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Old 12-23-2010, 11:06 AM
 
2,515 posts, read 1,719,926 times
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Quote:
Originally Posted by pghquest View Post
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?
You can't make an omelet without braking some eggs. It is unfair to the poor. I am poor myself with no income. I want a job and the easiest way to get a job is with full employment. Japan has been trying to get a small positive inflation rate for 20 years (after their housing bubble popped) and they haven’t been able to get it. Go for a high inflation rate for a bit then bring it under control. Wages need to be able to support housing prices. And we need to be looking at the peak prices. Those with fixed incomes should get a disproportionately large share of the new money as they pay the highest price for the resulting inflation.
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Old 12-23-2010, 11:45 AM
 
69,372 posts, read 55,381,403 times
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Quote:
Originally Posted by newonecoming2 View Post
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.
Government doesnt need to print money to run the government.. They can simply "borrow" money from the Treasury by a transactional ledger adjustment..
Quote:
Originally Posted by newonecoming2 View Post
Now if you print some money and then put in a jar it just sits there and doesnít grow. If you print some money and put it in a fractional reserve bank it doesnít sit there it grows.
And you think doing this is positive? Do you understand that this money then gets reloaned back out, often times back to the federal government which causes the federal government to lose money?

The transaction goes something like this.. under your positive scenario
Govt prints $1T and gives it to a bank who then pays the govt $50B in interest, the $50B is the money you claim is the growth".. Now when that bank buys the treasuries back they receive $60B, (they have to receive more money back in order to justify the investment).. The government however just added $10B to the national debt/deficits for a transaction you just claimed "grew".. Where exactly is this growth?
Quote:
Originally Posted by newonecoming2 View Post
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.
Thus far you are correct.. You have no inflation but you are LOSING money.. which of course the taxpayers have to pickup the tab for.
Quote:
Originally Posted by newonecoming2 View Post
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.
Wrong.. flat out wrong.. If you print $1T and then require the banks to hold $1T more in equity, then the banks buy treausuries with their equity which creates a negative return to the taxpayers, and now by your own admission this involves reducing capital the banks have to loan out, meaning less housing loans, less business loans, less loans that would of been available to the public, which results in what we see now.. NO MONEY circulating.. I was turned down for a $4M loan a few weeks ago to buy a building that was GOVERNMENT GUARANTEED.. The reason is the banks didnt have enough capital available to them.. Now I'm down to seperating the transaction to numerous banks.. And that was ONLY a $4M transaction.. A few years ago, banks would have been calling me to do the transaction.. When government competes with the private enterprise, this comes at the expense of jobs, not at the benefit of jobs.. That deal involved buying an office building, so this is one more property thats still on the market that shouldnt be.. Remind me again how to cushion the housing bubble, because last I checked it was to encourage real estate transactions, not limiting them..
Quote:
Originally Posted by newonecoming2 View Post
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.
Wrong.. there is no need to get housing prices above what they were.. There is a need to stabalize them.. Where do you get this fantasy land accounting from? I agree with you about the full employment but nothing the government is doing is encouraging employment AT ALL.. Everything they do is counter productive to boosting employment. Higher minimum wage just decreases employment as well.. You re just making up stuff as you go along..
Quote:
Originally Posted by newonecoming2 View Post
You can't make an omelet without braking some eggs. It is unfair to the poor. I am poor myself with no income. I want a job and the easiest way to get a job is with full employment. Japan has been trying to get a small positive inflation rate for 20 years (after their housing bubble popped) and they havenít been able to get it. Go for a high inflation rate for a bit then bring it under control. Wages need to be able to support housing prices. And we need to be looking at the peak prices. Those with fixed incomes should get a disproportionately large share of the new money as they pay the highest price for the resulting inflation.
Everything you are supporting is limiting your ability to get a job. If you want the omlet, then you need to break the eggs but they arent even breaking eggs right now.. Currently they are killing the chickens that would normally produce the eggs.. you dont need a high inflation rate, please.. thats just silly. you need to stop doing damages and let the economy recover on its own.. This is a free market system, it will recover naturally if you allow it to.. Instead, just like the great depression, liberal programs are making things worse and it'll be this way for a decade.. It failed then, it'll fail now..
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Old 12-23-2010, 12:28 PM
 
Location: Long Island (chief in S Farmingdale)
18,977 posts, read 15,441,035 times
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Quote:
Originally Posted by pghquest View Post
Ahh no.. either unemployment compensation is a boost, or its not..
Unemployment compensation is a boost when unemployment is high because it results in many more people spending $$$ that they don't have. When unemployment is low, extending the benefits will only go to a small amount of people and it may not have the same result on boosting demand.
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Old 12-23-2010, 12:36 PM
 
48,516 posts, read 83,718,934 times
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Creating a increased welfare state on borrowed money is good for the economy? That must mean that crdit card debt is good for people's budegt in some eyes.No wandwer so mnay are in trouble financially.
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Old 12-23-2010, 04:09 PM
 
2,515 posts, read 1,719,926 times
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Quote:
Originally Posted by pghquest View Post

Wrong.. flat out wrong.. If you print $1T and then require the banks to hold $1T more in equity, then the banks buy treausuries with their equity which creates a negative return to the taxpayers,

.
The banks are required to have cash on hand or money on deposit in the fed. This is called reserves. This is different than the equity that you are talking about. You can by requiring the banks to hold higher amounts of reserves have them buy the national debt at zero interest rates. The cash is the debt. Up the reserve and you have pulled money out of circulation. Not equity requirement cash in reserve.



Quote:
Originally Posted by pghquest View Post
Wrong.. there is no need to get housing prices above what they were.. There is a need to stabalize them.. Where do you get this fantasy land accounting from? I agree with you about the full employment but nothing the government is doing is encouraging employment AT ALL.. Everything they do is counter productive to boosting employment. Higher minimum wage just decreases employment as well.. You re just making up stuff as you go along..
The need to stabilize them yes and the only stable points are higher than the old peak, or less than the starting point of the bubble. The ratio of wages to income needs to be put in line for the prices to be stable, about 2.9 to 3.0 times the average wage for the average price of a house. The peak was at 4.5 times the average wage for the average price of a home. Pushing houses above the old peak and supporting those prices will make a big chunk of those toxic assets that are on the government books a whole lot less toxic. They even may be worth something.

Quote:
Originally Posted by pghquest View Post
Everything you are supporting is limiting your ability to get a job. If you want the omlet, then you need to break the eggs but they arent even breaking eggs right now.. Currently they are killing the chickens that would normally produce the eggs.. you dont need a high inflation rate, please.. thats just silly. you need to stop doing damages and let the economy recover on its own.. This is a free market system, it will recover naturally if you allow it to.. Instead, just like the great depression, liberal programs are making things worse and it'll be this way for a decade.. It failed then, it'll fail now..
Tell that to the fed. Up the rate to a sane 6% for the prime and watch the deficit explode. We don’t have a free market we have something else.

It will take a long time for the housing prices to fall down to where they need to be for them to be stable. Japan is 20 years into it and prices haven’t gone below the starting point of their bubble. They aren’t going up yet. We are going to have people messing with things. So let them mess in a way that will get things over quickly.

Quote:
Originally Posted by pghquest View Post

Thus far you are correct.. You have no inflation but you are LOSING money.. which of course the taxpayers have to pickup the tab for.
The banks are losing money or holding money at no interest rate. With inflation this is a tax on the banks. (The only one they pay)


They can't move money from the tresury fast enough to run the goverment. It just doesn't work that way.
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Old 12-23-2010, 04:17 PM
 
2,515 posts, read 1,719,926 times
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The reason that there is no money as you said is the falling prices of houses. This needs to be adressed before we can get economic growth. The only sustanable way to get higher housing prices is with higher wages. With outsorcing to China higher wages come from raising the minimum wage.
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Old 12-23-2010, 06:52 PM
 
19,216 posts, read 12,959,540 times
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Quote:
Originally Posted by newonecoming2 View Post
The reason that there is no money as you said is the falling prices of houses. This needs to be adressed before we can get economic growth. The only sustanable way to get higher housing prices is with higher wages. With outsorcing to China higher wages come from raising the minimum wage.
But jobs would require lowering wages.
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Old 12-23-2010, 07:03 PM
 
Location: Chandler, AZ
5,802 posts, read 5,448,510 times
Reputation: 3113
As long as Obama & his DOJ goons continue to push subprime loans, and even accelerate the use of them as IBD (Investors Business Daily) pointed out recently, the economy is not going to turn around, which will ensure his demise in 2012.

He and his party still think that people with lousy credit and 3.5% for a down payment are entitled to home ownership.

What a bunch of blockheads.
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Old 12-27-2010, 12:55 PM
 
2,515 posts, read 1,719,926 times
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Quote:
Originally Posted by ergohead View Post
But jobs would require lowering wages.
No jobs would require more money. The lack of jobs is a symptom of not enough money. Not enough money is a symptom of the falling prices of houses. The falling housing prices are a symptom of over building and over valuation. Debt to income was too high. Cutting debt is really hard on the economy. Raising income is in the short run hard on the economy as well but in the longer short term it is less painful than letting housing prices come down on there own.


Now if you do two things at the same time. One print a bunch of money and give it to everyone and two raise minimum wage 3 or 4 times what it is now then you should be able to get higher employment and less debt to income. That is what is needed for long term economic growth.
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Old 12-27-2010, 12:59 PM
 
69,372 posts, read 55,381,403 times
Reputation: 9358
Quote:
Originally Posted by Smash255 View Post
Unemployment compensation is a boost when unemployment is high because it results in many more people spending $$$ that they don't have. When unemployment is low, extending the benefits will only go to a small amount of people and it may not have the same result on boosting demand.
In order for your argument to be accurate, everyone should quit their jobs and go on unemployment, thereby boosting the economy even more. Is this something you think is true?

Again.. its either a boost or its not.. The amount of the boost would depend by how many are given money but it doesnt automatically flip the results from a negative to a postive..
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