Shooting Yourself In the Foot, 21st Century Style

rueger writes "Right now there's an election happening in British Columbia. A desperate government is flooding Facebook with "Sponsored Post" spam (example) extolling the wonderful things that they plan to do if re-elected. There's one problem though. Every one of these posts is followed by hundreds of extremely negative comments added by people who either dislike the party in question, or Facebook spam in general. Desperate moderators are trying to control the 'discussion,' but seem to have no hope of doing so. What was thought to be a cool marketing tool has turned into a public relations disaster. Is this the worst use of social media in an election?"

Comments

Re:Politics, still they don't get it

[udachny]

Balanced budget is the only sound economic policy. Central gov't is a LUXURY item, it's unnecessary for a society to exist by the way, society can run without any central gov't and have local gov't instead (if any, whatever the form it may be).

Central gov't is a spending item on the overall balance sheet of a country. It's the country that spends too much that has constant deficits, government deficits, trade deficits. USA has 50 Billion USD/month (around that) trade deficits. Lately they went down a bit, because USA reduced its fuel consumption and it's exporting some of its oil. That's how bad things are in USA, it's no longer using the oil, it exports it, like a raw material/energy exporter.

Well, that's the only thing that USA has left that it can actually trade with - raw energy, raw materials, probably food items. What else can it sell? Nuclear warheads? Aircraft carriers? Well, eventually, when the dollar is done and the bonds are toilet paper, they may even SELL THEIR AIRCRAFT CARRIERS. Why not? They could be used for metal or as barges maybe.

USA used to be a net importer before 19th century, it was a debtor nation and over the first 124 years of existence it became a net exporter and the largest CREDITOR nation in the world. It did it without any gov't, it did it without any gov't debt.

The debt was mostly private and it was repaid as the industry built up and made profits.

Americans will learn eventually that there is no difference between a pre-industrial economy and a post-industrial one, the major difference will be more difficult access to natural resources, because the easy ones were mined long ago, and so the American economy will be in a much more difficult position in the future century than it was 2 centuries ago from that perspective.

The REAL money is NOT created by gov't. Money is what market makes, not what gov't says it is, and market chooses money that is not easy for politicians to fake. Gold is money, paper is not. Gold has to be mined, the metal has real intrinsic value in it, people's effort goes into it, it's not very easy to increase the supply.

Paper, OTOH (and any electronic equivalent) is nothing at all, but a number printed in inc on a dirty sheet.

Real money does not come from fractional reserve lending, unless all of the banking participants (creditors, depositors) are aware of the fact that most of their money is in the hands of debtors, who may lose it. This means that REAL MONEY CAN BE LOST, there is a risk associated with lending.

That's not at all what gov't is facing when it issues more and more fake debt promises and more and more fake credit is created out of thin air by the Fed, to buy that fake debt, to keep interest rates down. But they can only keep the interest rates down as long as they take in all of the new debt and only until the currently held bonds start rolling over.

The real question becomes: with all the short term paper that is held by the foreigners and various public interests, will it be the very NEXT roll over or the one after that, which will collapse the US dollar and thus the bond, will push the interest rates way up and cause a massive recession (that USA actually needs to clear its debts and restart the economy)?

Which one?

I think whatever happens next depends on whether the creditors are willing to wait just one more roll over or if they are inpatient. So 2-3 years, no more than 5 is when the entire thing goes down.