Friday, February 4, 2011

House Majority Leader, Eric Cantor, in our office on Monday



Eric Cantor, the House Majority Leader, will be in the offices of John Thomas Financial on Monday. I will ask him about the debt ceiling and spending cuts.

18 comments:

AP Lerner said...

Please ask him if its just a coincidence that every time the federal government runs a surplus, a depression follows. Every time.

Randall Wray sums up the history.

http://www.huffingtonpost.com/l-randall-wray/the-federal-budget-is-not_b_457404.html

googleheim said...

Ask him why we handed economic leadership over to NIXON'S China
and also scientific leadership over to Eisenhower's Germany ?

Why is the Fermilab linear atom smasher being turned off in Illinois while we PROVIDE OPEN SWAP CREDIT LINES TO THE EUROPEANS while they run and operate their Large Hadron Collider to look for the last of the last particles ?

Might as well as point out the Super Conductor Super Collider being closed down by a higher % of Republicans in the 1994 Congress.

That asset would have cost $14 billion for 42 Terra Electron Volts of power while the European's have their current CERN smasher at only 10 Terra Electron Volts for same price ...

yet underwritten by OPEN SWAP LINES of the USA Treasury.

Matt Franko said...

Mike,

the numbers I'm tracking are that the Tea Party people are demanding a current year $100B cut in non-military discretionary, but Ryan (deficit hawk but not necessarily a Tea Party person) is on the record for $60B this year. What is Cantor's position? I think as leader, Cantor will have to referee this.

Also, if you could, see if he brings an aide, hopefully an aide who helps him wrt economic policy, if you can get a card from that person. Perhaps we can send that person some email information going forward.... introduce his staff at least to some of the fiscal realities, etc..

Resp,

Bob said...

Anytime a politician visited the offices of my union MEBA in washington dc. office located across the street from the capitol, all they wanted was money.
They will yes you to death, they will kiss your ass, until they get the money, than it is see ya.

But Mike please don't piss him off, he will just pull in and we won't learn anything about what is on his mind.
You can ask him for me will he push to reduce pork sweetheart deals, as part of the cut back in spending, and will he push to stop the 2,000 bank lobbyist, and god knows how many drug company and health insurance death squad lobbyists. Also ask him if he thinks the investment banks should be seperated from commercial banks and insurance companies? Ask him if he is in favor of term limits and a flat tax to eliminate lobbyists. Ask him why he spends so much time in Washington DC instead of just visitin once per quarter and than the rest of the time in his home state visiting all of his american people tax payors to see what they need him to do to help them? Last time I was in Washington DC I was part of a financial review committee to insure our union reps. weren't ripping us off. Some of them did, but they were found out. George Bush has audited the hell out of union offices on a regular basis to try to bust them. I do not work for a government union but for a private union of highly skilled workers. Ask this politician what type of energy policy should the US employ. Or just tell him to screw off and take your political donation, as whatever he tells you will be bull shit anyway!

Bob said...

A few more thing to ask him,

Why is he allowed to be exempt from the very laws that congress passes, for example,
He is allowed to sit on committees and than his closest friends and family can insider trade against the very sensitive issues that only the committee members and insider corporation execs. no about.
Aks him when will the banks have to mark to market all the toxic waste still on their balance sheets.
Ask him why he doesn't have the same social security retirement I do as a private worker who pays taxes.
Ask him if he voted for the three page TARP bailout the Hank Paulsen presented to congress.
Ask him if he thinks he will get re-elected if he cuts all the benefits of the teachers, fireman, policeman unions in his home state?
This is the problem Mike, it is a spiral into the toilet. These politicians knuckle under everytime when it comes to being fiscally responsible.
Ask him what his priority is?
Is it to get re-elected? or is it to do what is needed to be done regardless of consequences to his re-election. Ask him if he will take a lobbyist job when he gets voted out?

TomatoBasil said...

Good Luck!!! This congress seems genuinely motivated to try and fix the economic woes. If you can plant a seed of knowledge that helps him to begin to understand the workings of our system we will all be better off.

Anonymous said...

[Rep. Eric Cantor (R-Va.)], the Republican whip in the House of Representatives, bought up to $15,000 in shares of ProShares Trust Ultrashort 20+ Year Treasury ETF last December [2009], according to his 2009 financial disclosure statement. The exchange-traded fund takes a short position in long-dated government bonds. In effect, it is a bet against U.S. government bonds — and perhaps on inflation in the future... The fund is down 31 percent this year [as of June 2010].
http://blogs.wsj.com/washwire/2010/06/18/eric-cantors-investment/?mod=e2tw

TBT is still underwater from when he bought it.
http://finance.yahoo.com/q/bc?s=TBT&t=2y&l=on&z=l&q=l&c=

Accentuate the positive (from the GOP point of view that is), Bush's tax cuts adjusted the fiscal stance at the right time, perhaps mention Warren's discussion with Donald Rumsfeld and work with Art Laffer.
http://moslereconomics.com/2008/12/02/bernanke-on-the-swap-lines/#comment-2782

Matt Franko said...

Beo,
TBT has probably been good since the August 2010 time frame (start of QE2). But yes down since he bought them.

As I understand those leveraged ETFs they have a sort of "decay" built in (due to rolling the futures over intot he next month) to them so they end up eroding in value even if the underlying security remains unchanged. (Nat Gas ETF UNG is the best example)

Ive heard them described as good for short term trading but not for long term holdings. If he has held them for a year or more this is more evidence of a lack of judgement on his part, or bad advisory.

Mike you may want to tell him about "the roll" with these leveraged ETF things, and how they are not long term investments, it seems he may need a new advisor...

Letsgetitdone said...

Lerner@ 8:34 AM

A more detailed version of the Huffpo piece is here: http://www.newdeal20.org/2010/02/10/the-federal-budget-is-not-like-a-household-budget-heres-why-8230/?author=83

welfarewarfare state said...

I don't know why you guys are so upset with Mr. Cantor. It isn't even 60 billion dollars in proposed spending cuts at this point; it is now down to 37 billion. That is a joke.

Under the Democrat's plan we will add about 4 trillion dollars to the national debt. Under the Republican leadership's plan we will add a little over 3 trillion in debt. This is our choice? LOL!

The Democrat's plan just gets us over the cliff a little faster than the Republican plan.

Mike probably got a little hot under the collar confronting Mr. Cantor over what amounts to very little difference. The difference isn't substantive but, rather, rhetorical.

welfarewarfare state said...

The above post should have read the administration's plan adds 4 trillion over the next two years and the Republican's adds a little over 3 trillion over the next two years.

welfarewarfare state said...

Excellent video over at YouTube about soaring food prices and middle east unrest. Just go to YouTube and search for: Food shortage- Did US money printing Cause unrest in Arab countries.mp4

This was on the Dylan Rattigan show. He is one of the few in journalism that gets it.

Letsgetitdone said...

welfarewarfarestate, the size of the deficit is determined endogenously, not by what the Government does in specific attempts to cut the deficit. So, the truth is that the Democrats' projection of $4 T in deficits over the next few years is more likely to be much less than 4 T, while the Republicans' projection of 3 T is much more likely to hit 4 T or 5 T rather than the 3 T they project. Conversely, if the Parties just focused on creating full employment, the deficit would be down to 3% or better within that same time period.

So even if one thinks the deficit is important, it's better just to ignore it and spend what needs to be spent to really end the employment problem. Randy Wray's discussion of what deficits are important for is very good: http://www.newdeal20.org/2010/07/20/deficits-do-matter-but-not-the-way-you-think-15355/?author=83

welfarewarfare state said...

Letsgetitdone,

I have no idea what "the size of the deficit is determined endogenously" means. I am going to delete that from my memory bank. It's determined by how much more the govt. spends than it confiscates in taxes.

The deficit is likely to be higher than the CBO or the parties project. They seem to always get it wrong.

Deficits will only be 3% of GDP? That is more than a little optimistic. Our deficits will be closer to 10% of GDP. Government spending in the long run will cause higher unemployment because the service on the debt is going to require a lot of the federal tax revenue. There must be higher taxes to pay for servicing the interest on the debt in the long run. This will put a strain on business's ability to create productive jobs.

Anonymous said...

Government spending in the long run will cause higher unemployment because the service on the debt is going to require a lot of the federal tax revenue. There must be higher taxes to pay for servicing the interest on the debt in the long run.
And we're back... to square one.

Letsgetitdone said...

WWS, sorry about the using the term "endogenously." In this case it means that the size of the deficit is caused by the dynamics of the economic system system and is unresponsive to deliberate Government attempts to shrink it directly by raising taxes or cutting spending. That's why CBO projections are always wrong. They're basically doing accounting over there, and not economics. That's why they keep appointing policy analysts with a political science background, rather than macro-economists to head it up.

Those folks know how to add and subtract and work spread sheets, but they lack something between the ears when it comes to macro-economics.

Anyway, the point is that if you try to get rid of deficits with a direct approach because you don't like them, the most likely response of the economy will be even bigger deficits, because the reduction in demand and further tanking of the economy that will cause will increase Federal spending in the automatic safety net stabilizers, which may well increase spending more than the amount of the programs that were cut.

Also, if one did want to take the direct approach to cutting the deficit, then I think it's pretty clear that one ought to do it by taxing the wealthy far more more than we do now. Since that way we could take more revenue out of the private sector with minimal effect on the level of aggregate demand (since the marginal propensity to save among the wealthy is far greater than among other groups in the population.

In fact, if one were take much more revenue from the wealthy than was needed get rid of the deficit than the Government could transfer more dollars to higher spending multiplier groups than the wealthy, which is the best way of increasing demand if one is going to on getting rid of deficits.

Finally, you akso said:

"Deficits will only be 3% of GDP? That is more than a little optimistic. Our deficits will be closer to 10% of GDP. Government spending in the long run will cause higher unemployment because the service on the debt is going to require a lot of the federal tax revenue. There must be higher taxes to pay for servicing the interest on the debt in the long run. This will put a strain on business's ability to create productive jobs."

Have you got any empirical evidence for the idea that Government spending will cause unemployment because of debt service costs? For example have Government deficits in Japan caused higher debt service costs? Have high Government deficits since 2008 in the US caused higher debt service costs?

Who do you think controls those debt service costs? The bond Markets? Or the US Government? What do you think would happen if the Government started issuing only 3-month Treasury Bonds or even shorter-term debt instruments? Do you think that will raise or lower interest rates?

When you answer please make it fact-based. I really don't want to go round and round with you over some long-refuted neo-liberal theory that doesn't apply to a Government sovereign in its own currency (i.e. a Government issuing its own non-convertible currency, with a floating exchange rate, and no external debt in any currency not its own).

oukid said...

I see pictures of Eric Cantor at the offices of John Thomas Financial. Why isn't there a picture which includes the Chief Economist?

Have there been any comments from the Chief Economist regarding his questions to Cantor?

Anonymous said...

Excerpt from Warren Mosler's 7 Deadly Innocent Frauds of Economic Policy:

Deadly Innocent Fraud #7
Higher deficits today mean higher taxes tomorrow.

Why does the government tax?
Not to get money, but to take away our spending power if it thinks we have too much spending power and it’s causing inflation.

Why are we running higher deficits today?
Because the ‘department store’ has a lot of unsold goods and services in it- unemployment is high and output is lower than capacity. The government is buying what it wants and we don’t have enough after tax spending power to buy what’s left over. So we cut taxes and increase government spending to increase spending power and help clear the shelves of unsold goods and services.

And why would we ever increase taxes?
Not for the government to get money to spend- we know it doesn’t work that way.
We would increase taxes only if our spending power is too high, and unemployment has gotten so low, and the shelves have gone empty do to our excess spending power, that we are causing inflation.

So the statement “Higher deficits today mean higher taxes tomorrow” Is in fact is saying: “Higher deficits today when unemployment is high will cause unemployment to go down to the point we need to raise taxes to cool down a booming economy.”