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Old 10-07-2011, 12:58 PM
 
19,337 posts, read 16,930,256 times
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An excellent rebuttal to the nits who want to run the US like a family budget. To boot and he mentions that "surplus" means all new money at interest. In other words, a surplus is a banker's dream. It was the surplus and low interest rates that wound the spring real nice and good.



Debt Ceiling Set For Progressive Repealing | Michael Hudson




Mr. Obama’s first fallacy is that the government budget is like a family budget. But families can’t write IOUs and have the rest of the world treat it as money. Only governments can do that. It is a privilege that the banks would now like to obtain – the ability to create credit freely on their computer keyboards, and charge interest for what is almost free, and what governments can indeed create for free. (That is the State Theory of Money.
...



“Now, every family knows that a little credit card debt is manageable. But if we stay on the current path, our growing debt could cost us jobs and do serious damage to the economy.” But economies need government money to grow – and this money is provided by running federal budget deficits. This has been the essence of Keynesian counter-cyclical spending for more than half a century. Until the present, it was Democratic Party policy.
It’s true that Pres. Clinton ran a budget surplus. The economy survived by the commercial banking system supplying the credit needed to grow – at interest. To force the economy back into this reliance on Wall Street rather than on government, the government needs to stop running budget deficits. The economy will then have a choice: to shrink sharply, or to turn almost all the economic surplus over to banks as economic rent on their credit-creation privilege.



Naturally the "balance the budget", tea party nits are out in force distracting us all from Obama. We don't even need them to ruin the country because Obama is doing it just as well. Yeah, lets get rid of that national debt and celebrate the fact that we will succeed in paying interest on every dollar to the financial cartel. We have 10s of trillions of that debt and not a peep about it.
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Old 10-07-2011, 05:21 PM
 
Location: Sinking in the Great Salt Lake
13,145 posts, read 20,358,230 times
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I think what people don't realize is that money itself is a giant shell game that we are ALL stupid to play... though it's not like we have much choice in this period of time without being hermits in the woods.

It's naive to think the people making up the game have to play by the same rules as the players.
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Old 10-08-2011, 07:09 PM
 
766 posts, read 1,694,893 times
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Quote:
Originally Posted by Chango View Post
I think what people don't realize is that money itself is a giant shell game that we are ALL stupid to play... though it's not like we have much choice in this period of time without being hermits in the woods.

It's naive to think the people making up the game have to play by the same rules as the players.
Wrong. Money is a means of exchange and its sole purpose to facilitate transactions between parties by exchanging goods and services. Money is absolutely necessary if you want a system that allocates resources most efficiently because it reflects the production cost of a resource. Without taking account to the production cost of resources and the amount of capital & labor put into it, it becomes impossible to use the Earth's resources in the most efficient manner. That is exactly why we have the price mechanism and therefore, money is absolutely essential in this complex economy.
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Old 10-10-2011, 11:51 AM
 
19,337 posts, read 16,930,256 times
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Quote:
Originally Posted by Libohove90 View Post
Wrong. Money is a means of exchange and its sole purpose to facilitate transactions between parties by exchanging goods and services. Money is absolutely necessary if you want a system that allocates resources most efficiently because it reflects the production cost of a resource. Without taking account to the production cost of resources and the amount of capital & labor put into it, it becomes impossible to use the Earth's resources in the most efficient manner. That is exactly why we have the price mechanism and therefore, money is absolutely essential in this complex economy.
Hi Libohove90,


Money in general is precisely as you state. However this money system is a shell game.
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Old 10-10-2011, 12:24 PM
 
Location: western East Roman Empire
8,023 posts, read 11,805,414 times
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Quote:
Originally Posted by gwynedd1 View Post
Hi Libohove90,


Money in general is precisely as you state. However this money system is a shell game.
Indeed the effect of US monetary policy (and the social policy underlying it) over the past seven years or so has busted the conventional framework definition of money (means of exchange, unit of account, store of value).

Now that, for the US ruling classes, developing the economy on US soil is second fiddle to consolidating their own power position in the global economy, we simply do not know what the economy on US soil is worth anymore.

Domestic economic agents on US soil no longer have accurate and trustworthy signals from the price mechanism (including interest rates) to know how to most efficiently allocate resources.

Or at least I can speak for myself: I have knowledge and capital to allocate, I would love to do it on US soil, but the message I receive from the US ruling classes and its monetary (and tax) policy, is don't bother, do it somewhere else.

They say imitation is the sincerest form of flattery. So like an obedient citizen, I imitate the ruling classes and invest elsewhere, and I'm not talking about mere portfolio investment.

For those of you who can't and are stuck on the gulag of US soil ...

Good Luck!
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Old 10-10-2011, 12:32 PM
 
Location: Sputnik Planitia
6,897 posts, read 9,674,076 times
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our deficit USED to be $1 Trillion and that was considered absolutely outrageous...the latest estimate says our deficit for 2011 is going to be $1.3 Trillion..ridiculous

CBO estimates deficit for 2011 at $1.3 trillion - Oct. 7, 2011
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Old 10-10-2011, 01:47 PM
 
19,337 posts, read 16,930,256 times
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Quote:
Originally Posted by k374 View Post
our deficit USED to be $1 Trillion and that was considered absolutely outrageous...the latest estimate says our deficit for 2011 is going to be $1.3 Trillion..ridiculous

CBO estimates deficit for 2011 at $1.3 trillion - Oct. 7, 2011

k374,

I can see the nature of my post has completely escaped you. This is precisely why this money system must be scraped. Even when I tell people dead in the face, they cannot understand da guberment debt is the money supply, and is far superior to commercially created money at an interest bearing debt.

Didn't you read this?
But economies need government money to grow – and this money is provided by running federal budget deficits.
If da guberment debt is not your thing, then for the love of everything don't make it the money supply.
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Old 10-10-2011, 02:26 PM
 
6,712 posts, read 7,722,066 times
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Quote:
Originally Posted by gwynedd1 View Post


...



“Now, every family knows that a little credit card debt is manageable. But if we stay on the current path, our growing debt could cost us jobs and do serious damage to the economy.” But economies need government money to grow – and this money is provided by running federal budget deficits. This has been the essence of Keynesian counter-cyclical spending for more than half a century. Until the present, it was Democratic Party policy.
It’s true that Pres. Clinton ran a budget surplus. The economy survived by the commercial banking system supplying the credit needed to grow – at interest. To force the economy back into this reliance on Wall Street rather than on government, the government needs to stop running budget deficits. The economy will then have a choice: to shrink sharply, or to turn almost all the economic surplus over to banks as economic rent on their credit-creation privilege.

.

Wow! That is pure genius. I wonder how long it took hiim to figure out what has been generally known for several years?

The economy would still be thriving by relying on Wall Streets ability to raise cpaital, excpet that Wall Street has found a better model which is guarnateed to make money with a LOT less risk. And thus far the taxpayers haven't seemed to mind paying for it.

As for economic rent, that would be the US dollar. And many many years of 'surplus' have been blown by Washington in an attempt to fund this new 'model'. You can thank that traitor Hank Paulson for selling out the US so his pals at Goldman could continue their outsized wealth. And we didn't get credit creation from it, i am afraid.
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Old 10-10-2011, 03:12 PM
 
19,337 posts, read 16,930,256 times
Reputation: 7515
Quote:
Originally Posted by Ted Bear View Post
[/indent]Wow! That is pure genius. I wonder how long it took hiim to figure out what has been generally known for several years?

The economy would still be thriving by relying on Wall Streets ability to raise cpaital, excpet that Wall Street has found a better model which is guarnateed to make money with a LOT less risk. And thus far the taxpayers haven't seemed to mind paying for it.

As for economic rent, that would be the US dollar. And many many years of 'surplus' have been blown by Washington in an attempt to fund this new 'model'. You can thank that traitor Hank Paulson for selling out the US so his pals at Goldman could continue their outsized wealth. And we didn't get credit creation from it, i am afraid.

There is no surplus under the current model. All surplus means is reducing the the public money supply, which of course is possible when privately created money goes up.

The bold print is complete nonsense. What follows is the correct reply. You cannot use a check book analog to the US public debt. Our debt is debt because it has no use for it as a medium of exchange.

The current system is designed to take a common sense approach, and turn it into something that is against the average person's self interest. Turning debt into money was pure Wall Street genius.

You cannot balance the budget over the long term, ever. You can't retire the public debt. Its the money. The debt is the money, and the money is the debt. Any discussion of "common sense economics" is nothing but complete babble. Don't get me wrong. Its pure diabolical genius. The more we run a "surplus" the more our goose is cooked because it means all new money is at interest to a bank. "Surplus" is the harbinger of our doom.
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