1. Yes, Americans cannot afford Chinese goods without debt financing that consumption.
2. Yes, American goods are even more un-affordable to US consumers than Chinese goods, because there is so much less American produced goods.
3. Oil and other commodity prices are only going up relative to USD, which is being destroyed, I have a comment on that.
Why would anyone invest when consumption is dropping?
- it's not consumption that's dropping. It's production that dropped off and that's why consumption cannot be funded, so it's all debt financed. Consumption that is debt financed cannot be sustained given the fact that there is no production.
You have to PRODUCE something to consume something. Given that US cannot produce enough for its own consumption, it means it cannot consume. It means it must under-consume, over-produce, save and re-invest in order to rebuild production, so that consumption can happen again.
There is always demand - this is proven by the 53Billion USD/month trade deficit. Demand is not disappearing just because the means of payment are disappearing. But eventually this debt financed consumption will stop, and the only way to have consumption again will be by restarting production. What do you think will happen in the middle of that?
In the middle of that there will be a period of very low consumption and high level of poverty, because these poor people won't be able to pay for those products with anything for a year or two at least. There will be very limited consumption and standard of living will be very low.
Why would anybody invest in that environment? Because people can't all take off and leave from USA. 330,000,000 people can't all move to China. It's not possible, so you'll have over 300 million people and they will be sitting there, waving their dicks in the prairies or what?
They'll be producing again. People will go fishing again. They will go farming and mining again.
90% of US sea food is bought from Asia. That makes no sense - USA is surrounded with oceans an it has plenty of lakes and rivers. It makes no sense. So there will be more people fishing. Farming.
They won't have enough capital and tools especially the first year, so they will be saving all of their fish to sell it on the global market and to buy some better tools to improve their efficiency.
Everybody will have to do this. USA WILL be under-consuming, there is no question about it. The debt financed consumption WILL run out.
It's not about just money, it's about work. The 99% will have to do work that will allow them to underconsume and overproduce and to acquire some capital and tools in order to restart their economy. That's going to happen whether you want to or not, because there is no choice.
So far the choice was: will the US Congress approve another debt ceiling increase? (Now Obama just uses executive order to put another 1Trillion on the Treasury liability, whatever).
But soon the question will be: will the creditor BUY US debt or not? And once the people stop buying that debt, that's it. It's over. There will be no way to consume with more debt and production will have to restart.
And if you think you can't do anything about it - too bad for you. If you think the 99% of people can't start over, can't form new businesses to overproduce and underconsume and to save and restart production, well that's too bad.
I think you are wrong, you just don't understand that people will rather do that than starve to death. And it's not like you can tax the 1% 'rich' to keep the charade going. That's not possible, they already moved much of that capital outside of US into production capacity in other countries because of the way the government treats the productive class and investme
1. It's Marxism that allows the government to gather the power that it is not authorized to have - that is my point. I am not saying that gov't is Marxist ideologically, only as a matter of convenience to have a mousetrap that works with 'free' cheese in it.
2. The policy is very much Keynesian in terms that people believe that government must spend money in a recession because people aren't spending. Nobody cares to ask: why are people not spending and nobody cares to realize that spending is the disease, the cure is savings, underconsumption, deflation and debt restructuring.
As to redistribution - that's just stupid. It never solves any problems, it only destroys capital that is held privately and is invested. Any capital that a person is underconsuming is invested.
Any rich person who spends only a tiny fraction of his yearly income doesn't need to work to sustain his lifestyle. He can kick back, relax, do nothing. Enjoy life. Why did Steve Jobs work until 6 weeks before his death? He didn't have to work another day since 1985.
Stealing his money (that's what 'redistribution' means), doesn't do anything good for the economy. It doesn't create any more business. It doesn't create any business that can SURVIVE on its own without government just pouring money into it. Solyndra went bankrupt at the exact moment when the government money ran out.
There is nothing good about taking money away from a person who is not spending it and instead is investing it and giving that money to anybody else, especially to the government. The only thing that government can 'redistribute' is poverty.
Revolutions show this very well actually, as they destroy private capital and production capacity and the revolutionaries are left poor and without jobs. Then they have to go down the chain, taking the money from the next people in line, whoever has the money after the richest people. Then they have to go down the chain again, because they just consume the money.
Like in the former USSR in twenties-thirties, tens of millions of Ukrainian farmers were killed by gun and famine, because the revolutionaries needed to take away the fruits of their labor. Literally.
Systematically stealing money is wrong not just because it's immoral (that too), but it's BAD BUSINESS.
As I said - the real problem is NOT income inequality. The real problem is poverty - and that's direct result of government destruction of economy.
I explained this in many of my posts and journal entries. Look up the original comment for reference.
What USA has now is a growing difference between the incomes of the top and the bottom earners, and this is very easy to understand if one looks at when it started to grow - which almost exactly 40 years ago now. That's the time when Nixon took the world off the gold standard.
Find the graphs and look carefully at what happened - the cost of borrowing was becoming lower, as the federal reserve pushed the discount window interest rates down to allow banks to borrow more currency, which became at that point baseless.
The inflation - counterfeiting of money is the reason for the calamity USA finds itself in. Everything - from the impossibility to save and invest money at a decent interest rate (and now with negative interest rate), to impossibility to get a credit line for business because of how low the rates are, nobody allows businesses to get credit. This credit is really only available to the largest banks, who turn around and buy government Treasuries.
This is done on purpose - on one hand the banks can appear to be solvent (they are all bankrupt by the way), by arbitraging between FREE money and Treasury bills and the government can 'borrow' money from the Fed (indirectly), through the banks. This is money counterfeiting.
The government started growing faster than ever once the gold link was severed, at that point nothing was standing in the way of growing the number of regulations that destroy businesses, nothing was stopping the government from any growth. It was borrowing and printing like a drunk maniac, and obviously the productive capacity shifted to other places, because you can't invest in an economy like that - huge government spending, huge number of regulations, very high taxes (and it's a ruse that taxes used to be higher than today, today the effective taxes are the highest in US history as people cannot deduct what they could even when nominal rates where above 90%, nobody was paying that ever).
The problem with the monopolies is that they enjoy government support globally, all around the world they enjoy government support, and so there is very little competition. Obviously with little competition the prices are near monopolistic, and thus the top earners can set as high prices as they want.
So the problem is government - it's big, it's expensive, it's growing, it destroys competition, it prevents people from starting competing firms, it prevents credit from being available to the potential entrepreneurs, it creates regulations that benefit monopolies, because it prefers monopolies, because monopolies have the most cash to dole out to politicians. Government destroys the money, and this is a huge problem as well.
The Fed doesn't even admit that their interest rate manipulation is all about lowering the cost of labor! That's right, when they say: we lower the interest rates to heat up the economy, it means they CREATE INFLATION, which destroys the purchasing power of the salaried workers, which basically lowers their salaries, that's all there is to it.
The economy would have been so much better off without all this nonsense, without money counterfeiting and without the inflation.
People don't think about VALUE of money, they just see a nominal dollar amount and think that that's value. It's NOT value.
Dollar is falling in value all the time, that what they do not teach in schools, because it's basically anti-government knowledge.
Actually it's even more complicated than that. There are too many liabilities associated with hiring people. The taxes are only part of the story, there are also all the various rules and regulations, such as Equal Opportunity stuff, the 'civil rights' stuff, anything that can cause an employer to suffer a lawsuit.
Even if the employer himself cannot be argued to be say sexist/racist/'discriminating' on whatever grounds, if another employee can be somehow charged, then too often the employer is the one who is taken to court.
The government comes out with rules such as 'civil rights' (which are in reality entitlements for some at the expense of obligations to others) and all of a sudden an employer hiring a 'racial minority' stands a chance of being dragged through an expensive court procedure, can be fined, the lawyers cost money, it all costs time, etc.
Anything that government regulates, like special access for wheelchairs for example, even where it makes no sense, any kind of a rule that says one cannot discriminate while hiring somebody, now they are even coming out with a rule that says: you can't discriminate against somebody who has been out of work for 6 or more months or somebody who has no credentials from a college for example, all of those things raise the cost of hiring Americans (and other Westerners).
The problem with the government is that it prefers large companies - monopolies, that have large legal departments, those firms that have enough revenue to cover all sorts of liabilities and compliance people. This stuff costs a lot of money.
Same with any mandates for pension plans, medical plans, anything that requires an employer to do something because government says so - this raises cost of doing business.
Any sort of collaboration between the government and any union is destructive to the job market. Any amount of money that government spends is a tax to be collected now or in the future or through inflation. All of this again, raises cost of doing business.
Any license fees, any franchise licenses only granted by government, any special treatment by 'professional organizations' such as FINRA for example, where government requires that somebody doing a work in that field is certified with that agency. Any time a cab driver has to buy a license (medallion), all of this destroys competition, all of this creates barriers to entry, all of this raises prices, all of this destroys opportunities for people to start their own businesses in those areas, all of this makes US workers uncompetitive and USA unattractive to the investment capital.
It's amazing what the government has been able to accomplish.... to turn a large number of population into blind followers of the government programs, one cannot argue with the crowd, which is hell bent on protecting the role of government status-quo in the society even if it is obviously usurping the power that it has no authority to take away from the people. Government today is not by the people and for the people, it hasn't been that way for 100 years.
Any spending, any at all that is authorized by the Congress or the White house or the Fed directly hurts the people by hurting the economy, because none of the spending can be legitimately paid for anymore. The US government is broke, it cannot pay for stuff. It has to stop spending for some time at least to balance the budgets and return to sound money.
But try and bring this point across and people will react as if their favorite god has been attacked. Government itself is a State religion at this point.
Yes, race to the bottom is the best thing, because that's race to the bottom in all prices, not just labor prices but prices for all consumer goods and services.
You want everything to be as cheap as at all possible INCLUDING the labor price, this allows the greatest production capacity and the greatest distribution.
If majority of the people are making 10 bucks a day, but a private yacht only costs 1000 dollars, then it's a really really excellent world to live in.
No, minimum wage only outlaws some people from working.
NOBODY can FORCE me to hire someone, who is not producing more than minimum wage worth of value after all of the expenses for a higher than minimum wage salary.
If you hire a person, that person has to produce enough value to offset the cost of hiring, all of the associated expenses and he has to produce some profit.
So if somebody produces 6 dollars worth of revenue and he costs say 5 dollars, then the 1 dollar is profit. If the minimum wage is 7.25, then by hiring that person at that wage instead of generating 1 dollar worth of profit you generate 1.25 loss.
It makes no sense to hire somebody (unless you are a government), who costs your business money and generates a loss (well, there are instances where it may be a strategic hiring, something special, used to create a tax deduction or something).
But basically by setting minimum wage you outprice some people from the market.
If the entire world set a minimum wage of say 10 dollars per hour, then the result would be massive unemployment everywhere, as those people who were making under that amount and who are not producing enough revenue to cover and make some profit would all be fired.
Nobody can FORCE a company to hire somebody and nobody can force a company to hire somebody to make a loss. That's just weird misunderstanding of how economy works and why people start businesses.
In your world the total unemployment would be on the order of 30% total throughout the entire world.
You know what, I did think of Norway's oil. Sweden exports stuff, but not that particular substance. The deregulations in Sweden are the only way to keep that economy from falling in some not so distant future. There is no reason to stay there as a company in today's world, even such trademarks as Volvo, Ikea, Ericsson, Scania will outsource and move their businesses and they will be right to do so. There is no reason not to. Thus Sweden is doing the right thing even if you don't see it as such immediately.
Yep, the classic mo-Ron philosophy. Ron Paul has zero grasp of economics, much less foreign affairs.
- yet he is the only person in gov't who understands enough of it to build up a portfolio, with minimum gains of 300% and maximum gains of 2000% based on his... 'misunderstanding'?
He pulls the military off the South Korean DMZ, the Navy aircraft carrier groups mothballed, and out of Pacific waters. Great cost savings. Come a few days later, Kim has invaded Seoul.
- first of all, yes that's a real cost saving, because USA has no money.
Secondly, South Korea is plenty capable of protecting itself. In any case it's non of US's business.
China still has a grudge against Japan so their carrier fleet now is menacing that country.
- all that China needs to do in fact for US to stop its militarism is to stop funding it.
Seconly, Japan is plenty capable of protecting itself. Thirdly, Chinese rather trade with Japan than fight a war. Lastly, it's none of US's business.
Taiwan becomes red.
- right. Why don't you attack them preemptively? The failed Vietnam war shows just how misguided the approach of proliferating the 'righteousness' of US ideals is, and now USA is trading with Vietnam.
Now the West is in deeper shit because 1/3 of the total manufacturing capacity we have is now controlled by hostile countries or destroyed.
- maybe it's good for the West. It now will have a perfect reason not to pay the debts back and to re-invent its own productive capacity. There you go - instant jobs.
Ron pulls out of the Middle East leaving any allies (Israel, UAE, Saudi Arabia) to their own devices.
- terrorist attacks against USA stop. USA stops funding people that caused 9/11 (with money stolen via inflation and borrowed from China). That's just terrible.
Iran starts striking Tel Aviv with rockets, Israel retaliates with nukes, but gets overwhelmed by every country in the region swarming them.
- Israel has over 300 nukes. USA has nukes as well, if anybody attacks Israel with nukes it will immediately destroy the opponent and I am sure that Ron Paul would go to CONGRESS and ask the AMERICAN PEOPLE if they are willing to DECLARE A WAR.
What a fucking amazing concept, Anonymous Coward, isn't it? Who are you, Dick Cheney? How is bloodsucking going for you, you heartless prick?
Countries friendly to the west or at least not hostile (UAE, Saudi Arabia, Turkey) now have a bloodthirsty mob.
- Way to mix Saudi Arabia and Turkey into one crowd of 'non-hostile' or 'friendly' countries.
Again, 9/11 was FUNDED by Saudis, you fucking shit.
Now, nuclear terrorism is going to be a primary threat to the world as a region-wide caliphate expands to threaten Spain and western Europe.
- no no, you are Bill O'Reilly, aren't you?
Ron pulls funding from hospitals, Social Security, and Medicare.
- unfortunately that's not his platform, so you are a lying (what else is new).
Now hospitals and charity organizations have to take care of the sick, and we are back to poorhouses that are like African AIDS clinics where a drink of water, much less an IV of useful medication is a rare thing.
- More Bill O'Reilly.
Ron sells off government land. Great money maker.
- BETTER than the status quo, where the coal and gas and oil are extracted from these lands without ANY payments of any royalties. That, of-course, and all the moral hazards of the government setting liability caps and limitations while sniffing crack off toaster ovens and fucking with the company's executives.
I think that's not going to help as long as the basic economic principles that are widely accepted are based on the wrong (and long discredited but very much accepted by the politicians) Keynesian model.
That is why Democrats print so much money, it is the best way to steal from the rich.
- out of all the other stuff, I just want to bring out the point, that in reality the inflation tax hits the poor much harder than the rich.
The rich can shift money from asset class to asset class, sure some get hit with inflation, but the only people actually suffering from real rising prices that result from expansionary monetary base are the poor, who have to spend more and more of their fixed income on the same basket of goods.
- this comes from complete misunderstanding of what capital is.
Capital consists of savings that accrue when somebody overproduces/underconsumes and these savings are the result of actual work. I am not talking about worthless currency.
In most primitive terms, if somebody is smelting iron ore, any of the metal that he is not consuming, he is saving. These are real savings, and this is what constitutes capital.
Printing money does not constitute capital, as there is no underconsumption, so nothing is saved from real production.
Savings are only nominally expressed in monetary equivalent, but they represent actual productive output. USA is lacking real savings that results from productive output, this is clear from USA's 53 Billion USD / month trade deficit.
USA is not producing enough to save, thus there is no capital. So no real investment can be made. Without real investment capital there can be no new productive capacity, because tools cannot be bought, machines cannot be bought, labor cannot be paid for, nothing can be done without real savings.
That's why credit is so important to businesses, not to consumers (debt financed consumption), but to producers, who use credit to create productive output that can be used to pay interest and the principle back to the creditor.
But with government eating all of the available credit and setting artificial price on money, the businesses cannot have that credit available either. Only banks have access to the federal discount window, no real business can have that access.
So there is no investment capital, so how is all this new oil going to be extracted? It can be extracted of-course by those, who have real savings and real investment capital - oil firms have it of-course (and their income is huge, but it's that big because of inflation, in real money oil prices are very low.)
As to wages - there are over 20,000,000 people out of work, saying that they must not be allowed to work for lower wages is just suicidal for the economy. You rather see them on welfare?
The creative destruction has to happen, debts have to be restructured and liquidated, credit has to become available to the business, so government must shrink for that to happen. Price on money must go up to the level where markets want to see it, not to remain at the inflationary levels that the government prefers, because it is the largest debtor and counterfeiter.
There should be no EPA of-course, but only property owners can ensure real environmental protection. There is plenty of precedent of property owners protecting their property and suing those, who pollute it. If you are a large polluter, you end up polluting other people's property, that's what courts are for.
There is no such thing as an oversupply. That's just a political ruse to ensure higher prices than should exist (thus franchise licenses are given out for example to utility companies or medallions to cab drivers).
Minimum wage is just a way to outlaw some people from getting job, I explained that.. It's also inflationary, as it creates a depended class that is put on a welfare dole and the money comes from printing.
I don't know about Denmark, but Sweden is moving away from socialism towards less regulated free market. They have a long way to go of-course, but at least they are on the right track. If they don't do it, they are facing the same problem as the rest of the socialist world. As to them being 'keynesian', I don't know that for a fact. Sweden at least is an oil exporter. Maybe what they really are is a better way to be an energy exporter economy than say the Saudi Arabia or Russia or most of African exporters, where majority of wealth that is acquired from the exports ends up in very few hands.
Are you telling me there is a difference between your parties and between your candidates? Are you telling me that Clinton was any better than any of the Bushes or Reagan?
Why? Is it all the wars he went into? Is it the US debt refinancing with variable rate short term borrowing? Is it the bubble that was inflated during his time by the traitorous Greenspan's policy of taking price of money down to 1%? Was it NAFTA maybe? Maybe it was the increase in drug war spending?
But I am not protecting any party, they are all corrupt.
Nixon took the world off the gold standard - that's the last beginning of the destruction of US economy. Of-course all the previous destruction (Fed, IRS, FDIC, SS, Medicare,) didn't help. The wars didn't hep. The education dep't and all the loans didn't help.
Obama just pust 1Trillion dollars on the US Treasury books (liability side). Single handedly, like a Boss.
No. None of that works. The only real change can come from people understanding that the government is not supposed to be involved in business regulations, loans, labor, economy, price setting, interest rates, money printing, education, health, insurances of any kind.
All of those things are moral hazards. All of those things end up growing the gov't and destroying the money and the economy and turning you into slaves.
Yes, industrial revolution. The best thing that the free markets did for the people - allowing the people to be more productive by efficiently organizing land, capital and labor to increase productivity to the point, where under 5% of population could actually feed 100% of it. Allowing hundreds of people to work in factories manufacturing all sorts of products that would have taken tens or hundreds of thousands of people to produce purely by hand before that time.
Making the workers so efficient and productive that they didn't have to work 15 hours a day to feed themselves, but instead allowing a man to feed his family on his own income, eventually allowing the children not to go to work at a very young age as they have always done until the industrial revolution. Allowing the women to have to be baby factories to prop up subsistence farming to support the aging parents and thus shifting the role of women in society, actually allowing them to be free. Actually allowing the productivity of a free worker to become much higher of than that of a slave worker (slavery is very inefficient, it requires taking care of people's living and health and food, it's expensive, much more expensive than to hire people).
All those terrible things, like Ford being regulated by the MARKET, doubling the pay of his employees to reduce turn over, allowing them to buy the product they were working on with 4 months of salary, bringing down their working hours to 8 only and their working days to 5 in a week, paying them double what anybody else was, hiring the disabled people nobody else wanted, all because of that terrible industrial revolution, which increased the productivity so much, that even a partially disabled person could work on an assembly line building cars. Oh, incidentally he doubled his production capacity within a year after implementing those changes, paying his workers equivalent of 1.25 ounces of gold a week, which in todays prices is about 2200 USD or over 110K a year. That's without income taxes, that's without SS or Medicare. That's with those workers being able to support a family with a stay at home wife, 5-6 kids, paying for everything (health/education/pension) out of pocket and no debt.
Yes, the terrible industrial revolution, which only was the most innovative and inventive time in history, which allowed the US become the biggest creditor nation, biggest producer of high quality cheap goods nation on the planet.
There are no protections. There are no protections in your system. The people are not protected. Where do you see protected people?
The only real protections come from market regulating the behavior of individuals. Individuals are the real owners of property and businesses.
Corporations are not faceless, there are individuals behind the fictitious legal structures built by the government to protect those, who need that protection and are willing to 'share' with the politicians for those protections.
The protections are not to the average people, the protections that exist in your system are to the real owners of your government.
The only protections that exist protect the real owners of your political system and your government from YOU. From you, as a competitor. From you as an independent person. From you as a savor and investor of your own money into your own business and into your own future.
The real protections are only found in real free market - market free of government misdirection and mis-allocation of resources.
Market is the real democracy, with people voting on who is giving them the best value for their money.
--
As to the political system and the government, I think the best change would be to have people serve limited terms in the government, the way they serve in military in many countries. Yes, why not have people serve in government the way they serve in jury?
You can be drafted to serve in jury and you should be drafted to serve in government maybe? Maybe that's the real way to fix the problem of the broken political system.
I think the choice is either to have a completely destroyed economy and to shift to dictatorial/totalitarian government, to lose all freedoms.
OR
The other choice is to allow the restructuring of the economy, have a very hard 2 years, and eventually see the capital return to the US.
But to do that the government must be shrunk, the budgets must be balanced NOT by giving more revenue to the government, but by doing real cuts in spending (wars, SS, Medicare), by shutting down Federal Reserve, FDIC, Freddie/Fannie, FHA, HUD, IRS, FBI, CIA, DHS, dep'ts of education, energy, commerce, agriculture, EPA, FDA, FCC, FAA, etc., abolishing the income/payroll/corporate taxes, shrinking the federal registry.
This is not supposed to be a bad thing - more liberty and more freedom. This is supposed to fix the money, this is supposed to fix the environment for investment capital to return and re-open the production facilities. 1-2 years of this will be very hard.
I would go further than Ron Paul of-course in firing up to 99% of government employees, but I am not running, nor can I.
But this does NOT mean that people will be poorer for it. It means 2 years of real shake down and then it means reopening of production facilities, recreating the actual real economy, not based on vendor financed, debt/inflation financed consumption, but recreating the production, which allows real consumption and real money and real investments and real markets.
The truth is that Socialist / Marxist / Keynesian ideas that are implemented all around the Western world are causing the mass exodus of capital from that world.
The truth is that government regulations on all facets of business and labor, even such 'small' things as minimum wage create mis-allocation of resources, create imbalances in the markets that are then corrected by the capital and the jobs shifting elsewhere.
The truth is that politicians use 'free cheese', such as SS/Medicare ponzi schemes in the mousetrap to push forward their own agenda of stealing more power for themselves and growing the government with all that stolen money and selling the power that the larger government then holds.
The truth is that the government is incapable of fixing this without getting out of the way and shrinking and becoming proportionate to spending rather than to income of the economy in totality.
The truth is that the loss of jobs is a result of the government policy of implementing a fascist state (merging of government and largest corporations/monopolies) by using socialist ideology (wealth redistribution and 'taking care of people'). All the money printing, income taxes, business regulations, all of the unelected departments creating regulations that then can be sold and can be used to prop up monopolies and prevent competition.
The truth is that it is the government that stands in the way of healing the economy. The economy is being destroyed by the government. The problem with people becoming poorer (socialists/fascists like to call that income inequality, but it's not income inequality, it's just poverty) and people are becoming poorer because they have no choice but either to work for very few companies or to be on welfare or even go without. This is all created by the socialist/fascist agenda of the government. That agenda i
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still same guy, posting as AC, account is locked.
1. Yes, Americans cannot afford Chinese goods without debt financing that consumption.
2. Yes, American goods are even more un-affordable to US consumers than Chinese goods, because there is so much less American produced goods.
3. Oil and other commodity prices are only going up relative to USD, which is being destroyed, I have a comment on that.
Why would anyone invest when consumption is dropping?
- it's not consumption that's dropping. It's production that dropped off and that's why consumption cannot be funded, so it's all debt financed. Consumption that is debt financed cannot be sustained given the fact that there is no production.
You have to PRODUCE something to consume something. Given that US cannot produce enough for its own consumption, it means it cannot consume. It means it must under-consume, over-produce, save and re-invest in order to rebuild production, so that consumption can happen again.
There is always demand - this is proven by the 53Billion USD/month trade deficit. Demand is not disappearing just because the means of payment are disappearing. But eventually this debt financed consumption will stop, and the only way to have consumption again will be by restarting production. What do you think will happen in the middle of that?
In the middle of that there will be a period of very low consumption and high level of poverty, because these poor people won't be able to pay for those products with anything for a year or two at least. There will be very limited consumption and standard of living will be very low.
Why would anybody invest in that environment? Because people can't all take off and leave from USA. 330,000,000 people can't all move to China. It's not possible, so you'll have over 300 million people and they will be sitting there, waving their dicks in the prairies or what?
They'll be producing again. People will go fishing again. They will go farming and mining again.
90% of US sea food is bought from Asia. That makes no sense - USA is surrounded with oceans an it has plenty of lakes and rivers. It makes no sense. So there will be more people fishing. Farming.
They won't have enough capital and tools especially the first year, so they will be saving all of their fish to sell it on the global market and to buy some better tools to improve their efficiency.
Everybody will have to do this. USA WILL be under-consuming, there is no question about it. The debt financed consumption WILL run out.
It's not about just money, it's about work. The 99% will have to do work that will allow them to underconsume and overproduce and to acquire some capital and tools in order to restart their economy. That's going to happen whether you want to or not, because there is no choice.
So far the choice was: will the US Congress approve another debt ceiling increase? (Now Obama just uses executive order to put another 1Trillion on the Treasury liability, whatever).
But soon the question will be: will the creditor BUY US debt or not? And once the people stop buying that debt, that's it. It's over. There will be no way to consume with more debt and production will have to restart.
And if you think you can't do anything about it - too bad for you. If you think the 99% of people can't start over, can't form new businesses to overproduce and underconsume and to save and restart production, well that's too bad.
I think you are wrong, you just don't understand that people will rather do that than starve to death. And it's not like you can tax the 1% 'rich' to keep the charade going. That's not possible, they already moved much of that capital outside of US into production capacity in other countries because of the way the government treats the productive class and investme
1. It's Marxism that allows the government to gather the power that it is not authorized to have - that is my point. I am not saying that gov't is Marxist ideologically, only as a matter of convenience to have a mousetrap that works with 'free' cheese in it.
2. The policy is very much Keynesian in terms that people believe that government must spend money in a recession because people aren't spending. Nobody cares to ask: why are people not spending and nobody cares to realize that spending is the disease, the cure is savings, underconsumption, deflation and debt restructuring.
As to redistribution - that's just stupid. It never solves any problems, it only destroys capital that is held privately and is invested. Any capital that a person is underconsuming is invested.
Any rich person who spends only a tiny fraction of his yearly income doesn't need to work to sustain his lifestyle. He can kick back, relax, do nothing. Enjoy life. Why did Steve Jobs work until 6 weeks before his death? He didn't have to work another day since 1985.
Stealing his money (that's what 'redistribution' means), doesn't do anything good for the economy. It doesn't create any more business. It doesn't create any business that can SURVIVE on its own without government just pouring money into it. Solyndra went bankrupt at the exact moment when the government money ran out.
There is nothing good about taking money away from a person who is not spending it and instead is investing it and giving that money to anybody else, especially to the government. The only thing that government can 'redistribute' is poverty.
Revolutions show this very well actually, as they destroy private capital and production capacity and the revolutionaries are left poor and without jobs. Then they have to go down the chain, taking the money from the next people in line, whoever has the money after the richest people. Then they have to go down the chain again, because they just consume the money.
Like in the former USSR in twenties-thirties, tens of millions of Ukrainian farmers were killed by gun and famine, because the revolutionaries needed to take away the fruits of their labor. Literally.
Systematically stealing money is wrong not just because it's immoral (that too), but it's BAD BUSINESS.
As I said - the real problem is NOT income inequality. The real problem is poverty - and that's direct result of government destruction of economy.
By the way, how many jobs have YOU created? How many people do YOU hire?
How many people do you hire even if they cost you more money than they generate in revenue?
If you are not doing those things, aren't you eligible for that "tire around your head and burn alive" treatment that you are advocating here, buddy?
I explained this in many of my posts and journal entries. Look up the original comment for reference.
What USA has now is a growing difference between the incomes of the top and the bottom earners, and this is very easy to understand if one looks at when it started to grow - which almost exactly 40 years ago now. That's the time when Nixon took the world off the gold standard.
Find the graphs and look carefully at what happened - the cost of borrowing was becoming lower, as the federal reserve pushed the discount window interest rates down to allow banks to borrow more currency, which became at that point baseless.
The inflation - counterfeiting of money is the reason for the calamity USA finds itself in. Everything - from the impossibility to save and invest money at a decent interest rate (and now with negative interest rate), to impossibility to get a credit line for business because of how low the rates are, nobody allows businesses to get credit. This credit is really only available to the largest banks, who turn around and buy government Treasuries.
This is done on purpose - on one hand the banks can appear to be solvent (they are all bankrupt by the way), by arbitraging between FREE money and Treasury bills and the government can 'borrow' money from the Fed (indirectly), through the banks. This is money counterfeiting.
The government started growing faster than ever once the gold link was severed, at that point nothing was standing in the way of growing the number of regulations that destroy businesses, nothing was stopping the government from any growth. It was borrowing and printing like a drunk maniac, and obviously the productive capacity shifted to other places, because you can't invest in an economy like that - huge government spending, huge number of regulations, very high taxes (and it's a ruse that taxes used to be higher than today, today the effective taxes are the highest in US history as people cannot deduct what they could even when nominal rates where above 90%, nobody was paying that ever).
The problem with the monopolies is that they enjoy government support globally, all around the world they enjoy government support, and so there is very little competition. Obviously with little competition the prices are near monopolistic, and thus the top earners can set as high prices as they want.
So the problem is government - it's big, it's expensive, it's growing, it destroys competition, it prevents people from starting competing firms, it prevents credit from being available to the potential entrepreneurs, it creates regulations that benefit monopolies, because it prefers monopolies, because monopolies have the most cash to dole out to politicians. Government destroys the money, and this is a huge problem as well.
The Fed doesn't even admit that their interest rate manipulation is all about lowering the cost of labor! That's right, when they say: we lower the interest rates to heat up the economy, it means they CREATE INFLATION, which destroys the purchasing power of the salaried workers, which basically lowers their salaries, that's all there is to it.
The economy would have been so much better off without all this nonsense, without money counterfeiting and without the inflation.
People don't think about VALUE of money, they just see a nominal dollar amount and think that that's value. It's NOT value.
Dollar is falling in value all the time, that what they do not teach in schools, because it's basically anti-government knowledge.
Actually it's even more complicated than that. There are too many liabilities associated with hiring people. The taxes are only part of the story, there are also all the various rules and regulations, such as Equal Opportunity stuff, the 'civil rights' stuff, anything that can cause an employer to suffer a lawsuit.
Even if the employer himself cannot be argued to be say sexist/racist/'discriminating' on whatever grounds, if another employee can be somehow charged, then too often the employer is the one who is taken to court.
The government comes out with rules such as 'civil rights' (which are in reality entitlements for some at the expense of obligations to others) and all of a sudden an employer hiring a 'racial minority' stands a chance of being dragged through an expensive court procedure, can be fined, the lawyers cost money, it all costs time, etc.
Anything that government regulates, like special access for wheelchairs for example, even where it makes no sense, any kind of a rule that says one cannot discriminate while hiring somebody, now they are even coming out with a rule that says: you can't discriminate against somebody who has been out of work for 6 or more months or somebody who has no credentials from a college for example, all of those things raise the cost of hiring Americans (and other Westerners).
The problem with the government is that it prefers large companies - monopolies, that have large legal departments, those firms that have enough revenue to cover all sorts of liabilities and compliance people. This stuff costs a lot of money.
Same with any mandates for pension plans, medical plans, anything that requires an employer to do something because government says so - this raises cost of doing business.
Any sort of collaboration between the government and any union is destructive to the job market. Any amount of money that government spends is a tax to be collected now or in the future or through inflation. All of this again, raises cost of doing business.
Any license fees, any franchise licenses only granted by government, any special treatment by 'professional organizations' such as FINRA for example, where government requires that somebody doing a work in that field is certified with that agency. Any time a cab driver has to buy a license (medallion), all of this destroys competition, all of this creates barriers to entry, all of this raises prices, all of this destroys opportunities for people to start their own businesses in those areas, all of this makes US workers uncompetitive and USA unattractive to the investment capital.
It's amazing what the government has been able to accomplish .... to turn a large number of population into blind followers of the government programs, one cannot argue with the crowd, which is hell bent on protecting the role of government status-quo in the society even if it is obviously usurping the power that it has no authority to take away from the people. Government today is not by the people and for the people, it hasn't been that way for 100 years.
Any spending, any at all that is authorized by the Congress or the White house or the Fed directly hurts the people by hurting the economy, because none of the spending can be legitimately paid for anymore. The US government is broke, it cannot pay for stuff. It has to stop spending for some time at least to balance the budgets and return to sound money.
But try and bring this point across and people will react as if their favorite god has been attacked. Government itself is a State religion at this point.
Yes, race to the bottom is the best thing, because that's race to the bottom in all prices, not just labor prices but prices for all consumer goods and services.
You want everything to be as cheap as at all possible INCLUDING the labor price, this allows the greatest production capacity and the greatest distribution.
If majority of the people are making 10 bucks a day, but a private yacht only costs 1000 dollars, then it's a really really excellent world to live in.
No, minimum wage only outlaws some people from working.
NOBODY can FORCE me to hire someone, who is not producing more than minimum wage worth of value after all of the expenses for a higher than minimum wage salary.
If you hire a person, that person has to produce enough value to offset the cost of hiring, all of the associated expenses and he has to produce some profit.
So if somebody produces 6 dollars worth of revenue and he costs say 5 dollars, then the 1 dollar is profit. If the minimum wage is 7.25, then by hiring that person at that wage instead of generating 1 dollar worth of profit you generate 1.25 loss.
It makes no sense to hire somebody (unless you are a government), who costs your business money and generates a loss (well, there are instances where it may be a strategic hiring, something special, used to create a tax deduction or something).
But basically by setting minimum wage you outprice some people from the market.
If the entire world set a minimum wage of say 10 dollars per hour, then the result would be massive unemployment everywhere, as those people who were making under that amount and who are not producing enough revenue to cover and make some profit would all be fired.
Nobody can FORCE a company to hire somebody and nobody can force a company to hire somebody to make a loss. That's just weird misunderstanding of how economy works and why people start businesses.
In your world the total unemployment would be on the order of 30% total throughout the entire world.
So CAN YOU handle the truth?
The reality is obviously not looking very bright, if the majority vote is that the truth is a 'troll'.
You know what, I did think of Norway's oil. Sweden exports stuff, but not that particular substance. The deregulations in Sweden are the only way to keep that economy from falling in some not so distant future. There is no reason to stay there as a company in today's world, even such trademarks as Volvo, Ikea, Ericsson, Scania will outsource and move their businesses and they will be right to do so. There is no reason not to. Thus Sweden is doing the right thing even if you don't see it as such immediately.
Yep, the classic mo-Ron philosophy. Ron Paul has zero grasp of economics, much less foreign affairs.
- yet he is the only person in gov't who understands enough of it to build up a portfolio, with minimum gains of 300% and maximum gains of 2000% based on his ... 'misunderstanding'?
He pulls the military off the South Korean DMZ, the Navy aircraft carrier groups mothballed, and out of Pacific waters. Great cost savings. Come a few days later, Kim has invaded Seoul.
- first of all, yes that's a real cost saving, because USA has no money.
Secondly, South Korea is plenty capable of protecting itself. In any case it's non of US's business.
China still has a grudge against Japan so their carrier fleet now is menacing that country.
- all that China needs to do in fact for US to stop its militarism is to stop funding it.
Seconly, Japan is plenty capable of protecting itself.
Thirdly, Chinese rather trade with Japan than fight a war.
Lastly, it's none of US's business.
Taiwan becomes red.
- right. Why don't you attack them preemptively? The failed Vietnam war shows just how misguided the approach of proliferating the 'righteousness' of US ideals is, and now USA is trading with Vietnam.
Now the West is in deeper shit because 1/3 of the total manufacturing capacity we have is now controlled by hostile countries or destroyed.
- maybe it's good for the West. It now will have a perfect reason not to pay the debts back and to re-invent its own productive capacity. There you go - instant jobs.
Ron pulls out of the Middle East leaving any allies (Israel, UAE, Saudi Arabia) to their own devices.
- terrorist attacks against USA stop. USA stops funding people that caused 9/11 (with money stolen via inflation and borrowed from China). That's just terrible.
Iran starts striking Tel Aviv with rockets, Israel retaliates with nukes, but gets overwhelmed by every country in the region swarming them.
- Israel has over 300 nukes. USA has nukes as well, if anybody attacks Israel with nukes it will immediately destroy the opponent and I am sure that Ron Paul would go to CONGRESS and ask the AMERICAN PEOPLE if they are willing to DECLARE A WAR.
What a fucking amazing concept, Anonymous Coward, isn't it? Who are you, Dick Cheney? How is bloodsucking going for you, you heartless prick?
Countries friendly to the west or at least not hostile (UAE, Saudi Arabia, Turkey) now have a bloodthirsty mob.
- Way to mix Saudi Arabia and Turkey into one crowd of 'non-hostile' or 'friendly' countries.
Again, 9/11 was FUNDED by Saudis, you fucking shit.
Now, nuclear terrorism is going to be a primary threat to the world as a region-wide caliphate expands to threaten Spain and western Europe.
- no no, you are Bill O'Reilly, aren't you?
Ron pulls funding from hospitals, Social Security, and Medicare.
- unfortunately that's not his platform, so you are a lying (what else is new).
Now hospitals and charity organizations have to take care of the sick, and we are back to poorhouses that are like African AIDS clinics where a drink of water, much less an IV of useful medication is a rare thing.
- More Bill O'Reilly.
Ron sells off government land. Great money maker.
- BETTER than the status quo, where the coal and gas and oil are extracted from these lands without ANY payments of any royalties. That, of-course, and all the moral hazards of the government setting liability caps and limitations while sniffing crack off toaster ovens and fucking with the company's executives.
Now Yellowstone Park is a privately run re
So why is the economy of the People's Republic of China booming?
- because economically they are the freest market in the world today.
That's true by de-facto, as all the productive capacity shifted there for a reason. You can also ask these people.
I think that's not going to help as long as the basic economic principles that are widely accepted are based on the wrong (and long discredited but very much accepted by the politicians) Keynesian model.
That is why Democrats print so much money, it is the best way to steal from the rich.
- out of all the other stuff, I just want to bring out the point, that in reality the inflation tax hits the poor much harder than the rich.
The rich can shift money from asset class to asset class, sure some get hit with inflation, but the only people actually suffering from real rising prices that result from expansionary monetary base are the poor, who have to spend more and more of their fixed income on the same basket of goods.
The US doesn't need capital ... it needs oil.
- this comes from complete misunderstanding of what capital is.
Capital consists of savings that accrue when somebody overproduces/underconsumes and these savings are the result of actual work. I am not talking about worthless currency.
In most primitive terms, if somebody is smelting iron ore, any of the metal that he is not consuming, he is saving. These are real savings, and this is what constitutes capital.
Printing money does not constitute capital, as there is no underconsumption, so nothing is saved from real production.
Savings are only nominally expressed in monetary equivalent, but they represent actual productive output. USA is lacking real savings that results from productive output, this is clear from USA's 53 Billion USD / month trade deficit.
USA is not producing enough to save, thus there is no capital. So no real investment can be made. Without real investment capital there can be no new productive capacity, because tools cannot be bought, machines cannot be bought, labor cannot be paid for, nothing can be done without real savings.
That's why credit is so important to businesses, not to consumers (debt financed consumption), but to producers, who use credit to create productive output that can be used to pay interest and the principle back to the creditor.
But with government eating all of the available credit and setting artificial price on money, the businesses cannot have that credit available either. Only banks have access to the federal discount window, no real business can have that access.
So there is no investment capital, so how is all this new oil going to be extracted? It can be extracted of-course by those, who have real savings and real investment capital - oil firms have it of-course (and their income is huge, but it's that big because of inflation, in real money oil prices are very low.)
As to wages - there are over 20,000,000 people out of work, saying that they must not be allowed to work for lower wages is just suicidal for the economy. You rather see them on welfare?
The creative destruction has to happen, debts have to be restructured and liquidated, credit has to become available to the business, so government must shrink for that to happen. Price on money must go up to the level where markets want to see it, not to remain at the inflationary levels that the government prefers, because it is the largest debtor and counterfeiter.
EPA today is a way to strip people of private property rights.
There should be no EPA of-course, but only property owners can ensure real environmental protection. There is plenty of precedent of property owners protecting their property and suing those, who pollute it. If you are a large polluter, you end up polluting other people's property, that's what courts are for.
There is no such thing as an oversupply. That's just a political ruse to ensure higher prices than should exist (thus franchise licenses are given out for example to utility companies or medallions to cab drivers).
Minimum wage is just a way to outlaw some people from getting job, I explained that.. It's also inflationary, as it creates a depended class that is put on a welfare dole and the money comes from printing.
I don't know about Denmark, but Sweden is moving away from socialism towards less regulated free market. They have a long way to go of-course, but at least they are on the right track. If they don't do it, they are facing the same problem as the rest of the socialist world. As to them being 'keynesian', I don't know that for a fact. Sweden at least is an oil exporter. Maybe what they really are is a better way to be an energy exporter economy than say the Saudi Arabia or Russia or most of African exporters, where majority of wealth that is acquired from the exports ends up in very few hands.
Are you telling me there is a difference between your parties and between your candidates? Are you telling me that Clinton was any better than any of the Bushes or Reagan?
Why? Is it all the wars he went into? Is it the US debt refinancing with variable rate short term borrowing? Is it the bubble that was inflated during his time by the traitorous Greenspan's policy of taking price of money down to 1%? Was it NAFTA maybe? Maybe it was the increase in drug war spending?
But I am not protecting any party, they are all corrupt.
Nixon took the world off the gold standard - that's the last beginning of the destruction of US economy. Of-course all the previous destruction (Fed, IRS, FDIC, SS, Medicare,) didn't help. The wars didn't hep. The education dep't and all the loans didn't help.
Obama just pust 1Trillion dollars on the US Treasury books (liability side). Single handedly, like a Boss.
No. None of that works. The only real change can come from people understanding that the government is not supposed to be involved in business regulations, loans, labor, economy, price setting, interest rates, money printing, education, health, insurances of any kind.
All of those things are moral hazards. All of those things end up growing the gov't and destroying the money and the economy and turning you into slaves.
Yes, industrial revolution. The best thing that the free markets did for the people - allowing the people to be more productive by efficiently organizing land, capital and labor to increase productivity to the point, where under 5% of population could actually feed 100% of it. Allowing hundreds of people to work in factories manufacturing all sorts of products that would have taken tens or hundreds of thousands of people to produce purely by hand before that time.
Making the workers so efficient and productive that they didn't have to work 15 hours a day to feed themselves, but instead allowing a man to feed his family on his own income, eventually allowing the children not to go to work at a very young age as they have always done until the industrial revolution. Allowing the women to have to be baby factories to prop up subsistence farming to support the aging parents and thus shifting the role of women in society, actually allowing them to be free. Actually allowing the productivity of a free worker to become much higher of than that of a slave worker (slavery is very inefficient, it requires taking care of people's living and health and food, it's expensive, much more expensive than to hire people).
All those terrible things, like Ford being regulated by the MARKET, doubling the pay of his employees to reduce turn over, allowing them to buy the product they were working on with 4 months of salary, bringing down their working hours to 8 only and their working days to 5 in a week, paying them double what anybody else was, hiring the disabled people nobody else wanted, all because of that terrible industrial revolution, which increased the productivity so much, that even a partially disabled person could work on an assembly line building cars. Oh, incidentally he doubled his production capacity within a year after implementing those changes, paying his workers equivalent of 1.25 ounces of gold a week, which in todays prices is about 2200 USD or over 110K a year. That's without income taxes, that's without SS or Medicare. That's with those workers being able to support a family with a stay at home wife, 5-6 kids, paying for everything (health/education/pension) out of pocket and no debt.
Yes, the terrible industrial revolution, which only was the most innovative and inventive time in history, which allowed the US become the biggest creditor nation, biggest producer of high quality cheap goods nation on the planet.
Terrible thing of-course.
There are no protections. There are no protections in your system. The people are not protected. Where do you see protected people?
The only real protections come from market regulating the behavior of individuals. Individuals are the real owners of property and businesses.
Corporations are not faceless, there are individuals behind the fictitious legal structures built by the government to protect those, who need that protection and are willing to 'share' with the politicians for those protections.
The protections are not to the average people, the protections that exist in your system are to the real owners of your government.
The only protections that exist protect the real owners of your political system and your government from YOU. From you, as a competitor. From you as an independent person. From you as a savor and investor of your own money into your own business and into your own future.
The real protections are only found in real free market - market free of government misdirection and mis-allocation of resources.
Market is the real democracy, with people voting on who is giving them the best value for their money.
--
As to the political system and the government, I think the best change would be to have people serve limited terms in the government, the way they serve in military in many countries. Yes, why not have people serve in government the way they serve in jury?
You can be drafted to serve in jury and you should be drafted to serve in government maybe? Maybe that's the real way to fix the problem of the broken political system.
I don't think that's the choice.
I think the choice is either to have a completely destroyed economy and to shift to dictatorial/totalitarian government, to lose all freedoms.
OR
The other choice is to allow the restructuring of the economy, have a very hard 2 years, and eventually see the capital return to the US.
But to do that the government must be shrunk, the budgets must be balanced NOT by giving more revenue to the government, but by doing real cuts in spending (wars, SS, Medicare), by shutting down Federal Reserve, FDIC, Freddie/Fannie, FHA, HUD, IRS, FBI, CIA, DHS, dep'ts of education, energy, commerce, agriculture, EPA, FDA, FCC, FAA, etc., abolishing the income/payroll/corporate taxes, shrinking the federal registry.
This is not supposed to be a bad thing - more liberty and more freedom. This is supposed to fix the money, this is supposed to fix the environment for investment capital to return and re-open the production facilities. 1-2 years of this will be very hard.
I would go further than Ron Paul of-course in firing up to 99% of government employees, but I am not running, nor can I.
But this does NOT mean that people will be poorer for it. It means 2 years of real shake down and then it means reopening of production facilities, recreating the actual real economy, not based on vendor financed, debt/inflation financed consumption, but recreating the production, which allows real consumption and real money and real investments and real markets.
The answer to the question: "Can you handle the truth?" is given in the moderation of the question.
So can you handle the truth?
The truth is that Socialist / Marxist / Keynesian ideas that are implemented all around the Western world are causing the mass exodus of capital from that world.
The truth is that government regulations on all facets of business and labor, even such 'small' things as minimum wage create mis-allocation of resources, create imbalances in the markets that are then corrected by the capital and the jobs shifting elsewhere.
The truth is that economy depends on production and not on consumption, consumption is a trivial consequence of production, especially consumption that is tax financed, vendor financed, debt financed, inflation financed consumption.
The truth is that politicians use 'free cheese', such as SS/Medicare ponzi schemes in the mousetrap to push forward their own agenda of stealing more power for themselves and growing the government with all that stolen money and selling the power that the larger government then holds.
The truth is that printing money is not the same thing as producing something of value that market want and the truth is that the so called 'economists' that are supporting this agenda of money printing are just mouthpieces for the government, and they are pushing this agenda that government wants and this is the biggest part of the sickness in the economy - 'free money', currency destruction, which results in gambling rather than investing and of-course results in stealing.
The truth is that the people do NOT understand the real problem and the government is again very successful at playing the blame game, which misdirects the attention of the people from the real problem.
The truth is that the real problem is the loss of liberties and individual freedoms, allowing the government to create a huge prison and fight perpetual wars, taxing, borrowing, printing ever more money, which go to the real owners of the system.
The truth is that the government is incapable of fixing this without getting out of the way and shrinking and becoming proportionate to spending rather than to income of the economy in totality.
The truth is that the loss of jobs is a result of the government policy of implementing a fascist state (merging of government and largest corporations/monopolies) by using socialist ideology (wealth redistribution and 'taking care of people'). All the money printing, income taxes, business regulations, all of the unelected departments creating regulations that then can be sold and can be used to prop up monopolies and prevent competition.
The truth is that it is the government that stands in the way of healing the economy. The economy is being destroyed by the government. The problem with people becoming poorer (socialists/fascists like to call that income inequality, but it's not income inequality, it's just poverty) and people are becoming poorer because they have no choice but either to work for very few companies or to be on welfare or even go without. This is all created by the socialist/fascist agenda of the government. That agenda i