A primer on economics, the defecit, and the national debt
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25-03-2013, 11:44 AM
RE: A primer on economics, the defecit, and the national debt
(25-03-2013 10:26 AM)bbeljefe Wrote:  
(25-03-2013 03:26 AM)Revenant77x Wrote:  Actualy how Keynesian math works is you borrow when intrest rates are low (like they currently are, near 0%) Invest on a local basis. Now yes direct recuperation will never be 100%, however when you factor in the 3rd and 4th level ripples government spending causes, you can and do make the money back. I would propose the US interstate system as the prime example. It cost several billion dollars in todays money but, by including everything it allowed to happen created the biggest economic boom in history.
Third and fourth level tax ripples, like their namesake, are forever smaller than the last and their aggregate doesn't measure equal to the original dollar spent.

As for the boom you speak of, it was a part of the American credit card binge. Sure, there are some people who profited from it but look at where the country is today. This whole problem with fiat currency started in 1913... not a decade ago and not fifty years ago.

It's easy to look at something like the interstate highway system and the economic boom that caused it to be built and say that this is a good thing. After all, who can argue that the fifties through the late seventies wasn't a god time for a lot of people? Well, any economist who is willing to do a long term analysis can. The interstate highway system didn't create the economic boom, it was a by product of it. The boom was caused by fiat currency manipulation. It "worked" pretty good when the dollar was still worth nearly a dollar but as time wore on and more money was printed, much of it for government project that don't produce value, the value of the dollar dropped and inflation became a problem. In order to control inflation, the Fed lowered interest rates, but that led to malinvestment and that led to recession. So the Fed raised interest rates and the market tried to find equilibrium. And then the government flooded the market with new money again and it all started over.....

Right now, interest rates are as low as they've ever been and it isn't fixing the problem. That's because it never fixed anything before. Rather, it only gave the illusion of fixing things, which is Keynesian magic math. Now the Fed is talking about negative interest rates.... overseas the governments are enacting ex post facto taxes on existing savings and their having to keep banks closed in order to avoid a bank run. Currencies are going into hyperinflation and nation states the world wide are inventing new ways to fine and tax the proletariat in order to stay afloat.

All these things are the result of Maynard Keynes' "Live Off You Credit Cards" modus operandi for nation states. The ruling class loved it, because it gave them a way to promise three dollars in benefits for every dollar they collected in taxation. It gave them the money to reward their friends and the power to punish their enemies. The war vets and their baby boomer children loved it because they were promised more in return that they had to pay in. And for a while, that's what they got and it looked like the country prospered. But it didn't. Like I mentioned before, nothing of value was created by the interstate highway system. The market has no way of quantifying its value and the state has no way to pay for its upkeep. It was bought on credit cards and was given away. Now, it lays in need of repair and there's no more credit card money to spend on it.

Well Ultimatly it seems we approach the problem with diffrent presuppositions. I belive that not all government is bad and government spending can in fact be a good thing. 1 note however your worries of hyper-inflation are not happening right now. If you want to tie the european problem (which is a diffrent cause than the American problem) that has a much harsher solution. America weathered the great recession much better than europe due mainly to stimulus spending (europe went with austarity and has paid the price)
http://www.thethinkingatheist.com/forum/...p-big-time
I stated my solution to the Euro crisis here.
Now from what I can surmis (from reading your posts) you are somewhat of an anarchist and do not see the value of government action. If this is incorrect please enlighten me. If however that is the case I doubt any argument in favor of a collective response to the crissis would ever meet with your aproval. That being stated what would you propose?

(31-07-2014 04:37 PM)Luminon Wrote:  America is full of guns, but they're useless, because nobody has the courage to shoot an IRS agent in self-defense
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25-03-2013, 12:10 PM
RE: A primer on economics, the defecit, and the national debt
(25-03-2013 11:44 AM)Revenant77x Wrote:  Well Ultimatly it seems we approach the problem with diffrent presuppositions. I belive that not all government is bad and government spending can in fact be a good thing. 1 note however your worries of hyper-inflation are not happening right now. If you want to tie the european problem (which is a diffrent cause than the American problem) that has a much harsher solution. America weathered the great recession much better than europe due mainly to stimulus spending (europe went with austarity and has paid the price)
http://www.thethinkingatheist.com/forum/...p-big-time
I stated my solution to the Euro crisis here.
Now from what I can surmis (from reading your posts) you are somewhat of an anarchist and do not see the value of government action. If this is incorrect please enlighten me. If however that is the case I doubt any argument in favor of a collective response to the crissis would ever meet with your aproval. That being stated what would you propose?
You're quite correct. I see no value in theft or in arguments from effect, which is the go to position of statist arguments. And it isn't collective action I have a problem with, it's coercion I have a problem with.

America hasn't weathered the problem, it has applied more bandaids to the wound and, Europe and the rest of the world are tied to America's problems whether we like it or not. Especially when you consider that the US imports far more goods than it produces. If Europe fails writ large or China abandons the dollar, the US will suffer tremendously.

As for what I would propose, that's hard to say right now, given that the US is so far into this mess. It can't simply stop spending on, say, its wars. To bring home all the troups would cause a burden on the entitlement system and an unemployment catastrophe the likes of which no one has ever seen. Likewise with government employees... you can't simply end their jobs, for the same reasons.

I liken the US experiment to a person who has cancer. Sure, they have good days and bad days (US booms and recessions) but in the end, the cancer is growing ever larger and is doing ever more damage. In the case of the US, its government spending sprees are akin to the cancer victim taking heroine and having a few good days in a row. The US has had this cancer for a century now and it has passed the tipping point.

All I can do at this point is prepare for the crash. And I don't mean stockpiling guns and food and being paranoid of some sort of civil war. I just mean taking care with how I use credit, acquiring real assets and living my life like everyone should anyway, in as much as is possible.

The beginning of wisdom is to call things by their right names. - Chinese Proverb
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