tension. A poorer Europe lacks the wealth to invest in defense, a fact that in turn affects the willingness of Europeans to join America in confronting global security threats. But at least all of this is a warning to U.S. politicians who want this country to go down the same welfare-state road to decline.

Mister we could use a man like Thomas Jefferson again - and Walker sounds more like TJ. Lawton�s plans all involve bigger government spending and more debt.

I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them. - Thomas Jefferson

I place economy among the first and most important virtues, and public debt as the greatest dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt. If we run into such debts, we must be taxed in our meat and drink, in our necessities and in our comforts, in our labor and in our amusements. If we can prevent the government from wasting the labor of the people, under the pretense of caring for them, they will be happy. - Thomas Jefferson

The democracy will cease to exist when you take away from those who are willing to work and give to those who would not. - Thomas Jefferson

Perhaps if the Democrats and the Unions stay in power long enough they can do for Wisconsin what they’ve done for Michigan?

Things were going well in the USA until the Democrats took over Congress in 2006. It’s been all downhill since.

GDP is not the same as development, neither is GDP per capita. While these terms seem like an effective way of measuring wealth, they fail to see how this wealth is distributed amongst a country’s citizens. Though one can exult in America being the richest country in the world, what’s the point if it can’t provide half of its citizens with healthcare? Isn’t it rather ironic that charity organizations go into the U.S. to provide basic services such as dental care? The great disparity between the rich and the poor, when it comes to healthcare, education, etc, is painfully evident for a country considered to be so wealthy. You can follow the general American abhorrence of taxes, but when managed efficiently (and this is the key word) taxes can provide a system of services to all of its citizens at less cost. While one’s annual spending income might be lower, the services one receives from the government are more varied and numerous. Americans pay less taxes but are left with exorbitant healthcare rates and educational costs (think of good public schools and the corresponding high town taxes, or the ridiculous cost of attending university in the states); thus more of after tax income is spent on such services, if you can afford to do so… Thus, judging households in Sweden on the basis of 25,000 income is not a valid comparison. They might have less income, but the general population’s access to important health, educational services, etc, is far greater than that of an American with a 25,000 income. What’s important in this case is what the income can buy in terms of these basic yet very important services. I wholly agree that there have been cases in Europe where the welfare state has expanded too much and spends money inefficiently, thus hindering the development of Europe. However, I ask you to consider the merits of the system as well, especially when comparing it to sharp gap between rich and poor in the worlds wealthiest country. Being poor in America means a totally different thing from being poor in Sweden - a simple statistic like GDP per capita does not capture this.

There are two things I can’t stand in this world: people’s intolerance for other culture and the Dutch.

I think whats lacking here is attention to “gray areas”… Maybe there is good and bad things to it, rather than something being either right or wrong? Sometimes things are just not that black and white you know…

It will be interesting to see what the Dutch do once Sharia Law is in effect in their former country. It’s not what anyone could say is “progressive”, although it may be “sustainable”.

What would happen if the desert became socialist? Nothing for a while, and then there would be a sand shortage.