2010-06-18, 17:41 | Link #7862 | ||
Senior Member
Join Date: Jan 2009
|
Quote:
There is no indication that inflation is getting out of control, it's been fairly stable between 2 and 3 percent during the last decade. If inflation were to increase in the coming years it would actually be beneficial in lowering the debt/GDP ratio. In fact the main reason the debt levels in the 1945-1955 period dropped from 105% GDP to 65% was a relatively high inflation of roughly 5%. Though this move would really screw over China and Japan. A strong depreciation of the dollar is unlikely as these countries would also pay the price. Hyperinflation fears come from comparisons to the seventies where the FED did attempt to use the Keynesian policy to keep unemployment below NAIRU levels. The situation now is completely different as we are dealing with systemic failure and not a normal downturn. The FED is trying to stimulate recovery, not aiming to keep an overheated economy from going in to recession. Quote:
|
||
2010-06-18, 18:56 | Link #7863 |
廉頗
Join Date: Feb 2004
Location: Massachusetts
Age: 34
|
The hyperinflation fears come from the combination of rising prices in all commodities, continually high unemployment (decades high level), the continuing increase in food stamp usage by American citizens, all food prices rising, over 13 trillion dollars of debt, with more to come due to the social security/medicare/medicaid financing crisis we already had to deal with. This can't just continue forever. The country is bankrupt. It's not crazy, as an above poster seems to be suggesting. What are all the countries that rely on the dollar going to do? Their reliance wouldn't change the outcome of hyperinflation. The combination of the current national debt, the Fannie/Freddie debt of 6.3 trillion dollars, and the 60 trillion from social security, medicare, and medicaid, leaves us with $70 trillion in government liabilities. In order to pay these off, we need to print money, thus causing hyperinflation. Essentially unavoidable.
Sure the official rates say we are at 2%. But that is because the government has spent the past two decades revising the CPI standard. Why? Because social security payment rates are supposed to be adjusted for inflation. Given that the debt for SS is already out of control, the government has eased the inflation rate continually to avoid the proper payout to social security receivers. There's a reason those SS payments don't go as far as they did 30 years ago. They understate inflation in a number of ways which you can look into further on your own if they interest you, including hedonics and geometric weighting. And believe me, it wouldn't be beneficial... we're not talking ordinary inflation fluctuation, this is hyperinflation. The cost of living would run completely out of control. I think the idea should be put out there that our country is in financial tatters because it seems no one is willing or wants to admit that fact. Look into it on your own. I believe it to be a very real possibility. Last edited by ChainLegacy; 2010-06-18 at 19:50. |
2010-06-18, 23:34 | Link #7864 | |
On a sabbatical
Join Date: Nov 2008
Location: Wellington, NZ
Age: 43
|
Quote:
-In Singapore, it worked 3 times in a row: New Singapore Shares in 2001, Economic Restructuring Shares in 2003, and GST Credits in 2007. All to combat excessive saving by Singaporeans. But the big boo-boo was to break the "war chest" this year. It's called a WAR CHEST for a reason! -It resulted in FDR's New Deal. ---- But it also caused the failure of the Japanese economy - they threw money in Niigata, Hokkaido, Kyushu, etc. All the cash went to waste. Not even corruption - it was just poor planning and rural opposition. And remember the 1973 Oil crisis? Its effects are still being felt today. The OPEC realised that they could manipulate the world economy by adjusting output every so often - and the world will still pay. Why? During the crisis, output went down. Governments threw money at OPEC. ---- So bascially, it's either Keynesian or Thatcherite economics for you. Keynesian economics is OK if you have ardent saves, and a strong state bank, like Singapore, China and Taiwan. Keynesian will be a fast recovery, but it slows progress and the state must jack up progress by state-led initiaves, like Singapore's R&D drive, China's "scientific" progress and Taiwan's support of entrepreneurism. Oh and, always do it in June. These three countries all have their annual sales season about this time. On the other hand, if your state bank is inherently weak, like US/UK, then it's not partically useful. That's because your money spent goes to the private sector, not the people sector. That means that your money flows out fast, and it's not enough to support a recovery. (Unlike in strong state economy, where the money flows thru the public sector.) Thatcherism is better here because it reduces the flow of money to the private sector since the people will spend less and save more (which the US and the EU really need to do right now.)
__________________
|
|
2010-06-18, 23:49 | Link #7865 | ||
NYAAAAHAAANNNNN~
Join Date: Nov 2007
Age: 35
|
Quote:
Quote:
Then again I could be wrong.
__________________
|
||
2010-06-19, 00:20 | Link #7866 | |
On a sabbatical
Join Date: Nov 2008
Location: Wellington, NZ
Age: 43
|
Quote:
Bascially, my point is that ALL STIMULUS MUST be directed by the PUBLIC sector to benefit the PEOPLE. It cannot be entrusted to the PRIVATE sector.
__________________
|
|
2010-06-19, 00:37 | Link #7867 | ||
(ノಠ益ಠ)ノ彡┻━┻
Moderator
Join Date: Mar 2006
|
Quote:
The real bailout would have been better spent on investing directly into the public sector with a nod to the private. Increased funding to stabilize the housing market (the current plans are woefully inept), programs to help stabilize the working poor and lower middle classes, that sort of thing. The US also needs help in infrastructure, education, and energy. They're typically considered Democratic talking points but they are in dire need of help. There's also a whole host of social programs that simply aren't holding up and need to be redone or scrapped entirely, starting with the big three: Social Security, Medicare, and Medicaid. Despite the grumblings from the right we do need a more efficient and affordable health care system, but that won't happen as long as it ends up mired in misinformation like "Death Panels". The debt isn't the problem, nor is paying it off. The real issue is that the money the government is spending has questionable long term value. Is dumping 700 billion dollars into the financial industry worth it after a few years, or could that money have been better spent for the future of the country? Note that pretty much every industrial nation has a significant amount of debt. At this point money has become so worthless as a backed transaction that we simply value money for the writings on it and the faith in the country issuing it. If you were to actually break down the US debt and figure out how to repay it, you're still looking at an incredibly long time before the numbers go down noticeably. It would take several generations before the numbers came down to "sane" levels. It's also important to note that the amount of money the US government spends on military and the big three social programs dwarfs the rest of their spending by a considerable amount. And between military and the social programs military wins by a good margin. We spend a massive amount on it really, but then again we're running two wars and spread all across the world....and paying the price for it back home. Sooner or later something will have to give. Quote:
http://www.reuters.com/article/idUSTRE65F5CC20100616 Granted, there's no obligations and it's for charity, but even the fact that this is being considered is absolutely amazing.
__________________
|
||
2010-06-19, 00:53 | Link #7868 | |
On a sabbatical
Join Date: Nov 2008
Location: Wellington, NZ
Age: 43
|
Quote:
__________________
|
|
2010-06-19, 00:58 | Link #7869 | |
NYAAAAHAAANNNNN~
Join Date: Nov 2007
Age: 35
|
Quote:
He is one of the most eccentric rich people in the world, he earns money from the stock market just to give himself satisfaction, and he throws practically all the money back into the market again. There is a recent article which a reporter blasted him for being "useless" and "pathetic" for not being able to make a concrete stand while testifying against Goldman Sachs, claiming that he's "doing it to protect his investments". From what I know, he doesn't invest much in financial firms because he already owns one (Berkshire Hathaway). It is funny that many people have illogical concepts about real philanthropists like him.
__________________
|
|
2010-06-19, 01:16 | Link #7870 | |
On a sabbatical
Join Date: Nov 2008
Location: Wellington, NZ
Age: 43
|
Quote:
Paul Newman might be more suitable. http://en.wikipedia.org/wiki/Newman%27s_Own He makes zero profit out of it, unlike Buffett, who still gets a small slice of the pie.
__________________
|
|
2010-06-19, 02:55 | Link #7871 |
NYAAAAHAAANNNNN~
Join Date: Nov 2007
Age: 35
|
Come to think of it, the financial system of US has become something like what Ozzy Osbourne sang in "Crazy Train"....
One person conditioned to rule and control The media sells it and you have the role
__________________
|
2010-06-19, 05:57 | Link #7872 | |||
Senior Member
Join Date: Feb 2007
Location: USA
|
Quote:
Consider (source): Quote:
Quote:
Free market Capitalism is predicated upon a strong Middle Class. The Middle Class creates the small businesses that employ people, and that does the real productive work of a healthy economy. The ultra-rich can be tolerated as an aberration when they hold a minority share of the wealth in society. In our case concentration of wealth has become a pathological condition. The money that normally would have been used productively by the Middle Class has gone into financial speculation. Check this image out (source): Anyways, longish post because I'm truly worried about the consequences of this situation. (Hello, aristocracy? ) |
|||
2010-06-19, 07:38 | Link #7873 | |
廉頗
Join Date: Feb 2004
Location: Massachusetts
Age: 34
|
Quote:
I'm actually surprised everyone is so nonchalant about our national debt. It is an astoundingly large number that we have no hope of ever paying off. Even if we got rid of every government institution, INCLUDING THE MILITARY, tax receipts would still not cover social security, medicare, and medicaid. Now if that isn't cause for alarm I don't know what is. We need to start taking action, fast, to be ready for an impeding disaster... Last edited by ChainLegacy; 2010-06-19 at 07:48. |
|
2010-06-19, 09:06 | Link #7874 | |
NYAAAAHAAANNNNN~
Join Date: Nov 2007
Age: 35
|
Quote:
__________________
|
|
2010-06-19, 10:33 | Link #7876 |
廉頗
Join Date: Feb 2004
Location: Massachusetts
Age: 34
|
I've heard 12.8% budget deficit of their GDP if this is wrong I am sorry. Either way the example works; Greece makes up about 3% of European Union GDP, whereas California makes 13.5% of US GDP, and as you may have read recently Arnie is demanding a bailout for the state due to its debt.
|
2010-06-19, 17:43 | Link #7879 | ||
Senior Member
Join Date: Jan 2009
|
Quote:
Gini coefficients do suggest that the US has a far larger inequality in the income distribution then the rest of the developed world. That at least supports Seaz's theory. |
||
Tags |
current affairs, discussion, international |
|
|