> Anyway, getting back on topic, this data will not convince the 99% of the AGW whose beliefs about global warming aren't even remotely rooted in science, and so the dark ages in the US will continue.
Exactly! Great post! I'm tired of the silly virtual bravado these people display on pseudoanonymous message boards, but will piss their pants the moment the FBI knocks their door down for promoting a violent overthrow of the government.
Revolution? Are you calling for a violent overthrow of the government? I fucking dare you to send a letter to the editor with your post to a major paper using your real name.
Huh? Centrally planned economies means that 100% of the economy is controlled by the government, as in former soviet bloc countries. Here we're talking about government hiring the few percent of the population that are unemployed at a minimum wage. If done, recovery will occur fast and these people would move to higher paid private sector jobs. How is that anything like central planning?
MMT has that angle covered as well. In bad economic times, the solution is deficit spending and the government can pick up the slack of employment (at minimum wage). Once recovery is in progress, it backs off, and raises taxes, before inflation can start rising too much. Now, arguably that backing off is against the nature of politicians, but that's a political issue, not an economic/monetary theory one.
Not really. Here are ways to fix the monetary aspect of the system: http://bilbo.economicoutlook.net/blog/?p=5098 and http://bilbo.economicoutlook.net/blog/?p=4656 and also proper regulation (for example in many cases before the crisis, bank capital ratios were not enforced or worse, were enforced selectively). But those things come down to good governance; using fiat instead of commodity money in itself is not a bad thing. The private sector left to its own devices will result in even bigger periodic crises. What's needed is to minimize banking influence on the government and to stop hiring ex-bankers into government positions, and applying regulation fairly across the board. Also we need government to stop public and international borrowing, and to use its ability to do deficit spending unconstrained until recovery and the private sector beings picking up the slack again, then remove the excess currency by appropriate taxation.
You're committing the fallacy of composition, which is a cardinal sin in economics. Macroeconomic debt is categorically different from private sector debt, and means something completely different. US government debt is enumerated in a currency of which the US is the monopoly issuer. It can always be monetized. Much of this debt is held at the Fed, and indeed all of it could be--that some is public and international borrowing is merely a political decision, and there is no constraint in terms of the monetary system being used that this should be so. http://pragcap.com/resources/understanding-modern-monetary-system
Bunch of countries under the Euro, who have given up their right to be monopoly issuers of their own currency? That's what makes all the difference; the US is not in this situation and it can always monetize its debt.
Debt should be expensive? Perhaps private sector debt. But these considerations don't play a part in discussing government debt; that would be committing the fallacy of composition.
> Most people think the way a bank works is.....Say I put $1000 in savings....This keeps going until there is $10,000. So the banks create $9,000 of money from that first $1000.
Complete and total refutation of what you have just written: http://bilbo.economicoutlook.net/blog/?p=1623
I'm begging you to educate yourself before making ignorant posts and spreading misinformation on a public website.
You conveniently omitted that loans banks make out (asset to the bank, liability to the customer) are deposited at other banks (asset to the customer, liability to the bank). This ALWAYS NETS TO ZERO. Only government deficit spending creates a net increase in money. That builds up government debt, and that debt can ALL be held at the Fed--where it is but an accounting fiction, like a debt between husband and wife. Government does NOT need to borrow from the public or other countries; that is a 100% political choice.
You haven't the foggiest clue what you are talking about. Money in a fiat system is backed by virtue of the requirement that taxes can only be paid in said currency. (the other reason for taxes is to remove excess currency from circulation). Please read this carefully: http://pragcap.com/resources/understanding-modern-monetary-system
You are wrong, since the money lent out is deposited at other banks, creating corresponding liabilities. The other banks lend out, and new corresponding deposits are made. The system overall has a net increase of ZERO. Please read this carefully: http://bilbo.economicoutlook.net/blog/?p=1623
> a bank can create money based on some multiple of the amount of its deposits.
You seem to be misunderstanding the information you're quoting, because you're missing operational details of how this system is implemented. Banks lend out as much as they can (subject to capital, not reserve, constraints), and then, if their reserve accounts at the Fed are insufficient, they borrow from the overnight interbank market whatever is needed. So in practice the banks are not reserve constrained; the reserve ratio is a red herring. Only the capital/asset ratio matters. If the whole system is in trouble and the overnight market is insufficients, the Fed's discount window allows borrowing from the Fed directly. http://bilbo.economicoutlook.net/blog/?p=1623
> Banks create new money when they create loans
And those loans are deposited in other banks, creating corresponding liabilities that mean the net money created is ZERO. Banks don't create net money; only government deficit spending does. http://bilbo.economicoutlook.net/blog/?p=11218
Your argument is easy to obliterate:
1. The US can easily monetize its debts.
2. Economy can be sustained through deficit spending regardless of foreign exchange-implied value of dollar (government is not revenue constrained so the only limit to deficit spending is political).
3. Greece... LOL are you serious? the whole problem with Greece is that it's part of the Euro countries and no longer a monopoly issuer of its own currency. Kind of hard to fight back against Germany's "beggar-thy-neighbor" huge trade imbalance with the Euro countries when you've given up a major component of your sovereignty.
PUBLIC BORROWING IS NOT NECESSARY FOR THE GOVERNMENT TO FUND ITSELF. The US doesn't have to sell treasury debt instruments to the public or other countries. That's a purely political choice, and an obviously wrong one. http://pragcap.com/resources/understanding-modern-monetary-system http://bilbo.economicoutlook.net/blog/?p=11218 http://bilbo.economicoutlook.net/blog/?p=5098
The solution is simple. The government should stop public (and international) borrowing. The government is not revenue constrained and can do deficit spending as much as it wants; the only constraint is political. Don't forget that macroeconomic debt is categorically different from private sector debt (surely every economist is familiar with the fallacy of composition). http://bilbo.economicoutlook.net/blog/?p=5098
The first sentence was a good start, but then you went into conspiracy theory territory. And here I was hoping I had found someone else on slashdot who knew MMT/neo-Chartalism.
You're committing the fallacy of composition. Macroeconomic debt is completely unlike private sector debt. Government is not revenue constrained, and it doesn't really have to repay debt enumerated in a currency of which it is the monopoly issuer. On the other hand, you do have to repay your debt. Government debt can be purely between the Treasury and the Fed--and that's like debt between a husband and wife--it's an accounting fiction. Public and international borrowing (through selling Treasury bonds) is not necessary for the government to do as much deficit spending as it wants to. The ONLY constraint is political considerations.
You don't need to issue bonds at all; the law doesn't prevent deficit spending without selling Treasury instruments to the public and other countries. http://bilbo.economicoutlook.net/blog/?p=5098
Slashdot Mirror
> Anyway, getting back on topic, this data will not convince the 99% of the AGW whose beliefs about global warming aren't even remotely rooted in science, and so the dark ages in the US will continue.
Did you actually look at what the data shows? Zero temperature rise in the last decade: http://www.dailymail.co.uk/sciencetech/article-2055191/Scientists-said-climate-change-sceptics-proved-wrong-accused-hiding-truth-colleague.html
The article is even more misleading that that: the actual data shows NO temperature increase in the past DECADE: http://www.dailymail.co.uk/sciencetech/article-2055191/Scientists-said-climate-change-sceptics-proved-wrong-accused-hiding-truth-colleague.html
Exactly! Great post! I'm tired of the silly virtual bravado these people display on pseudoanonymous message boards, but will piss their pants the moment the FBI knocks their door down for promoting a violent overthrow of the government.
Revolution? Are you calling for a violent overthrow of the government? I fucking dare you to send a letter to the editor with your post to a major paper using your real name.
Huh? Centrally planned economies means that 100% of the economy is controlled by the government, as in former soviet bloc countries. Here we're talking about government hiring the few percent of the population that are unemployed at a minimum wage. If done, recovery will occur fast and these people would move to higher paid private sector jobs. How is that anything like central planning?
MMT has that angle covered as well. In bad economic times, the solution is deficit spending and the government can pick up the slack of employment (at minimum wage). Once recovery is in progress, it backs off, and raises taxes, before inflation can start rising too much. Now, arguably that backing off is against the nature of politicians, but that's a political issue, not an economic/monetary theory one.
But the government doesn't need the taxes to fund itself, since it's not revenue constrained. Read the paper I linked to carefully.
Not really. Here are ways to fix the monetary aspect of the system: http://bilbo.economicoutlook.net/blog/?p=5098 and http://bilbo.economicoutlook.net/blog/?p=4656 and also proper regulation (for example in many cases before the crisis, bank capital ratios were not enforced or worse, were enforced selectively). But those things come down to good governance; using fiat instead of commodity money in itself is not a bad thing. The private sector left to its own devices will result in even bigger periodic crises. What's needed is to minimize banking influence on the government and to stop hiring ex-bankers into government positions, and applying regulation fairly across the board. Also we need government to stop public and international borrowing, and to use its ability to do deficit spending unconstrained until recovery and the private sector beings picking up the slack again, then remove the excess currency by appropriate taxation.
You're committing the fallacy of composition, which is a cardinal sin in economics. Macroeconomic debt is categorically different from private sector debt, and means something completely different. US government debt is enumerated in a currency of which the US is the monopoly issuer. It can always be monetized. Much of this debt is held at the Fed, and indeed all of it could be--that some is public and international borrowing is merely a political decision, and there is no constraint in terms of the monetary system being used that this should be so. http://pragcap.com/resources/understanding-modern-monetary-system
Bunch of countries under the Euro, who have given up their right to be monopoly issuers of their own currency? That's what makes all the difference; the US is not in this situation and it can always monetize its debt.
Debt should be expensive? Perhaps private sector debt. But these considerations don't play a part in discussing government debt; that would be committing the fallacy of composition.
> Most people think the way a bank works is.....Say I put $1000 in savings....This keeps going until there is $10,000. So the banks create $9,000 of money from that first $1000.
Complete and total refutation of what you have just written: http://bilbo.economicoutlook.net/blog/?p=1623
I'm begging you to educate yourself before making ignorant posts and spreading misinformation on a public website.
You conveniently omitted that loans banks make out (asset to the bank, liability to the customer) are deposited at other banks (asset to the customer, liability to the bank). This ALWAYS NETS TO ZERO. Only government deficit spending creates a net increase in money. That builds up government debt, and that debt can ALL be held at the Fed--where it is but an accounting fiction, like a debt between husband and wife. Government does NOT need to borrow from the public or other countries; that is a 100% political choice.
You haven't the foggiest clue what you are talking about. Money in a fiat system is backed by virtue of the requirement that taxes can only be paid in said currency. (the other reason for taxes is to remove excess currency from circulation). Please read this carefully: http://pragcap.com/resources/understanding-modern-monetary-system
This is a more clear explanation: http://bilbo.economicoutlook.net/blog/?p=1623
You are wrong, since the money lent out is deposited at other banks, creating corresponding liabilities. The other banks lend out, and new corresponding deposits are made. The system overall has a net increase of ZERO. Please read this carefully: http://bilbo.economicoutlook.net/blog/?p=1623
> a bank can create money based on some multiple of the amount of its deposits.
You seem to be misunderstanding the information you're quoting, because you're missing operational details of how this system is implemented. Banks lend out as much as they can (subject to capital, not reserve, constraints), and then, if their reserve accounts at the Fed are insufficient, they borrow from the overnight interbank market whatever is needed. So in practice the banks are not reserve constrained; the reserve ratio is a red herring. Only the capital/asset ratio matters. If the whole system is in trouble and the overnight market is insufficients, the Fed's discount window allows borrowing from the Fed directly. http://bilbo.economicoutlook.net/blog/?p=1623
> Banks create new money when they create loans
And those loans are deposited in other banks, creating corresponding liabilities that mean the net money created is ZERO. Banks don't create net money; only government deficit spending does. http://bilbo.economicoutlook.net/blog/?p=11218
Cutting taxes won't increase production. Deficit spending will. Taxes are a monetary tool, not an economic one (they remove excess currency from circulation). http://pragcap.com/resources/understanding-modern-monetary-system
Your argument is easy to obliterate:
1. The US can easily monetize its debts.
2. Economy can be sustained through deficit spending regardless of foreign exchange-implied value of dollar (government is not revenue constrained so the only limit to deficit spending is political).
3. Greece... LOL are you serious? the whole problem with Greece is that it's part of the Euro countries and no longer a monopoly issuer of its own currency. Kind of hard to fight back against Germany's "beggar-thy-neighbor" huge trade imbalance with the Euro countries when you've given up a major component of your sovereignty.
PUBLIC BORROWING IS NOT NECESSARY FOR THE GOVERNMENT TO FUND ITSELF. The US doesn't have to sell treasury debt instruments to the public or other countries. That's a purely political choice, and an obviously wrong one.
http://pragcap.com/resources/understanding-modern-monetary-system
http://bilbo.economicoutlook.net/blog/?p=11218
http://bilbo.economicoutlook.net/blog/?p=5098
Good stuff. Unfortunately, nedlohs' views are common among the deluded who think monetary policy has anything to do with this issue.
The solution is simple. The government should stop public (and international) borrowing. The government is not revenue constrained and can do deficit spending as much as it wants; the only constraint is political. Don't forget that macroeconomic debt is categorically different from private sector debt (surely every economist is familiar with the fallacy of composition). http://bilbo.economicoutlook.net/blog/?p=5098
The first sentence was a good start, but then you went into conspiracy theory territory. And here I was hoping I had found someone else on slashdot who knew MMT/neo-Chartalism.
Hey! You stole my shtick dude! I was the first one that started posting these links around them here parts, pardner
You're committing the fallacy of composition. Macroeconomic debt is completely unlike private sector debt. Government is not revenue constrained, and it doesn't really have to repay debt enumerated in a currency of which it is the monopoly issuer. On the other hand, you do have to repay your debt. Government debt can be purely between the Treasury and the Fed--and that's like debt between a husband and wife--it's an accounting fiction. Public and international borrowing (through selling Treasury bonds) is not necessary for the government to do as much deficit spending as it wants to. The ONLY constraint is political considerations.
You don't need to issue bonds at all; the law doesn't prevent deficit spending without selling Treasury instruments to the public and other countries. http://bilbo.economicoutlook.net/blog/?p=5098