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Utah Reps call for Constitutional Convention

babe said:
I'm finding your courage inspiring. I don't think you have to have a degree in economics to have ideas to talk about in sports forums, do you?

Do you think the principle of internet dominance is justified by the necessity for Statist norms?

I guess some of these dudes are worried Hopper is gonna show up again. Gosh they even sorta try to wrap their minds about that scary scary scary scenario.

Well, since you are not an economist, and I at least have read a variety of economists including Robert L. Hielbroner's "Primer on Government Spending" as well as a few paragraphs of Ludwig von Mises, perhaps I can help you out.

It's all psychological human behavior. If the gov can keep a carrot in front of the hamsters in their cages so that they can just keep running towards it, all is well. We roll outta bed and join the chorus of "I owe, I owe, so off to work I go", and we keep electing the same folks who keep printing more money. Life is good, we pay back yesterdays debt with todays dollars. We ride the balmy inflation wave and as most businessmen know, a rising tide floats all boats.

Heilbroner in his Primer explained how deficit spending runs the engines of commerce and keeps everything going. The gov just prints money, and some folks jump at it, work their little legs furiously, and spin the cylindrical cage real fast.

However, I know some young kids who are starting to wonder how they will fare in their future, with all that debt on their shoulders to begin their worklives with.

So how about the down side to all this wonderful spending? Gov largesse stimulating the economy carries some inefficiencies in its mechanism. They create demand, yes, but for what. What will folks spend their energy doing? Gov spending opens up one class of jobs, and ultimately has to derive taxes from everybody to pay the interest on the debt. Printing fiat currency means when you go to buy a car or a house, or a can of beans, there's a lot more money showing up in the market competing for the product, and we pay more for it.

Gov spending like this is a sort of tax on our future. It makes the money we're earning mean less when we try to buy something later on. A house I bought in 1975 would sell today at six times the price I paid. Meaning in effect, the next person who wants to buy it will have to pay a tax called inflation. Well, if we can keep inflation going maybe they'll feel alright in thirty five years when it's paid for and supposedly worth six times as much again. Until they sell it and have to pay all that "capital gains" on it. Well, if we keep the tax exemption on the specific capital gain on a primary residence, provided we move the sales price into another house, I guess we are alright. Except these kinds of price movements really make us all just a whole lot more inefficient in our decisions and actions. People avoiding doing the most convenient or best thing to avoid taxes. . . .

What I see is a lot of people today struggling to keep up some sort of security, with wages going down as a result of world trade treaties and job flight overseas, and wages are not keeping up very good with our expenses. No, I really don't think what we're doing is really working. . . . at least not in our interest.

I don't think SirKicky is gonna be there to help you when you get caught between that debt and your shaky little job that somebody in Bangladesh will do for mere pennies. So if it's not alright to question authority in a sports forum, I'm thinkin it might just be more worthwhile movin' on down the road.
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It is whack-a-mole. Anyone pops up that isn't impressed with their big bad selves they gotta smack down. I'm guessing the Obama Regime and the followers that go off of the conventional wisdom that he is the smartest teleprompter reader out there treat the average American with more contempt than the Founders treated the slaves they inherited.

The Scottish impress me. That Adam Smith guy had some real balls to wear a man skirt and philosophize on the Wealth of Nations while playing the bagpipes.

I guess we are supposed to be all apathetic to what the government is up to with our economy. They have it all under control. No worries.
 
Millsapa said:
I'm guessing the Obama Regime and the followers that go off of the conventional wisdom that he is the smartest teleprompter reader out there treat the average American with more contempt than the Founders treated the slaves they inherited.
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I'm not certain you understand the concept of slavery.
 
Sirkickyass said:
I'm not certain you understand the concept of slavery.
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Oh wow, you've lowered yourself to respond to one of your inferiors, or is this just quality control? LOL

To some slavery was a matter of economics. How they treated the "ignorant and inferior" people they had control over was a different matter.

I see no difference between dependence on landowners and dependence on government for ones needs.
 
Millsapa said:
Oh wow, you've lowered yourself to respond to one of your inferiors, or is this just quality control? LOL

To some slavery was a matter of economics. How they treated the "ignorant and inferior" people they had control over was a different matter.

I see no difference between dependence on landowners and dependence on government for ones needs.
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Ladies and Gentleman: Millsapa.
 
franklin said:
There has been fractional banking since before the birth of the country. The Federal Reserve didn't bring it. The business cycle predates fractional banking by thousands of years. The cycle is inevitable, and was just as bad or worse before the creation of the Federal Reserve. There were many depressions before and only one since. We attempt to minimize it, and, we'll call them the Ron Paul crowd, wrongly blames the cycle on government. Sure government can compound or reduce the sway, but it doesn't cause the cycle.

Truth be told, "sound money" still employs the fractional reserve mechanism anytime any loan is made, whether the loan is in gold, cattle, land, or anything else. Think about this: you loan your neighbor a gold coin, she invests it in a new parlor dress for her prostitutin' bidniss, the taylor then loans it to a drunk. Two loans are outstanding from one gold coin. It's all fractional, man.

Fractional banking creates and destroys money. If we didn't have this mechanism then the government would have to get money into circulation another way. Saying "sound money" sounds nice, but it's a baseless concept with not much thought behind it. Our money is a medium of exchange. The value comes from the economic powerhouse that backs it. It's given further validity through taxing power. I'll take this system over gold any day. All gold does is get thrown in a vault and worshiped, where it does nothing to better humanity. Money is used for the benefit of all. Gold is an idol, and I'd be happier if all the world's reserves were dumped into Eyjafjallajokull.
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Interesting ideas. May I interject a couple of points.
1. Governments/central banks may not be able to prevent downturns in the business cycle, but through their intervention, they can certainly make it worse. They can create a climate of uncertainty so that investors will be unwilling to invest.
2. The advantage of a commodity-backed monetary system is specifically that governments can't create gold or silver out of thin air. From 1798 until 1912, a dollar, as well as an ounce of gold, retained pretty much the same value (although there were some variations in-between). Since the creation of the Federal Reserve and the abandonment of the gold standard, your dollar today is worth about $0.02. Government love inflation; a commodity backed currency puts severe limits on their ability to inflate the money supply.
 
The Thriller said:
100 congresses ago, people could live off less than $1000 dollars per year.

You're bringing up some weak arguments.

Basically, you're saying that paying Deron x amount of money right now is worrisome since Stockton didn't make in his career what Deron is in just this year alone.
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I; know I'm late to the party here but back in the day a $20 bill could be exchanged for an ounce of gold. Could you, today, live on 50 ounces of gold for a year (current gold price at $1,400 per ounce)?
 
Below are the top 10 largest holders of U.S. debt as of the end of October.

-- China, mainland: $906.8 billion

-- Japan: $877.4 billion

-- United Kingdom: $477.6 billion*

-- Oil exporters, which include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria: $213.9 billion.

-- Brazil: $177.6 billion

-- Hong Kong: $139.2 billion

-- Caribbean banking centers, which include Bahamas, Bermuda, Cayman Islands, Netherlands Antilles and Panama: $133.7 billion

-- Russia: $131.6 billion

-- Taiwan: $131.2 billion

-- Canada: $125.2 billion

* UK figure may include government debt bought by other countries through London intermediaries

Source: Treasury Department

https://www.reuters.com/article/idUSTRE70919N20110110
 
If our debt becomes worthless what are the options of the country that holds the most?

1. War
2. Hand over the keys
3. ?
 
Sirkickyass said:
They'll raise it. The alternative is just too horrible.
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Your earlier post along these lines didn't account for any blow back/insecurity/uneasiness/financially ruining those on fixed incomes/bond vigilantes. Are any of these negatives built into the models you're basing your opinion from, if any? Are you merely parroting the Pauline Doctrine? Also, why do you think this policy will work well in the US financial markets when it has had terrible impacts on Chinese consumption (see Michael Pettis)?

TIA
 
VINYLONE said:
What do we have to sell?
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That's up to Chinese to decide whatever they want us to produce. More ag products would be a great start IMO. Despite popular thought, we're still the production powerhouse of the world. We could also start producing and selling the products we're currently importing.

Can anyone tell me with a straight face what is so bad about China dumping USD? It would be one of the greatest wealth transfers the world has ever seen (to the US). It would also go a long way to balance the current account and bring all those jobs back home [that we've been screaming about for a couple of decades]. People who keep chanting this dumping line need a lesson in FX, and more than a bit of insight into how sovereign purchasers of USD are the ones creating huge distortions by acting against the system.
 
franklin said:
Your earlier post along these lines didn't account for any blow back/insecurity/uneasiness/financially ruining those on fixed incomes/bond vigilantes.
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I think if these were actual problems the rates on US Treasuries would be higher. As is, bond vigilantes haven't appeared and the markets judge US debt as "safe."

From a Keynesian perspective, the sudden halt in spending or raises in taxes that would be required if the debt ceiling were not raised would be 1937 all over again with no ability for the Fed to lower rates because we're already at the zero bound (preventing the Friedman hypothesis on 1937's downturn from applying). It's an instance where both Friedman and Keynes would agree it's a disastrous move.

Purely from a perspective of balancing risks I regard the risks and impacts of a significant downturn from failing to raise the debt ceiling as significantly greater than the emergence of hypothetical bond vigilantes.
 
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