Poll: How will this ultimately work out?
The Fed will be able to continue buying up the government's with newly printed money indefinitely.
The Fed will have to stop at some point, but the US will be able to handle the interest payments.
It will lead to either a currency collapse if the Fed keeps printing money like this, or a default if they don't.
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Big surprise. The Republicans caved in.
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18-10-2013, 08:04 PM
RE: Big surprise. The Republicans caved in.
Quote:Roads and bridges and railways and wind farms and nuclear power plants and upgrading the grid and teachers and cops and firemen and other infrastructure sounds like both a stimulus and an investment to me DarkMeat.

Oh really? Please, explain this to me SPECIFICALLY... Let's keep it small and simple. Take a hypothetical town which has a population of 10,000 people, and is 100% residential. Of those, 500 work for the local government, and the other 9500 work in the private sector for companies in neighboring towns, with an average income of $30,000/year. This means the total amount of money coming into the town's residents $285m/year (9500 x $30,000). The 500 who work for the local government also make $30k/year, or $15m/year total. Therefore, everybody in the town needs to pay $1500/year in taxes to cover the government workers ($15m / 10k people).

Now, in this town is a struggling artist, having a hard time making ends meet. He's only able to make about $20,000/year, half the average. And so the mayor takes pity on him and hires him as an extra cop.

So how did the town's finances change? Well the total income for the town went from $285,000,000 to $284,980,000. The cost of the government employees went up from $15,000,000 to $15,040,000, which means the taxes went up to $1504/year, so everyone brings home $4/year less.

Therefore, the net result is (a) less money for the town, (b) higher taxes for everyone which results in, © less take home money for everyone.

Explain to me, again, why that is stimulus? How is the town being "stimulated"? Seriously, be specific and explain this, because I think you're totally confused.

Now, here's where I'll help you out. _IF_ the town had a crime problem and homes were being burglarized and adding an extra cop reduced the crime rate, _THEN_ the people in the town might decide that it's worth it to pay an extra $4/year. But, you're totally confused for calling this 'stimulus'. It did NOT "stimulate" the economy. The real issue, which libertarians ask is: "Are these new government workers providing services that were previously lacking and which were holding back the private sector? What additional value are the new government workers adding, and is it worth the extra burden on the private sector?

But when liberals insist that having the government hire more workers is, in of itself, "stimulating" the economy, it's absolute nonsense. And the most damaging part is that because liberals believe it, that hiring more government works is good for the economy in and of itself, they don't worry so much about WHAT the government workers are actually doing and if it's really worth it, since they think it's good just to give them a job. That's why the government is full of people who do nothing but convert oxygen into carbon dioxide, or worse yet, actually make things worse (like HUD, Dept of Education, etc.).

If liberals would think this through, they wouldn't be saying "let's hire more government workers", they'd be saying "what services are we lacking that is holding us back or making our lives worse, and how can we best fill that gap."

(18-10-2013 07:13 PM)Revenant77x Wrote:  I have never understood how libertarians overlook all those things when discussing the government.

ROFL. I can safely predict that the libertarians in the forum will be the ONLY ones ready to address these issues head on, and that the liberals will run for cover once a libertarian starts to address this stuff.

Take roads and bridges. Before the 1920's they were all privately owned and built. Then the government took over. And now the same liberals that say how wonderful is it that government took this over from the private sector are also complaining that the roads and bridges are falling apart ever since the switch. You want to debate this?

Take teachers. Go to the ranking of all American universities, and, from top to bottom, see which ones were founded by the government vs. which ones were founded by the "robber barons", charitable donations from rich entrepreneurs. The last time I looked, the highest rated public university was #47 on the list. EVERY ONE of the top 46 universities were private. Do you want to debate this? I'm fine with that.

Or cops and firemen. There are actually a few cities in the country that have PRIVATELY owned and run fire departments, and guess what! On average they do just as good a job and get it down for 1/2 what the government run ones do. link

Or we can talk about public transport. While it was private, the rate of innovation grew by leaps and bounds so that by the 1920's the trains were running at 100mph, had air conditioning, and 250k miles of track, with over 1,500 light rail (metro) systems, so that in every town with a population over 2,500 there was a metro, and 90% of all trips were on public transport. They were also working on vacuum evacuated tube transport systems, which could travel at hypersonic speeds. THEN the government took over, nationalized the public transport, effectively stealing all that infrastructure from the private structure. By the end of the century, nearly all the metro systems are now gone, with only a couple big cities having them anymore, 90% of the track is gone, the trains are running at half the speed they were 100 years ago, and hardly any American takes public transport anymore. You want to debate this?

As I side, libertarians do NOT overlook this stuff. We LOVE to debate this stuff. Pick your topic, and let's debate.
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18-10-2013, 08:08 PM
RE: Big surprise. The Republicans caved in.
(18-10-2013 07:57 PM)Dark Light Wrote:  Again, that doesn't go against my wishes. I want Maryland to be as socialist as it wants. I just don't wanna live there or pay for it.

It's just a simple cost-benefit analysis isn't it? For me the higher taxes are more than made up for by the increase in salary. We pay best. Tongue Depends on your skillset obviously, one of the reasons, probably the main reason, Maryland's at the top is that we are very high tech.

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18-10-2013, 08:13 PM
RE: Big surprise. The Republicans caved in.
(18-10-2013 07:58 PM)Revenant77x Wrote:  
(18-10-2013 07:54 PM)Dark Light Wrote:  That's why I said largely done.

Actually it's mostly done by local administrations with federal money. Like most government it is not that cut and dry which is why the state/federal argument is false.

I feel like no one is actually reading my posts because they keep arguing with things I didn't say. Never did I say it was cut and dry. Over 1/3 of roads are paid for with state gasoline taxes. Much of the rest is paid for with other local and state taxes. The Federal government does provide grants and the like, but it is largely paid for by state and local government.

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19-10-2013, 02:56 AM
RE: Big surprise. The Republicans caved in.
Quote:Oh really? Please, explain this to me SPECIFICALLY... Let's keep it small and simple. Take a hypothetical town which has a population of 10,000 people, and is 100% residential. Of those, 500 work for the local government, and the other 9500 work in the private sector for companies in neighboring towns, with an average income of $30,000/year. This means the total amount of money coming into the town's residents $285m/year (9500 x $30,000). The 500 who work for the local government also make $30k/year, or $15m/year total. Therefore, everybody in the town needs to pay $1500/year in taxes to cover the government workers ($15m / 10k people).

Now, in this town is a struggling artist, having a hard time making ends meet. He's only able to make about $20,000/year, half the average. And so the mayor takes pity on him and hires him as an extra cop.

So how did the town's finances change? Well the total income for the town went from $285,000,000 to $284,980,000. The cost of the government employees went up from $15,000,000 to $15,040,000, which means the taxes went up to $1504/year, so everyone brings home $4/year less.

Therefore, the net result is (a) less money for the town, (b) higher taxes for everyone which results in, less take home money for everyone.

Explain to me, again, why that is stimulus? How is the town being "stimulated"? Seriously, be specific and explain this, because I think you're totally confused.

That guy, the struggling artist , is not shoving this extra money up his ass. He will be spending it. In shops, restaurants , gas stations... thus stimulating the towns economy.
What I think you don't understand is that when you pay somebody , that money doesn't disappear. First you get the service you payed for, and trough spending he puts that money back in the economy. That's how this shit works. Distributing surplus of money and goods pushes the economy forward.
This is far more beneficial for the society then "this guy is struggling , fuck him".

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19-10-2013, 08:18 AM (This post was last modified: 19-10-2013 09:09 AM by frankksj.)
RE: Big surprise. The Republicans caved in.
(19-10-2013 02:56 AM)Slowminded Wrote:  
Quote:Oh really? Please, explain this to me SPECIFICALLY... Let's keep it small and simple. Take a hypothetical town which has a population of 10,000 people, and is 100% residential. Of those, 500 work for the local government, and the other 9500 work in the private sector for companies in neighboring towns, with an average income of $30,000/year. This means the total amount of money coming into the town's residents $285m/year (9500 x $30,000). The 500 who work for the local government also make $30k/year, or $15m/year total. Therefore, everybody in the town needs to pay $1500/year in taxes to cover the government workers ($15m / 10k people).

Now, in this town is a struggling artist, having a hard time making ends meet. He's only able to make about $20,000/year, half the average. And so the mayor takes pity on him and hires him as an extra cop.

So how did the town's finances change? Well the total income for the town went from $285,000,000 to $284,980,000. The cost of the government employees went up from $15,000,000 to $15,040,000, which means the taxes went up to $1504/year, so everyone brings home $4/year less.

Therefore, the net result is (a) less money for the town, (b) higher taxes for everyone which results in, less take home money for everyone.

Explain to me, again, why that is stimulus? How is the town being "stimulated"? Seriously, be specific and explain this, because I think you're totally confused.

That guy, the struggling artist , is not shoving this extra money up his ass. He will be spending it. In shops, restaurants , gas stations... thus stimulating the towns economy.
What I think you don't understand is that when you pay somebody , that money doesn't disappear. First you get the service you payed for, and trough spending he puts that money back in the economy. That's how this shit works. Distributing surplus of money and goods pushes the economy forward.
This is far more beneficial for the society then "this guy is struggling , fuck him".

@Slowminded, you haven't thought this through. The total spending in shops and restaurants goes DOWN. What you're forgetting is the government employee's spending COMES OUT OF the spending of the private sector. You're only seeing half the equation. You see increased spending in government, and forget that it was MORE THAN offset by reduced spending in the private sector. Go back to the example. All the townfolk have $4/year LESS to spend in shops and restaurants, because it's going to the new government employee. So, this is a wash; the townfolk collectively spend $40k less in shops and restaurants, and the government employee spends that $40k in shops and restaurants. BUT, it's a net negative because before he was a government employee he was selling $20k/year of art. That's GDP or income for the town that's lost. Once he stopped producing goods and services and started living on tax revenue, the town's total income went DOWN by that $20k that he stopped producing. So, in the end the total spent on shops and restaurants is LESS by $20k, because the $40k he spends from his government salary was merely diverted from the townfolk's spending, and the $20k he was making as an artist is GONE and lost forever.

If you're logic were sound, that moving 1 guy from the private sector to the public increased the town's economy, then why not keep doing it? Add another guy and another and another, until the town consists of 1 person in the private sector, say a dentist, and the other 9,999 are cops. Oh wait, this means the dentist not only has 9,999 patients to treat, but since the public sector's wages comes out of the private sector's taxes, he ALSO has to earn enough money to feed himself AND feed the other 9,999 people in the town! In other words, it's a completely impossible situation, and the town will collapse. The effect from moving one person over from private to public is small enough to not be felt. But it is the same effect—it's one tiny notch in the direction towards collapse. Just like turning the volume knob up one notch at a time. You may not hear the difference, but the volume is going up. And keep turning the knob up, even an imperceptible one notch at a time, and eventually you'll blow your ear drums out, just like you'll eventually crash the town's economy.

Now, here's where libertarians think the opposite. We have the same compassion. We do NOT say “this guy is struggling , fuck him". BUT, we think through the effects of our actions. Instead of the strugging artist giving up his art to become a government employee, a BETTER solution is if all the townfolk give up $1/year to the artist as charity (or better yet buy his art). Think this through. With both of our solutions the struggling artist now has a livable income of $30k/year, like the rest. BUT, with my solution, the townfolk accomplished it by only giving up $1/year voluntarily. With your solution, to accomplish the same goal, the townfolk have to give up $4/year in taxation. With my solution, the towns total income stays the same. With your solution the towns total income, and the amount being spent in shops and restaurants, drops by $20k.

See how many times I've said repeatedly that liberals don't think this through. They see a problem, like a struggling artist, and just immediately assume that no matter what the problem, the solution is to use government force. And they never stop to think about the consequences. They just follow the primitive, animalistic instinct to pick up a club and start swinging every time they see something they don't like. Like bulls in a china shop. Libertarians, however, we use our brains, not our clubs. We do the math, we model the effect of all this liberal club-wielding, and, like in this example, we find that in nearly every case the liberals club-wielding actually makes things worse and there IS a MUCH BETTER way to accomplish the desired goal peacefully, WITHOUT using force.
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20-10-2013, 08:20 PM
RE: Big surprise. The Republicans caved in.
What Frank said.

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21-10-2013, 12:12 AM
RE: Big surprise. The Republicans caved in.
(18-10-2013 07:48 PM)earmuffs Wrote:  Mmhmm. You have no argument from me that printing money is a bad thing.
I was just basically saying that printing money causes inflation. You explained it a lot better than I did.

Pretty much all I was trying to say in my previous argument. The point being that our entire economy is now up to the fed, and printing money is what the fed is about. The system (without some serious checks and balances, which isn't happening) was designed to fail. Only not for the fed, they get to legally rape and pillage the economy at will, but they don't have to, we do it to ourselves and come back to them begging for more. It's an obviously stupid way of existing.

But now I have come to believe that the whole world is an enigma, a harmless enigma that is made terrible by our own mad attempt to interpret it as though it had an underlying truth.

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21-10-2013, 12:21 AM
RE: Big surprise. The Republicans caved in.
(21-10-2013 12:12 AM)evenheathen Wrote:  
(18-10-2013 07:48 PM)earmuffs Wrote:  Mmhmm. You have no argument from me that printing money is a bad thing.
I was just basically saying that printing money causes inflation. You explained it a lot better than I did.

Pretty much all I was trying to say in my previous argument. The point being that our entire economy is now up to the fed, and printing money is what the fed is about. The system (without some serious checks and balances, which isn't happening) was designed to fail. Only not for the fed, they get to legally rape and pillage the economy at will, but they don't have to, we do it to ourselves and come back to them begging for more. It's an obviously stupid way of existing.

ehh not really.
I don't know anything about your federal reserve but ours was made for the purpose of controlling inflation.
Prior to our federal reserve inflation was controlled by the government and so it was used for political purposes. You can see graphs and inflation would fluctuate anywhere between negative a couple percent to 20% in one year. Obviously this is not good. So the federal reserve (or we call it the Reserve Bank of New Zealand) was created with the purpose of controlling inflation. Since it's establishment inflation has fluctuated between 1 and 2 percent, I think 3 percent a couple years, which is a normal amount of inflation.
The point being don't be so quick to outright dismiss it.

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21-10-2013, 12:32 AM
RE: Big surprise. The Republicans caved in.
(21-10-2013 12:21 AM)earmuffs Wrote:  ehh not really.
I don't know anything about your federal reserve but ours was made for the purpose of controlling inflation.
Prior to our federal reserve inflation was controlled by the government and so it was used for political purposes. You can see graphs and inflation would fluctuate anywhere between negative a couple percent to 20% in one year. Obviously this is not good. So the federal reserve (or we call it the Reserve Bank of New Zealand) was created with the purpose of controlling inflation. Since it's establishment inflation has fluctuated between 1 and 2 percent, I think 3 percent a couple years, which is a normal amount of inflation.
The point being don't be so quick to outright dismiss it.

Dismiss the general idea, of course not. It was put into place because like all things, it works on paper. You have to have honest people willing to put forth the effort to keep things honest in order for good ideas to flourish. I just don't think that's been the case here in america.

But now I have come to believe that the whole world is an enigma, a harmless enigma that is made terrible by our own mad attempt to interpret it as though it had an underlying truth.

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21-10-2013, 08:12 AM
RE: Big surprise. The Republicans caved in.
(21-10-2013 12:32 AM)evenheathen Wrote:  Prior to our federal reserve inflation was controlled by the government and so it was used for political purposes. You can see graphs and inflation would fluctuate anywhere between negative a couple percent to 20% in one year. Obviously this is not good. So the federal reserve (or we call it the Reserve Bank of New Zealand) was created with the purpose of controlling inflation. Since it's establishment inflation has fluctuated between 1 and 2 percent, I think 3 percent a couple years, which is a normal amount of inflation.
The point being don't be so quick to outright dismiss it.

This chart shows the historic cumulative effect of inflation in New Zealand. chart. Like everywhere else in the world, there was no inflation until 1971, and it's been soaring ever since (except in Switzerland).

Remember, the whole world was on a gold standard from 1948 to 1971. During that time, there was no inflation, because the quantity of gold only increases 1-2%/year. BUT, government's HATE the gold standard because that means when they want money they have to get the people to agree to give them the money in the form of taxation. They LOVE fiat currencies, because all they have to do is hit the 'print' button and they can take as much money as they want from the people, and the people don't even know it. Remember, in 1971, Nixon effectively stole the whole world's supply of money, because before that time, US dollars were simply claim checks for money (gold), and the world shipped the US their gold in exchange for claim checks. In 1971 Nixon said "We're going to keep all your gold, but lucky you, you get to keep the claim checks." The only reason the rest of the world didn't complain about getting robbed like this is that they all loved having a fiat currency.

So, if NZ really wanted to curb inflation they would have done what Switzerland did--keep the gold standard. And this is much better for the people because it rewards saving and investing, whereas a fiat currency punishes them, and rewards spending and borrowing.

Now, it's true that IF you're going to have a fiat currency, a semi-independent central bank, which is prohibited from directly paying the government's bills, shows more restraint. I'm not familiar with the system in NZ, but I imagine that originally the same politicians that passed the budget were also the ones with their fingers on the 'print' button, so, for every new spending project they wanted, it was easiest to take the money they needed by just cranking up the press. An independent central bank with a charter to keep inflation under control generally does a BETTER job. However, they're still politically appointed, so they still have to ultimately give the government what it wants.

Also, don't forget that the reason why the "official" inflation numbers are so low is that the governments keep changing how they calculate inflation in order to get lower numbers and convince the people that they're doing a good job. Here in the US, if you apply the ORIGINAL formula from the 80's (price change of a basket of goods), the REAL inflation rate is around 7%. But, the former Fed Chairman, Greenspan, told Congress the government could, basically, raid senior citizens retirement accounts by reducing the official number, since social security and entitlement programs are tied to the official inflation number. Congress, of course, LOVED the idea. And now, they do all sorts of hedonic adjustments, and they cherry pick what's in the inflation figures (health care, for example, only accounts for 1% of the inflation figure, even though it's a huge actual expense, and they weigh the cost of newspapers heavier than the cost of health care). From what I can tell, all other countries picked up on this trick and now do the same thing. So it's possible you're not really having low inflation--just a low figure.
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