OldSchool Loc: Moving to the Red State of Utah soon!

Monstrous credit / debt spirals orchestrated by the Fed over the past decades that have brought us the economic crisis.

How much debt is there exactly in today’s economy? Stratospheric amounts. The Federal Government owes over $17.5 trillion in just its “funded debt.” When everything is added up, total public and private American debt today is $61 trillion. But when we add in the government’s “unfunded debt,” i.e., its future obligations for social security, medicare, and employee pensions, the figure becomes stupefying. Total public and private American debt today is in excess of $150 trillion.

http://canadafreepress.com/index.php/article/62597

Patty

Washington has allowed their masters to completely ruin the economy. There is no hope for recovery either from a national or global perspective.
The dollar has already failed and people don't get it.
http://www.dailyfinance.com/2010/06/09/risk-quadrillion-derivatives-market-gdp/
They are getting desperate and I fear they might do something even stupider than we are accustom to already. Will they bring the whole world into a global war? Look at the idiots we have in charge of making those decisions?

MarvinSussman

There have been two major economic experiments proving that sufficient deficit spending to increase consumer demand will restore prosperity.

In January 1933, Hitler took power during a terrible depression and restored prosperity in one year by spending heavily on the autobahn, the Volkswagen, TV, gliders, zeppelins, concentration camps, munitions, etc. That made him popular and enabled him to rebuild the German Army.

In March 1933, FDR took power during a terrible depression and managed to reduce the unemployment rate from 25% to 12% by 1936 by spending as much as Republicans would let him spend on WPA, PWA, CCC, TVA, and more. He built the Hoover Dam, planted two billion trees, and built thousands of federal buildings still in service. Just when he wanted to start on the Interstate Highway System, the Republicans made him balance the budget and the unemployment rate went back up to 18% by 1939.

Then World War II brought fantastic, utterly wasteful spending without limit. Did it bring more depression? No! Prosperity was restored within one year. Eighty million war workers had money in the bank and in war bonds, enough to live decently during the war and to buy cars and homes after the war.

When I came home from Europe in 1935, my uncle told me that my grandchildren would be paying off the debt. He was so wrong. The war debt was never paid off. It still exists as a blip on the current debt, overwhelmed by the tremendous spending on veterans homes and education, the Marshall Plan, Cold
War rearmament, the Korean War, nuclear energy, the Interstate Highway System, NASA, the Vietnam war, and a dozen proxy wars. The result was that the wartime debt/GDP ratio declined from 120% to 30% during 35 years of prosperity due to growth of the denominator, GDP.

Ask grandma how good it was.

Deficit spending has always brought recovery from recessions and depressions every time the spending was large enough.

Obama’s stimulus was a great success and would have brought full recovery if it were three or four times larger to fully close the output gap. http://www.pitbulleconomics.com/stimulus.pdf

Recessions are caused by lack of consumer demand. Prosperity depends upon major purchases (homes, cars, etc.), which require bank loans based upon savings. So, recovery from a recession requires savings, which the working population uses to reduce debt. Therefore, recovery needs new savings from new hiring generated by investment in new products. So, recovery waits for investors who wait for recovery, which explains the slow recovery.

To hasten recovery, there must be another source of savings. With a trade deficit, that source must be deficit spending on infrastructure by the federal government. Without such deficit spending, there can be no early savings, lending, major purchases, and quick recovery.

If FDR spent in 1933 as much as he spent in 1943, would not the depression have ended in 1934 as it ended in 1944 due to the same amount of spending? It worked for Hitler. Why would it not work for FDR?

MarvinSussman

There have been two major economic experiments proving that sufficient deficit spending to increase consumer demand will restore prosperity.

In January 1933, Hitler took power during a terrible depression and restored prosperity in one year by spending heavily on the autobahn, the Volkswagen, TV, gliders, zeppelins, concentration camps, munitions, etc. That made him popular and enabled him to rebuild the German Army.

In March 1933, FDR took power during a terrible depression and managed to reduce the unemployment rate from 25% to 12% by 1936 by spending as much as Republicans would let him spend on WPA, PWA, CCC, TVA, and more. He built the Hoover Dam, planted two billion trees, and built thousands of federal buildings still in service. Just when he wanted to start on the Interstate Highway System, the Republicans made him balance the budget and the unemployment rate went back up to 18% by 1939.

Then World War II brought fantastic, utterly wasteful spending without limit. Did it bring more depression? No! Prosperity was restored within one year. Eighty million war workers had money in the bank and in war bonds, enough to live decently during the war and to buy cars and homes after the war.

When I came home from Europe in 1935, my uncle told me that my grandchildren would be paying off the debt. He was so wrong. The war debt was never paid off. It still exists as a blip on the current debt, overwhelmed by the tremendous spending on veterans homes and education, the Marshall Plan, Cold
War rearmament, the Korean War, nuclear energy, the Interstate Highway System, NASA, the Vietnam war, and a dozen proxy wars. The result was that the wartime debt/GDP ratio declined from 120% to 30% during 35 years of prosperity due to growth of the denominator, GDP.

Ask grandma how good it was.

Deficit spending has always brought recovery from recessions and depressions every time the spending was large enough.

Obama’s stimulus was a great success and would have brought full recovery if it were three or four times larger to fully close the output gap. http://www.pitbulleconomics.com/stimulus.pdf

Recessions are caused by lack of consumer demand. Prosperity depends upon major purchases (homes, cars, etc.), which require bank loans based upon savings. So, recovery from a recession requires savings, which the working population uses to reduce debt. Therefore, recovery needs new savings from new hiring generated by investment in new products. So, recovery waits for investors who wait for recovery, which explains the slow recovery.

To hasten recovery, there must be another source of savings. With a trade deficit, that source must be deficit spending on infrastructure by the federal government. Without such deficit spending, there can be no early savings, lending, major purchases, and quick recovery.

If FDR spent in 1933 as much as he spent in 1943, would not the depression have ended in 1934 as it ended in 1944 due to the same amount of spending? It worked for Hitler. Why would it not work for FDR?

OldSchool Loc: Moving to the Red State of Utah soon!

I knew you were going to pipe in with your pro-Keynesian bullshit! And, it is bullshit!!!!!

Talk about a broken and cracked record!!!!

MarvinSussman

You were unable to find fault with a single sentence in my essay because you can’t. You have neither the knowledge nor the resources required to get enough knowledge to counter my facts and logic. You simply do not like the logical conclusion. So, bereft of facts and logic, you became angry, lost your composure, and lashed out like a cornered snake. How sad!

But there is hope for you. Go back and try to tackle it again. Borrow a dictionary and look up the long words. Keep trying. Grit and perseverance may bring success. Good luck and have faith!

And what happened to civility?

Patty

He doesn't understand that due to the Hoover-Roosevelt interventionist policys of price controls, price subsidies, labor laws, gold confiscation, and SCOTUS indecision despite low costs and a massive pool of labor the confidence by the private investors was not there and all government intervention was useless.
It was central banks discretionary policies that got us into the depression and he thinks they can now get us out. It is illogical. It was 2 years after the Bank of Englan that over valued the sterling in 1925 that led the fed to run a tight money policy which caused the market collapse in 29. This left the dollar as the most over valued currency and was rectified by pegging the dollar from $20.67 to $35.00 an oz. (gold)
It was the actions of the gov that caused the depression and only when the free markets were opened up at the on set of WWII did the economy recover.

OldSchool Loc: Moving to the Red State of Utah soon!

Nor, can you back any of it up with REAL FACTS, dumbass. Like I said, it's all failed Keynesian bullshit! I don't need a dictionary to look up Bullshit, I already know what it means, and how to spell it. Now, go pedal your failed Keynesian bullshit to some one who is ignorant enough to swallow it, which won't be many.

Patty

"The plague of our time is Keynesian economics. It has destroyed the economics profession and enabled the political class to obtain powers never intended.
Keynesian economics provided the intellectual cover for the criminal class we politely call “government” to plunder its citizenry. In the beginning, clear-thinking, independent economists (not dependent on government largess) expressed objections to this “new economics.” There was little new in Keynes’ work and many errors that had been debunked decades before Keynes was even born. Bastiat’s parable of the “broken window” in 1850 is probably the best-known refutation, although similar arguments preceded Bastiat by a century or more.

In the 1930s leaders were desperate and willing to try anything. Keynes General Theory was published in 1936, during the middle of the greatest depression the world had ever experienced. Politicians, more so than economists, welcomed his ideas as a new approach.
The Austrian economists represented by Mises and Hayek saw the fallacies in this new approach immediately. Some of the Chicago School (Knight, Simons, Viner) did also. Ludwig von Mises, never one to mince words, described Keynesian economics in the following manner:
What he really did was to write an apology for the prevailing policies of governments."
http://www.zerohedge.com/news/2014-03-02/guest-post-why-keynesian-political-economy-theft

MarvinSussman

Your definition of "free markets" (Uncle Sam paying everyone's salary for four years) gets close to my idea of good government.

The goal of a nation’s economy is to maximize the wealth of the nation by full employment of its resources. When private industry does not fully employ all of the nation’s resources, it is the duty of a government with fiat currency and a floating exchange rate to employ its idle resources to build infrastructure for our grandchildren while avoiding harmful inflation and a serious trade imbalance.

The wealth of our nation depends only upon its resources and its productive capacity and not upon its accounts. Whatever is technically feasible is financially possible. The myth that the powers of Congress are limited by tax revenue vanishes in every crisis, corrupts political dialogue, promotes austere budgets, and destroys our infrastructure.

Our Congress does not need tax revenue for spending. On the contrary, taxpayers need Congress’ spending to pay their taxes. Congressional spending is the only source of currency.

Think about it. How did the first American taxpayer, a Pilgrim, get legal tender for the first American tax payment? At first, the colonial government was new and had no currency. Tax-anticipation warrants were the only answer and became the only legal tender for paying taxes.

The Governor of the Massachusetts colony, out of thin air, issued warrants as payment for goods and services furnished by the colonists. The warrants would also be the only legal tender for payment of taxes. Without the Governor’s warrants, the colonists would not be able to pay their taxes. The Pilgrims also used the warrants as money. The warrants became money.

Every householder or business owner ALWAYS checks his bank account before writing a large check. Before passing a spending bill, Congress NEVER checks to see if the Treasury has the cash. Congress writes a check that never bounces. After cashing the check, the Treasury taxes the public. Any funds spent and not recovered by taxes (the deficit) are saved by the public and becomes the public’s wealth. The Treasury auctions enough bonds to provide interest-bearing assets for that wealth. Outstanding US bonds are equivalent to the wealth of the private sector.

There is no upper limit on the amount of money Congress can spend, neither in the Constitution nor in any law. The financial assets of the federal government are infinite. Our only problems are inflation and unemployment, not federal debt.

If you could legally print dollars in your attic, why would you balance your budget? You would only have to balance your desires against the well-being of your family. The government does not have to balance its budget. It has to balance inflation against unemployment. Unemployment is winning that fight thanks to austerity nuts.

MarvinSussman

[quote=Patty]"The plague of our time is Keynesian economics. It has destroyed the economics profession and enabled the political class to obtain powers never intended.
Keynesian economics provided the intellectual cover for the criminal class we politely call “government” to plunder its citizenry. In the beginning, clear-thinking, independent economists (not dependent on government largess) expressed objections to this “new economics.” There was little new in Keynes’ work and many errors that had been debunked decades before Keynes was even born. Bastiat’s parable of the “broken window” in 1850 is probably the best-known refutation, although similar arguments preceded Bastiat by a century or more.

In the 1930s leaders were desperate and willing to try anything. Keynes General Theory was published in 1936, during the middle of the greatest depression the world had ever experienced. Politicians, more so than economists, welcomed his ideas as a new approach.
The Austrian economists represented by Mises and Hayek saw the fallacies in this new approach immediately. Some of the Chicago School (Knight, Simons, Viner) did also. Ludwig von Mises, never one to mince words, described Keynesian economics in the following manner:
What he really did was to write an apology for the prevailing policies of governments."
http://www.zerohedge.com/news/2014-03-02/guest-post-why-keynesian-political-economy-theft[/quote

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
The chart shows that deficits could be low while most people provided for their own food, shelter, and clothing. When the society became industrial, about half-way through your chart, people needed salaries and savings. The only source for net savings in the private sector is the federal deficit. Bank loans have to be repaid. A trade surplus, if any, isn't enough. Counterfeiting is illegal

Patty

Restrictions of how much the government can devalue the dollar doesn't lie in Congress but in how much other countries who hold reserves will tolerate it.
http://www.bloomberg.com/news/2013-11-20/pboc-says-no-longer-in-china-s-favor-to-boost-record-reserves.html

OldSchool Loc: Moving to the Red State of Utah soon!

Blah...blah...blah....zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

OldSchool Loc: Moving to the Red State of Utah soon!

[quote=MarvinSussman][quote=Patty]"The plague of our time is Keynesian economics. It has destroyed the economics profession and enabled the political class to obtain powers never intended.
Keynesian economics provided the intellectual cover for the criminal class we politely call “government” to plunder its citizenry. In the beginning, clear-thinking, independent economists (not dependent on government largess) expressed objections to this “new economics.” There was little new in Keynes’ work and many errors that had been debunked decades before Keynes was even born. Bastiat’s parable of the “broken window” in 1850 is probably the best-known refutation, although similar arguments preceded Bastiat by a century or more.

In the 1930s leaders were desperate and willing to try anything. Keynes General Theory was published in 1936, during the middle of the greatest depression the world had ever experienced. Politicians, more so than economists, welcomed his ideas as a new approach.
The Austrian economists represented by Mises and Hayek saw the fallacies in this new approach immediately. Some of the Chicago School (Knight, Simons, Viner) did also. Ludwig von Mises, never one to mince words, described Keynesian economics in the following manner:
What he really did was to write an apology for the prevailing policies of governments."
http://www.zerohedge.com/news/2014-03-02/guest-post-why-keynesian-political-economy-theft[/quote

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
The chart shows that deficits could be low while most people provided for their own food, shelter, and clothing. When the society became industrial, about half-way through your chart, people needed salaries and savings. The only source for net savings in the private sector is the federal deficit. Bank loans have to be repaid. A trade surplus, if any, isn't enough. Counterfeiting is illegal[/quote]

blah...blah...blah...zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

Patty

In 2008 if the banks were allowed to fall as they should have we would have experienced a normal hard period that comes with revalue back to reality that occurs when every market is manipulated for the 1%ers.
The big banks should have been nationalized, assets liquidated at a real value and produced investment. The stock holders should have lost their ass, the bond holders should have made up the difference, the CEO's and all others should have been jailed and the parasitic corps that are none productive should have been allowed to fail as is the case in a capitalist system. We would be back on our feet today and not in a pattern of the fed and helicopter Ben who tried to throw money at the problem to fight the natural depression created when a economic readjustment needs to happen. Pay the piper, let the bankers be responsible and move on.