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Yamato

Schiff: The Real State of the Union 2013

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Every recession we had is an historical fact. They occur approximately every four years. We recovered from them all with no quantitative easing.

because normal monetary policy worked. Are you completely unaware of how different the 2008 recession was?

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Please refer me to this great post where you've explained why you're against Obama's bailouts.

hmmm. To my memory, the only "Obama" bailout is GM. I continue to agree that GM should have been helped. But it should have never gotten to that point. It should have been broken up via antitrust by the government.

The investment banks were bailed out under TARP before Obama became president. I have serious doubts as to if they were necessary or effective. TARP was effective in stopping a full fledged banking panic. Derivatives were and still are very evil instruments.

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because normal monetary policy worked. Are you completely unaware of how different the 2008 recession was?

It's the first recession in US history that the gimme gimme generation couldn't suck up and deal with it. Had we done so we'd be well on our way to REAL ECONOMIC RECOVERY and not this delayed inevitable collapse where we didn't fix any of the fundamental problems with the system, we just printed and borrowed ourselves into a much more painful future. "Normal" this ain't.

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hmmm. To my memory, the only "Obama" bailout is GM. I continue to agree that GM should have been helped. But it should have never gotten to that point. It should have been broken up via antitrust by the government.

The investment banks were bailed out under TARP before Obama became president. I have serious doubts as to if they were necessary or effective. TARP was effective in stopping a full fledged banking panic. Derivatives were and still are very evil instruments.

So you only acknowledge one bailout and you support it, therefore you support Obama's bailouts 100% like I said you did and at first you tried to deny it. Apology accepted.

People like you should have a check box on your 1040 that says "I want to help government fix everything instead of letting the responsible pay their own price" therefore here is my voluntary donation to spend my money on all the things you rule are important to spend my money on, so we can turn this immoral Corporatocracy into a truly free society where we volunteer our time and resources for what's truly important. You're so indoctrinated to have such blind faith in the State. You're the most faithful statist I've ever encountered in my life. Try running up five years of your income worth of debt and see how you're treated by everybody. Treat your government by the same standard. Stop trusting irresponsible liars who can't afford themselves or their 90% disapproval rating. Let the people decide.

I don't care when they were started. That's academic. I care about ending them; and Obama has proven a willing clown for all of Bush's greatest hits.

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So you only acknowledge one bailout and you support it, therefore you support Obama's bailouts 100% like I said you did and at first you tried to deny it. Apology accepted.

People like you should have a check box on your 1040 that says "I want to help government fix everything instead of letting the responsible pay their own price" therefore here is my voluntary donation to spend my money on all the things you rule are important to spend my money on, so we can turn this immoral Corporatocracy into a truly free society where we volunteer our time and resources for what's truly important. You're so indoctrinated to have such blind faith in the State. You're the most faithful statist I've ever encountered in my life. Try running up five years of your income worth of debt and see how you're treated by everybody. Treat your government by the same standard. Stop trusting irresponsible liars who can't afford themselves or their 90% disapproval rating. Let the people decide.

I don't care when they were started. That's academic. I care about ending them; and Obama has proven a willing clown for all of Bush's greatest hits.

I agree with ninjadude for the most part. He is not "the most faithful statist" that I have ever encountered. Not even close! He is simply using facts to back up his opinion. You seem to believe in the conservative fairy-tale that government is the greatest evil and that corporations and the market are the most moral and trustworthy things in the world. I agree that government is corrupt and that government power needs to be checked; however, I also think that corporations are corrupt and their power also needs to be checked. Government is the only power in the country that can check corporate power, and yet government has failed to do this. The free market needs to be regulated and no player in the free market should be so big that their failure can upset the entire system. Obviously corporate leaders cannot be trusted to break up their corporations when they become so big as to have this effect on the market, so therefore the only other power that can break them up and check this corporate power is government power.

You obviously do not understand prevailing economic theories and you have yet to respond to my other post where I laid out prevailing economic theory for you to see what it is. You offer simplistic solutions like "government should just get out of the way" without offering any evidence to back up why government should do this, and what effect this would even have on the economy.

Yes congress has an overwhelming disapproval rating as a whole, but individual congressmen/women usually have pretty high approval ratings from their own constituents who vote them in. There is no such thing and never has been such a thing as a "truly free society" as you describe. America has never been a free society the way you describe it. You are no better than hardcore liberals and their fantasy ideal world where government is incorruptible and fairness and equality are the standard. Idealism is great on paper, but falls apart in the real world.

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Posted (edited)

I agree with ninjadude for the most part. He is not "the most faithful statist" that I have ever encountered. Not even close! He is simply using facts to back up his opinion. You seem to believe in the conservative fairy-tale that government is the greatest evil and that corporations and the market are the most moral and trustworthy things in the world. I agree that government is corrupt and that government power needs to be checked; however, I also think that corporations are corrupt and their power also needs to be checked. Government is the only power in the country that can check corporate power, and yet government has failed to do this. The free market needs to be regulated and no player in the free market should be so big that their failure can upset the entire system. Obviously corporate leaders cannot be trusted to break up their corporations when they become so big as to have this effect on the market, so therefore the only other power that can break them up and check this corporate power is government power.

You obviously do not understand prevailing economic theories and you have yet to respond to my other post where I laid out prevailing economic theory for you to see what it is. You offer simplistic solutions like "government should just get out of the way" without offering any evidence to back up why government should do this, and what effect this would even have on the economy.

Yes congress has an overwhelming disapproval rating as a whole, but individual congressmen/women usually have pretty high approval ratings from their own constituents who vote them in. There is no such thing and never has been such a thing as a "truly free society" as you describe. America has never been a free society the way you describe it. You are no better than hardcore liberals and their fantasy ideal world where government is incorruptible and fairness and equality are the standard. Idealism is great on paper, but falls apart in the real world.

Please list his facts and cite sources for them then. Thanks.

Prevailing economic theories that rely on exponential increases in debt (fact) aren't going to be prevailing for long. I think the fantasy is that you'll never have to pay your bills. But if you're not the government, you're going to be the one left holding the bag. Be smart and stop letting these crooks mortgage our future and destroy the real value of our money. They want nothing more than you and I to be in their debt. Don't be a shill for the establishment. The rule of law and the free market has all the power it needs, provided we get this overbloated government of central planning, price fixing, entitlement complex, and market making that can't afford itself out of the way. There are far more efficient and freer systems that puts the rewards and the costs where they belong, not what I think should be done with your money but what you think. If you want to give your entire life savings to the government because you think that's the best place for it, go for it man. Send it all in now.

Government getting out of the way will cause a recession. Paying all our debt will cause a recession. We need to swallow the bitter medicine now or we'll have to swallow much worse medicine later. Stop believing that your favorite bureaucrats can punt our problems down the field forever. This is unprecedented nonsense, this quantitative easing. Society is on a spectrum between freedom and tyranny. Let's move towards freedom for a change. We don't have to get lost in the theoretical and rhetorical extremes to move in the right direction.

Edited by Yamato

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Please list his facts and cite sources for them then. Thanks.

-ninjadude:

Are you completely unaware of how different the 2008 recession was

This is true, the 2008 recession WAS different than other recessions and required more government intervention SOURCE

-ninjadude:

To my memory, the only "Obama" bailout is GM

This is also true, the only bailout during the Obama administration was the auto industry bailout. However, it needs to be noted that Bush actually started the beginning of the Auto bailout, before kicking the can down the road for Obama to finish. SOURCE SOURCE2

-ninjadude:

TARP was effective in stopping a full fledged banking panic

This is also true. Although pundits and most people would never admit that it was a success. Indeed, it is a program that Americans love to hate. SOURCE

-ninjadude:

congress passed the bailouts so no they don't subvert bankruptcy laws.

This is not necessarily fact, but then again neither is the argument that it did break the law. This is one of those legal grey areas that lawyers love to exploit. Some say it is legal, some say it is not. Pick your side, I guess. SOURCE

-ninjadude:

Everything you said is right, except you still fail to understand the depth that GM and other car mfg's linked their suppliers. Suppliers linked to Suppliers linked to suppliers. The chain goes for a considerable number of levels.

This is also true. "Because of the financial crisis, no private lender was in a position to provide Chrysler and GM with funds. If government turned down the companies, their only recourse would be liquidation—they’d have to shut down operations and sell off their assets. Their workers, numbering in the hundreds of thousands, would quickly become unemployed. And the damage wouldn’t stop there. The companies that provided Chrysler and GM with parts would start shutting down, disrupting the entire supply chain and threatening even relatively healthy carmakers, like Ford. Credible estimates suggested that more than a million people would lose their jobs—at the very moment when, because of the very same financial crisis, hundreds of thousands of Americans were already losing jobs every month." SOURCE

-ninjadude:

how would the "market" take care of too big to fail? That almost never happens. And when does, the crash is horrendous. Enron comes to mind. The market encourages too big to fail. GOVERNMENT needs to break those up.

This is another one of those debated points. Some say the market can take care of too big to fail, some say it cannot. One thing is for sure, most learned people agree that the market could not take care of too big to fail in 2008, simply because of the lack of available capital for loans, and the severity of the economic downturn and financial crisis. If the economy was normal at this time the banks probably would have been allowed to fail, but this was not the case. Sources I listed above show this to be true.

One thing rings true, Desperate times call for desperate measures. All things taken into account, the crisis that started at the end of Bush's last term was unprecedented, frightened the government who used desperate measures to attempt to mitigate the effect of the crisis.

I will leave you with this to ponder:

"Some commentators have suggested that the financial crisis of the recent recession makes the

Great Depression a more relevant comparison than the other post-war recessions. While the

current financial downturn has been the most severe in the post-war period by many measures,

there are many differences between the recent situation and the Great Depression. Although the

stock market crash of 1929 played a role in setting the economic downturn in motion, there is a

consensus among economists that policy errors caused the downturn to become the Great

Depression.16 Among the most important errors were the Fed’s failure to counteract the

contraction in the money supply, which caused overall prices to fall a cumulative 25%, and bank

runs, which caused thousands of banks to fail. (The money supply fell primarily in order to

maintain the gold standard, and the economic growth rate was high after the United States

abandoned the gold standard.)

By contrast, policymakers have responded aggressively and unconventionally to attempt to

contain the current crisis. The Fed has reduced short-term interest rates to nearly zero. Direct Fed

assistance outstanding to the financial system has exceeded $1 trillion, and Congress authorized

Treasury to provide an additional $700 billion to the financial system through the Troubled Assets

Relief Program.17 Widespread bank runs have not occurred since the introduction of deposit

insurance in the 1930s, and similar runs on money market mutual funds in 2008 were circumvented when Treasury temporarily guaranteed their principal. The Federal Deposit

Insurance Corporation (FDIC) also temporarily guaranteed certain bank debt to ensure that banks

would not lose access to borrowing markets.

During the Great Depression, policymakers were also reluctant to stimulate the economy through

fiscal expansion (a larger structural budget deficit).19 By contrast, the budget deficit increased as a

share of GDP from 1.2% in 2007 to 10% in 2009. There was also a belief among some

policymakers at the time that recessions were healthy processes that purged the economy of

inefficiently allocated resources—a view that fell out of favor as the Depression worsened, and

was eventually replaced by the view that prudent policy changes could avoid the needless waste

of resources laid idle by recessions" - SOURCE

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Please list his facts and cite sources for them then. Thanks.

Prevailing economic theories that rely on exponential increases in debt (fact) aren't going to be prevailing for long. I think the fantasy is that you'll never have to pay your bills. But if you're not the government, you're going to be the one left holding the bag. Be smart and stop letting these crooks mortgage our future and destroy the real value of our money. They want nothing more than you and I to be in their debt. Don't be a shill for the establishment. The rule of law and the free market has all the power it needs, provided we get this overbloated government of central planning, price fixing, entitlement complex, and market making that can't afford itself out of the way. There are far more efficient and freer systems that puts the rewards and the costs where they belong, not what I think should be done with your money but what you think. If you want to give your entire life savings to the government because you think that's the best place for it, go for it man. Send it all in now.

Government getting out of the way will cause a recession. Paying all our debt will cause a recession. We need to swallow the bitter medicine now or we'll have to swallow much worse medicine later. Stop believing that your favorite bureaucrats can punt our problems down the field forever. This is unprecedented nonsense, this quantitative easing. Society is on a spectrum between freedom and tyranny. Let's move towards freedom for a change. We don't have to get lost in the theoretical and rhetorical extremes to move in the right direction.

I think you misunderstand me. I do not wholeheartedly agree with the prevailing economic theories. Economics is a fairly new study, and it by no means has everything figured out. I agree that we unfortunately will have to as you say "swallow the bitter medicine now or we'll have to swallow much worse medicine later", however I think that you fail to understand that Government economics is a totally different ball game than you or I's personal budget. The thing that really, really rubs me the wrong way, is that we have these republicans, like Paul Ryan and Romney and most of the others, who are now shouting that "Government is too bloated! We need to cut spending right now! We need to cut entitlements! blah blah blah. Yet they were in total control for several years under Bush, and controlled both houses of congress for a number of years under Clinton, and they did NOTHING to cut spending during that time, under Bush they doubled our deficit. They have just as much of a hand in this mess as the Democrats do. Yet they will never own up to it. We cannot trust either of these clowns (democrats or repubs) to fix the problem that they both created.

It is simply ridiculous that we are even in this mess to begin with. A responsible government should save money during good times, for the specific purpose of using that money to get though bad times. All along here our government has felt the need to spend every dime it makes plus some. Even during good economic times. This makes absolutely no sense, and again shows the hypocrisy of both parties. However, desperate times call for desperate measures, and we were in desperate times in 2008, which is why I think that the bailouts and government stimulus was necessary. Now we must figure out how we can cut back, pay down our debt, and save money aside during good times so that we have the means to tackle the next crisis without taking on way more debt. when the time comes. I do think that government DOES need to spend at a deficit if necessary during recessions. I just think that they should not continue to spend like this during good economic times. That is my core argument here.

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An opinion editorial, an ambulance driver, a novelist, a guy with a blog an article without an author's name and something called "jurango dot jpg"?

ninjadude is wrong about everything he's said bar none. He (you?) couldn't handle swallowing the medicine in 2008 and that's created the moral hazard and the dangerous unprecedented path we're on. If the markets were panicking in 2008, they should have been panicking. We never seem to care when the markets are jubilant, with irrational exuberance (my sources are economists) and everything is growing every year and nobody is panicking. How come those emotions and those sentiments are okay? How come prices always have to go higher and higher so the have-nots can't afford what the haves already got?

There must be room for natural market movements in both directions. You can't privatize the gains and socialize the losses. You can't save losers and penalize the winners. You can't save the giants and let the smaller business fail. The markets make absolutely no sense when the government starts flinging money around at random, or however it politically wants to depending on what political party and political philosophy happens to rule the day. That is moral hazard beyond imagining. These delusional expectations of endless growth are a ruse. They're an impossibility. There is no such thing as permanent growth. Recessions are inevitable and the collapse in 2008 was the correct response to the charade of lending and the explosion of credit and fiscal irresponsibility we've seen since the late 1970s. But the wimps couldn't deal with it. They wanted to bail the perps out. And here we are. Wall Street is doing fine and Main Street is on the ropes. We have a fake economy propped up by the Federal Reserve. I don't know what the true value of anything is anymore. I don't know if a large company will ever go bankrupt again, so I might as well invest in the large caps and snub the little guys even more. That's immoral as hell and not the way this country was supposed to work.

These delusional expectations of endless growth are a ruse. They're an impossibility. There is no such thing as endless growth. What goes up, must come down. And when it's time to come down, we must let the product life cycle, the corporate life cycle, the biological life cycle and the credit life cycle take its course. We didn't do that. We're living on borrowed time and borrowed money. Our citizens are up to their eyeballs in debt, there isn't a shred of conscience in this politburo we have spending our money for us to pay down that debt, and the fiscal cancer we have in this country has not even begun to be addressed.

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I think you misunderstand me. I do not wholeheartedly agree with the prevailing economic theories. Economics is a fairly new study, and it by no means has everything figured out. I agree that we unfortunately will have to as you say "swallow the bitter medicine now or we'll have to swallow much worse medicine later", however I think that you fail to understand that Government economics is a totally different ball game than you or I's personal budget. The thing that really, really rubs me the wrong way, is that we have these republicans, like Paul Ryan and Romney and most of the others, who are now shouting that "Government is too bloated! We need to cut spending right now! We need to cut entitlements! blah blah blah. Yet they were in total control for several years under Bush, and controlled both houses of congress for a number of years under Clinton, and they did NOTHING to cut spending during that time, under Bush they doubled our deficit. They have just as much of a hand in this mess as the Democrats do. Yet they will never own up to it. We cannot trust either of these clowns (democrats or repubs) to fix the problem that they both created.

It is simply ridiculous that we are even in this mess to begin with. A responsible government should save money during good times, for the specific purpose of using that money to get though bad times. All along here our government has felt the need to spend every dime it makes plus some. Even during good economic times. This makes absolutely no sense, and again shows the hypocrisy of both parties. However, desperate times call for desperate measures, and we were in desperate times in 2008, which is why I think that the bailouts and government stimulus was necessary. Now we must figure out how we can cut back, pay down our debt, and save money aside during good times so that we have the means to tackle the next crisis without taking on way more debt. when the time comes. I do think that government DOES need to spend at a deficit if necessary during recessions. I just think that they should not continue to spend like this during good economic times. That is my core argument here.

Telling me how lame the republicans are is singing to the choir. There is no partisan solution to this problem. The problem is bipartisan so the solution must be apartisan. Desperate times call for desperate measures, and the desperate measure wasn't "too big to fail", it was letting the market land on the bad borrowers, the bad creditors, the bad corporate malfeasance, and the bad politicians. We didn't do any of that. We didn't punish any of the responsible parties for the problems that even you can identify, we freaking rewarded them. That is insane. We've dug ourselves into such a hole, you think 2008 was desperate, you have no idea.

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An opinion editorial, an ambulance driver, a novelist, a guy with a blog an article without an author's name and something called "jurango dot jpg"?

ninjadude is wrong about everything he's said bar none. He (you?) couldn't handle swallowing the medicine in 2008 and that's created the moral hazard and the dangerous unprecedented path we're on. If the markets were panicking in 2008, they should have been panicking. We never seem to care when the markets are jubilant, with irrational exuberance (my sources are economists) and everything is growing every year and nobody is panicking. How come those emotions and those sentiments are okay? How come prices always have to go higher and higher so the have-nots can't afford what the haves already got?

There must be room for natural market movements in both directions. You can't privatize the gains and socialize the losses. You can't save losers and penalize the winners. You can't save the giants and let the smaller business fail. The markets make absolutely no sense when the government starts flinging money around at random, or however it politically wants to depending on what political party and political philosophy happens to rule the day. That is moral hazard beyond imagining. These delusional expectations of endless growth are a ruse. They're an impossibility. There is no such thing as permanent growth. Recessions are inevitable and the collapse in 2008 was the correct response to the charade of lending and the explosion of credit and fiscal irresponsibility we've seen since the late 1970s. But the wimps couldn't deal with it. They wanted to bail the perps out. And here we are. Wall Street is doing fine and Main Street is on the ropes. We have a fake economy propped up by the Federal Reserve. I don't know what the true value of anything is anymore. I don't know if a large company will ever go bankrupt again, so I might as well invest in the large caps and snub the little guys even more. That's immoral as hell and not the way this country was supposed to work.

These delusional expectations of endless growth are a ruse. They're an impossibility. There is no such thing as endless growth. What goes up, must come down. And when it's time to come down, we must let the product life cycle, the corporate life cycle, the biological life cycle and the credit life cycle take its course. We didn't do that. We're living on borrowed time and borrowed money. Our citizens are up to their eyeballs in debt, there isn't a shred of conscience in this politburo we have spending our money for us to pay down that debt, and the fiscal cancer we have in this country has not even begun to be addressed.

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Yeah you are right those sources I gave were mostly crap now that I look into them more. Sorry about that. I was trying to hurry :P.

I actually agree with your entire post, it makes absolute sense. Sadly, or system is not based on common sense and rationality. But you do exaggerate some things. Small business in recent years has actually been experiencing a boom. SOURCE

Our economic system, capitalism, actually relies on never-ending economic growth. In fact, our current system is totally unsustainable if no growth were to happen. The free market in any form it has existed in throughout history relies on never-ending economic growth. Our citizens up to their eyeballs in debt? Some of them sure are, but personally I am doing just fine living almost totally debt free! Most people in my community are doing great in fact.

One thing people need to understand is that the market is largely based on psychological principles and not sound rationality. It does not always allocate resources efficiently, and it does make mistakes.

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Posted (edited)

Telling me how lame the republicans are is singing to the choir. There is no partisan solution to this problem. The problem is bipartisan so the solution must be apartisan. Desperate times call for desperate measures, and the desperate measure wasn't "too big to fail", it was letting the market land on the bad borrowers, the bad creditors, the bad corporate malfeasance, and the bad politicians. We didn't do any of that. We didn't punish any of the responsible parties for the problems that even you can identify, we freaking rewarded them. That is insane. We've dug ourselves into such a hole, you think 2008 was desperate, you have no idea.

I respectfully disagree with you sir. The precise reason why they were bailed out was because of the fact that letting them collapse would have made the entire economy suffer. You, me, our kids, our families would have suffered directly and measurably as a result of that. Think back to the great depression, with soup lines, widespread hunger and undernourishment. Now THAT would have been making the people suffer for the banks, politicians, and creditors mistakes. That could very well have led to violent upheavals and desperation the likes of which we have not witnessed in a hundred years. So in fact, counter to what you said, the people were saved from this hell because of the bailouts and stimulus. It was VERY unfortunate that in the process we rewarded the ones who caused this crisis. They should have been thrown in jail, but sadly, they weren't. But hey, things could be a lot worse.

Edited by Einsteinium

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Yeah you are right those sources I gave were mostly crap now that I look into them more. Sorry about that. I was trying to hurry :P.

I actually agree with your entire post, it makes absolute sense. Sadly, or system is not based on common sense and rationality. But you do exaggerate some things. Small business in recent years has actually been experiencing a boom. SOURCE

Our economic system, capitalism, actually relies on never-ending economic growth. In fact, our current system is totally unsustainable if no growth were to happen. The free market in any form it has existed in throughout history relies on never-ending economic growth. Our citizens up to their eyeballs in debt? Some of them sure are, but personally I am doing just fine living almost totally debt free! Most people in my community are doing great in fact.

One thing people need to understand is that the market is largely based on psychological principles and not sound rationality. It does not always allocate resources efficiently, and it does make mistakes.

The value of things are based on sentiment, that's right. How much something is worth is dependent on the value we believe it to be worth. Sometimes that value goes down and we need to grow up and deal with it.

The market will win in the end no matter what. The government can print gazillions of dollars til the cows come home. Mankind can blow himself back to the stone age and the market will still reign supreme. Someone's going to be out there needing something badly and they're going to have something to trade with somebody else and that trade will take place at a mutually agreed upon transfer of value. Capitalism doesn't need an impossible dream of endless growth to exist, otherwise it has never existed, because we've never had endless growth. We have a recession every four years in this country and it's time we stopped printing our way out of them. God help us if we print, borrow and spend our way out of the next one.

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I respectfully disagree with you sir. The precise reason why they were bailed out was because of the fact that letting them collapse would have made the entire economy suffer. You, me, our kids, our families would have suffered directly and measurably as a result of that. Think back to the great depression, with soup lines, widespread hunger and undernourishment. Now THAT would have been making the people suffer for the banks, politicians, and creditors mistakes. That could very well have led to violent upheavals and desperation the likes of which we have not witnessed in a hundred years. So in fact, counter to what you said, the people were saved from this hell because of the bailouts and stimulus. It was VERY unfortunate that in the process we rewarded the ones who caused this crisis. They should have been thrown in jail, but sadly, they weren't. But hey, things could be a lot worse.

No, things could be a lot better. We could have swallowed the medicine in 2008 and we would have been well on our way to a full recovery by now. We'd have fiscal responsibility, we'd have sound financial institutions to lend us money, we'd have responsible borrowing, higher credit scores, a sovereign AAA rating, and a national focus on production and savings instead of consumption and credit. On GDP and capital instead of gratification and debt. We'd have politicians with a shred of fiscal responsibility in their skirts, because they'd have to act like they didn't have a magic printing press to solve immediate problems with far greater long term problems.

We don't have any of that. Nothing has been solved since 2008. We've just borrowed over our problems and dug ourselves deeper into the same ditch. When Wall St. is going to the moon Alice, everyone is complacent and nobody cares. Wall St. seems to dictate everyone's attitudes and it has put you into a deep deep sleep. If a panic is all our real economic problem is, that's on its way. We haven't prevented any future panic, we've guaranteed the future panic is going to be far more massive than 2008's.

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The value of things are based on sentiment, that's right. How much something is worth is dependent on the value we believe it to be worth. Sometimes that value goes down and we need to grow up and deal with it.

The market will win in the end no matter what. The government can print gazillions of dollars til the cows come home. Mankind can blow himself back to the stone age and the market will still reign supreme. Someone's going to be out there needing something badly and they're going to have something to trade with somebody else and that trade will take place at a mutually agreed upon transfer of value. Capitalism doesn't need an impossible dream of endless growth to exist, otherwise it has never existed, because we've never had endless growth. We have a recession every four years in this country and it's time we stopped printing our way out of them. God help us if we print, borrow and spend our way out of the next one.

Actually, capitalism IN ANY KNOWN HISTORICAL form needs growth in order to exist. Why? Because our population continues to grow. If our economy does not grow along with the growth of population, then we reach a point where demand far exceeds supply, and where our money supply cannot sustain the population. Hypothetically if our population growth levels out, then theoretically we should be able to sustain an economic system with no growth. However, be prepared to kiss good returns on investment goodbye, kiss your hope for a better future for your kids goodbye, and kiss your retirement goodbye as well. The stock market system we have feeds on economic growth, and without it returns on stocks would be basically zero. Taking away the incentive to invest, and thus collapsing the stock market. As it currently exists of course.

Make no mistake about it, we WILL be printing and borrowing our way out of the next one, and the next one, and the one after that even. Until one day it all comes crashing down. This is our system, we do not change anything until a crisis forces us too. I don't like it, you obviously don't like it, but sadly that is the way it is, and that is the way it has been since times long forgotten.

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No, things could be a lot better. We could have swallowed the medicine in 2008 and we would have been well on our way to a full recovery by now. We'd have fiscal responsibility, we'd have sound financial institutions to lend us money, we'd have responsible borrowing, higher credit scores, a sovereign AAA rating, and a national focus on production and savings instead of consumption and credit. On GDP and capital instead of gratification and debt. We'd have politicians with a shred of fiscal responsibility in their skirts, because they'd have to act like they didn't have a magic printing press to solve immediate problems with far greater long term problems.

We don't have any of that. Nothing has been solved since 2008. We've just borrowed over our problems and dug ourselves deeper into the same ditch. When Wall St. is going to the moon Alice, everyone is complacent and nobody cares. Wall St. seems to dictate everyone's attitudes and it has put you into a deep deep sleep. If a panic is all our real economic problem is, that's on its way. We haven't prevented any future panic, we've guaranteed the future panic is going to be far more massive than 2008's.

There is no way for anyone to prove what you have just asserted. No man living or dead could know what would have happened had the government not intervened. But historically speaking the most likely result would have been another great depression like situation. A run on banks, far greater unemployment than we currently have, no credit available for anyone for a long time, shrinking businesses, extreme deflation, etc. The great depression is the closest thing we can look at to try and figure out what could have happened had the government not stepped in. Only time will tell if we crash and burn as a result of what was done in 2008 or not. But we were borrowing more money as a ratio to GDP in WWII and look at the booming 50's. It could go either way still, only time will truly tell. Although sadly I agree with you that most likely we will crash and burn.

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Actually, capitalism IN ANY KNOWN HISTORICAL form needs growth in order to exist. Why? Because our population continues to grow. If our economy does not grow along with the growth of population, then we reach a point where demand far exceeds supply, and where our money supply cannot sustain the population. Hypothetically if our population growth levels out, then theoretically we should be able to sustain an economic system with no growth. However, be prepared to kiss good returns on investment goodbye, kiss your hope for a better future for your kids goodbye, and kiss your retirement goodbye as well. The stock market system we have feeds on economic growth, and without it returns on stocks would be basically zero. Taking away the incentive to invest, and thus collapsing the stock market. As it currently exists of course.

Make no mistake about it, we WILL be printing and borrowing our way out of the next one, and the next one, and the one after that even. Until one day it all comes crashing down. This is our system, we do not change anything until a crisis forces us too. I don't like it, you obviously don't like it, but sadly that is the way it is, and that is the way it has been since times long forgotten.

The economy is correlated to population size but the principle about growth is just as true for population as it is for the economy. Please review the nine parts of the following presentation by Dr. Bartlett before trying to put this ruse off that anything needs an impossibility to exist. Populations aren't going to grow forever and neither are economies. All we've done is applied some very irresponsible methods for allocating scarce resources to keep the champagne taste on a beer budget intact. We're not going to grow our way out of this and you admitting we're going to crash is probably the most agreement we will have here. The thing to do from here is to understand why.

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Posted (edited)

There is no way for anyone to prove what you have just asserted. No man living or dead could know what would have happened had the government not intervened. But historically speaking the most likely result would have been another great depression like situation. A run on banks, far greater unemployment than we currently have, no credit available for anyone for a long time, shrinking businesses, extreme deflation, etc. The great depression is the closest thing we can look at to try and figure out what could have happened had the government not stepped in. Only time will tell if we crash and burn as a result of what was done in 2008 or not. But we were borrowing more money as a ratio to GDP in WWII and look at the booming 50's. It could go either way still, only time will truly tell. Although sadly I agree with you that most likely we will crash and burn.

The entire US history of the government not intervening is the precedent of what I just asserted. The banks should have been run on. That's what they deserved. I ran on my bank voluntarily and I'll never go back to that scum of a corporation again. That was the solution. And I'm glad I solved the problem for myself. I haven't had credit taken out for a long time. I've made sacrifices. I'm still here and I'm responsible now. My spending problem was duly solved, not enabled. And I know who I am and how I'm valued. I pay my bills and I have an excellent credit score for not having a dime of credit card debt, student loan debt, or mortgage debt.

World War II was a disaster for the economy here at home. If you want to know what austerity is, you have no idea unless you lived in the US in WW2. This cream puff generation can't stand to get a little boo boo on its finger before it whines for the establishment to go print something. The economic recovery didn't start until long after WW2 when the government collapsed into its own footprint. Government spending collapsed. It went off a cliff, and the free market exploded after that happened. That's what we need to do right now. It might be a horrible two years of austerity and our people won't have a big bad bogeyman in Europe as the faceman for all their pain either. It'll be a lot closer to home this time, and maybe even as close as the mirror, and so a lot more politically difficult to accept. But that's no excuse. The only good thing the war did was dramatically accelerate technologies and the economy got a boost from innovations in transportation, automation, communication, materials, and so on. It was a bankrupting waste of men and material otherwise. A horrible allocation of resources. We had some 60,000 surplus aircraft at the end of the war and most of them went to the scrap yard. That's the same kind of ruinous mentality we have with these Keynesians today. The Broken Window Fallacy lives on.

Edited by Yamato

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Posted (edited)

Treat your government by the same standard.

personal budgets are totally unrelated and unrelatable to government economics. I'm sure you'll disagree but it's a fact.

Edited by ninjadude
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I think the fantasy is that you'll never have to pay your bills.

your fantasy is that somehow the government is not paying bills.

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No, things could be a lot better. We could have swallowed the medicine in 2008 and we would have been well on our way to a full recovery by now. We'd have fiscal responsibility, we'd have sound financial institutions to lend us money, we'd have responsible borrowing, higher credit scores, a sovereign AAA rating, and a national focus on production and savings instead of consumption and credit.

This is a pipe dream. In fact, things would be much worse than they are now.

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The government could send everyone a check for some arbitrary sum, drawn from the air, and then send everyone a tax bill for the same amount, and announce it has balanced the budget with this special tax.

This is really what is going on, although in fact the tax is less than the sum they send us, so they run a deficit. This causes people to think they have some money and they spend it and behold! it becomes real money and real product and real services. A surplus is one of the most foolish things a government can run, as sooner or later it is bound to cause deflation.

It's not magic and its not tomfoolery. It's just that "money" is only a unit of measurement of worth, and worth is nothing more than what people are will to buy and sell things for, and this can vary all over the place based mainly on supply and demand which also vary based on desires, needs, mood, feelings of flushness, and whatever.

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This is a pipe dream. In fact, things would be much worse than they are now.

Yeah that's what the soap box keeps repeating. Unfortunately the proof comes in the form of political blogs, politicians, and the usual faithful herd of sheep that's happy with President Obama. It's baseless and frankly absurd to believe the notion that somehow this time the economy wouldn't have recovered in four years time without Obama's spending spree. Thumbs up for your fiscal cancer. Bravo "Frank".

your fantasy is that somehow the government is not paying bills.

Yeah that thing called the debt. You should check the clock now and then. It's another fact I can actually cite.

personal budgets are totally unrelated and unrelatable to government economics. I'm sure you'll disagree but it's a fact.

Oh sure principles like paying bills and borrowing responsibly don't apply to the giant printing press in the sky or the gang of liars and their selfish entitlement complexes.

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The government could send everyone a check for some arbitrary sum, drawn from the air, and then send everyone a tax bill for the same amount, and announce it has balanced the budget with this special tax.

This is really what is going on, although in fact the tax is less than the sum they send us, so they run a deficit. This causes people to think they have some money and they spend it and behold! it becomes real money and real product and real services. A surplus is one of the most foolish things a government can run, as sooner or later it is bound to cause deflation.

It's not magic and its not tomfoolery. It's just that "money" is only a unit of measurement of worth, and worth is nothing more than what people are will to buy and sell things for, and this can vary all over the place based mainly on supply and demand which also vary based on desires, needs, mood, feelings of flushness, and whatever.

The best and most honest thing that could happen to this country is God forbid, a few years of deflation, to get our people off these impossible expectations of endless inflation. The purpose of this system was supposed to be currency stability, now they shamelessly admit that their purpose is to maintain continuous inflation and call that stability. There's nothing magic about constant inflation, this shell game of endless demand, endless supply and endless growth nearly imploded as it naturally should have but we bandaided over it with massive federal capital injections. Well now we have piled on more debt courtesy of George W. Bush and Barack Obama than the entire history of the United States. How much do you make a year in "Ho Chi Minh City, Frank"? Run your debt up to 4.7 times your annual income and tell me how any bank in their right mind is going to treat you. You'd be bankrupt 5 times over again. Telling me that it's different for the US government than it is for individuals isn't telling me anything valuable I can apply in life. The reason why they're different is because I can't print money on my printing press in the basement. Well I could, but if I did it on the right 100% cotton paper and with the right ink, and made it look all official like, I'd go to prison and rightfully so. The government would put you in a cage for doing what it does with no known limits in the proud moral decay year of 2013. Because you're not the best decider for what to do with your own money, you've got to hand it over to Goldman Sachs who knows better what to do with it than you do.

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The first day of the apocalypse has arrived. If you haven't stockpiled your baked beans, it's too late Br. I'm sorry. ;)

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