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If that were true, obviously the government would merely need to 'print' a trillion each year in free food stamps to be distributed to the populace. All food co

by shingen 15y ago

If that were true, obviously the government would merely need to 'print' a trillion each year in free food stamps to be distributed to the populace. All food costs could be Fed funded through magic dollars. Magically it would generate a 'profit' of $730 billion per printed trillion per year for the general economy. Except the stimulus programs, from the first that Bush fired off, to the Fed's QE programs, to the trillion dollar fraud Obama made shovel ready (har har) --- all have one thing in common: they've all failed to improve the US economy in any meaningful way. Work force participation rate? hyper implosion. Government dependency? skyrocketing. Real wages? declining. Inflation? pain at the pump and grocery store. Trade deficit? Near all time record highs. Savings rate? miniscule. Household wealth? Less than 15 years ago. Standard of living? Hasn't moved in in 50 years. Debt? On the moon and rising faster by the day. Entitlements? $100 trillion unfunded disaster. Stock market? Hasn't moved in 15 years inflation adjusted. and on and on

_delirium 15y ago
The fact that a specific amount of some economic activity caused a specific increase in total economy activity doesn't mean you can extrapolate it to infinity. Google has a (large) positive return on capital, but that doesn't mean that Google could generate infinite amounts of money simply by plowing arbitrary amounts of capital into its business. So, yes, it is probably the case that $1 trillion in food stamps would not generate $1.73 trillion in economic activity. But that's not really a counterargument about whether the current spending has a 1.73x multiplier.
- shingen 15y ago
  That's understood. In this case, I particularly referenced a trillion dollars, which isn't a gigantic sum in our economy any longer. It's a mere rounding error on our liabilities. You also can't print magic dollars to continue to fake economic results without suffering consequences that completely wipe out the supposed gains that are being claimed. For example, even just 6% real inflation times ten years becomes a disaster for a middle class whose real wages are flat lined. Every dollar the Fed shovels into the system, becomes inflation somewhere. Food stamps = pure inflation in a government system running a $1.3 trillion deficit. The Fed has to monetize it all. Whatever you're supposedly gaining through one program, is completely wiped out by the inflation.
  - _delirium 15y ago
    I'm sorry, but there is so much wrong with this comment it's hard to figure out where to begin; it's completely inconsistent with mainstream economic analysis of inflation.
    - spoiledtechie 15y ago
      It might be wrong, but he makes a valid argument. And I am right there with it.
      - _delirium 15y ago
        It's not an argument; it's a series of assertions about how economics works that are not backed up and incorrect. If you want to state opinions, that's fine, but this isn't religion where you can just invent facts. In particular, nobody who studies the matter argues that all government spending automatically produces inflation; not even Milton Friedman took that line (and empirical data doesn't support it).
        cobrausn 15y ago
        Nitpick - religion doesn't invent facts, it invents beliefs, many of which are not prove-able (i.e., assertions about 'right' and 'wrong') and many of which can be easily proved or disproved. You can't invent facts, merely discover them. But you already knew that. /pedantic EDIT: Also, I don't think he asserted government spending causes inflation. I think he asserts that government deficit spending causes inflation. Minor difference.
        nerfhammer 15y ago
        You can model this new, moralistic economics as follows: Some things are bad by nature. These include, inflation, deficit spending, any government spending, forex devaluation, trade deficits, debt, big banks, government loans ranging from bailouts to the discount window. All things that are bad can be thought of as the same thing. Since inflation=bad and government spending=bad, therefore government spending = inflation. There is no need for precise or careful distinct meanings of any "bad" term and can be used interchangeably as a matter of taste. I think that you'll find that this model is simple to understand, has far less complexity or uncertainty than you may be used to and can be a lot of fun, too.
spoiledtechie 15y ago
"Work force participation rate? hyper implosion. Government dependency? skyrocketing. Real wages? declining. Inflation? pain at the pump and grocery store. Trade deficit? Near all time record highs. Savings rate? miniscule. Household wealth? Less than 15 years ago. Standard of living? Hasn't moved in in 50 years. Debt? On the moon and rising faster by the day. Entitlements? $100 trillion unfunded disaster. Stock market? Hasn't moved in 15 years inflation adjusted." You just explained everything wrong with our economy. Don't forget, we also have two parents at work while standard of living has remained the same. If I could sum up with whats wrong with our country right now, that quote would be it.
mudil 15y ago
What? A fact-based intelligent comment is down voted? Sadly, it says a lot about effects of politically-correct brainwashing in our society. On the other hand, a comment on top about the true voodoo economics is up and running well...
- shingen 15y ago
  People mostly don't want the truth, and they certainly don't want to talk about consequences or necessary pain from decades of irresponsibility. Allow a natural recession instead of monetizing a fake recovery? Outrageous! Live within your means? Who would do such a thing when you can destroy the global reserve currency and buy some votes. I think most people want to keep milking the collapsing system for as long as they can, for they're overly invested into that system's survival. Anything else literally scares them. It's why the politicians spout the same drivel year after year, right or left. They're just feuding over how to divide up the last crumbs. The crumbs are running out.
  - spoiledtechie 15y ago
    @shingen, Your profile says nothing about you, yet I have this urge to know more. You have an email or something? mine is username + gmail.
- rsanchez1 15y ago
  It's an inconvenient truth.

by shingen 15y ago

_delirium 15y ago

The fact that a specific amount of some economic activity caused a specific increase in total economy activity doesn't mean you can extrapolate it to infinity. Google has a (large) positive return on capital, but that doesn't mean that Google could generate infinite amounts of money simply by plowing arbitrary amounts of capital into its business. So, yes, it is probably the case that $1 trillion in food stamps would not generate $1.73 trillion in economic activity. But that's not really a counterargument about whether the current spending has a 1.73x multiplier.

shingen 15y ago
That's understood. In this case, I particularly referenced a trillion dollars, which isn't a gigantic sum in our economy any longer. It's a mere rounding error on our liabilities. You also can't print magic dollars to continue to fake economic results without suffering consequences that completely wipe out the supposed gains that are being claimed. For example, even just 6% real inflation times ten years becomes a disaster for a middle class whose real wages are flat lined. Every dollar the Fed shovels into the system, becomes inflation somewhere. Food stamps = pure inflation in a government system running a $1.3 trillion deficit. The Fed has to monetize it all. Whatever you're supposedly gaining through one program, is completely wiped out by the inflation.
- _delirium 15y ago
  I'm sorry, but there is so much wrong with this comment it's hard to figure out where to begin; it's completely inconsistent with mainstream economic analysis of inflation.
  - spoiledtechie 15y ago
    It might be wrong, but he makes a valid argument. And I am right there with it.
    - _delirium 15y ago
      It's not an argument; it's a series of assertions about how economics works that are not backed up and incorrect. If you want to state opinions, that's fine, but this isn't religion where you can just invent facts. In particular, nobody who studies the matter argues that all government spending automatically produces inflation; not even Milton Friedman took that line (and empirical data doesn't support it).
      - cobrausn 15y ago
        Nitpick - religion doesn't invent facts, it invents beliefs, many of which are not prove-able (i.e., assertions about 'right' and 'wrong') and many of which can be easily proved or disproved. You can't invent facts, merely discover them. But you already knew that. /pedantic EDIT: Also, I don't think he asserted government spending causes inflation. I think he asserts that government deficit spending causes inflation. Minor difference.
      - nerfhammer 15y ago
        You can model this new, moralistic economics as follows: Some things are bad by nature. These include, inflation, deficit spending, any government spending, forex devaluation, trade deficits, debt, big banks, government loans ranging from bailouts to the discount window. All things that are bad can be thought of as the same thing. Since inflation=bad and government spending=bad, therefore government spending = inflation. There is no need for precise or careful distinct meanings of any "bad" term and can be used interchangeably as a matter of taste. I think that you'll find that this model is simple to understand, has far less complexity or uncertainty than you may be used to and can be a lot of fun, too.

spoiledtechie 15y ago

"Work force participation rate? hyper implosion. Government dependency? skyrocketing. Real wages? declining. Inflation? pain at the pump and grocery store. Trade deficit? Near all time record highs. Savings rate? miniscule. Household wealth? Less than 15 years ago. Standard of living? Hasn't moved in in 50 years. Debt? On the moon and rising faster by the day. Entitlements? $100 trillion unfunded disaster. Stock market? Hasn't moved in 15 years inflation adjusted." You just explained everything wrong with our economy. Don't forget, we also have two parents at work while standard of living has remained the same. If I could sum up with whats wrong with our country right now, that quote would be it.

mudil 15y ago

What? A fact-based intelligent comment is down voted? Sadly, it says a lot about effects of politically-correct brainwashing in our society. On the other hand, a comment on top about the true voodoo economics is up and running well...

shingen 15y ago
People mostly don't want the truth, and they certainly don't want to talk about consequences or necessary pain from decades of irresponsibility. Allow a natural recession instead of monetizing a fake recovery? Outrageous! Live within your means? Who would do such a thing when you can destroy the global reserve currency and buy some votes. I think most people want to keep milking the collapsing system for as long as they can, for they're overly invested into that system's survival. Anything else literally scares them. It's why the politicians spout the same drivel year after year, right or left. They're just feuding over how to divide up the last crumbs. The crumbs are running out.
- spoiledtechie 15y ago
  @shingen, Your profile says nothing about you, yet I have this urge to know more. You have an email or something? mine is username + gmail.
rsanchez1 15y ago
It's an inconvenient truth.