son of witless wrote:
straightUp wrote: "In any case, I don't agree that this stimulus package left the economy awash in liquidity. If it did there wouldn't have been a need for a second stimulus package. "
That is my main point.
See? We agree already. ;)
son of witless wrote:
There was no economic need for President Biden's stimulus package.
I literally said there WAS a need for it and you said that was your main point... Now you're saying there WASN'T a need for it... Are you confused or am I?
son of witless wrote:
There was a political need.
Everything the government does satisfies a political need.
son of witless wrote:
Biden's economic team, they ain't very schmart, wanted to juice the economy so as to make a stark a comparison as possible between Trump's covid plagued economy and Biden's new economy.
Biden's economic team didn't have anything to do with it. That second stimulus check came from Congress, just like the first one did. All Biden did was sign it, just like Trump did with the first one.
I realize that the American right tends to think of the president as as king, but our government doesn't work that way. We are a representative democracy... We elect representatives to Congress and that's where the big decisions are made on our behalf. Elected representatives from both sides of the aisle agreed that Americans needed the stimulus that Biden signed.
son of witless wrote:
The subsequent inflation that surprised the Biden economic team by it's Stickyness, has proven I am right.
Actually it doesn't because inflation was caused by many more factors than just the stimulus checks. Blaming inflation on the stimulus checks alone is like blaming one customer out of 10,000 for a run on the bank.
Keep in mind that ONLY banks are allowed to actually create money. The government does not have that power. The banks do because of the fractional reserve banking system in which they only need 10% of the money they are loaning to actually exist in reserve. The other 90% is created out of thin air based on the creation of debt.
So when the government borrowed from the Federal Reserve so they can issue stimulus checks, they were in fact causing the banks to create new money, which DOES inflate the money supply. But let me also point out that personal credit card debt sky-rocketed after the pandemic to a record-breaking total of $1.3 trillion. This also created new money in the same way... Same game, different banks.
So, what I'm saying here is that the creation of money that inflated the supply didn't just come from the stimulus packages... It also came from Americans like you and me covering what the stimulus checks didn't cover by putting it on our credit cards. The market doesn't care if the money came from our national debt or from our personal debts... it's all the same in the end.
This is why it's logical to assume that the money supply would have been inflated anyway. With or without the stimulus checks. If the stimulus checks made any difference, it would be in the way it shifted some of the debt from personal liability to national liability and it helped the people who the banks wouldn't have helped due to poor credit ratings.
And this only accounts for the inflation caused by adding money to the economy... On top of that you had the rampant price-gouging following the pandemic, which explains why the price of gas at the pump went up. Technically, this isn't true inflation but the effect on the price tag is the same and a lot of people can't really tell the difference; It's all inflation to them.
So... I'm afraid there is almost no evidence to suggest that the government, much less the Biden administration is primarily responsible for inflation. In fact, THAT is an argument made to satisfy a political need. If I were you, I would reconsider your sources.
And what makes you think you can prove anything about the supply simply by looking at the price and nothing else? I already mentioned price-gouging. That DOES happen and when it does, the price goes up no matter what the supply looks like. You seem to think we live in a world where big corporations never do anything dishonest.
son of witless wrote:
" On April 20th, 2020, the price of West Texas Intermediate crude oil slumped into negative for the first time in history, falling to negative 37.63 U.S. dollars per barrel. "
OK... this one's not so easy to explain but that wasn't the actual price of a barrel of oil physically traded. That negative value was the result of paper contracts traded by speculators and hedgers with no physical access to the oil. The intention is to sell the paper contract to those who do have access. The thing to understand here is that each WTI contract requires the delivery of 1,000 barrels of WTI crude to a specific holding tank in Oklahoma which was a problem for the speculators because they failed to predict the pandemic and it's effect on demand that left the tank FULL for the duration of that trading period. So the contracts could not be fulfilled because there was no more room to accept further deliveries. Meanwhile, the speculators had to close their books at the end of the trading period which happened to be April 20th. So they were forced to take a loss by paying a premium $37.63 per barrel just to sell the contracts and close their books. The very next day, physical trading resumed at $15 per barrel.
Speculators can really distort the picture and I barely understand this stuff myself, I would suggested reading this...
https://gardner.utah.edu/blog/blog-what-negative-oil-prices-really-mean/But as complicated as paper trading can be, didn't you wonder how a drop in supply would result in a drop in price? The general rule of thumb is when supply goes down, the prices go up, not down. So didn't this weird anomaly on the market make you think that there has to be a different explanation? I mean, seriously, how do you SELL something for negative money?
I tell ya what, I would LOVE for the supermarket that sold me the coffee I am drinking to have actually paid ME the $17 to "buy" the bag of beans instead of the other way around. LOL
son of witless wrote:
I realize that the crazies on the left were over the Moon, that those evil nasty greedy oil barons were hurting, but for those who deal in reality, this was not good.
I don't know about the crazies on the left but the sensible people on the left such as myself knew perfectly well that companies like WTI weren't hurting. Just to show you, WTI stock opened on 4/20/20 at 1.8900 per share and they closed that day at 2.7200 per share. They were doing fine. Obviously, some speculators got hurt but that's the price they pay for playing risky games with our economy while producing nothing.
son of witless wrote:
And yes oil production in the US did shut down and more than a little bit. It had to. Once the storage facilities around the country were full, where were they going to go with it ?
Weren't you just blaming Biden for cutting oil production in an effort to explain the rise in prices (inflation)? Now you're saying they HAD to cut back because of an OVERSUPPLY of oil and yet prices still rose because Biden cut oil production? Forgive me for being confused but your argument just isn't making any sense. The price of gas at the pump is affected by supply, not production. Even if production WAS cut, as long as the supply is abundant, the price should remain low. That's why it really doesn't matter if we produce the oil or import it as long as it gets to our storage tanks, the prices should remain low.
Maybe think about it and get back to me.
son of witless wrote:
Now President Trump, you remember him, the guy your people say is Hitler Jr. had a most excellent idea. He thought that how about we fill up the Strategic Oil Reserve. It was brilliant, no it was genius. The government could buy the oil Super Duper Cheap, and the oil industry would not have to moth ball so much production capacity.
The Strategic Petroleum Reserve (SPR) was created in 1975 specifically so the government could buy oil and stockpile it. How are you calling Trump a genius for basically saying we ought to do that?
"I'm going to drive to work now... and guess what? I'm going to use my hands to turn the steering wheel."
"dude... that's frickin' GENIUS!"Look, every president since Reagan has wanted to fill the SPR and until Trump came along every president except Clinton saw a net gain in SPR volume. Ironically, Trump, despite his blabbering, is the first and only Republican president to see a net decline in SPR volume.
son of witless wrote:
Guess what ? It did not happen. Do you know why ? Because it made too much sense. So of course the Democrats killed it. They had to. No way would they allow a bone to be thrown to the evil dastardly American Petroleum Industry. An 8 % decline is ginormous.
The reason why it didn't happen is because Congress took it out of the stimulus package. First of all, this was in 2020 after Trump had already allowed the SPR to bleed in each of his three previous years for a total loss of 60 million barrels which made him look bad considering that no other Republican president had ever allowed a net loss like that... Even under Obama the reserves gained a net 27 million barrels. Trump knew that this might be his last chance to make amends and so he so he tried to shove the proposal into the stimulus bill. The problem there is despite Trump's blabber about buying oil for cheap, the oil industry had no intention of giving the government a discount and it was calculated that topping off the SPR at current prices would cost about $2.3 billion.
So, my bet is that Congress knew the oil industry was not hurting and at the time, they were trying to help the American people while keeping the cost down as much as possible. I would call it fiscal responsibility... that term that Republicans blabber about while Democrats actually practice it.
son of witless wrote:
But I know what you are thinking. Son of Witless, where is your proof that US oil production dramatically declined ? Thank you for asking.
https://www.eia.gov/todayinenergy/detail.php?id=47056#:~:text=U.S.%20crude%20oil%20production%20averaged%2011.3%20million%20barrels,decline%20in%20the%20U.S.%20Energy%20Information%20Administration%E2%80%99s%20records.
" U.S. crude oil production averaged 11.3 million barrels per day (b/d) in 2020, down 935,000 b/d (8%) from the record annual average high of 12.2 million b/d in 2019. The 2020 decrease in production was the largest annual decline in the U.S. Energy Information Administration’s records. The production decline resulted from reduced drilling activity related to low oil prices in 2020. "
br But I know what you are thinking. Son of Witle... (
show quote)
One problem with all this... Biden didn't take office until 2021. I wasn't talking about the Trump years. YOU had claimed that oil production was cut because of Biden's "war on oil". I countered by saying oil production was NOT cut. Because of your claim, I was referring to the years that Biden was in office not the years that Trump was in office and Biden had no say in the matter.
son of witless wrote:
I apologize for not addressing all of your points. I detest long posts, and this one is way over long. I will try to get to your other concerns another time. Have a good afternoon.
No worries... Maybe next time you post, try to keep your assertions to a minimum because I DO respond to each point and when there's a lot of assertions to challenge it does make for a long post.
Again, thanks for remaining civil.