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Old 12-23-2010, 10:28 AM
 
62,360 posts, read 27,748,078 times
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Quote:
Originally Posted by pghquest View Post
I've learned a mathmatical equation a very long time ago that goes something like this.
If you can earn $X bypaying someone $X + $Y.. then do it..

You cant replace missing money without taking it out of the economy to begin with.. Why is this difficult for many to get? If government is draining the economy of all of the capital, then people have nothing to borrow.. Businesses cant expand, people cant buy homes, you cant get a line of credit for products, payroll etc.. THERE IS NO MONEY..
noc2 wants to create additional money with no corresponding debt obligation. For some reason, noc2 thinks that will solve the problem.
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Old 12-23-2010, 10:34 AM
 
2,515 posts, read 1,656,420 times
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Quote:
Originally Posted by InformedConsent View Post
Only as long as the money printing presses and handout spigot keep flowing. You've already acknowledged that debt creates money, which is correct. Look at what happened when additional debt creation froze. Look at the results of the already attempted quantitative easing.

You're advocating kicking the can down the road instead of resolving the problem.
Looking at the already attempted QE. They are putting the money in at the wrong place. They are forcing money into the banking system when there is no demand for new debt. The reason there is no demand is the falling prices of housing. How you unfreeze the creation of new debt is to stimulate demand for debt. Supply side economics is broken. We have a demand side problem. Why should I buy a new home now when in 5 years they will be much cheaper? No demand for new debt.

How do you stimulate demand for new debt?

You up the minimum wage a lot.

Then you print a bunch of money and give it to everyone and watch the economy grow.
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Old 12-23-2010, 10:40 AM
 
2,515 posts, read 1,656,420 times
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Quote:
Originally Posted by pghquest View Post
I've learned a mathmatical equation a very long time ago that goes something like this.
If you can earn $X bypaying someone $X + $Y.. then do it..
Well said.

Quote:
Originally Posted by pghquest View Post
You cant replace missing money without taking it out of the economy to begin with.. Why is this difficult for many to get? If government is draining the economy of all of the capital, then people have nothing to borrow.. Businesses cant expand, people cant buy homes, you cant get a line of credit for products, payroll etc.. THERE IS NO MONEY..
“THERE IS NO MONEY..” The cash in my pocket is part of the national debt. If you up the debt limit by $1t and disperse this new debt as cash then there is a lot of new money. The easiest way to make money is to print it.
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Old 12-23-2010, 10:40 AM
 
69,372 posts, read 53,591,148 times
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Quote:
Originally Posted by newonecoming2 View Post
If you take a look at the great depression what ended it was putting everyone to work on the war effort. The men got a check for mostly sitting on their assets and the women got a check for doing factory work. Putting everyone to work is what is really needed, but letting everyone spend money like they had a job and everyone that wanted a job would be able to get one.
But we arent letting people spend as if they had a job.. They arent able to spend anywhere close to they are if they had a job.. This is what is fricken annoying about the stimulus, they spent something like $250,000 creating temporary jobs, and now need to make up for the wasteful spending there by limiting spending here.. I could have created 10 full time jobs for every job they created, and many of them would have been perminant.. Unemployment creates ZERO jobs..
Quote:
Originally Posted by newonecoming2 View Post
“And when the money is gone (spent), then what?” The money is never gone when you spend it the person that you bought something from has it to spend again, and again, etc. The term in economics is called the velocity of money..
Ahh but you almost had it.. When the money is spread out, you cant do anything worthy. You cant create new factories, you cant expand your work force, you cant create any new jobs because the money is being spent on bare minimum necessities. Rent/mortgage for example is the primary expense. How much left over do you think is actually "spent"?

If 1000 people have $100 disposable income this goes to 1000 different companies. Good you'd say, but I'd argue that it might be better if the money all went to one company which would allow them to hire 4-5 more individuals.. Spreading it out in your manner results in $100 which hires no one..
Quote:
Originally Posted by newonecoming2 View Post
“Just keep printing and handing out more?” Well when the unemployment rate is over 5% why not? How you keep the money from causing hyperinflation is, you up the reserve requirements that the banks are required to keep on hand, let them pay the inflation tax. And buy the national debt at no interest.
Ha? You want to remove even more money out of the economy, and require that they have less money to loan out to create jobs, buy houses, thereby even further depressing the economy? Lets not even ignore the fact that this would require banks to pass on these fees to the consumer raising the prices even more.
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Old 12-23-2010, 10:41 AM
 
69,372 posts, read 53,591,148 times
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Quote:
Originally Posted by InformedConsent View Post
noc2 wants to create additional money with no corresponding debt obligation. For some reason, noc2 thinks that will solve the problem.
Thats the silliest notion I've heard in my entire life. The result would lead to higher inflation and since the poor have very little money, i.e. unemployment checks, welfare checks etc wouldnt increase, this would hurt them march harder than everyone else.
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Old 12-23-2010, 10:42 AM
 
62,360 posts, read 27,748,078 times
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Quote:
Originally Posted by newonecoming2 View Post
Looking at the already attempted QE. They are putting the money in at the wrong place. They are forcing money into the banking system when there is no demand for new debt. The reason there is no demand is the falling prices of housing.
The $1 trillion stimulus bill was supposed to jump start the economy, but didn't. Look carefully at the reasons why that is so.
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Old 12-23-2010, 10:43 AM
 
69,372 posts, read 53,591,148 times
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Quote:
Originally Posted by newonecoming2 View Post
Looking at the already attempted QE. They are putting the money in at the wrong place. They are forcing money into the banking system when there is no demand for new debt. The reason there is no demand is the falling prices of housing. How you unfreeze the creation of new debt is to stimulate demand for debt. Supply side economics is broken. We have a demand side problem. Why should I buy a new home now when in 5 years they will be much cheaper? No demand for new debt.

How do you stimulate demand for new debt?

You up the minimum wage a lot.

Then you print a bunch of money and give it to everyone and watch the economy grow.
That doesnt grow the economy.. Look at Zimbabwe for example..
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Old 12-23-2010, 10:45 AM
 
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Quote:
Originally Posted by InformedConsent View Post
You're advocating kicking the can down the road instead of resolving the problem.
In all truth yes I am But I am looking a long way down the road. Every 80 years or so we have the same problem. Jewish law has one solution the year of jubilee I think is what it is called. All debts are forgiven and all assets revert to the original owner. That is one way but the underlying problem remains. It is that economic growth is based on more debt this year than last. I don't have a solution to this problem. It take 80 years or so for it to get really bad so what do you do when it happens? Reset the clock?
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Old 12-23-2010, 10:46 AM
 
69,372 posts, read 53,591,148 times
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Quote:
Originally Posted by newonecoming2 View Post
“THERE IS NO MONEY..” The cash in my pocket is part of the national debt. If you up the debt limit by $1t and disperse this new debt as cash then there is a lot of new money. The easiest way to make money is to print it.
But that doesnt fix a dam thing. It makes those who are poor even poorer because their fixed income is limited and can only be spent so far. If they have even less spendable income, what exactly are you stimulating?
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Old 12-23-2010, 10:58 AM
 
2,515 posts, read 1,656,420 times
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Quote:
Originally Posted by pghquest View Post
That doesnt grow the economy.. Look at Zimbabwe for example..
The government printing money and the government spending the money doesn't work because the government can't print money fast enough to run the government. Now if you print some money and then put in a jar it just sits there and doesn’t grow. If you print some money and put it in a fractional reserve bank it doesn’t sit there it grows. The growth of the money is called the velocity of money. If you print $1T and put the money in the Federal Reserve Bank then the velocity of that money is zero. You have no inflation from printing money. You have inflation from printing and circulating that money. So if you print $1T and give it to everyone and at the same time require that the banks hold $1T more in reserve then the velocity of the new money will be closer to zero than what it normally is. Doing this you can print a lot of new money and have very little inflation. The figure we need to replace is something like $7T that is the amount of money that went away when the housing bubble started to pop.

We need the housing prices above what they were at the peak of the housing bubble. That will return to circulation the money that went away when the bubble went pop. In order to support the housing prices we need higher wages and full employment. Higher wages minimum wage. Full employment print and give money to everyone.
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