Perhaps I wasn't clear. CLINTON did not raise the GDP. While he might have raised his cock at overweight Jewish interns, his superpowers did not extend beyond the astroturfed bed of his el Camino. What he did do was generally stay out of the way, which is about as much as any President can do for economic growth.

Furthermore, and Jesus this should be simple fucking civics, the Congress holds the power of the purse, not the President. Non-essential government functions fucking shut down because the two parties couldn't come to an agreement on the budget.

6/29/2010 7:00:54 PM

yawn

6/29/2010 7:11:29 PM

Quote :

"What a stupidly simplistic view. Most any economist will argue for stable inflation, this is so our money supply can grow with our economy. Our labor adds value to more and more goods everyday, a growing money supply should mirror that growth. Deflation screws that up and causes deflationary traps and frequent depressions, inflation reduces these and increase our responsiveness to those depressions."

Why should it grow with the economy? The purchasing power of the money should go up. We didn't have frequent depressions before 1913. It was only when the Federal Reserve began controlling the money supply that we had the kind of boom bust cycles that we've had for the past century.

You don't address the argument that falling prices are a good thing. Yes, I know what the mainstream economic belief is. It's wrong. This concept that we're going to create a shitload of money and get deflation is absurd.

Quote :

"They did not use deficit spending as a response to economic recession. You asking this question is more than proof that you have no idea what Keynesianism is."

I didn't say that Zimbabwe/Weimar/Argentina hyperinflation was the result of Keynesianism. I was using those as examples of hyperinflation. I was asking what the fundamental difference is between what they're doing and what we're doing. Nice misdirection, though.

As a previous poster mentioned, we have a more stable government than say, Zimbabwe. We aren't to the point of printing trillion dollar bills. But, as history teaches, hyperinflation happens very rapidly, and usually blindsides most people. We have the advantage, right now, of having the reserve currency. I don't know how long that will last, and I don't know how long the rest of the world will continue working their asses off for us.

Quote :

"Treasury bills are money. We inflated our currency as soon as we issued them."

In a round about way, yes, but treasury bills and money are not the same thing. The Treasury can't raise money without selling a bond. A bond is just a loan to the government. Inflation (expansion of the money supply) only happens when the bond matures and the yield has to be paid. When the Federal Reserve actually purchases a bond, that's inflation.

Quote :

"Additionally your statement could arguably be true for the 2002 downturn, but certainly not the 2001 downturn, which was directly caused by the 9-11 attacks."

I hope you don't actually believe this. In 2001, we were still in a recession due to the bursting of the tech bubble. The Federal Reserve had been raising interest rates aggressively before then. They started slashing interest rates when the bubble burst, which would help create the housing bubble. 9-11 resulted in a sell off, but the recession was already here. The Fed was more than willing to throw fuel on the fire.

6/29/2010 7:19:14 PM

Quote :

"We didn't have frequent depressions before 1913."

http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

6/29/2010 7:22:11 PM

Fair enough, though I wouldn't say depressions were frequent, and it's not as if we had steady inflation in 19th century United States. Deflation was what allowed the United States to thrive during the late 19th century.

Interestingly, the worst depression in the 19th century, centered around the panic of 1819, was caused by expansionary monetary policy.

6/29/2010 7:34:23 PM

Quote :

"CLINTON did not raise the GDP."

Quote :

"What he did do was generally stay out of the way, which is about as much as any President can do for economic growth."

Don't those two statements contradict one another?

Quote :

"Why should it grow with the economy?"

Money represents labor and goods, there's more of that today than there was yesterday.

Quote :

"We didn't have frequent depressions before 1913."

We didn't have the astronomical growth we experienced after either. Depressions are a byproduct of an increasingly complex world-wide marketplace. That marketplace is only enhanced by fiat currencies in the same way that fractional reserve systems enhance marketplaces.

Quote :

"You don't address the argument that falling prices are a good thing."

Sure I did, deflation causes recessions and spirals. It causes people not to circulate money, when money isn't circulating the economy is not growing, when the economy is not growing, it is shrinking.

Quote :

"I didn't say that Zimbabwe/Weimar/Argentina hyperinflation was the result of Keynesianism."

I didn't say it was either. I pointed out that "They did not use deficit spending as a response to economic recession."

Quote :

"hyperinflation happens very rapidly"

In unstable economies. As you've admitted, we are not one of them.

Quote :

"Inflation (expansion of the money supply) only happens when the bond matures and the yield has to be paid."

That would only be true if the government did not pay. Treasury bills are promissory notes of created dollars, thus we are able to expand our money supply simply by printing bonds.

Quote :

"I hope you don't actually believe this. In 2001, we were still in a recession due to the bursting of the tech bubble. The Federal Reserve had been raising interest rates aggressively before then. They started slashing interest rates when the bubble burst, which would help create the housing bubble. 9-11 resulted in a sell off, but the recession was already here. The Fed was more than willing to throw fuel on the fire."

What the hell are you talking about? None of that had anything to do with what I said.

6/29/2010 7:51:24 PM

Quote :

"Don't those two statements contradict one another?"

Not hardly.

6/29/2010 8:42:31 PM