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That runs counter to traditional thinking, which generally assumes a trade-off between economic growth and efforts to reduce inequality. Under this view, a higher tax rate on the wealthy or higher spending on social welfare, while it may reduce income inequality, would likely depress growth.

planet p wrote:

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Mandatory spending (social security, Medicare, etc.) increased from less than 30% of total federal government spending in 1963 to 60% and rising today, while the % of defense and discretionary spending has substantially reduced.

haltz wrote:

IMADreamer wrote:Wow that's pretty low. In an ideal word the executives would go to jail and that company would just be shut down. Here in Americaland the execs will get bonuses and the company will get fined something like $38.

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pioneer98 wrote:

planet p wrote:

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Mandatory spending (social security, Medicare, etc.) increased from less than 30% of total federal government spending in 1963 to 60% and rising today, while the % of defense and discretionary spending has substantially reduced.

So does this mean our financial system is crumbling? Looks to me like overall government spending held steady at 100% of government spending. Unless you are saying spending less on mandatory spending and more on military spending would help our economy. Who knows maybe it would.

planet p wrote:

pioneer98 wrote:

planet p wrote:

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Mandatory spending (social security, Medicare, etc.) increased from less than 30% of total federal government spending in 1963 to 60% and rising today, while the % of defense and discretionary spending has substantially reduced.

So does this mean our financial system is crumbling? Looks to me like overall government spending held steady at 100% of government spending. Unless you are saying spending less on mandatory spending and more on military spending would help our economy. Who knows maybe it would.

Probably a bad thread choice, just thought it was an interesting short video depicting the changing allocation of fed dollars and didn't want to start a new thread.

pioneer98 wrote:It was interesting. I guess in addition to how the money is now allocted differently, I'd also like to know how much the spending has grown over the same time, and if it has grown faster or slower than GDP.

Mr. Paulson: "And so when I went to Congress and asked for these emergency powers [to stabilise Fannie and Freddie], and I was getting the living daylights beaten out of me by our Congress publicly, I needed to call the Chinese regularly to explain to the Central Bank, 'listen this is our political system, this is political theatre, we will get this done'. And I didn't have quite that much certainty myself but I sure did everything I could to reassure them."

"Here I'm not going to name the senior person, but I was meeting with someone… This person told me that the Chinese had received a message from the Russians which was, 'Hey let's join together and sell Fannie and Freddie securities on the market.' The Chinese weren't going to do that but again, it just, it just drove home to me how vulnerable I felt until we had put Fannie and Freddie into conservatorship [the rescue plan for them, that was eventually put in place]."

For me this is pretty jaw-dropping stuff - the Chinese told Hank Paulson that the Russians were suggesting a joint pact with China to drive down the price of the debt of Fannie and Freddie, and maximize the turmoil on Wall Street - presumably with a view to maximizing the cost of the rescue for Washington and further damaging its financial health.