CheeseForSteeze

We have HUGE amounts of inflation waiting to destroy the dollar. Why do you think there has been such an argument about raising the debt ceiling. The reason inflationary forces haven't acted on domestic prices yet, is because we've been able to con overseas bond purchasers to keep buying US Treasury debt obligations.

Anyone who says we have low inflation is painfully and intentinally ignorant. Lending rates have been supressed to nearly 0 for years. This WILL cause inflation by its very nature. This is how central reserve banking works. If lending rates are low, creation of commercial money goes way up because borrowing money carries little risks (low interest). Increased commercial money will result in large upward force on prices across the board. This inflation can be exported if the low rates are exploited by funding everything through longer term liabilities sold to foreign investors. However, when all those liabilities mature, the US will either have to default honestly (unlikely) or dishonestly by printing their way out of paying for it. This let all the accumulated inflation to drive domestic prices through the roof.

CheeseForSteeze

They are emotional appeals. The fact is, every post I've read sets a tone for the producer/manufacturers to be some sort of monolithic, villainous entity while the masses are the helpless, vulnerable proletariat. I do not paint my posts with a tone that suggest either character is moral or amoral. I just describe how they behave. After all, despite the use of quantitative models, economics is fundamentally a study of human behavior. Any such tonal formations in regards to each character does nothing but distract from the actual discussion and pretty readily hints and a emotional stake drawn in the ground of the chosen stance.

Germany is closing down all their nuclear facilities as a regulatory measure. The only German products that are of worth are boutique ones which are artificially demanded due to excess wealth in first world countries, wealth that is rapidly shriveling with a US Dollar in great peril.

If you want to look at real, emerging markets, look to South East Asia. China, Vietnam and Hong Kong hold some of the richest jewels with blossoming growth potentials limited only by the shortsighted position of coupling currency to a failing US Dollar.

I'm not Americacentric whatsoever. I don't know if you took the time to actually parse what the key arguments I've presented are, but they are extremely bearish on both the structure of the US Economy as well as monetary policy.

Economic theory such as mine hasn't been really practiced since the Taft administration. It is predicated on sound currency, backed by real money and allowance of the market mechanism to drive allocation of resources.

Simply put, the current trendy economic model is predicated on the idea that a group of men can successfully manage an economy by resources through use of labor and trade restrictions, subsidization and the like. Anytime policy is introduced with the intention of helping one party, many uninvented consequences result. Take FDIC for example. It insures 100,000 on all depository accounts to participating banks. This is good for the public, right? Well, it actually hurts the dollar and hurts their savings because the bank can basically write off that first 100,000 in all deposits since it's insured. It *incentivizes high risk loaning behavior because the deposits can't be lost*. In the end, the taxpayer will foot the bill for this, mostly likely, the same tax payers who keep their cash in such depository institutions. I contend there is NO group of men smart enough to successfully manage an economy or even manage it suboptimally. I would contend that we could better predict global weather patterns using models with resolutions on the atomic scale. I reject this notion. And in order to accept that these models can be successful, it is necessarily true that you must believe, to the contrary, that this is possible.

Capitalism doesn't breed greedy mentality. It's just the result of human nature. It's not evil nor good in character - it just is. All economic models must be based around the idea of voluntary trade to each party's benefit.

And I know for fact that every single person has, at any given point, patronized another entity which exhibits behavior they find reprehensible. It's the American way. We don't do our due diligence.

I would assert you would never believe that free market economics could allocates resources to their most productive use. But this is the behavior observed in free markets.

dtshakuras

Having lending rates, or interest, set to 0 does not guarantee inflation. Look at Japan. Their interest rates have been low for an extremely long time. But their inflation rate is very small over the past decade. In fact at times, the inflation rate dropped.

There is a very simple reason why stuff is off-shored: Lack of tariffs

The blame cannot rest with the everyday consumer for buying stuff at Walmart or goods manufactured cheaply overseas. Its human nature to get the best deal and save money, always has and always will. I can say with certainty that if the US hadn't implemented tariffs throughout our history, our nation would never have grown to be so powerful and so fast. Rather the blame should be directed at politicians because as leaders they have a duty to do whats best for our nation. Unfortunately as we all know, much of the leaders today pale in comparison to the iron will exerted by past leaders in history.

As for subsidizing the poor, you bet I support that, one of the reasons why I'm a Democrat. It contributes to a better society. Besides welfare for food and healthcare (which lags behind industrialized countries even with the passing of the health care bill), education should be available for single moms. We should even adapt Portugal's drug program which provides treatment for drug users instead of jail (which has been proven to work). Of course, some common sense should be utilized. I know a well off couple whose upscale neighborhood was also host to subsidized housing. Obviously their perception and attitude towards certain minorities and poor people have not been nice. Oh and before you make assumptions about me, while my family was poor when I was a child, we never took a dime of welfare.

In response to the topic of this thread, our country is broke as hell because of immense tax cuts implemented and 2 wars waged during that period. Totally insane.

HoboMaster

I think an interesting concept to think about that helps shine light on the difference between American corporations and leaders during the past, and now, is globalization. I think as a country, America used to have such pride as an emerging world power. There was a strong sense of American loyalty from even the most greedy and corrupt entities operating here. It was also a completely different world, in which domestic production made far more sense then mass importation of goods due to a lack of other industrialized countries and technology.

American corporations are now no more American then the Chinese sweat-shop employees they hire. They are global entities, owing no allegiance to any nation or form of government but themselves. As long as they are making money, they could really care less what nation benefits and what nation loses. Much the same with politicians, it is a scary world when the desire for money completely overrides any national allegiance. What do you have to rely on when those controlling your world frankly don't care about your world? The truth of the matter, it seems more apparent to me everyday, is that those with power really don't give a shit about America. As long as they have enough money, they figure they can just flee or buy comfort when the shit hits the fan. They are no longer confined to being here, and because they are not, they simply don't care about shitting on their own floor.

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dtshakuras

I agree that globalization has given American companies easier access to do as they please. Yet in my opinion I didn't think they cared about American in the past more than now. It was just that in the past, it wasn't practical to have their operations overseas either due to costs or regulation. Things like worker safety, minimum wage, unions, etc were because American corporations of the past were less than generous in benefits to the American worker.

I believe that the loyalty of American corporations can definitely be adjusted with regulations, although getting the regulations passed is a different story.

CheeseForSteeze

I am not making it the center of the discussion. I never even introduced it. It has nothing to do with interpretation. I haven't interpreted anything except the plain English adjectives you've used to defame the characters being discussed rather to avoid discussing their actual behavior. I am not interested in discussing whether any of the characters playing part in any economic activity are villainous or heroic.

It's not about communicating within "my parameters". A character assassination is not a well-reasoned or rational stance wherein to make a debate unless the discussion is primarily about the moral character of the entities being discussed.

Have you ever been to those countries? Do you have family or friends there? Obviously, they have problems but they are an EMERGING MARKET. That is part of what entails transitioning from a third world state into a modern industrialized nation.

Your fiat dismissal just distracts from the point being made that things have drastically improved in the last 20 to 30 years. Just because it's not instantly some utopian paradise does not invalidate this point.

No one is saying it is right. It's not a character of one specific economic model as you asserted. Capitalism is not responsible for greed, it is just a medium that greed can exist within.

Actually, laws are by definition, not right. They exist because they are needed, but laws restrict rights unless you believe rights are derived from government and not natural to the human state.


Again, capitalism doesn't become "predatory", the actors within a capitalist system can be. A centrally engineered system can become quite predatory, as well.


You realize I work in one of the highest capacity factor domestic nuclear plants and we are strictly non-represented labor. It's nice, because being an engineer, if something is broke and they are short a hand, I can actually go put a wrench on something (things I'm qualified to work on) and I don't have to worry about "stealing" work from some superfluous laborer.

Regulation is the anti-thesis of capitalism. I'm speaking in terms of definition here. Capitalism is market driven. Capitalistic based systems might have some oversight or artificial boundaries placed on the market mechanism but we have to be careful with the language we use. A system can be capitalistic but that doesn't mean it is Capitalism or cannot exit in a more "capitalistic" state.

As to the main sentiment in this thread. No, the US, by definition, cannot run out of cash. Cash is refers to a paper, fiat currency. Money is not cash and cash is not money. Understanding this difference is actually quite crucial. Cash can be manipulated to tax certain sects of the population in a obfuscated and underhanded way.

cifex

My point is that the general feeling of US citizens is that it's not okay to let number 5 starve to death. Enter social services...

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CheeseForSteeze

Yes, but Japan also has a very high savings rate. Their mentality about borrowing money is different. Do you see a culture of savings in the United States? Look how many things you can finance.

Interest rates don't guarantee "inflation" because that would insinuate a specific threshold of monetary growth upon which the state of inflation would depend. It increases inflation. Any monetary growth more than 0 is, by definition, inflation. What low interest rates guarantee, through the function of central fractional reserve banking, higher inflation than without low interest rates.

The reason leaving interest rates to be determined by the market is critical is because monetary growth would control itself. Low interest rates would generate a lower demand for capital investment, driving rates up until more capital was created, driving rates down.

It contributes to reduced cost, but it isn't the only force.

[/quote]The blame cannot rest with the everyday consumer for buying stuff at Walmart or goods manufactured cheaply overseas. Its human nature to get the best deal and save money, always has and always will.[/quote]

Yes, and the best deal will come with a price – the offshoring of jobs because of the greater competitive production environment available elsewhere. That's like arguing that reproducing can't be blamed on humans because it's human nature to reproduce.

Buying domestic obviously comes with a higher cost, but it's a cost that buys something some people are willing to pay. I bought my snowboards from companies that make them in America (with the exception of Capita). I pay more money, obviously, but that extra cost pays for something that I want to buy.

So yes, the blame does rest with the consumer. Either they are too ignorant to understand or do not care. If demand for US made products came in to vogue, do you think more companies would offer American made products and aggressive market this aspect of these products?

What do tariffs do? They intend to protect domestic producers by making imported wares more expensive, artificially. It stands to reason that the domestic products cannot be made as efficiently, because if they could be, they would be priced as cheap and the need for the tariff wouldn't exist. But this means to buy a ware of a certain type, now the consumer must pay more because they will either have to buy the import with the tariff or the inefficiently made domestic product. This means there are funds that aren't available to spend on other wares from domestic producers of wares in a different trade.

What tariffs do, unintentionally, is protect domestic producers at the expense of other domestic producers.

Yes, but the leaders are chosen and held accountable to the people. It is the duty of the people to make sure the leaders of the country do what is right. I'm not sure what this has to do with the point you're making above, either.

This is erroneous. You don't have to be a Democrat to support that. I voluntarily give money through my local charities, I volunteered time in college and today to organizations like Russell House (a local battered woman's shelter), Habitat for Humanity and I volunteer on the holidays at local places (I did Bea Gatty last year, and TBH, it could have been better organized). I am unaffiliated with any party.

Ratsch-Bumm

So US have no money, but plenty of cash? :-)
Oh, this changes everything!

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Please don't kick me for bad English

CheeseForSteeze

Why would he starve to death, though? He can still work and maybe they can produce enough food to feed 5.8 people and trade the excess food for other things or maybe he can go produce firewood or tools for the other four to use in exchange for his portion of food.

What there is becoming a general feelling of is that it is not ok for him to do nothing because the other four are going to produce enough to feed all five of them.