ummmm
now this post is funny
tiny brained people have someone to blame for all the world's troubles
does anyone else see the irony here?
BTW: I'm not calling anyone "tiny brained". I'm just amused by that somebody to blame line.
Of course we should have some small amount of fiscal responsibility, we have none. Bush had none, Obama will have none. Obama is not change, he is more of the same, just with a tilt towards the left as opposed to the right.
We need truth in politics before our fiscal problems will be solved.
Having said that, the larger the economy, the more debt that can be serviced. Just like a family's income and the mortgage they can afford. But not many families literally flush money down the toilet like our governments do. We waste far too much money.
The debt will become a much bigger issue if the economy contracts while the debt continues to grow. Rising interest rates can also heighten the problem.
At some point, we need budget surpluses to pay down some debt. Can only be done when reality sets in and the liars stop lying. We can cut spending today and probably create a surplus overnight, but we won't.
We need truth in politics before our fiscal problems will be solved.
Having said that, the larger the economy, the more debt that can be serviced. Just like a family's income and the mortgage they can afford. But not many families literally flush money down the toilet like our governments do. We waste far too much money.
The debt will become a much bigger issue if the economy contracts while the debt continues to grow. Rising interest rates can also heighten the problem.
At some point, we need budget surpluses to pay down some debt. Can only be done when reality sets in and the liars stop lying. We can cut spending today and probably create a surplus overnight, but we won't.
like government waste helps our economy
i'm not saying it does
obviously being the free market kook that i am
the private sector knows better how to spend money than government no ifs and buts about it
but when the private sector is collapsing government has no other choice but to spend and not worry about deficits to ensure that it survives so that UE doesn't go crazy and you have masses rioting on the streets
from what i'm seeing of obama so far he seems to at least be taking a more conservative approach with it than i had envisioned at least in rhetoric in that he's gonna put alot of thought into where the money is thrown and if it is indeed a good long term investment for our country
rather than just throwing money randomly out there and wasting it like we've done in this country for many decades now and is part of the reason we in this bind
but we'll see what actually happens in practice once he gets in and starts doing stuff
obviously being the free market kook that i am
the private sector knows better how to spend money than government no ifs and buts about it
but when the private sector is collapsing government has no other choice but to spend and not worry about deficits to ensure that it survives so that UE doesn't go crazy and you have masses rioting on the streets
from what i'm seeing of obama so far he seems to at least be taking a more conservative approach with it than i had envisioned at least in rhetoric in that he's gonna put alot of thought into where the money is thrown and if it is indeed a good long term investment for our country
rather than just throwing money randomly out there and wasting it like we've done in this country for many decades now and is part of the reason we in this bind
but we'll see what actually happens in practice once he gets in and starts doing stuff
bottom line willie if you want to ensure tizgloom's depression cut government spending now
i don't think obama can avert major pain the worse we've seen since the 30s
up till now all the money targeted at banks and AIG type shit was to save/stabilize the federal reserve, banking system, and fiat monetary system there was no gain to the economy as far as jobs and such all it was doing was throwing money into a deflationary black hole to avert the major gloom and doom in that the entire global financial system implodes and you have bank run mania and everybody freaking out
going forward now we are getting into the creating/saving jobs area with the auto stuff as well as the 700 billion stimulus package to come
government will likely do a poor job of this as they always do
but in the end they have no other choice they in survival mode right now to some extent
i don't think obama can avert major pain the worse we've seen since the 30s
up till now all the money targeted at banks and AIG type shit was to save/stabilize the federal reserve, banking system, and fiat monetary system there was no gain to the economy as far as jobs and such all it was doing was throwing money into a deflationary black hole to avert the major gloom and doom in that the entire global financial system implodes and you have bank run mania and everybody freaking out
going forward now we are getting into the creating/saving jobs area with the auto stuff as well as the 700 billion stimulus package to come
government will likely do a poor job of this as they always do
but in the end they have no other choice they in survival mode right now to some extent
tizdoom, I differentiate between spending and waste. Waste does not contribute to GDP. Eliminate waste, and we can actually spend money on somewhat productive public works projects, reduce our deficit and maybe even cut taxes.
Two out of three grow the economy.
Two out of three grow the economy.
yeah alot of cleaning up is needed no doubt we'll see how good a job obama and company do
he has talked about cutting and making certain areas more efficient
only problem with that its a hard thing to do in times such as this
when corporations do restructuring and make their businesses more efficient they always take a near term hit in their productivity and earnings to carry that out for long term gains
so the more you restructure now as the pain is unfolding the larger the pain is gonna be near term
but is a necessary step long term
he has talked about cutting and making certain areas more efficient
only problem with that its a hard thing to do in times such as this
when corporations do restructuring and make their businesses more efficient they always take a near term hit in their productivity and earnings to carry that out for long term gains
so the more you restructure now as the pain is unfolding the larger the pain is gonna be near term
but is a necessary step long term
Only one way to fend this off... continue to debase the dollar and pray we dont hit hyperinflation for 50 years. Then after that its all down hill. Spending wont be cut because nobody wants to go through tough times, but at some point it wont be a choice. The trends are pointing to a financial Armageddon at some point in the near future, i dont see a way out of it.
hno: :lolBIG:
As of Dec 2011, there are approx $53.8T outstanding debts (government, businesses, and individuals...)
356% of the size of GDP
http://www.federalreserve.gov/releases/z1/current/z1r-4.pdf
356% of the size of GDP
http://www.federalreserve.gov/releases/z1/current/z1r-4.pdf
Why are people so scared of the size of the debt but no one gets scared about the size of GDP?
Like I have explained a million times. In order for real GDP to continue to rise the Govt has to go in to more debt, we have to spend more money faster (velocity), or we have to export more goods.
Like I have explained a million times. In order for real GDP to continue to rise the Govt has to go in to more debt, we have to spend more money faster (velocity), or we have to export more goods.
Those of you that like learning this kind of stuff. Let's take a really SIMPLE example of why the money supply must grow (which in our case happens by the Govt going in to debt). In this simple example GDP is just a calculation of the number of transactions that take place and there is no importing/exporting and no taxes.
So you have $1,000 you throw in to the economy of your make believe world.
Year 1 -
Transactions - $1,000
GDP - $1,000
Velocity - 1.00
Money Supply - $1,000
Year 2 -
Transactions $1,500
GDP - $1,500
Velocity - 1.00
Money Supply - $1,000
Year 3 -
Transactions - $1,000
GDP - $1,000
Velocity - 1.00
Money Supply - $1,000
UH OH!!!! GDP has gone down 50% meaning that we are in a depression!! Whatever can we do to increase GDP above $1,500?? We can increase velocity or we can increase the qty of money.
Remember the calculations for the money supply used in transactions.
QTY * Velocity
So you ask the banks for $1,000 to lend to the economy so that they spend more money.
Year - 4
Transactions - $2,000
GDP - $2,000
Velocity - 1.00
Money Supply - $2,000
Now imagine how much money the country needs to have a $15 trillion GDP?
First off let's correct the debt. The debt held by the public is all that matters. Intragovernmental debt is not money that has been created. It is an allowance. So our real debt is around $10 trillion. Now divide that by 310,000,000 people. That is $48,387 per person.
Now look at real GDP per capita... What an amazing coincidence!!! It is right around that $48,000!! Amazing how logic works.
So you have $1,000 you throw in to the economy of your make believe world.
Year 1 -
Transactions - $1,000
GDP - $1,000
Velocity - 1.00
Money Supply - $1,000
Year 2 -
Transactions $1,500
GDP - $1,500
Velocity - 1.00
Money Supply - $1,000
Year 3 -
Transactions - $1,000
GDP - $1,000
Velocity - 1.00
Money Supply - $1,000
UH OH!!!! GDP has gone down 50% meaning that we are in a depression!! Whatever can we do to increase GDP above $1,500?? We can increase velocity or we can increase the qty of money.
Remember the calculations for the money supply used in transactions.
QTY * Velocity
So you ask the banks for $1,000 to lend to the economy so that they spend more money.
Year - 4
Transactions - $2,000
GDP - $2,000
Velocity - 1.00
Money Supply - $2,000
Now imagine how much money the country needs to have a $15 trillion GDP?
First off let's correct the debt. The debt held by the public is all that matters. Intragovernmental debt is not money that has been created. It is an allowance. So our real debt is around $10 trillion. Now divide that by 310,000,000 people. That is $48,387 per person.
Now look at real GDP per capita... What an amazing coincidence!!! It is right around that $48,000!! Amazing how logic works.
Fucktard is taking pride of being stupid everyday. When you flood the economy with easy money, you flood it with the inflation. A true measure of purchasing power is individual disposable income. Disposable income has been barely keeping with inflation since 1970, consumers have to substitute their incomes with debts. That's how we got in this mess.
Inflation has gone up 500% since 1970
Consumer Price Index for All Urban Consumers: All Items (CPIAUCSL)
While disposable income has gone 100% upward in the same period.
Real Disposable Personal Income: Per capita (A229RX0)
Inflation has gone up 500% since 1970
Consumer Price Index for All Urban Consumers: All Items (CPIAUCSL)
While disposable income has gone 100% upward in the same period.
Real Disposable Personal Income: Per capita (A229RX0)
So if we balanced a budget and only took what we needed to pay essentials and eliminated waste and sacrificed bureaucracies we could do without... that would hurt GDP because business and individuals would have less cash on hand? For that to make sense, it would explain the absurdity of our system and again, another example of why our system will run its course. Export more goods? Like what? We are selling off entire sectors in favor of retail, and why not all we export is our need to consume, which technically is an export thus here we are.
Speaking of velocity, the debt has reach a point where GDP will never catch up, because we are at near zero in interest rates. This is as friendly of an environment bank to bank lending will get and we cant get out of the mud. Ill give you an example. Since banks dont need deposits to make money, debt = money. Thus, the debt is the vehicle for everything in a fiat system. Picture the fastest runner in the world distance and springting and combine him into one... that is our GDP. Then stick him on a treadmill. No matter how fast or how far he can run, it will never beat out the treadmill. First, he is using the treadmill thus whatever his output is... is tied to a certain degree the treadmill.
The treadmill though doesnt need the sprinter to go faster or slower because it keeps plugging away and still maintains its momentum. Thus if production slows, debt still climbs... production increases so does your debt , just as you say. What happens when the sprinter is tired and full of debt and the treadmill's increasing velocity wears out the runner? Imagine that treadmill getting cranked up, because thats what happens when we raise interest rates, and we will. We will find out. Consumers are saddled with so much debt and a system that feeds off debt needs good creditors. But when they are over leveraged you have to look elsewhere, enter subprime. Consumers are are strapped and consumption makes up 80% of GDP , thats a problem.
Consumers are also on the hook for a debt that will be impossible to maintain just the interest payments down the road much less the principal. The only way to stop the treadmill is to totally reverse course and step off. We wont just blow the whole thing up. That isnt going to happen. So it will blow up in front of our faces. This isnt sustainable thus how can you defend it? Arguing how it works doesnt matter because its a flawed premise. Arguing what do to about it is another argument.
Once again, this is just a description of the system. I didn't say we have more goods to export, I said that is ONE way to increase GDP with out increasing the money supply. This is just pure math. If you want to increase GDP you have to increase the money supply, increase velocity, or increase exports.
This doesn't make sense. There is no correlation between interest rates and velocity. And this does not mean the debt has reached a point where GDP will never catch up.
That is a useless analogy. It all boils down to productivity. If you think about it logically, even under non fiat currency systems it still boils down to debt. A medium of exchange is simply a claim on goods and services. If goods and services decrease your claim decreases, if goods and services increase your claim increases. So I don't get your point about fiat currency not being able to keep pace with debt.
Consumer debt is a problem. It is why we are in trouble right now. This is a balance sheet recession. Tons of people "believed" they had a lot more money than they did. So they increased their spending, increased their debt, etc. Now they have to unwind, pay off debt, save money, etc. That is causing this suppressed demand which is the reason the Govt is basically supplementing the demand in our country. We lost $20 trillion in "wealth" in the span of a year. Making up that kind of loss is not going to be easy and will not be saved by a $800 billion stimulus. This country simply needs MUCH more money.
Debt is not that big of a deal. Our debt will always be paid off. Consumers will continue to buy goods and services and produce goods and services. If someone defaults on loans than that affects bank capital, it does not affect our ability to make money and purchase goods and services.
