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between $8 and $15 trillion... (total deficits + Fed bailouts) I was thinking that we got lucky and TARP ended up not costing much (not counting 2nd order effe

between $8 and $15 trillion... (total deficits + Fed bailouts) I was thinking that we got lucky and TARP ended up not costing much (not counting 2nd order effects pushed into the future). Also, I'm seeing 'only' about $5.3 trillion of new debt from 2008 to now: http://www.usgovernmentdebt.us/federal_deficit_chart.html http://www.usgovernmentdebt.us/federal_deficit_chart.html

ferringham 14y ago
The problem with Government numbers is that they are cooked. Example: The Government numbers will tell you that deflation is a threat. Can you remember a single year in the past decade when your health insurance, gas, food or other neccessities went down in price? No way! They always go up! What the Government does is cooking the CPI (inflation) number by mixing neccessities with gadgets and telling you that you're better off with 100% more expensive healthcare for the past decade because TV sets are 50% cheaper. That's not true economics. That's why start-ups like this: http://www.shadowstats.com/ http://www.shadowstats.com/ make a killing. Because no serious investor trusts Government numbers. Another great example: Did you know that if we counted unemployment rate as we did during Reagan years it would be closer to 20% now? And what is the official number they just reported? 8.2% ? That's wishful thinking and fantasy land, not the unemployment number. They change the way they calculate data hoping people will trust it more than their own eyes. The truth is we have been getting poorer every year for decades now.
muzz 14y ago
and this affects startups how?
- adventureful 14y ago
  The Fed fires up funding bubbles by encouraging risk. It pushes capital out of low risk paper and into high risk speculation (startups, stocks, whatever). It's why we saw incredible funding bubbles in the late 1990s, the mid 2000's, and just recently, all timed very well to the Fed encouraging risk booms through artificially low rates and other similar manipulation. Understanding how the system functions, helps you understand the funding environment, which benefits anybody trying to work on a startup that has to concern themselves with financing. It's not ideal to overly focus on this of course, but it matters.
  - muzz 14y ago
    No, govt paper is low risk because there is simply a very, very high demand for it. No one is forced to do anything with their capital.
- herdrick 14y ago
  It doesn't directly. I was asking only because I think his facts were wrong.

ferringham 14y ago

The problem with Government numbers is that they are cooked. Example: The Government numbers will tell you that deflation is a threat. Can you remember a single year in the past decade when your health insurance, gas, food or other neccessities went down in price? No way! They always go up! What the Government does is cooking the CPI (inflation) number by mixing neccessities with gadgets and telling you that you're better off with 100% more expensive healthcare for the past decade because TV sets are 50% cheaper. That's not true economics. That's why start-ups like this: http://www.shadowstats.com/ http://www.shadowstats.com/ make a killing. Because no serious investor trusts Government numbers. Another great example: Did you know that if we counted unemployment rate as we did during Reagan years it would be closer to 20% now? And what is the official number they just reported? 8.2% ? That's wishful thinking and fantasy land, not the unemployment number. They change the way they calculate data hoping people will trust it more than their own eyes. The truth is we have been getting poorer every year for decades now.

muzz 14y ago

and this affects startups how?

adventureful 14y ago
The Fed fires up funding bubbles by encouraging risk. It pushes capital out of low risk paper and into high risk speculation (startups, stocks, whatever). It's why we saw incredible funding bubbles in the late 1990s, the mid 2000's, and just recently, all timed very well to the Fed encouraging risk booms through artificially low rates and other similar manipulation. Understanding how the system functions, helps you understand the funding environment, which benefits anybody trying to work on a startup that has to concern themselves with financing. It's not ideal to overly focus on this of course, but it matters.
- muzz 14y ago
  No, govt paper is low risk because there is simply a very, very high demand for it. No one is forced to do anything with their capital.
herdrick 14y ago
It doesn't directly. I was asking only because I think his facts were wrong.