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Interest rate manipulation has been done many times in the past - including during the Carter/Reagan years when interest rates were driven up artificially to cool inflation. It's been SOP for a long time now.
Regarding QE - it's NOTHING NEW:
"...In October 1866, the stock markets were tumbling. The great speculator Jay Gould was falsely rumored to be dead. Cyrus Field lost a fortune, even though he had just succeeded in laying the transatlantic cable that joined the United States to Europe.
To rescue the markets from panic, the U.S. Treasury first bought $14 million of bonds “in a lump,” according to chronicler Cuthbert Mills. When interest rates didn’t stay down, the Treasury also flooded the markets with $27 million in cash.
These numbers sound small to modern ears; $14 million is about $200 million in today’s money, and $27 million in 1866 dollars is roughly $383 million in 2011. But these two interventions by the government totaled $41 million at a time when all the money held by the U.S. Treasury amounted to $139 million, according to the Statistical Abstract of the United States.
As Mills put it two decades later, the intervention “beyond question averted a panic.”
In short, back in 1866—what many Americans think of as the heyday of unfettered free enterprise—the U.S. government was willing to put nearly a third of the Treasury’s balance sheet at risk to prop up the capital markets...."
You do realize that the FED wasn't created until 1913, do you? Let me ask again. Name a specific time in history when the FED enacted similar actions to what it is doing today
You do realize that the FED wasn't created until 1913, do you? Let me ask again. Name a specific time in history when the FED enacted similar actions to what it is doing today
It doesn't matter whether it's the FED or not - the PROCESS is the same. We are essentially doing the same thing today that we did in 1866. It's the FED doing it instead of the Treasury because back then there was no FED (so it was the Treasury that did it directly) but process is the SAME - and IT WORKED.
The fact that you folks may not like the FED is entirely irrelevant to whether or not QE works.
You do realize that the FED wasn't created until 1913, do you? Let me ask again. Name a specific time in history when the FED enacted similar actions to what it is doing today
So, technically, you're not concerned about the steps taken, but who is taking the steps. Right?
And therein lies the problem that is purely ideological.
This isn't ideological, it is practical.
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Do corporations feel charitable suddenly? You'd have a point if you suggested lowering corporate tax rates but taking away deductions. But then, you might have heard of that being a plan and promoted by opposition as a "tax increase".
Why do you think so many corporations have primary offices in Ireland? In Bermuda? Corporate tax increases drive business away from this country. I would rather actually collect on a 15% corporate tax rate than have a 60% rate and not see income from it.
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Easier said than done. Especially considering that just a month ago, you posted this as a rebuttal defending high executive pay:
"Can you post an article that doesn't cherry pick eight companies also involved in fraud cases? Picking the bottom .01% of companies and claiming that it is a 'rampant trend' is hardly a smart thing to do. Is executive pay a problem in a select few companies? Obviously....is it a problem in the vast majority of companies? Absolutely not."
And then y'all want your ideas to be taken seriously.
You asked for practical solutions in this thread, and I was attempting to compromise with you. In the other thread, I was posted what I wanted in an ideal world. But I guess you aren't the kind of person who wants compromise, are you?
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Just what the Wall Street wants.
The stock market has always outperformed social security in terms of ROI. Choosing to not privatize SS is choosing to give retirees less money on a year to year basis. I am not heartless enough to do that.
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Social Security, NOT Rely-On-Wall-Street security. And, you probably also think that raising age limit has no implications elsewhere.
Obviously it has implications elsewhere, but as average life expectancy goes up, people should expect to work more.
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Does it explain why there might be a need to increase the length of UI?
This is a difference in mindsets. You see UI as a way to help people on a day to day basis. I see it as a way to incentivize people to try harder in finding a new job.
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One of those arguments that illustrates the right wing, AKA conservative, mindset. It is great if federal law trumps state laws, as long as the law is something they support. So, what is wrong with (the very few) states that do not have Tort Reform implemented? Force them to adopt it? Based on what evidence of it helping in the other 38?
Are you seriously suggesting that fear of lawsuits are not creating high health care costs in this country? No one on either side of the isle other than you is making that claim.
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And you believe there would be no implications of this. And how exactly do you propose this "market" be determined? What greater way to force people into areas of expertise a bureaucracy determines than to resort to such abomination?
Obviously there will be implications with this. We don't live in a black and white world. The rate of student loans should be set by the time in which a job is found post-graduation as well as the average starting salary of that job.
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Why not down to zero?
Because that is completely unrealistic. Also, there is that whole compromise thing that you don't seem to want to do.
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And we just might have the conditions we see today in China. On the bright side, we will have a thriving manufacturing economy, to sell products in India and China.
I am willing to go through hard times for 20-30 years if it puts this country on a positive trajectory. You seem to want short term gains regardless of the long term harm caused.
There is nothing practical about your suggestion, down to assuming things will be terrible for 20-30 years and then we will be greatness again.
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Why do you think so many corporations have primary offices in Ireland? In Bermuda? Corporate tax increases drive business away from this country. I would rather actually collect on a 15% corporate tax rate than have a 60% rate and not see income from it.
What is the difference between Bermuda and the USA? But, you seemed to have pretty much everything I said on the subject, in favor of professing a race to the bottom. It is unrealistic to assume that the USA can compete with Bermuda, or any tax haven. It is also unrealistic to assume that the USA can compete with low labor cost countries with good infrastructure for manufacturing. A practical solution would entail finding solutions that will work. But, like any conservative, you speak for corporations who can get away with a lot. I spoke of businesses that can't. It is why I suggested... lowering corporate tax rate with closing loop holes is the best bet. It benefits smaller businesses. Mega corporations do not find self limited to options.
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You asked for practical solutions in this thread, and I was attempting to compromise with you. In the other thread, I was posted what I wanted in an ideal world. But I guess you aren't the kind of person who wants compromise, are you?
A compromise can be had on policies, not between reality versus ideology.
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The stock market has always outperformed social security in terms of ROI. Choosing to not privatize SS is choosing to give retirees less money on a year to year basis. I am not heartless enough to do that.
It DOES NOT matter. Social Security is a SOCIAL safety net and ought to stay that way. People have 401K and other options to rely on Wall Street if they want to.
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Obviously it has implications elsewhere, but as average life expectancy goes up, people should expect to work more.
How many implications can you list?
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This is a difference in mindsets. You see UI as a way to help people on a day to day basis. I see it as a way to incentivize people to try harder in finding a new job.
What I see or you do, is a moot point and unnecessary bickering. The question was: Does it [Beveridge Curve] explain why there might be a need to increase the length of UI?
Answer that.
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Are you seriously suggesting that fear of lawsuits are not creating high health care costs in this country? No one on either side of the isle other than you is making that claim.
A deflection, again. My point clearly spelled out that you're as likely as any other conservative to whine about federal law forcing all states into doing something, EXCEPT when it comes to such things as Tort Reform that y'all want. And my questions that you'd rather not touch: what is wrong with (the very few) states that do not have Tort Reform implemented? Force them to adopt it? Based on what evidence of it helping in the other 38?
Just reposting with the idea that you will actually respond to the argument rather than deflect (again).
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Obviously there will be implications with this. We don't live in a black and white world. The rate of student loans should be set by the time in which a job is found post-graduation as well as the average starting salary of that job.
Which is the very premise of the idea you presented. But, allow me to present mine: There should be no need for college loans. Its pathetic enough that kids have to drown in debt to get the education they want (if they weren't discouraged already). Now, we want bureaucracy to charge select majors more so we can make up for deficits? Ridiculous. Idiocy. Lunacy.
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Because that is completely unrealistic. Also, there is that whole compromise thing that you don't seem to want to do.
Sorry, I'm not going to exchange realities for someone's ideological dreams. It ain't a compromise to begin with.
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I am willing to go through hard times for 20-30 years if it puts this country on a positive trajectory. You seem to want short term gains regardless of the long term harm caused.
If you can deal with hard times, you should be complaining less today.
Last edited by EinsteinsGhost; 12-27-2012 at 03:25 PM..
Okay, explain how. I'll wait and see if you can actually explain it without being picked completely apart by the people here who actually work with macroeconomics every day and understand how this stuff works. With all my respects, I'm rather doubtful you can. I don't mean that to be an @ss; it's just that I see people tossing out statements about the economy with clearly no understanding of how the public debt and the sovereign debt actually work in economic terms.
That's the problem. You can't explain it, and nobody else can, either. The bigger problem is that you're voting for people who are going to make this problem a lot worse. The fiscal cliff tax hikes and the budget cuts are actually the result of a political party that refused to negotiate with the president or the senate. You'll get your balanced budget. The problem is, the budget won't stay balanced for long, once revenues fall. That's what you all don't seem to understand too well. The republican obsession with the debt is going to turn into the equivalent of the dog that keeps chasing its own tail.
Well, let's see...
We are gluttons...there is no denying this. America consumes more of almost everything than anyone.
Now, how does this relate to printing money and entitlements?
Well, pretty simple. Our government spends recklessly on everything. Wars, entitlement programs, state salaries, research funding, etc. etc.
Now, due to their reckless spending everybody foots the bill.. The government assumes you overspent as well because when they monetize the debt, they weaken the dollar you already have. The people who save get penalized and the person in debt doesn't really care much.
They government seeks to spend more and go about status quo by handing out stipends in the form of these entitlements....the government truly doesn't want to cut funding to these programs.... neither side. The people who receive need based assistance are usually buried in the most debt.
They are the ones who took on upside down mortgages, ridiculous auto loans, payday loans, defer their federal education loans endlessly. These are the people who enable the spenders in office. Again, it isn't tantamount to some of the main drivers... But to say it is totally irrelevant is stupid. I know, some people like to gloss over individual accountability. Believe me.... ALL fiscal conservatives know some people like to gloss over individual accountability.
Your BS notion that "The fiscal cliff tax hikes and the budget cuts are actually the result of a political party that refused to negotiate with the president or the senate. " is just that...
The bottom line is deficit spending has never....NEVER worked.
It's neverrrrrrrr workedddd... Why would it work now?
Of course, the budget will fall out of wack again... but not because of falling revenues. Simply because Americans are out of their gourd and so are their priorities.
I'm WELL aware of the actions of the Fed. I'm also aware of that most of the stuff has been done before and has a track record of success. In short I don't buy the Austrian theories. I think the Keynesians are FAR closer to reality and that their views are more often correct and tend to work better. I'm also WELL aware of the fact that economics is NOT a HARD SCIENCE because you can't rewind time and rerun the experiment in a truly scientific manner - nor can you divorce economics from social influences and the "soft" science aspects of things like psychology (especially mass psychology), historical inertia etc. In short I just don't buy your arguments that the debt etc can't be "unwound" down the road. You Austrian School believers here on this board seem to be under the illusion that all your economic theories are "proven" - and they are NOT. The Austrian-school fans simply "believe them to be true" like it's a religion or something and tend to forget that there's an entirely different school of economic thought (with tons and tons of the top economists on board) that don't buy your theories at all. Economics is like fashion - one theory is popular for while then it's popularity fades and is replaced by the other. Since the Reagan years the Austrian thories have tended to be more "popular" - but you know what? Over that period of time the gap between rich and poor has widened and the middle class eroded instead of expanded - and little by little people (including many economist) have been catching on to that and now the Keynesian model is coming back into "popularity" again - for the simple reason that "trickle-down economics" and other Austrian-inspired ideas just haven't worked out the way there were "supposed to". There's a REASON for that - the school of thought is FLAWED.
The fact is, all of the economic schools of thought - from the Austrian school, to the Keynesian school to the Communists or whatever are all just beliefs in certain economic models - NONE of which are absolute reality. They are simply efforts to TRY and make sense of economics as whole - and over the last few decades the Austrian school has REALLY shown it's flaws. Those of you who cling to the theories based on that model are simply glued to the dogma and have no particularly special insight compared to anyone else.
Ken
Ah, yes, the good old days of Keynesian economics.
Man, those pre-Reagan years were the bestest!
Did you ever think for a second that the reason the middle class is eroding and that the upper class is thriving is the fact that globalization has been picking up speed for quite some time. Maybe you'll remember those evil Japanese and their cars from the late 70's through to the 80's.
From the Japanese to the Koreans to the SE Asian countries to the Chinese to MENA to C. Eurasia to Sub-Saharan Africa... You've got a long list of people to complain about taking your lifestyles away and you've only just started historical speaking.
People in the upper echelon tend to take advantage of globalization while the middle class pretty much can't do anything at all to take advantage of it except invest their 401ks in emerging markets but of course if their incomes are being eroded the amount they can invest is also eroded.
I don't think you have thought of any of that because if you had you would see how futile it is to raise taxes on anyone and especially on the people who could quite literally move out of the country and not skip a beat in regards to their businesses. In fact other countries are begging them to come there and are willing to reward them for doing so.
Ah, yes, the good old days of Keynesian economics.
Man, those pre-Reagan years were the bestest!
Did you ever think for a second that the reason the middle class is eroding and that the upper class is thriving is the fact that globalization has been picking up speed for quite some time. Maybe you'll remember those evil Japanese and their cars from the late 70's through to the 80's.
From the Japanese to the Koreans to the SE Asian countries to the Chinese to MENA to C. Eurasia to Sub-Saharan Africa... You've got a long list of people to complain about taking your lifestyles away and you've only just started historical speaking.
People in the upper echelon tend to take advantage of globalization while the middle class pretty much can't do anything at all to take advantage of it except invest their 401ks in emerging markets but of course if their incomes are being eroded the amount they can invest is also eroded.
I don't think you have thought of any of that because if you had you would see how futile it is to raise taxes on anyone and especially on the people who could quite literally move out of the country and not skip a beat in regards to their businesses. In fact other countries are begging them to come there and are willing to reward them for doing so.
Of course I've "thought of globalization" - I've mentioned it MANY times - but it has little to do with the deterioration of the middle class until the last decade or so (when it came to roost with a vengence). Regarding the upper class "moving away" - if they want to move away, there's not much to stop them and I doubt that raising taxes back to the Reagan-days level will make much of a difference one way or the other - especially in light of polls of such folks where they ADMIT they should probably be taxed more and that tax rates rarely enter into their business decisions so that argument is just ignorant BS.
At the same time, sending a letter or email to the Whitehouse brings a standard "form letter" response and nothing more. In order to get Whitehouse ATTENTION, it must be in the form of a petition with a minimum of signatures, like the Piers Morgan deportation petition.
Now, try sending a letter, or email, to your Rep and see just what kind of form-letter you get for a response. There are some good ones on the Hill, but not enough of them.
If you don't have a good rep, why do you continue to vote for them?
You do have control, you know.
It's called voting.
The petitions at whitehouse.gov really don't mean anything.
Any idiot can start one, and lots more can support them.
To petition the government to deport someone because you don't like their opinion doesn't deserve recognition.
You should contact your GOP representatives and tell them to stop obstructing, stalling and filibustering.
And you know it's not my side won {democrats} it's what Americans voted for by a majority {tax increases}. If you can't accept that, then step aside.
You shoukd call you Dem Reps and let them know they need to cut spending where there is much more savings especially when compared to the small increase in revenue from taxes.
THat's not even considering resulting less tax revenue as it higher taxes affects economic activity and hiring.
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