So, we continue to inch closer to higher taxes plus decreased spending, which seems to be a a combination neither party claims to want. Tax cuts expiring and sequestration spending reductions and neither side is willing to move from their intractable bullshit positions they claim to hold.

Why is this a problem again?

Sure, it could lead to a slight uptick in unemployment, but it would also make a huge difference in terms of deficit spending and might actually help to reduce public debt. The tax increase from letting the Bush tax cuts expire would mean an increase in taxes for 90% of folks (actually, only a reduction in refunds for a large chunk of the country) including an extra $3500 a year for people like me. So what? I can fork over another $135 per check.

I understand the concerns about continuing the recession, but can we honestly continue along our current path? Unlimited quantitative easing and deficit spending policies aren't doing the job, why not try a little bit of austerity?

Here's a not entirely terrible CNN article about it:

http://money.cnn.com/2012/10/01/pf/taxes/fiscal-cliff-tax/index.html?iid=Lead&hpt=hp_t3

10/2/2012 12:35:17 AM

Quote :

"Why is this a problem again?"

The government is $16,000,000,000,000 in debt.

According to usdebtclock.org, each US citizen owes $51,000.

When you say... "I can fork over another $135 per check."

Even if you stopped the debt from increasing today and never increase again in the future, it would take 377 years to pay off the debt.

10/2/2012 1:31:54 AM

we have to print money and start over. default/print money/new currnecy whatever it takes to get rid of the debt without literally paying for it.

10/2/2012 1:34:54 AM

Quote :

"we have to print money and start over. default/print money/new currnecy whatever it takes to get rid of the debt without literally paying for it."

I hope you bought some silver and gold because the money in your bank account will be worthless.
It may be simple to advocate to start over, but if you keep the same financial policies, then the same outcome will be inevitable.

Despite all warnings and safeguards installed at the beginning of the government, each were repealed slowly over time to allow rampant misuse and crime against the dollar. Alas, the path has lead us to where we are right now.

But first, before starting over, you have to prove that the government didn't do this on purpose. If it was an accident, they certainly didn't hardly try to put water on the fire, they put gasoline on it instead. If they did it on purpose, that means they have a sinister plan for the new government.

10/2/2012 1:44:50 AM

Yes, we are all aware that there is a shitload of debt. My question "why is this a problem again?" was about the furor and hand wringing around the upcoming combination of sequestration and expiring tax cuts.

Austerity is needed on some level, continued deficit spending is not possible. Paying off the debt is possible if there is a budget surplus you can actually pay down the debt, the amount of time required to do so is unimportant. It could conceivably take as little as 50-75 years to do it or as much as never.

Realistically we probably can't pay off the entire debt because that would remove treasury bonds from the global economy, but we can and should start running a surplus and start paying down the debt.

On an unrelated note, gold and silver are completely useless commodities. Their value is every bit as variable and untethered as anything else. Gold and silver have very limited utility and are therefore just as useless in terms of stability as any fiat currency. Imagine the dollar collapses and you have a bunch of gold coins. Great, now what? You hope that other human beings will accept some quantity of gold in exchange for goods and services. How do you value it, why would they trade you a bag of apples for .01 ounces of gold? Without any frame of reference owning physical gold is pointless. I've never really understood going back to the gold standard. I mean, I guess tethering the amount of money in circulation to something is useful, but why pick a shiny metal that can be dug out of the ground? Because historically it's something that people have treasured?

[Edited on October 2, 2012 at 2:14 AM. Reason : sdfs]

10/2/2012 2:08:36 AM

Before you knock gold, you need to know why it has withstood the test of time. I can't make you understand gold but there is something about not being able to be counterfeited that makes it so valuable. If you look at its chemical, deterioratorive, and elemental properties, it seems as if gold's destiny was to be money.

10/2/2012 2:21:03 AM

gold is money, period. Paper is only valuable as long as people will accept it. Which they won't do in a crisis. Look at Iran, their currency was down 20% today. Think anyone would accept a large quantity of Iranian Rial for goods and services today?

Also, silver has many industrial uses so to say it's useless is incorrect.

It doesn't matter if we officially go back to the gold standard because we are unofficially already back on it. That's why you see so many people accepting gold as collateral, people hoarding PM's, etc.

The only thing that is worrisome is that when the dollar collapses in the next few years people are going to say it's "unfair" that the people who have gold are protected even though people like me have been warning people to buy gold for years (and smarter people than I have been screaming it for even longer). So now we have to worry about the government confiscating gold again and telling us to eat dirt.



[Edited on October 2, 2012 at 2:59 AM. Reason : a]

10/2/2012 2:57:19 AM

Quote :

"But first, before starting over, you have to prove that the government didn't do this on purpose. If it was an accident, they certainly didn't hardly try to put water on the fire, they put gasoline on it instead. If they did it on purpose, that means they have a sinister plan for the new government. "

10/2/2012 3:20:51 AM

Quote :

"people hoarding PM's"

no kidding, my inbox has been green nonstop lately, and i ain't sharing that shit.

10/2/2012 9:31:24 AM

Quote :

"Why is this a problem again?"

How is it not a problem? Any increase in taxes is a problem for me. This tax increase basically negates the raise I would have gotten this year. Fuck that.

Decreases in government services will be a problem for a bunch of people. I don't agree that this national debt is mine to take responsibility for. A lot of that debt was a free money giveaway to well connected bankers who simply gambled with the money.

"Austerity" suggests that it's up to us to "tighten our belts". Well, that's bullshit. The government is operated by criminals. These politicians never pay any real consequences for the destruction they cause. In the worst possible scenario, they lose re-election, and they still get gold-plated everything, pensions, benefits, a book deal. The same is usually true for the leaders of banking/financial institutions.

Listen to me. If interest rates ever rise, the jig is up. This is why it's so important for the Fed to say that monetary policy will be easy for the next 4 years or however long. They have to continually signal that nothing serious will change anytime soon.

People say that Europeans riot because of austerity, and Americans are just too fat and lazy to riot. I say that Americans are primed to riot, but the circumstances necessitating that kind of behavior are not here yet. We have not had austerity or anything close to austerity, regardless of what some are saying. If social security, medicare, food stamps, and unemployment ever take a significant hit, social unrest is going to get nasty - and fast.

[Edited on October 2, 2012 at 10:09 AM. Reason : ]

10/2/2012 10:03:52 AM

Quote :

"I don't agree that this national debt is mine to take responsibility for."

And that's the problem. Guess what, whether you like it or not, it is. Most of the debt is from things like domestic spending on welfare, SS, medicare, medicaid, and also on national defense and wars. TARP and the bailouts make up a small portion of the debt, somewhere between 6 and 10%.

You are a citizen of the US, you and I and every person in this country own this debt, like it or not.

I'm not happy about the prospect of a tax hike. Believe me, there are things I could do and would rather do with that $3500 in added taxes I'll pay if the Bush era tax cuts expire. I would much prefer to invest more money in my brokerage account or buy a new TV, but as much as I bitch about government spending I'm still accountable for it.

Our elected official pissed away tons of money, some of it I benefited from, some I didn't, but ultimately the public debt is held by the public.

10/2/2012 2:15:32 PM

You're missing the part about this being a free country.

We aren't free if debt is forced upon us into slavery.

10/2/2012 2:28:45 PM

No one is forcing you to do anything. You are an American citizen by birth or by naturalization. You can always seek citizenship elsewhere and thereby abdicate your responsibility for the actions of this government. Personally I think citizenship should be earned through voluntary enrollment at voting age, but it isn't.

You don't get to reap the benefits of being a citizen of this country without also taking responsibility for things like public debt and the actions of our politicians.

Don't blame me, I voted for Kodos is not a valid excuse.

10/2/2012 2:37:33 PM

Deflation is a tax on all debt holders

10/2/2012 2:39:49 PM

Quote :

"And that's the problem. Guess what, whether you like it or not, it is. Most of the debt is from things like domestic spending on welfare, SS, medicare, medicaid, and also on national defense and wars. TARP and the bailouts make up a small portion of the debt, somewhere between 6 and 10%. "

No, it's not. You can say it is, but it isn't. I did not have a say in whether or not that debt was taken out, and I will not accept a lower standard of living to pay down the debt. Of course, I won't have much of a choice with an IRS gun to my head. A contract is not valid if I don't agree to it.

You've been duped into believing that you're responsible for the actions of the sociopaths running the government, which is a real shame. As long as people carry that basic sentiment, then the obligations of the guilty can be successfully offloaded onto the people. That's bullshit and we shouldn't accept it, just as the Europeans shouldn't accept "austerity" while their financial overlords lounge on private islands.

Quote :

"Deflation is a tax on all debt holders"

Sign me up!

10/2/2012 2:47:42 PM

Look, I'm just a disgusted with our politicians as you are, I vote Libertarian in every election, but pissing into the wind and screaming, "it's not fair" isn't going to fix anything. You bitch about not having a say, if you vote you have a say. The result didn't match what you want, that happens sometimes.

You claim that the social contract isn't a valid contract, that it was forced upon you. It wasn't, you are free to give up your citizenship at any time. No one is keeping you here by force.

A revolution, bloodless or otherwise, would be great, I hope the country realizes how fucked our economic and political systems are, but denying all responsibility for our accumulated debt is not an option. Spending must be reigned in, taxes must be raised, and deficit spending must stop. It's going to be painful, and it's going to be unpopular, but it has to happen.

Just think, in 1998-99 when I was starting college we were on track to pay off the entire national debt by the end of this year, now we are discussing the possibility of the dollar no longer being the world's reserve currency. If our generation sacks the fuck up and stops this insanity we can undo the damage our parents did.

10/2/2012 2:55:20 PM

Quote :

"Look, I'm just a disgusted with our politicians as you are, I vote Libertarian in every election, but pissing into the wind and screaming, "it's not fair" isn't going to fix anything"

Neither is accepting your fate as a slave.

10/2/2012 2:57:48 PM

Quote :

"Sign me up!"

You're an idiot. What do you think happens to investment and jobs when putting money under the mattress becomes a viable strategy in and of itself?

10/2/2012 2:58:46 PM

"Wah wah wah social contracts aren't valid" - Guy who claims to own property

10/2/2012 3:00:16 PM

^^^^hear, hear.

^^^^^no offense, but your attitude comes across as that of a spoiled child. "It's just not fair". As has been mentioned, if you're really that disgusted with the U.S.'s debt, you can choose to not be a U.S. citizen. I think all politicians are slimy, i don't trust the government, but as of now, you and I are using the benefits afforded to us the U.S. government, and are free to move elsewhere at anytime, if we choose.

[Edited on October 2, 2012 at 3:05 PM. Reason : ]

10/2/2012 3:01:45 PM

Quote :

"Neither is accepting your fate as a slave."

you're not a slave. slaves can't leave anytime they choose.

10/2/2012 3:02:18 PM

Quote :

"You claim that the social contract isn't a valid contract, that it was forced upon you. It wasn't, you are free to give up your citizenship at any time. No one is keeping you here by force."

Can I give up my citizenship and live my life, not paying taxes? No, I have to pay taxes and spend thousands moving to some other state where I'll also have to pay taxes, giving up all family, friends, and relationships? This argument doesn't hold water. There's society and there's the state. I'm a member of society, but I don't consent to be governed.

The argument that goes "you can move somewhere else, but while you're here you have to support the state" is complete garbage.

Quote :

"A revolution, bloodless or otherwise, would be great, I hope the country realizes how fucked our economic and political systems are, but denying all responsibility for our accumulated debt is not an option. Spending must be reigned in, taxes must be raised, and deficit spending must stop. It's going to be painful, and it's going to be unpopular, but it has to happen. Just think, in 1998-99 when I was starting college we were on track to pay off the entire national debt by the end of this year, now we are discussing the possibility of the dollar no longer being the world's reserve currency. If our generation sacks the fuck up and stops this insanity we can undo the damage our parents did."

We just disagree on how this is all going to play out. You believe that the debt can and will be paid. I disagree; I don't think politicians or the people have any desire or ability to do it. I think default will not only be less painful, I think it will be the only option.

Quote :

"What do you think happens to investment and jobs when putting money under the mattress becomes a viable strategy in and of itself?"

Currently, the only viable strategy is to put money into a institutionalized crap shoot, i.e. the stock market. If the alternative is that people hold onto money and it increases in value, that sounds good to me. Despite the bitching and moaning of mainstream economists about the dangers of deflation, history shows that some price deflation isn't anything to be afraid of.

[Edited on October 2, 2012 at 3:05 PM. Reason : ]

10/2/2012 3:04:10 PM

Quote :

"Can I give up my citizenship and live my life, not paying taxes? No, I have to pay taxes and spend thousands moving to some other state where I'll also have to pay taxes, giving up all family, friends, and relationships? This argument doesn't hold water. There's society and there's the state. I'm a member of society, but I don't consent to be governed."

then disappear, move into the rugged wilderness, and live off the grid, free. Seriously man, your utopian ideal is nice, but kinda ridiculous.

10/2/2012 3:08:21 PM

Quote :

"then disappear, move into the rugged wilderness, and live off the grid, free. Seriously man, your utopian ideal is nice, but kinda ridiculous."

Your argument is ridiculous. I don't like that people are getting slaughtered every day with money taken from me by force, and the only option I have is to move into the wilderness? I need you to understand how bad this argument really is.

10/2/2012 3:13:14 PM

Quote :

"Currently, the only viable strategy is to put money into a institutionalized crap shoot, i.e. the stock market. If the alternative is that people hold onto money and it increases in value, that sounds good to me."

Please, destroyer, try for one minute to think about this without starting from your conclusion and working backwards. Why should I expand my business if I can get reliably richer by just doing nothing instead? Why should I invest in someone else's business, and thus engage in risk, if my money grows in value by just burying it in a tin in the back yard? Why should somebody hire you when the money that goes to your wages could just grow on its own?

Deflation is anti-investment and anti-growth. It's simultaneously a symptom and a cause of economic contraction. It's bad for people who are in debt, because their capacity to pay them diminishes. It's bad for people who produce goods, because the value of their profit margin shrinks every day their goods take to sell. The only people it's good for is unproductive clods who hoarded cash in the past because they're paranoid about inflation. If they have a job, it's still bad for them, as their wages drop (like the price of all things during deflation).

Quote :

" Despite the bitching and moaning of mainstream economists about the dangers of deflation, history shows that some price deflation isn't anything to be afraid of."

Please, tell me this history.

Quote :

"Your argument is ridiculous. I don't like that people are getting slaughtered every day with money taken from me by force, and the only option I have is to move into the wilderness? I need you to understand how bad this argument really is."

Propertarians like you don't get to bitch and moan about the use of force. The entire institution of private property is held up by force, either by a state or by whoever has the biggest gun and wants a piece of land.

[Edited on October 2, 2012 at 3:18 PM. Reason : .]

10/2/2012 3:15:52 PM

Quote :

"Your argument is ridiculous. I don't like that people are getting slaughtered every day with money taken from me by force, and the only option I have is to move into the wilderness? I need you to understand how bad this argument really is"

i know it's ridiculous. and i think your argument is pretty ridiculous. i understand your argument, but it's not the way the world is. bitching and moaning and screaming "it's not fair" isn't going to change anything. i mean, i agree with a lot of your views. they're just not realistic.

10/2/2012 3:20:12 PM

Quote :

"Please, destroyer, try for one minute to think about this without starting from your conclusion and working backwards. Why should I expand my business if I can richer by just doing nothing instead? Why should I invest in someone else's business, and thus engage in risk, if my money grows in value by just burying it in a tin in the back yard? Why should somebody hire you when the money that goes to your wages could just grow on their own? "

Some people aren't satisfied with a 1-2% return, which is usually what you'd see with normal price deflation. I'd rather get 5, 10, 30% return on an investment. Did you really think you were dropping some knowledge here, man? Get a grip.

Quote :

"Deflation is anti-investment and anti-growth. It's simultaneously a symptom and a cause of economic contraction. It's bad for people who are in debt, because their capacity to pay them diminishes. It's bad for people who produce goods, because the value of their profit margin shrinks every day their goods take to sell. The only people it's good for is unproductive clods who hoard cash because they're paranoid about inflation."

It's just a symptom of economic contraction, not a cause. It is bad for people in debt, yes, and price deflation does discourage excess credit. The people who produce goods will see lower costs, so no, it's not uniformly bad for them.

"unproductive clods who hoard cash because they're paranoid about inflation." You mean savers? Ah, yes, savers...ever and always the great enemy of the economy.

Quote :

"Propertarians like you don't get to bitch and moan about the use of force. The entire institution of private property is held up by force, either by a state or by whoever has the biggest gun and wants a piece of land."

My views on property aren't what you think they are. First principles - you own yourself, and you own your labor. I go from there.

[Edited on October 2, 2012 at 3:25 PM. Reason : ]

10/2/2012 3:21:35 PM

Quote :

"i know it's ridiculous. and i think your argument is pretty ridiculous. i understand your argument, but it's not the way the world is. bitching and moaning and screaming "it's not fair" isn't going to change anything. i mean, i agree with a lot of your views. they're just not realistic."

According to you, bitching and whining is not a realistic way of getting what you want.
According to you, strikes and protests don't work.

10/2/2012 3:29:04 PM

Quote :

"Some people aren't satisfied with a 1-2% return, which is usually what you'd see with normal price deflation. "

"Normal price deflation" ? Please explain where this term came from. how you established "normal", because it sounds like you're just defining 1-2% as normal so as to avoid talking about what rates above 1-2 might entail.

Quote :

"I'd rather get 5, 10, 30% return on an investment. "

Yes, so would I, but those usually carry something called risk, which steady deflation has none of. But go ahead and just make up investments, and also pretend that all investors will have the same attitude as you, and that a switch to deflation wouldn't cause any proportion of the market to shift into liquidity.

Quote :

"Did you really think you were dropping some knowledge here, man? Get a grip."

Aww, gettin defensive now.

Quote :

"It's just a symptom of economic contraction, not a cause. It is bad for people in debt, yes, and price deflation does discourage excess credit. "

Really, you don't see how a shift in incentives towards liquidity couldn't cause anything resembling contraction?

Quote :

"The people who produce goods will see lower costs, so no, it's not uniformly bad for them."

It's bad for anyone whose product takes time to sell, period. Doesn't matter if your costs reduce, because your product is necessarily on the market after you buy the materials to produce it. Every production round is going to suffer as a result, and god help your company if it has any debts at all.

Quote :

""unproductive clods who hoard cash because they're paranoid about inflation." You mean savers? Ah, yes, savers...ever and always the great enemy of the economy."

Actually, yes, savers are the enemy of the economy. An economy runs because money moves, money that doesn't move contributes nothing and causes stagnation. Even the simple-minded of savers can at least put his money into a decent mutual fund or, hell, GOLD. If you're putting money under your mattress, you're an idiot and helping nobody, including yourself.

Further, I don't think laboring in the past should entitle you to additional value in the present and future. You think it's such an awful thing when somebody makes money from inflation by doing nothing of value, but it's okay when someone else does it via deflation? Honestly man I suspect you just want to gain value without working. You want your dollars to be worth more every day simply by the merit of you having them.

Quote :

"My views on property aren't what you think they are. First principles - you own yourself, and you own your labor. I go from there."

Yes, we all understand that you find your stated assumptions to be very agreeable, and mistakenly believe you can extrapolate the universe from two platitudes.


[Edited on October 2, 2012 at 3:37 PM. Reason : .]

10/2/2012 3:30:12 PM

Quote :

""Normal price deflation" ? Please explain where this term came from."

Deflation that occurs when there isn't a central bank actively increasing the money supply. The catastrophic deflation you reference in the 1930s came directly after a credit boom. It's very different than the deflation that was seen in the 1880s and 1890s, for instance.

Quote :

"Yes, so would I, but those usually carry something called risk, which steady inflation has none of. But go ahead and just make up investments, and also pretend that all investors will have the same attitude as you, and that a switch to deflation wouldn't cause any proportion of the market to shift into liquidity."

There's going to be an element risk whenever you make choices with money or anything else. Inflation isn't risky, it's just a guaranteed loss 100% of the time.

Quote :

"It's bad for anyone whose product takes time to sell, period. Doesn't matter if your costs reduce, because your product is necessarily on the market after you buy the materials to produce it. Every production round is going to suffer as a result, and god help your company if it has any debts at all. "

Why is it that 1-2% ("moderate") inflation is great and healthy, but any small degree of deflation will bring the entire economy to a halt? Why do you believe that?

Quote :

"Actually, yes, savers are the enemy of the economy."

This is no longer worth my time.

10/2/2012 3:38:43 PM

Str8Foolish, I don't blame you for not knowing how the economy works.

Quote :

". An economy runs because money moves, money that doesn't move contributes nothing and causes stagnation."

Does this picture move the economy? Can you explain why the economy moves in this picture and tell us the reason why we don't we just repeat this 100,000,000 times?

10/2/2012 3:40:21 PM

The broken window fallacy assumes there is no liquidity preference, and that every tailor and baker was already producing at maximum capacity, serving full consumer demand, at the moment the window was broken.

In other words, when you assume your conclusions, you end up proving them.




[Edited on October 2, 2012 at 3:43 PM. Reason : .]

10/2/2012 3:41:44 PM

Also I'm about 99% sure you don't understand what I just said or what it means, so just say the word and I'll try to break it down for you.

[Edited on October 2, 2012 at 3:44 PM. Reason : .]

10/2/2012 3:44:44 PM

You're right, not even you know what the fuck you just said.

10/2/2012 3:48:36 PM

First you need to know that the broken window parable was not a general prescription, it relates only to a liquidity trap. Do you know what a liquidity trap is?

[Edited on October 2, 2012 at 3:50 PM. Reason : Hint: Try google]

10/2/2012 3:50:15 PM

Listen, moron, the answer is simple.

The answer to the question is "because it's not productive"

Let me illustrate it another way:

I can dig a hole and pay you to fill it
then you can dig a hole and you pay me to fill it.
we can repeat this a million times.

Can you see that the money is moving?
Please tell me you can see the money moving.

How is it strengthening our economy?

10/2/2012 3:55:58 PM

A liquidity trap is when, for whatever reason, investors hold onto cash (liquidity) instead of investing. Usually it's because they expect low returns or high risks should they invest. A threat of deflation, for instance, makes liquidity a good idea. So does an imminent economic contraction, or low consumer demand. That puts you in a situation where people don't want to invest because it's risky, and as a result the economy stalls. No investment means no new jobs, which means consumer demand stagnates, which means no businesses expanding, which means no incentive to invest. In other words, it becomes a self-reinforcing cycle, that's why it's called a "trap." You can pump all the money you want into the system, but until people spend it prices and interest rates stay the same.

That's a liquidity trap. Building on that is the "paradox of thrift." which basically states "If everybody in the economy saves money at the same time, the loss in investment and circulation stalls overall growth, so taken as a group they do worse than if they'd engaged in investment."

Trading goods and services generates wealth over time. All the paradox of thrift is saying is that everybody saving at once means reduced generation of wealth. Each individual is minimizing their risk, quite rationally, but the aggregate effect is lost growth, so the total wealth that could have been created is stymied.

The broken window parable basically says "Cause some senseless destruction so as to force money-holders to spend it, thus renewing circulation and breaking the cycle."

The rebuttal is usually "But, if that person spends that money on a new window, he WONT spend that money on a tailor or a baker, so the net spending is the same."

In other words, the parable of the broken window is based on a liquidity-trap scenario, and the "rebuttal" assumes there is no liquidity trap at all. So yes, breaking windows is completely counterproductive in a 100%-capacity economy. Thing is, nobody ever said it was a good idea for such an economy, just one in a liquidity trap. The "rebuttal" assumes there is no liquidity trap, so of course the broken window is counterproductive.

Does that make any more sense? If it doesn't please just say so, I'll try to calm down and not be insulting, I really want you to understand this because it's kind of the heart of the Keynesian approach, and it'd be a real shame if you went another 4 years railing against something you very clearly don't know the first thing about.

10/2/2012 4:00:53 PM

Wow. You're a failure.

10/2/2012 4:01:32 PM

Quote :

"Listen, moron, the answer is simple"

No, it's not, and that's your problem. You favor simplicity over truthfulness. Now please read what I wrote slowly and carefully and tell me which part you don't get.

If you understand these two concepts:
1. Liquidity preference
2. Paradox of Thrift

Then the broken window parable should make some more sense to you. You're assuming that it's supposed to be applied to all economic scenarios, that any economy can be improved by breaking some windows. That's wrong, that's simply not what it is, and it demonstrates beyond a doubt that you don't know what you're talking about.

[Edited on October 2, 2012 at 4:04 PM. Reason : .]

10/2/2012 4:02:37 PM

“If you can't explain it simply, you don't understand it well enough”

Albert Einstein

10/2/2012 4:04:13 PM

Now you're just having a tantrum. I tried to lay it out for you as simply as I could without being insulting, and I'm sincerely offering to walk you through it even more slowly if you can just tell me what part you're not getting. Don't be like this.

Also, if you like Einstein, why not read his essay on why he supported Socialism?

http://monthlyreview.org/2009/05/01/why-socialism

[Edited on October 2, 2012 at 4:08 PM. Reason : Read it, it's good]

10/2/2012 4:06:46 PM

Why are you going to walk me through the park when I gave you the answer 6 posts ago in 4 words.

10/2/2012 4:09:03 PM

Quote :

"Why is it that 1-2% ("moderate") inflation is great and healthy, but any small degree of deflation will bring the entire economy to a halt? Why do you believe that?"

Because one incentivizes investment and circulation, and the other encourages hoarding. One is pro-growth, the other stalls growth by effectively removing wealth from the economy.

Quote :

"This is no longer worth my time."

If you admit that circulation of currency, goods, and services causes wealth creation, then you are also admitting that savers aren't helping the economy. Sorry it conflicts with conventional wisdom, but it's the hard truth. It's a great idea for an individual to save for this and that, but the fact is that if we all save at the same time the economy undergoes contraction due to the decrease in the effective money supply.

Sorry, I know this is a monumentally hard thing for anyone remotely libertarian to understand, but let me repeat it: Sometimes individually rational behaviors, acted out by an entire society at once, can be damaging to the individuals.

[Edited on October 2, 2012 at 4:18 PM. Reason : .]

10/2/2012 4:13:58 PM

Quote :

"Why are you going to walk me through the park when I gave you the answer 6 posts ago in 4 words."

Your answer is wrong. Killing people is unproductive but can still be profitable. "Productivity" is a subjective term that varies depending on an individuals circumstances. Now can we move on? Tell me what part of my post you didn't understand.

[Edited on October 2, 2012 at 4:15 PM. Reason : .]

10/2/2012 4:15:06 PM

Quote :

"I can dig a hole and pay you to fill it then you can dig a hole and you pay me to fill it. we can repeat this a million times. Can you see that the money is moving? Please tell me you can see the money moving."

If we are the only two people on planet Earth, you're correct, no economic improvement. That's because neither of us is getting a comparative advantage in a repeating transaction, no wealth is created, and the money just goes back and forth between you and me. However, an actual economy has more than two people, and comparative advantages are more common.

Imagine I'm a billionaire who spends none of his money, and everyone else is very poor. For whatever reason, I pay you to dig a hole and fill it in, then you go and spend that money at the corner store, they get a sale, decide to hire another worker, report the sale to their supplier, who also hires more workers, and reports it to the producer, who makes more widgets to sell because apparently shit's selling again.

Whether or not I keep paying you, already more investment is being made because there's been a signal that more money is in the economy. That circulation encourages more investment, more wages, more production. Those wages get spend and re-spent. The same amount of money is in the economy, but it moves more now that I'm not storing it under my mattress. Even if the initial investment (the hole) was pointless in and of itself, the introduction of that money into circulation prompts additional economic activity with lasting benefits.


[Edited on October 2, 2012 at 4:25 PM. Reason : .]

10/2/2012 4:23:32 PM

The solution to a shortage of money flow in the economy is for the federal reserve to print more money and distribute it, not have the government borrow the money and spend it on unproductive activities.

10/3/2012 1:27:39 PM

All of the numbers that people throw out about how taxes alone cant erase the deficit never factor in the benefits of increasing retirement age, drastically cutting military spending, and reforming unemployment. They basically just say, taxes can't do it, so lets just make the poor people the scapegoats and cut all of the entitlement programs so that we can continue to live high



[Edited on October 3, 2012 at 3:31 PM. Reason : h]

10/3/2012 3:30:12 PM

Just to comment on the OP, the problem isn't that they're cutting spending or raising taxes, the problem is that it's being done in a sloppy and haphazard way. Instead of thinking through and making cuts based upon whether or not a service adds value or impact, we're simply cutting across the board indiscriminately.

However, Fiscal Cliff discussions are a distraction from a much bigger problem: the growth of automatic spending programs like Social Security, Medicare and Medicaid. As a % of GDP, discretionary spending has held relatively steady or even shrunk. Social Security, Medicare and Medicaid however have increased dramatically. If anything is going to financially break us, it's that.

10/3/2012 4:37:37 PM

straightfoolish, can you eloquently explain why pumping more freshly printed money in to the economy, to end the liquidity trap, won't create another bubble --> burst that we all got to witness in 2008?

10/3/2012 5:10:17 PM

set em up ---------->

10/3/2012 8:58:24 PM