I understand the sentiment, but you didn't really think this through.
What you are saying is that you want to see a movie of reality as opposed to living through it, you want to see the long term result of where the civilization is going. It's interesting of-course, but you are missing something:
1. If everybody decided to do the same thing, the reality would be filled with vats full of people, waking up every 100 years, looking at each other and going back to sleep.
2. You are then an observer, not a participant. Unless you have some unlimited funding, which also is not stolen from you while you are asleep, I doubt anybody would care to wake you up.
3. That would be pretty pointless of a life, you'd still die, but you'd end up achieving nothing.
No, you don't understand. Krugman was on a radio-show about 2 months ago actually stating that even just hiring people to dig and fill in ditches is a worthwhile exercise if it 'employs' people.
That is what I am talking about.
As to the infrastructure - if this was the actual problem in USA, missing infrastructure, it would have been addressed by the private companies. Instead what is happening is that capital is leaving.
Gov't is mis-allocating the remaining capital and credit, sure it can build whatever it wants, it's not going to change the fact that this is capital mis-allocation and will cause worsened situation.
The USA didn't get out of the gov't created Great Depression because of 'new deal' or anything like it, it got out of the depression once the WWII stopped and gov't stopped spending on it and private sector was able to get the labor (soldiers) and the capital - factories/tools that were used for war and restructure this capital and use that labor to start manufacturing goods that the rest of the world needed. US had its level of economy go up because the rest of the world couldn't compete with USA, because most of the rest of the world didn't have anything left after the war and USA had its factories/roads intact.
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Today, on the other hand USA is nowhere near the same position. It has no capital, it has no credit left (QE2 is the indicator of that) and the rest of the world is competing, producing everything and USA doesn't have this luxury of not having any competition.
You believe that gov't taking the credit/savings of everybody and building INFRASTRUCTURE is going to do ANYTHING USEFUL?
Why? There is no reason at all for any new infrastructure to result in ANY increased economic activity in USA.
What USA NEEDS is DEFLATION and falling prices. What USA needs is to get capital (savings/credit) away from its disgusting government and USA needs to have the prices FALL so it can compete with the likes of China.
If you think that today USA is in the same position, as it was after the WWII, think again. There was NO China, NO Japan, NO Germany producing everything the world needs.
USA imports toilet paper today, forget about tools, it's just such an empty idea, to have gov't spending and hoping that will do anything, when in fact it took USA 16 years to wait until gov't STOPPED spending to get anywhere.
If businesses could charge more for those goods, and have people buy them, then they'd already charge more for those goods.
- BZZZT! You are a doofus. The prices for the junk you buy now do not have those high import taxes you want to implement.
Implement your high import taxes, and unless you give ONE IMPORTER company a preferential deal, all of the prices will go up by the amount of the import tax you charge.
- I disagree. Monetizing debt is worse than just defaulting, selling assets and repaying maybe 20-35% on the dollar in the current dollars, whatever they are worth (though, seriously, USD is 30% below its value of 10 years ago in just currencies, and its maybe 300%-500% below in various commodities).
Monetizing debt means a dishonest way to buy back bonds, it's dishonest and it will destroy the dollar on one hand and will push long term interest up into double digits on another. Even if there is no hyper inflation immediately, the double digit interest rates will preclude any economic activity in US for a long time.
Our GDP still outstrips our debt obligations
- again, military spending, bail outs, bond sales, stimulus, all of this nonsense is part of this GDP.
What is US producing? Submarines I guess, because consumer goods show 50Billion/month trade deficit. Well, good luck eating submarines.
and tax rates on the wealthiest are still paltry compared to where they were in the '60's.
- I am sorry, that's just such a (expletive deleted) argument. First of all nobody was paying those stupid rates at the time, the effective taxes were LOWER than what the effective taxes today, that's why the capital is leaving. Secondly, why do you even think that there should be any income taxes at all, especially when what is actually LACKING is capital? Unbelievable.
We're not in any danger over the next decade unless the government gets really boneheaded
- hey, if putting hands over your ears and shouting "not listening" is working for you, it's fine then.
I moved all money into gold quite a while ago, seems to me to make more sense. Got out of North America, working on a business in Europe/Asia, targeting non-Americans as consumers, because I do think that what US gov't is doing will destroy economy of US within 1-2 years from now. QE2 is a very good indicator - Fed printing as much money in 6-7 months to buy those US bonds as much US gov't is aiming at borrowing by June 2011. AFAIC this is debt monetization and now and it is Fed being the lender of last resort to US gov't.
Why should Fed buy those bonds? Looks to me like nobody else is going to, that's why. Looks to me the US will soon have to buy back the bonds that are about to roll over, that's why. It's falling down right in front of us.
I think what you mean is the USD may not remain being the world reserve currency, which is not nearly the same thing as becoming irrelevant.
- what I actually mean, is that you'll be carrying those dollars in a little wheelbarrow to buy whatever you still can, but don't leave the load in front of a store, somebody may just dump the dollars and steal the barrow.
And yet the market, with all it's big players and such, don't seem to disagree with them all that much.
- really? Which indicators are you looking at? I am looking at these:
October 1 2010
Gold: new high Silver: new 30 year high Gold stocks hit 52 week high Oil: strong day and strong week Dollar: dropped 13 percent from peak 3 months ago
September is done, media says: this is best September in 71 years. Dow gained 7.7%, S&P gained 8.8%.
However this month of September.
CRB Index (commodities): gained 8.7% - beat DOW and just under S&P Soy beans: up 9.5% - beat S&P Copper: up 10% - beat S&P Rice: up 10% - beat S&P Oil: up 11% - beat S&P Corn: up 12% - beat S&P Silver: up 13% - beat S&P Frozen concentrated orange juice: up 13% - beat S&P
Honestly, I would recommend to get out of US, start targeting customers in other countries, US consumer is dying out and US currency is as weak as never and getting weaker, so what are you waiting for?
SS today is cash flow negative and it's all bonds, no actual cash. So whatever the, you know, working people put into it, it's all gone immediately and most of it is not even going to cover SS obligations.
The point is that you cannot call something solvent if it's based on debt, which SS is based on. It's a bunch of bonds, and bonds need to be sold first, before you can call it money, and once you sell it, it's debt.
So SS is all debt.
To do retirement planning right for individuals, the gov't needs to let go of the income based taxes (and payroll of-course) and only be financed by consumption, and this will allow the people to save/invest their money themselves.
The gov't though doesn't care about your ability to retire, only about its ability to spend on whatever, so it's taxing your income.
If at least the money was actually there, invested or just cash/gold, OK, you could make an argument that they care about your retirement, but it's all BONDS. It's debt. It's gone.
As I said, go ahead, tax imports. US has no production capacity, much good it will do to tax imports, when you have no competing goods produced in US.
ALL THAT YOU WILL DO IS CAUSE HIGHER PRICES FOR US CONSUMERS.
You will not have ANY effect on the bottom line of the importing companies, because they will simply make your consumer eat that import tax.
That's ALL. You have no competition from inside the country.
You want the US consumer to pay more? Go right ahead and set your import taxes. I hope you have fire insurance, otherwise don't boast to anybody you have caused their junk to go up in price.
That is the stupidest thing I've ever heard. Yes, China really does care if we buy their stuff. Microsoft, to pick an example in the article, really does care if we buy their stuff.
- Any producer, who is based outside of US can sell their junk outside of US.
Sure, they care to a point. But US will fail very soon and those companies will restructure and will sell to other countries. Don't flatter yourself, US is not that important a market anymore, when dollar is worth nothing. China is removing the dependence on US currency now, they have a billion people market, they will shrug it off.
We are the largest country of first world people.
- not anymore, you don't. US was the first world country when it was the first producer, now it's the first debtor. Sure, there is huge military there, but USSR also had a huge military, so what, they couldn't produce even enough toilet paper for themselves. Same with US at this point.
As to the tariffs, you are just making me laugh here out loud, how silly your argument is. US has no bargaining power about the consumer products, because it doesn't BUILD them anymore. As I said, don't tell anyone you caused their new TV to go up in price by a factor of 2.
Well the growth of the 20s was market driven GIVEN the gov't printing of money.
However do not forget the main point - the recession was over in 1 year and gov't did on thing in the beginning of it, cut its spending by 70%.
As to the 'deflationary depression', dude, I am so tired of people being scared of falling prices, it's not funny. Nobody has ever actually seen deflation in the 20th century.
In 19th century though they did, the prices were falling constantly, the dollar ended up twice as valuable by the end of 19 century as compared to its value when it started.
The Fed had ONE mandate: price stability.
What a spectacular failure that has been! From the moment it was created until about now, the dollar has depreciated by 20 times, that means prices went up as many times. That's just sad, how can people argue for any centrally planned economy when it has shown itself to be such a spectacular failure over and over, from USSR and Cuba, all the way to the Fed, Great Depression and now.
Also your other comment, you should not just forget the off-the books debt.
US owes 13-14Trillion, that's on the books.
The bonds that are covering SS and other programs are in the 60 Trillion dollar range. There is no bigger debtor in the world.
None of gov'ts business, it's not what the gov't is for - creating factories/hospitals/etc. I can't believe this is even an argument.
Gov't is a monopolistic structure by default, which is incapable of any sort of competition and thus does not follow the rules of price discovery through trade.
Gov't funding in itself is anti-competitive in nature, as gov't gets its funding by force. You can't build anything of use if it's all dictated by gov't, gov't cant't build independent structures in the market that are not profit motivated, and profit driven motivation system is the only sound economic system we have to date, it ensures market level price discovery through trade, it ensures nearly correct market saturation levels with various products/services at the prices that the market is willing to bear.
You don't want gov't to deal with economy, it's a big mistake to allow a monopolistic, non-profit driven, income ensured, bureaucratic, ever growing, anti-competitive, money printing system to set economic rules, it will inevitably crash the society by imposing itself all over the economy.
Gov't is supposed to be just a cost, it's a cost of having minimum military for protection and a cost of having a working justice system to look after criminal and contract laws.
Leave the individuals to take care of market requirements, leave the individual choices for price/quality discovery, leave the market to set interest rates, do not allow gov't to borrow, do not allow gov't to tax production, keep it on a short consumption financed leash, otherwise it will destroy the economy and society, because it has no boundaries.
No it is not government's job to deal with economic situations, to 'heal', to provide education, etc. Government doesn't KNOW what is needed, it doesn't have any feed back loop mechanisms to correct the spending in any way, it doesn't compete with anybody and thus it cannot do price and quality discovery, but it can sink enormous amounts of money into whatever by printing and taxing and borrowing.
So gov't surely can SPEND but it cannot run anything as a business, because it does not have to make ends meet apparently, it doesn't have to compete.
Most importantly, it is not the gov'ts job to compete in health or education or anything.
The job of a gov't (well at least in the US) is to make sure that the citizens are provided the freedoms and liberties to be able to provide for themselves, but freedoms and liberties from other nations, who'd want to take them away, the problem in US now, it looks like the US gov't is the entity that is taking these liberties away.
Another gov't job is to maintain a working justice system to ensure that criminal and contract laws are followed.
Anything else gov't does is misguided and ends up worsening the situation in the long run by mis-allocating the resources and destroying economy.
What YOU fail to understand is that US is running a 50Billion/month trade deficit, all that stuff you are saying you are buying, it's all foreign stuff. It's not whether they want to sell it to you, it's YOU who wants to buy it, because you have no economy, no production.
US economy is on the brink of collapse and instead of welcoming the capital and production capacity by getting rid of income taxes and repealing all regulations you want to tighten it. As I said, good luck.
You think you have the 'biggest first world market in the world', what you have a pyramid scheme, the USD (and bond) being the hot potato. You think that it is trivial that you will get all that supply, you will find out how trivial this is, once the US bond market crashes and USD is printed out of existence.
As to other countries, you think you will get them to do what is profitable for the US, I guess you always got it, however watch out, China and Russia just signed an agreement to trade in their own respective currencies with each other, USD is becoming irrelevant.
Pre-WWII depression was caused by gov't trying too hard, mis-allocating resources, credit and printing money.
Had it gone away, the way it did in 1920, the 1929 recession could as well be over as fast as the recession of 1920, which was over in 1 year.
If you look at the history of recessions in 19 century, you'd see that they happened and quickly went away, giving rise to more economic growth, and it was all done without gov't intervention.
Debt is the mechanism by which not the capitalism, but the gov't eats itself. Who do you think has the most debt at this point?
It's not a lie. N.Z. and Germany and most other countries do not have federal insurance, if you are unclear on that, it's easy to check and I don't have to 'provide citation' on this fact.
Without gov't insurance the banks couldn't gamble with the deposits as much or at all, that's also a fact. You can, if you care, see how well the countries without FDIC equivalent did.
As far as saying that 'lying leads to being moded as troll', that is also a lie. Troll moderation on this site has nothing to do with the merits of the comment itself, it has to do with the side the moderator takes.
- sure it will. It will monetize the debt, it's the same thing only worse, because the currency itself will be destroyed.
USD will become irrelevant, if you don't think so then see how last week the Chinese and the Russians have signed an agreement to trade between their countries in Chinese and Russian currencies, skipping the USD altogether.
So then, there must be rampant inflation then correct? According to economic indicators our currency has been strengthening recently, and inflation has been low to non-existent.
- the 'economic indicators' are cooked. If you talk about CPI, then you should really pay attention more to what retailers are showing, for example Wall Mart just indicated that it sees inflation at 4%, not the official 1.8 or whatever. That's just one company but it's a big retailer, they know their own prices better than the gov't.
Besides, what 'strengthening' are you talking about? 15 years ago Canadian dollar was about 60-65 US cents. Today it's 1:1. In all currencies the USD has lost 30% of value in 10 years. In commodities it lost hundreds of percent of value. The CPI is cooked, just like the GDP, which counts into itself various inflated military figures, gov't spending, borrowing, 'repayment' of the stimulus, etc. It's all cooked.
In fact it has been too low which has worried some that we would enter a deflationary period.
- Recession MUST cause deflation, which is contraction of monetary supply, which in turn should push the prices down for goods as well as for labor, it should cause layoffs and it should free capital and it should allow the capital to be reallocated as well as labor, so it can be restructured and allocated by the private sector to start new forms of production.
What is wrong with all these people who are scared of deflation? Deflation, has it ever actually happened to you? Has it ever hurt you? Did you see prices falling? Well prices need to fall. Labor costs need to fall. But of-course the problem is not deflation for consumers, the problem is gov't debt. How are THEY going to repay their debt, right? Another problem is all the toxic mortgages still held by the bailed out banks and by gov't. If prices fall (as they should) the houses should become affordable at the current cost of the downpayment! You should be able to buy a house with what you pay downpayment today with.
Sure, gov't is scared of that, it'll show that the banks are insolvent, it would push the interest rates up immediately and gov't will have to deal with its debt now instead of waiting and prolonging this into some future, which judging by QE2 numbers and comparing that to the gov't borrowing projected before June 2011 is not that far away.
Deflation is good, it allows restructuring. That's what healed the US economy in 1920, when the recession went away in 1 year, after gov't reduced its spending by 70%.
Yeah, who will be taking their SS money and dumping it back into the economy. Sure it will stress the SS program but that money isn't evaporating into thin air. It will be re-entering the system.
- SS is bankrupt. It's insolvent right now, it's cash negative, it is ALL BONDS, which means you actually have to be able to SELL those bonds to get some money, and once you sell them, that's DEBT. SS is insolvent right now, it needs to be abolished and those people who cannot afford to live without it (*not everybody who gets it today) must re-qualify for welfare, because that's what SS is, since the actual money is spend and you can't spend the same 1 dollar twice. The voters already got something for that spent dollar, don't make the future generations pay for the mistakes of the past, they just won't do it and they'll be right not to. They'll leave.
Mainly because we don't have a real education system in place for people to gain new skill sets. There's a reason
What you fail to understand that fiat money is NOT the problem for a country such as US, it prints all the money it wants.
The problem IS the productive capacity, so dissing the producers (those companies you want to tax) will force those companies to find different markets, not to return to US.
On the other hand the US will have to find the supply of all those goods that those companies are producing. Supply is the wealth, not cash. Do you know how I know? Look at all that junk people are fighting to buy these days from all those evil corporations that are supplying them with this junk.
What you fail to understand is that the wealth is in production, not in cash. Cash is the trivial part of economy (at least for a Keynesian oriented gov't), it's the supply that's the problem.
However of-course for this economy the jobs are the problem, as they are disappearing and people are living their lives on borrowed time and money, again, all this courtesy Keynesian gov't, printing money, borrowing by selling bonds, trying to push the interest rates down but eventually failing on the long term interest.
You think for some reason that the producers have to produce and supply you with goods and ALSO they have to supply you with the cash to buy those goods. Let's see how much longer this theory will hold.
Borrowing only makes sense if it is borrowing that actually has a reasonable chance to improve something in the future, what we see is that gov't borrowing does not fall into this category. This is all beside the fact, that it is not the gov'ts job to control economic outcomes in the first place, well, of-course you are welcome to change what the US is all about (private enterprise etc.) and try and turn it into some form of dictatorial socialist state, but as I mentioned, the people who will end up paying for the debt+interest with taxes OR with a destroyed economy are the people who are not voting yet, and for them to be in that sort of a situation I imagine will be very aggravating. I believe that those of them, who could have been business leaders of the future will leave the country (not a stretch, giving the reasons why most people actually came to US in the first place).
If forcing future entrepreneurs out of the country into better economic zones is your goal, go ahead, let your gov't borrow.
US government got us out of the recession with the statement that the government got us into it, which does not refute the original statement but rather supports it by demonstrating the government's power without saying anything to contradict it.
- what is wrong with your reading comprehension, or is it so difficult to read something written by a person who speaks English as second language?
US gov't NEVER GOT US OUT OF THE GREAT DEPRESSION - this is what I am saying.
please stop repeating something I never said.
but if all that was operating was a lack of competition then low-paid US workers wouldn't have benefited from it, by definition.
- NO. The US didn't have EXTERNAL competition, but the demand for US based workers was high, that's why standard of living of US based 'blue collar' workers kept creeping up, not because of unions. It was the wealth that US produced, due to the fact that there was no competition from other countries, that provided the US worker with high salaries and ability to have a family with a single income, not anything any union can ever do.
The Soviet Union wasted its productive capacity on its military and on controlling its population in no small part because it was prevented from having markets for anything, by the Cold War. If Europe had bought products from Soviet factories, those factories would have produced them.
- USSR didn't even have ability to produce enough FOOD for its own population, what the hell are you talking about? USSR had a centrally planned economy, the number of toilet paper rolls was probably estimated somewhere, yet it still had to be imported by the ton because there was not enough supply, yet the USA was able to both, live through the cold war AND produce enough goods for the entire world to consume. You are just blind in the face of facts.
"Libertarian" management of the economy was the deregulation of the stock market that let people buy stocks speculatively on credit
- NO. It's perfectly fine to 'buy stocks speculatively on credit' as long as it's YOUR MONEY and NOT GUARANTEED BY THE GOVERNMENT.
That's how the internet bubble ended - a bunch of private businesses lost a bunch of private money. Sure, the jobs were gone anyway, and to stop the recession, Greenspan lowered the interest rates to 1%, which was the original stimulus package. You are again, ignorant.
1which was what funded the equity bubble that crashed
- Equity bubble? Are you talking about the Internet bubble of the nineties or the housing bubble?
The Internet bubble was funded privately, but nobody was paid public money to stay in business, so what's the problem? Free market in action - stupid people are soon parted with their cash.
The housing bubble was creation of the gov't regulation (FDIC), low interest rates and insurance (Freddie/Fannie). Sure, the Glass Steagall was repealed - this was expected, as there was so much money accumulated by the gov't propped up banks, who got all that free money and wanted to gamble.
So they took the moral hazard of FDIC and made sure that the counterbalance of the Glass Steagall is removed. Well, FDIC should have never existed in the first place and if you remove the couterbalance (Glass Steagall), you must also remove the reason for it (FDIC) or you end up with an unbalanced system, thank you government.
That credit didn't come from the government, it came from private banks, which got money from the unregulated government.
- do you even understand what you are writing? "Unregulated government". This is ridiculous, it's like you are from the twilight zone.
Very libertarian, very Great Depression. You said that "the government" created the Great Depression (again, while tacitly acknowledging that "the government" fixed it), but there were two very different gov
Wait until I reiterate my position on SS and other various gov't programs.
For example why SS is insolvent (funded by US bonds, which means there is no money there, only debt)
Then you'll see the real outrage. As is, I only get -1 Troll on my comments if you see through this topic. If I end up posting the actual commentary on each gov't program separately, such as welfare, SS (which is also welfare), food stamps, minimum wage, subsidies to all businesses, regulations on any business, pretty much any economy related law, interest rate setting, printing etc., then you'll see dozens of replies each accusing me of some sort of travesty in addition to the simple '-1 Troll' moderation.
"Keynes predicted". You know, I am not certain about all things his theories are credited with, but one thing is known for a fact: Keynesian shamanism was used to 'predict' that once the WWII was over the US would fall back into the 'Great Depression', because WWII was a huge spending spree by the gov't, which according to Keynes is precisely what's needed - spending, to counteract the reduced purchasing power of the people during a recession.
However all this nonsense was proven to be completely false, because in reality what happened, was a huge boom exactly due to the gov't stopping the spending on the war effort, which allowed the private sector to regain the credit and the labor (returning soldiers) and to start producing consumer goods. Of-course the US was only able to have an enormous boom right then due to the fact that the rest of the world didn't provide any competition to the US producer, since the rest of the world was in ruin.
As to the Chinese, you are correct, there is no way to continue borrowing from them AND buying from them, that's unsustainable, because then US only produces inflation, nothing else. It's clear from the 50Billion/month US trade deficit.
As to how it is better to pay out the debt, well certainly the US gov't seems to think that inflation is what the doctor prescribed, precisely because US is the biggest debtor. Obviously in the process of printing, the US gov't is inflating the monetary supply, causing US dollar to fall and causing the eventual demise of it probably as well as the demise of the American life style, since the purchasing power of all the US dollar holders will be destroyed, and it's still mostly US Americans who live US dollar paycheck to paycheck.
You seem to believe though that it is very easy to rebuild the production capacity that US has lost (evidence is the trade imbalance) once the dollar is destroyed, but where exactly is US going to get all of the tools and factories needed to rebuild its production capacity from, if the rest of the world stops supplying the US with all the cheap products?
Well, of-course the US CAN do it, it's just it's unwilling even to try, and by prolonging this limbo it's ensuring that the restructuring will be so much more painful. I imagine that nobody in US really wants to see hyper-inflationary depression, the shortages of products, double digit interest rates, which will preclude anybody in US from getting any business related loans.
All of this, of-course is coming, thanks to the gov't being such a heavy burden on the economy, rather than helping it by stepping away, as it did once in 1920 recession, when the US economy restructured itself completely without gov't intervention in about 1 year, and then US had what is known as the 'roaring twenties' (while the Fed was busy inflating the next equity bubble, everybody knows how that ended up.)
I don't know why my comment was posted anonymously, must have checked the box by mistake somehow.
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government did create the Great Depression by letting people borrow unlimited amounts to spend on credit-inflated stock
- you are just a bit off there, just like all other bubbles since the Fed, that one was also created by the loose money policy. It's not that the gov't let people to borrow, it's that the gov't was running a pyramid scheme with the money supply ever since the Fed was created and this pushed people out of money and into various assets. The G.D. started from the bursting of an equity bubble, which gov't inflated by printing money.
You tacitly concede that the government got us out of it
- that's the reverse of the truth, you know, a lie.
I never conceded such a ridiculous thing because it's not true. I said the exact opposite, that the gov't had to stop spending in order for the market to recover. Just like they stopped spending in 1920 and that recession went away in about 1 year and US had the 'roaring twenties', if gov't stopped spending in 1929, the recession would have been over in probably also about a year. Instead gov't started printing more, started all the projects, which mis-allocated the resources, which finally were freed up after the WWII.
as if you've somehow proved something
- I have no idea what this is supposed to mean, what are you trying to prove or imply here?
Also I don't care about the party lines, all this partisan BS will not do anything, as a libertarian all of you, republicans and democrats are pretty much witches to me.
The returning soldiers did not work cheap. They were largely unionized and were well paid, which is a big part of what they fought to protect from Fascists
- they were cheap enough to be hired in the post-war environment.
It's the organization and consequent power of American workers that could demand high pay
- no, it was the lack of competition from the other nations, whose capital was destroyed and thus who couldn't provide the same cheap goods as quickly as the US could. It was a market of growth based on lack of viable competition.
Without locking the Soviet Union into a box, the Soviet industrial capacity (and its - literally - rocketlike growth) would have resupplied Europe instead of the US doing so
- you have not a single clue about the USSR and I was born there, my grandparents worked there, my uncles and ants worked there, my parents worked there, there was nothing that USSR could do to supply anybody, less themselves with any consumer goods at all. USSR was selling all sorts of resources and only weapons to the world to buy food, because USSR could not provide even that to their own people. There was a reason why we had the 'black markets' in the USSR, that's because there was almost nothing produced there that could be used by non-military personnel. The country was printing trillions of rubles but couldn't produce even toilet paper in quantities needed, because it didn't have either private enterprise nor market based feed back loop to 'know' what was needed. Nor was it the policy of the country, the policy was all military. Shows what you know about that system to tell me fairy tails here, go find somebody else for this nonsense.
As to USA not exporting inflation? You are as blind as I can see from your post. All of the countries of the world inflating their currencies to correspond to the printing of the dollar just to subsidize the US customer with their goods, that is inflation. Getting off the gold standard to print fiat to cover war costs without raising taxes honestly - that's inflation. All the US wars, it's all done for one reason - to maintain high levels of inflation of US dollar being dumped upon the world just to keep the US consumer with relatively stable prices within th
While gov't does change the rules of the game, don't diss the free market, which provide the US with biggest and fastest growth between the Civil war and WWI.
Slashdot Mirror
I understand the sentiment, but you didn't really think this through.
What you are saying is that you want to see a movie of reality as opposed to living through it, you want to see the long term result of where the civilization is going. It's interesting of-course, but you are missing something:
1. If everybody decided to do the same thing, the reality would be filled with vats full of people, waking up every 100 years, looking at each other and going back to sleep.
2. You are then an observer, not a participant. Unless you have some unlimited funding, which also is not stolen from you while you are asleep, I doubt anybody would care to wake you up.
3. That would be pretty pointless of a life, you'd still die, but you'd end up achieving nothing.
No, you don't understand. Krugman was on a radio-show about 2 months ago actually stating that even just hiring people to dig and fill in ditches is a worthwhile exercise if it 'employs' people.
That is what I am talking about.
As to the infrastructure - if this was the actual problem in USA, missing infrastructure, it would have been addressed by the private companies. Instead what is happening is that capital is leaving.
Gov't is mis-allocating the remaining capital and credit, sure it can build whatever it wants, it's not going to change the fact that this is capital mis-allocation and will cause worsened situation.
The USA didn't get out of the gov't created Great Depression because of 'new deal' or anything like it, it got out of the depression once the WWII stopped and gov't stopped spending on it and private sector was able to get the labor (soldiers) and the capital - factories/tools that were used for war and restructure this capital and use that labor to start manufacturing goods that the rest of the world needed. US had its level of economy go up because the rest of the world couldn't compete with USA, because most of the rest of the world didn't have anything left after the war and USA had its factories/roads intact.
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Today, on the other hand USA is nowhere near the same position. It has no capital, it has no credit left (QE2 is the indicator of that) and the rest of the world is competing, producing everything and USA doesn't have this luxury of not having any competition.
You believe that gov't taking the credit/savings of everybody and building INFRASTRUCTURE is going to do ANYTHING USEFUL?
Why? There is no reason at all for any new infrastructure to result in ANY increased economic activity in USA.
What USA NEEDS is DEFLATION and falling prices. What USA needs is to get capital (savings/credit) away from its disgusting government and USA needs to have the prices FALL so it can compete with the likes of China.
If you think that today USA is in the same position, as it was after the WWII, think again. There was NO China, NO Japan, NO Germany producing everything the world needs.
USA imports toilet paper today, forget about tools, it's just such an empty idea, to have gov't spending and hoping that will do anything, when in fact it took USA 16 years to wait until gov't STOPPED spending to get anywhere.
I am done here.
If businesses could charge more for those goods, and have people buy them, then they'd already charge more for those goods.
- BZZZT! You are a doofus. The prices for the junk you buy now do not have those high import taxes you want to implement.
Implement your high import taxes, and unless you give ONE IMPORTER company a preferential deal, all of the prices will go up by the amount of the import tax you charge.
YOU = BIG FAIL.
Monetizing debt is not the same as defaulting.
- I disagree. Monetizing debt is worse than just defaulting, selling assets and repaying maybe 20-35% on the dollar in the current dollars, whatever they are worth (though, seriously, USD is 30% below its value of 10 years ago in just currencies, and its maybe 300%-500% below in various commodities).
Monetizing debt means a dishonest way to buy back bonds, it's dishonest and it will destroy the dollar on one hand and will push long term interest up into double digits on another. Even if there is no hyper inflation immediately, the double digit interest rates will preclude any economic activity in US for a long time.
Our GDP still outstrips our debt obligations
- again, military spending, bail outs, bond sales, stimulus, all of this nonsense is part of this GDP.
What is US producing? Submarines I guess, because consumer goods show 50Billion/month trade deficit. Well, good luck eating submarines.
and tax rates on the wealthiest are still paltry compared to where they were in the '60's.
- I am sorry, that's just such a (expletive deleted) argument. First of all nobody was paying those stupid rates at the time, the effective taxes were LOWER than what the effective taxes today, that's why the capital is leaving. Secondly, why do you even think that there should be any income taxes at all, especially when what is actually LACKING is capital? Unbelievable.
We're not in any danger over the next decade unless the government gets really boneheaded
- hey, if putting hands over your ears and shouting "not listening" is working for you, it's fine then.
I moved all money into gold quite a while ago, seems to me to make more sense. Got out of North America, working on a business in Europe/Asia, targeting non-Americans as consumers, because I do think that what US gov't is doing will destroy economy of US within 1-2 years from now. QE2 is a very good indicator - Fed printing as much money in 6-7 months to buy those US bonds as much US gov't is aiming at borrowing by June 2011. AFAIC this is debt monetization and now and it is Fed being the lender of last resort to US gov't.
Why should Fed buy those bonds? Looks to me like nobody else is going to, that's why. Looks to me the US will soon have to buy back the bonds that are about to roll over, that's why. It's falling down right in front of us.
You know what you are reminding me of? Bernanke, when he was sitting in 2006, 2007 an 2008, saying: there is nothing going on, no housing bubble, no recession, nothing.
I think what you mean is the USD may not remain being the world reserve currency, which is not nearly the same thing as becoming irrelevant.
- what I actually mean, is that you'll be carrying those dollars in a little wheelbarrow to buy whatever you still can, but don't leave the load in front of a store, somebody may just dump the dollars and steal the barrow.
And yet the market, with all it's big players and such, don't seem to disagree with them all that much.
- really? Which indicators are you looking at? I am looking at these:
October 1 2010
Gold: new high
Silver: new 30 year high
Gold stocks hit 52 week high
Oil: strong day and strong week
Dollar: dropped 13 percent from peak 3 months ago
September is done, media says: this is best September in 71 years. Dow gained 7.7%, S&P gained 8.8%.
However this month of September.
CRB Index (commodities): gained 8.7% - beat DOW and just under S&P
Soy beans: up 9.5% - beat S&P
Copper: up 10% - beat S&P
Rice: up 10% - beat S&P
Oil: up 11% - beat S&P
Corn: up 12% - beat S&P
Silver: up 13% - beat S&P
Frozen concentrated orange juice: up 13% - beat S&P
Honestly, I would recommend to get out of US, start targeting customers in other countries, US consumer is dying out and US currency is as weak as never and getting weaker, so what are you waiting for?
SS today is cash flow negative and it's all bonds, no actual cash. So whatever the, you know, working people put into it, it's all gone immediately and most of it is not even going to cover SS obligations.
The point is that you cannot call something solvent if it's based on debt, which SS is based on. It's a bunch of bonds, and bonds need to be sold first, before you can call it money, and once you sell it, it's debt.
So SS is all debt.
To do retirement planning right for individuals, the gov't needs to let go of the income based taxes (and payroll of-course) and only be financed by consumption, and this will allow the people to save/invest their money themselves.
The gov't though doesn't care about your ability to retire, only about its ability to spend on whatever, so it's taxing your income.
If at least the money was actually there, invested or just cash/gold, OK, you could make an argument that they care about your retirement, but it's all BONDS. It's debt. It's gone.
Fuck off, you useless scam, that's not a bank, that's a private lender. Just go away back into your rat hole where you came from.
As I said, go ahead, tax imports. US has no production capacity, much good it will do to tax imports, when you have no competing goods produced in US.
ALL THAT YOU WILL DO IS CAUSE HIGHER PRICES FOR US CONSUMERS.
You will not have ANY effect on the bottom line of the importing companies, because they will simply make your consumer eat that import tax.
That's ALL. You have no competition from inside the country.
You want the US consumer to pay more? Go right ahead and set your import taxes. I hope you have fire insurance, otherwise don't boast to anybody you have caused their junk to go up in price.
That is the stupidest thing I've ever heard. Yes, China really does care if we buy their stuff. Microsoft, to pick an example in the article, really does care if we buy their stuff.
- Any producer, who is based outside of US can sell their junk outside of US.
Sure, they care to a point. But US will fail very soon and those companies will restructure and will sell to other countries. Don't flatter yourself, US is not that important a market anymore, when dollar is worth nothing. China is removing the dependence on US currency now, they have a billion people market, they will shrug it off.
We are the largest country of first world people.
- not anymore, you don't. US was the first world country when it was the first producer, now it's the first debtor. Sure, there is huge military there, but USSR also had a huge military, so what, they couldn't produce even enough toilet paper for themselves. Same with US at this point.
As to the tariffs, you are just making me laugh here out loud, how silly your argument is. US has no bargaining power about the consumer products, because it doesn't BUILD them anymore. As I said, don't tell anyone you caused their new TV to go up in price by a factor of 2.
New Zealand did not have any bailouts through this crisis that US is experiencing.
Just bugger off.
Well the growth of the 20s was market driven GIVEN the gov't printing of money.
However do not forget the main point - the recession was over in 1 year and gov't did on thing in the beginning of it, cut its spending by 70%.
As to the 'deflationary depression', dude, I am so tired of people being scared of falling prices, it's not funny. Nobody has ever actually seen deflation in the 20th century.
In 19th century though they did, the prices were falling constantly, the dollar ended up twice as valuable by the end of 19 century as compared to its value when it started.
The Fed had ONE mandate: price stability.
What a spectacular failure that has been! From the moment it was created until about now, the dollar has depreciated by 20 times, that means prices went up as many times. That's just sad, how can people argue for any centrally planned economy when it has shown itself to be such a spectacular failure over and over, from USSR and Cuba, all the way to the Fed, Great Depression and now.
Also your other comment, you should not just forget the off-the books debt.
US owes 13-14Trillion, that's on the books.
The bonds that are covering SS and other programs are in the 60 Trillion dollar range. There is no bigger debtor in the world.
None of gov'ts business, it's not what the gov't is for - creating factories/hospitals/etc. I can't believe this is even an argument.
Gov't is a monopolistic structure by default, which is incapable of any sort of competition and thus does not follow the rules of price discovery through trade.
Gov't funding in itself is anti-competitive in nature, as gov't gets its funding by force. You can't build anything of use if it's all dictated by gov't, gov't cant't build independent structures in the market that are not profit motivated, and profit driven motivation system is the only sound economic system we have to date, it ensures market level price discovery through trade, it ensures nearly correct market saturation levels with various products/services at the prices that the market is willing to bear.
You don't want gov't to deal with economy, it's a big mistake to allow a monopolistic, non-profit driven, income ensured, bureaucratic, ever growing, anti-competitive, money printing system to set economic rules, it will inevitably crash the society by imposing itself all over the economy.
Gov't is supposed to be just a cost, it's a cost of having minimum military for protection and a cost of having a working justice system to look after criminal and contract laws.
Leave the individuals to take care of market requirements, leave the individual choices for price/quality discovery, leave the market to set interest rates, do not allow gov't to borrow, do not allow gov't to tax production, keep it on a short consumption financed leash, otherwise it will destroy the economy and society, because it has no boundaries.
No it is not government's job to deal with economic situations, to 'heal', to provide education, etc. Government doesn't KNOW what is needed, it doesn't have any feed back loop mechanisms to correct the spending in any way, it doesn't compete with anybody and thus it cannot do price and quality discovery, but it can sink enormous amounts of money into whatever by printing and taxing and borrowing.
So gov't surely can SPEND but it cannot run anything as a business, because it does not have to make ends meet apparently, it doesn't have to compete.
Most importantly, it is not the gov'ts job to compete in health or education or anything.
The job of a gov't (well at least in the US) is to make sure that the citizens are provided the freedoms and liberties to be able to provide for themselves, but freedoms and liberties from other nations, who'd want to take them away, the problem in US now, it looks like the US gov't is the entity that is taking these liberties away.
Another gov't job is to maintain a working justice system to ensure that criminal and contract laws are followed.
Anything else gov't does is misguided and ends up worsening the situation in the long run by mis-allocating the resources and destroying economy.
What YOU fail to understand is that US is running a 50Billion/month trade deficit, all that stuff you are saying you are buying, it's all foreign stuff. It's not whether they want to sell it to you, it's YOU who wants to buy it, because you have no economy, no production.
US economy is on the brink of collapse and instead of welcoming the capital and production capacity by getting rid of income taxes and repealing all regulations you want to tighten it. As I said, good luck.
You think you have the 'biggest first world market in the world', what you have a pyramid scheme, the USD (and bond) being the hot potato. You think that it is trivial that you will get all that supply, you will find out how trivial this is, once the US bond market crashes and USD is printed out of existence.
As to other countries, you think you will get them to do what is profitable for the US, I guess you always got it, however watch out, China and Russia just signed an agreement to trade in their own respective currencies with each other, USD is becoming irrelevant.
Pre-WWII depression was caused by gov't trying too hard, mis-allocating resources, credit and printing money.
Had it gone away, the way it did in 1920, the 1929 recession could as well be over as fast as the recession of 1920, which was over in 1 year.
If you look at the history of recessions in 19 century, you'd see that they happened and quickly went away, giving rise to more economic growth, and it was all done without gov't intervention.
Debt is the mechanism by which not the capitalism, but the gov't eats itself. Who do you think has the most debt at this point?
It's not a lie. N.Z. and Germany and most other countries do not have federal insurance, if you are unclear on that, it's easy to check and I don't have to 'provide citation' on this fact.
Without gov't insurance the banks couldn't gamble with the deposits as much or at all, that's also a fact. You can, if you care, see how well the countries without FDIC equivalent did.
As far as saying that 'lying leads to being moded as troll', that is also a lie. Troll moderation on this site has nothing to do with the merits of the comment itself, it has to do with the side the moderator takes.
The US CAN'T default on it's debt.
- sure it will. It will monetize the debt, it's the same thing only worse, because the currency itself will be destroyed.
USD will become irrelevant, if you don't think so then see how last week the Chinese and the Russians have signed an agreement to trade between their countries in Chinese and Russian currencies, skipping the USD altogether.
So then, there must be rampant inflation then correct? According to economic indicators our currency has been strengthening recently, and inflation has been low to non-existent.
- the 'economic indicators' are cooked. If you talk about CPI, then you should really pay attention more to what retailers are showing, for example Wall Mart just indicated that it sees inflation at 4%, not the official 1.8 or whatever. That's just one company but it's a big retailer, they know their own prices better than the gov't.
Besides, what 'strengthening' are you talking about? 15 years ago Canadian dollar was about 60-65 US cents. Today it's 1:1. In all currencies the USD has lost 30% of value in 10 years. In commodities it lost hundreds of percent of value. The CPI is cooked, just like the GDP, which counts into itself various inflated military figures, gov't spending, borrowing, 'repayment' of the stimulus, etc. It's all cooked.
In fact it has been too low which has worried some that we would enter a deflationary period.
- Recession MUST cause deflation, which is contraction of monetary supply, which in turn should push the prices down for goods as well as for labor, it should cause layoffs and it should free capital and it should allow the capital to be reallocated as well as labor, so it can be restructured and allocated by the private sector to start new forms of production.
What is wrong with all these people who are scared of deflation? Deflation, has it ever actually happened to you? Has it ever hurt you? Did you see prices falling? Well prices need to fall. Labor costs need to fall. But of-course the problem is not deflation for consumers, the problem is gov't debt. How are THEY going to repay their debt, right? Another problem is all the toxic mortgages still held by the bailed out banks and by gov't. If prices fall (as they should) the houses should become affordable at the current cost of the downpayment! You should be able to buy a house with what you pay downpayment today with.
Sure, gov't is scared of that, it'll show that the banks are insolvent, it would push the interest rates up immediately and gov't will have to deal with its debt now instead of waiting and prolonging this into some future, which judging by QE2 numbers and comparing that to the gov't borrowing projected before June 2011 is not that far away.
Deflation is good, it allows restructuring. That's what healed the US economy in 1920, when the recession went away in 1 year, after gov't reduced its spending by 70%.
Yeah, who will be taking their SS money and dumping it back into the economy. Sure it will stress the SS program but that money isn't evaporating into thin air. It will be re-entering the system.
- SS is bankrupt. It's insolvent right now, it's cash negative, it is ALL BONDS, which means you actually have to be able to SELL those bonds to get some money, and once you sell them, that's DEBT. SS is insolvent right now, it needs to be abolished and those people who cannot afford to live without it (*not everybody who gets it today) must re-qualify for welfare, because that's what SS is, since the actual money is spend and you can't spend the same 1 dollar twice. The voters already got something for that spent dollar, don't make the future generations pay for the mistakes of the past, they just won't do it and they'll be right not to. They'll leave.
Mainly because we don't have a real education system in place for people to gain new skill sets. There's a reason
What you fail to understand that fiat money is NOT the problem for a country such as US, it prints all the money it wants.
The problem IS the productive capacity, so dissing the producers (those companies you want to tax) will force those companies to find different markets, not to return to US.
On the other hand the US will have to find the supply of all those goods that those companies are producing. Supply is the wealth, not cash. Do you know how I know? Look at all that junk people are fighting to buy these days from all those evil corporations that are supplying them with this junk.
What you fail to understand is that the wealth is in production, not in cash. Cash is the trivial part of economy (at least for a Keynesian oriented gov't), it's the supply that's the problem.
However of-course for this economy the jobs are the problem, as they are disappearing and people are living their lives on borrowed time and money, again, all this courtesy Keynesian gov't, printing money, borrowing by selling bonds, trying to push the interest rates down but eventually failing on the long term interest.
You think for some reason that the producers have to produce and supply you with goods and ALSO they have to supply you with the cash to buy those goods. Let's see how much longer this theory will hold.
Sounds to me you like to argue semantics.
Borrowing only makes sense if it is borrowing that actually has a reasonable chance to improve something in the future, what we see is that gov't borrowing does not fall into this category. This is all beside the fact, that it is not the gov'ts job to control economic outcomes in the first place, well, of-course you are welcome to change what the US is all about (private enterprise etc.) and try and turn it into some form of dictatorial socialist state, but as I mentioned, the people who will end up paying for the debt+interest with taxes OR with a destroyed economy are the people who are not voting yet, and for them to be in that sort of a situation I imagine will be very aggravating. I believe that those of them, who could have been business leaders of the future will leave the country (not a stretch, giving the reasons why most people actually came to US in the first place).
If forcing future entrepreneurs out of the country into better economic zones is your goal, go ahead, let your gov't borrow.
US government got us out of the recession with the statement that the government got us into it, which does not refute the original statement but rather supports it by demonstrating the government's power without saying anything to contradict it.
- what is wrong with your reading comprehension, or is it so difficult to read something written by a person who speaks English as second language?
US gov't NEVER GOT US OUT OF THE GREAT DEPRESSION - this is what I am saying.
please stop repeating something I never said.
but if all that was operating was a lack of competition then low-paid US workers wouldn't have benefited from it, by definition.
- NO. The US didn't have EXTERNAL competition, but the demand for US based workers was high, that's why standard of living of US based 'blue collar' workers kept creeping up, not because of unions. It was the wealth that US produced, due to the fact that there was no competition from other countries, that provided the US worker with high salaries and ability to have a family with a single income, not anything any union can ever do.
The Soviet Union wasted its productive capacity on its military and on controlling its population in no small part because it was prevented from having markets for anything, by the Cold War. If Europe had bought products from Soviet factories, those factories would have produced them.
- USSR didn't even have ability to produce enough FOOD for its own population, what the hell are you talking about? USSR had a centrally planned economy, the number of toilet paper rolls was probably estimated somewhere, yet it still had to be imported by the ton because there was not enough supply, yet the USA was able to both, live through the cold war AND produce enough goods for the entire world to consume. You are just blind in the face of facts.
"Libertarian" management of the economy was the deregulation of the stock market that let people buy stocks speculatively on credit
- NO. It's perfectly fine to 'buy stocks speculatively on credit' as long as it's YOUR MONEY and NOT GUARANTEED BY THE GOVERNMENT.
That's how the internet bubble ended - a bunch of private businesses lost a bunch of private money. Sure, the jobs were gone anyway, and to stop the recession, Greenspan lowered the interest rates to 1%, which was the original stimulus package. You are again, ignorant.
1which was what funded the equity bubble that crashed
- Equity bubble? Are you talking about the Internet bubble of the nineties or the housing bubble?
The Internet bubble was funded privately, but nobody was paid public money to stay in business, so what's the problem? Free market in action - stupid people are soon parted with their cash.
The housing bubble was creation of the gov't regulation (FDIC), low interest rates and insurance (Freddie/Fannie). Sure, the Glass Steagall was repealed - this was expected, as there was so much money accumulated by the gov't propped up banks, who got all that free money and wanted to gamble.
So they took the moral hazard of FDIC and made sure that the counterbalance of the Glass Steagall is removed. Well, FDIC should have never existed in the first place and if you remove the couterbalance (Glass Steagall), you must also remove the reason for it (FDIC) or you end up with an unbalanced system, thank you government.
That credit didn't come from the government, it came from private banks, which got money from the unregulated government.
- do you even understand what you are writing? "Unregulated government". This is ridiculous, it's like you are from the twilight zone.
Very libertarian, very Great Depression. You said that "the government" created the Great Depression (again, while tacitly acknowledging that "the government" fixed it), but there were two very different gov
During the Clinton years, the U.S. was actually repaying its debts.
- biggest lie.
Clinton didn't 'repay' any debts, he REFINANCED them.
There is a difference.
Wait until I reiterate my position on SS and other various gov't programs.
For example why SS is insolvent (funded by US bonds, which means there is no money there, only debt)
Then you'll see the real outrage. As is, I only get -1 Troll on my comments if you see through this topic. If I end up posting the actual commentary on each gov't program separately, such as welfare, SS (which is also welfare), food stamps, minimum wage, subsidies to all businesses, regulations on any business, pretty much any economy related law, interest rate setting, printing etc., then you'll see dozens of replies each accusing me of some sort of travesty in addition to the simple '-1 Troll' moderation.
First, citation of what?
Secondly, what is your actual question, 'infinite wisdom'?
Third, I have typed enough words on this story already.
"Keynes predicted". You know, I am not certain about all things his theories are credited with, but one thing is known for a fact: Keynesian shamanism was used to 'predict' that once the WWII was over the US would fall back into the 'Great Depression', because WWII was a huge spending spree by the gov't, which according to Keynes is precisely what's needed - spending, to counteract the reduced purchasing power of the people during a recession.
However all this nonsense was proven to be completely false, because in reality what happened, was a huge boom exactly due to the gov't stopping the spending on the war effort, which allowed the private sector to regain the credit and the labor (returning soldiers) and to start producing consumer goods. Of-course the US was only able to have an enormous boom right then due to the fact that the rest of the world didn't provide any competition to the US producer, since the rest of the world was in ruin.
As to the Chinese, you are correct, there is no way to continue borrowing from them AND buying from them, that's unsustainable, because then US only produces inflation, nothing else. It's clear from the 50Billion/month US trade deficit.
As to how it is better to pay out the debt, well certainly the US gov't seems to think that inflation is what the doctor prescribed, precisely because US is the biggest debtor. Obviously in the process of printing, the US gov't is inflating the monetary supply, causing US dollar to fall and causing the eventual demise of it probably as well as the demise of the American life style, since the purchasing power of all the US dollar holders will be destroyed, and it's still mostly US Americans who live US dollar paycheck to paycheck.
You seem to believe though that it is very easy to rebuild the production capacity that US has lost (evidence is the trade imbalance) once the dollar is destroyed, but where exactly is US going to get all of the tools and factories needed to rebuild its production capacity from, if the rest of the world stops supplying the US with all the cheap products?
Well, of-course the US CAN do it, it's just it's unwilling even to try, and by prolonging this limbo it's ensuring that the restructuring will be so much more painful. I imagine that nobody in US really wants to see hyper-inflationary depression, the shortages of products, double digit interest rates, which will preclude anybody in US from getting any business related loans.
All of this, of-course is coming, thanks to the gov't being such a heavy burden on the economy, rather than helping it by stepping away, as it did once in 1920 recession, when the US economy restructured itself completely without gov't intervention in about 1 year, and then US had what is known as the 'roaring twenties' (while the Fed was busy inflating the next equity bubble, everybody knows how that ended up.)
I don't know why my comment was posted anonymously, must have checked the box by mistake somehow.
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government did create the Great Depression by letting people borrow unlimited amounts to spend on credit-inflated stock
- you are just a bit off there, just like all other bubbles since the Fed, that one was also created by the loose money policy. It's not that the gov't let people to borrow, it's that the gov't was running a pyramid scheme with the money supply ever since the Fed was created and this pushed people out of money and into various assets. The G.D. started from the bursting of an equity bubble, which gov't inflated by printing money.
You tacitly concede that the government got us out of it
- that's the reverse of the truth, you know, a lie.
I never conceded such a ridiculous thing because it's not true. I said the exact opposite, that the gov't had to stop spending in order for the market to recover. Just like they stopped spending in 1920 and that recession went away in about 1 year and US had the 'roaring twenties', if gov't stopped spending in 1929, the recession would have been over in probably also about a year. Instead gov't started printing more, started all the projects, which mis-allocated the resources, which finally were freed up after the WWII.
as if you've somehow proved something
- I have no idea what this is supposed to mean, what are you trying to prove or imply here?
Also I don't care about the party lines, all this partisan BS will not do anything, as a libertarian all of you, republicans and democrats are pretty much witches to me.
The returning soldiers did not work cheap. They were largely unionized and were well paid, which is a big part of what they fought to protect from Fascists
- they were cheap enough to be hired in the post-war environment.
It's the organization and consequent power of American workers that could demand high pay
- no, it was the lack of competition from the other nations, whose capital was destroyed and thus who couldn't provide the same cheap goods as quickly as the US could. It was a market of growth based on lack of viable competition.
Without locking the Soviet Union into a box, the Soviet industrial capacity (and its - literally - rocketlike growth) would have resupplied Europe instead of the US doing so
- you have not a single clue about the USSR and I was born there, my grandparents worked there, my uncles and ants worked there, my parents worked there, there was nothing that USSR could do to supply anybody, less themselves with any consumer goods at all. USSR was selling all sorts of resources and only weapons to the world to buy food, because USSR could not provide even that to their own people. There was a reason why we had the 'black markets' in the USSR, that's because there was almost nothing produced there that could be used by non-military personnel. The country was printing trillions of rubles but couldn't produce even toilet paper in quantities needed, because it didn't have either private enterprise nor market based feed back loop to 'know' what was needed. Nor was it the policy of the country, the policy was all military. Shows what you know about that system to tell me fairy tails here, go find somebody else for this nonsense.
As to USA not exporting inflation? You are as blind as I can see from your post. All of the countries of the world inflating their currencies to correspond to the printing of the dollar just to subsidize the US customer with their goods, that is inflation. Getting off the gold standard to print fiat to cover war costs without raising taxes honestly - that's inflation. All the US wars, it's all done for one reason - to maintain high levels of inflation of US dollar being dumped upon the world just to keep the US consumer with relatively stable prices within th
While gov't does change the rules of the game, don't diss the free market, which provide the US with biggest and fastest growth between the Civil war and WWI.