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So if deflation takes hold and isn't very temporary and people are scared to spend and demand for good drops.... what happens? Well it causes falling profits, closes factories, shrinks employment and incomes, and increasing defaults on loans by companies and individuals. The 1930s are great period in which to see the "benefits" of deflation.
if it used to cost $2 to make a Big Mac and now only costs $1, profits increase, not decrease. If its cheaper now to build tv sets, these tv's can be exported meaning more factories..
You are being completely ridiculous. Companies are outsourcing to cheaper countries all the time, BECAUSE ITS CHEAPER to do so.
Quote:
Originally Posted by dv1033
Sorry but inflation is more ideal than deflation. Considering the USD is essentially the world's currency, it won't help our exports for too long when the demand for the goods diminishes because it makes more financial sense to stuff cash under your mattress.
is that why we're in such a better situation now than 10 years ago when people used to live on one full time income in the household, and now 2 they can barely survive?
Quote:
Originally Posted by dv1033
What is silly is you basing your reality on a very simple graph. You don't seem aware why spending falls and increases. Look at how much Reagan increased spending during the 80's, which didn't help anyone but defense contractors and those who invest them. You have such a simple worldview.
So you admit government increasing spending in the 80's didnt help anyone but stand here and whine non stop that we need more government spending.
That sounds like a pretty stupid argument to make, glad I'm not the one making it..
Quote:
Originally Posted by dv1033
Because it isn't smart spending to pay for the defense of other countries. Spending money on research such as the NIH, NASA, DOE, etc is smart. Spending money on bridges, mass transit, highways, waste water plants, etc is smart.
I agree with your first sentence, but not the second. Its only smart to spend the money if there is a need. If you spend $5,000,000 on repairing a bridge now that would have been repaired 5 years from now, you move the spendign from 5 years from now, to now. meaning now you have government spending but in 5 years, this needs to be reduced by $5,000,000
To make a blanket statement that if we just run around spending money on roads, bridges etc is asinine.
Why dont they tear up your road every week and redo it, after all, think of the economic stimulation which according to you, would occur.
ooh, of course you ignore that they need to take money from the economy, i.e. by taxing you, in order for those repairs to take place, so again, all they did was take money from you that you would have spent on a tv, and now rebuilt a road that wasnt needing repairs.
if you're fine with that, you go ahead, I however prefer something not so dumb
Quote:
Originally Posted by dv1033
It's very embarrassing that you can't understand nuance or context.
I'm far more embarrassed that you can argue that government spending wasn't good, and then argued that we need more of it, even to the point that it gets spent on things not needed, while ignoring that the money used, has an adverse effect on the ability of the money to be spent elsewhere.
President Clinton oversaw a period of considerable economic growth and expansion during his tenure. In particular, real GDP per capita increased from about $38,000 in 1994 to about $45,000 in 2001 (in real 2011 dollars).[1] The U.S. national debt as a percent of GDP also declined from about 66% to about 56% during Clinton's government.
Actually, your post doesn't really have a jolly vibe.
Your posting actually validates my point and disputes the OP's...
Less debt, GREW THE ECONOMY.. Go figure.. So why do you argue that we need MORE debt, and then expect the economy to grow under Obama
Democrats, never afraid to embarrass the crap out of themselves by claiming completely opposite actions (i.e. growth of debt vs reduction of debt), will lead to the exact same economic result, ie growing the economy.
So if deflation takes hold and isn't very temporary and people are scared to spend and demand for good drops.... what happens? Well it causes falling profits, closes factories, shrinks employment and incomes, and increasing defaults on loans by companies and individuals. The 1930s are great period in which to see the "benefits" of deflation.
Sorry but inflation is more ideal than deflation. Considering the USD is essentially the world's currency, it won't help our exports for too long when the demand for the goods diminishes because it makes more financial sense to stuff cash under your mattress.
What is silly is you basing your reality on a very simple graph. You don't seem aware why spending falls and increases. Look at how much Reagan increased spending during the 80's, which didn't help anyone but defense contractors and those who invest them. You have such a simple worldview.
Because it isn't smart spending to pay for the defense of other countries. Spending money on research such as the NIH, NASA, DOE, etc is smart. Spending money on bridges, mass transit, highways, waste water plants, etc is smart.
It's very embarrassing that you can't understand nuance or context.
You sound smart except the part about Reagan not helping anyone except defense contractors. Were you even alive in the 80's? Maybe you should stay at a Holiday inn Express and repost...
You sound smart except the part about Reagan not helping anyone except defense contractors. Were you even alive in the 80's? Maybe you should stay at a Holiday inn Express and repost...
They dont need facts, they have some preconceived notion and just ramble stuff, even if its not true..
....please explain how cutting spending will reduce unemployment and grow the economy.
You have a disconnect in your question.
Technically, government spending has nothing to do with how citizens spend their resources. Wait - I take that back. If government spends money on creating regulations that citizens have to redirect their income towards compliance - then that slows the economy. That is a direct effect on the economy.
Otherwise - it's about the tax rates that effect jobs and the economy. Government spending then becomes an indirect factor regarding jobs and the economy - since spending could relate to how much we are taxed.
Technically, government spending has nothing to do with how citizens spend their resources. Wait - I take that back. If government spends money on creating regulations that citizens have to redirect their income towards compliance - then that slows the economy. That is a direct effect on the economy.
Otherwise - it's about the tax rates that effect jobs and the economy. Government spending then becomes an indirect factor regarding jobs and the economy - since spending could relate to how much we are taxed.
Regulation has costs. It also has benefits.
Reducing regulation has costs and benefits.
You need an appropriate balance. And it is not none as was so well demonstrated by the derivative securities disaster.
I would also point out it is not true that cost is the only or even the dominant reason for off-shoring. The labor content is so low in certain items that they actually can be competitively made in the US. but they are still made offshore. Most semiconductor parts are an example.
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