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maybe you dont understand basic entry level accounting.
Maybe you don't understand markets.
Quote:
Originally Posted by pghquest
When the government "sells treasuries", money moves from the economy to the government to be spent, and when the treasuries are due, then the government needs to remove that money from the economy previously pumped in, so they can pay them back.
Did you get that from a Fisher Price book?
The money does not "move from the economy." It moves from a sovereign fund into treasuries. It moves from an index fund into treasuries. It moves from equities into treasuries. I mean, technically speaking, the money in a sovereign fund is not "in the economy" either. So what difference does it make?
Quote:
Originally Posted by pghquest
The fact that its an interest free loan, doesnt mean it doesnt need to be paid back.
Okaaaaayy. We're getting interest free money and we also have lower debt to GDP ratios than during WWII. So what's the problem?
I'm not at all arguing that its not, to those people. But simply saying the stock market is up, thus the economy is better, is about as ridiculous as saying the GDP is up because of government spending, and therefor, the economy is improving..
A lot of folks dont have $500 to their name, so the stock market is meaningless..
Those people vote. That is why it is included in the matrix. If the stock market was in the tank and your 401 was devalued 50%, you would be a very unhappy camper. The reverse is also true.
No offense but your post is economic illiteracy. How can government spending be excluded from GDP when the definition of GDP is:
where:
C = consumption
I= gross investment G = government spending
X = exports
M = imports
Government spending is a component of GDP.
Moreover, it makes no difference from a macro-economic standpoint if GM sells a car to you or it sells it to the Interior Department. e proceeds go into the economy; people are working to produce the car, etc. Those people take their earnings and spend it in the economy.
Re:GDP
They need a sticky note at top of forum.
many here never took preliminary economics in college.
The money does not "move from the economy." It moves from a sovereign fund into treasuries. It moves from an index fund into treasuries. It moves from equities into treasuries. I mean, technically speaking, the money in a sovereign fund is not "in the economy" either. So what difference does it make?
Okaaaaayy. We're getting interest free money and we also have lower debt to GDP ratios than during WWII. So what's the problem?
news flash, treasures are sold on the OPEN MARKET.. So if I buy them, that means I'm not spending money on something else..
The fact that its moving from an index fund, REMOVES IT FROM THE INDEX FUND, and thus its OUT OF THE ECONOMY. Thats why we have QE1, QE2, QE3, to inflate these markets, but all of that money needs to be removed eventually.
Whats the problem? The interest rates arent always going to be 0.. What happens when it goes to 5%, and we have to spend $1T a year in interest? Thats tax money that needs to go to pay back the debt, money that should be going to help the poor, and pay for our expenses..
As I stated, you cant be this dumb..
If what you said is true, then it wouldnt matter if we spent $10T a year on the military, correct?
Those people vote. That is why it is included in the matrix. If the stock market was in the tank and your 401 was devalued 50%, you would be a very unhappy camper. The reverse is also true.
And the people that lost their jobs at the companies benefit to boost their profit margins, also vote..
Thats why there are MILLIONS more on welfare and living in poverty, while you celebrate and high 5 it as a success
You could say the same thing about putting money in a 401K.
Not even close. a 401K is an ASSET, which brings in cash, the federal government selling treasuries is a DEBT.. They are opposite of one another. If I buy a stock, that means SOMEONE ELSE IS SELLING, the net effect on the economy is ZERO.
Tell me this Bajan, would you borrow money against your home to put in a 401k?
Quote:
Originally Posted by BajanYankee
How is an index fund keeping money any more in the economy?
Because when you buy into an index fund, someone else sold, its an economic wash, and because you dont buy them with debt, you dont need to pay it back.
Quote:
Originally Posted by BajanYankee
The rest of your post is not really worth addressing because it's clear you don't know what you're talking about.
Translation, you FAILED.
Here, lets make it simple for you.
If the treasuries and debt isnt a problem, then whats it matter whats spent on the military? I've asked multiple times you havent answered..
If debt is no problem, then we should sell $10T a year in treasuries and explode the military budget, right?
Don't take it personal. I did not say your posts were unreliable. I said his was as reliable as yours... I give them the same weight. He is just a blogger your an anonymous poster. My statement was in artful, I will apoligize for that.
As far as:
do believe I am putting whats best for the nation first:
-Less wars/conflicts
-Reduced spending
-Less wounded/dead military members
-More military members home with their families
-Fewer countries and rouge groups that despise us for our foreign policy and military conquests
I completely agree with you on these issues.
Cool, I appreciate the candor, and glad to see that we both agree on some pretty reasonable issues. And actually that guy is much more reliable than me. There are some questionable posts out on that site, but overall the contributors there have some interesting and insightful things to say. It is a pretty popular blog in the financial world, and they did some good work on exposing Goldman years ago.
So the government shouldn't write checks to anybody? Well, you can continue to live in that fantasy land if you want. The federal government (and foreign governments as well) are often the biggest clients for financial firms, software providers, construction companies, and builders (ever heard of HUD or a Sovereign Wealth Fund??). It's nice to believe that the private sector gets it all done with innovation, ingenuity and efficiency, but the reality is that the private sector benefits from public spending tremendously.
Nope, not my point at all. The government NEEDS to write checks to companies that you mention that help provide for and support the basic infrastructure of day to day operations. What I strongly disagree with is any military spending that isn't 100% critical in regards to our ability to DEFEND the country (ie. nation building doesn't count) and I also disagree with the government "investing" or "picking winners" in the industry of the day that happens to be trendy.
I don't believe that it is 100% beneficial to everyone for the individual companies within the chosen private sectors to get government money. It hurts their competitors and it gives companies an unfair advantage that they might not deserve or know how to deal with. Again, the government is not an investment banker or venture capitalist. Those activities are nothing short of a huge gamble, and with the massive amount of debt that we have that is a horrible use of our money as has already been proven. Maybe if we had billion dollar surpluses I could look the other way, or consider it a good use of "extra" money, but not as we stand today.
Overall, this report suggests that we are not yet in recession, yet, but are barely above stall speed — more like a 1.5% GDP ex-government interventions and drought. The improvements we are seeing seem to be driven mostly by Fed and government intervention.
The key question, in light of the mediocre earnings season, is how long the propping up can continue.
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There are some questionable posts out on that site, but overall the contributors there have some interesting and insightful things to say. It is a pretty popular blog in the financial world, and they did some good work on exposing Goldman years ago.
