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peter45

Can we even solve the economic disaster?

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Can we even solve the economic disaster?


Should we claim that Obama did a good job on the economy, or that maybe he should have thrown people in jail?

Even more so, being the first black President, would he have been risking his life if he had cleaned house. With so many goofy right wingers, and so much money available to the crooked "conservatives", it was probably a real possibility.

 

What really happened?
G. W. Bush started the disaster by putting borrowing and spending into hyperdrive. He wanted to pretend that his tax cuts worked.
Which, caused the crash.
Most of the Federal Reserve really cheap lending went to buy crappy ventures.
These became the "toxic assets".
But then Obama poured more dollars on the mess.
Instead of letting the companies just go belly up, and sending the "conservatives" to jail, the Quantative Easing program substituted government backed securities for borrowed government money securities.
And then came Trump.

 

The actual problem is probably not so much making an attempt to pay off the national debt, as the continuing pretense of a "successful" economy.
We are neck deep in an economy which CANNOT continue as is, without continuous government borrowing and spending.
And, we appear to have an electorate who doesn't have a clue that all the "winning" is happening on a credit card.
Trump has told the Federal Reserve that they WILL NOT raise interest rates, and the "pretend to be" independent agency is going to go along with the oligarchs.

 

The economy cannot "grow" out of the borrowing hole that it is in.
Simple arithmetic dictates that an economy cannot grow faster than the population grows, because there isn't anybody available to do the work of making the products, and providing the services.
Even "productivity increases" cannot occur fast enough to pay down the past borrowing.

 

However,
most of the past borrowing has wound up in the bank accounts of billionaires.
Which,
should mean that,
it really is the government's money.
Just because some billionaire borrowed some government dollars to "invest" in a bad idea,
and then Obama's FED came along and bought that bad idea with good government dollars,
doesn't mean the crook who bought the bad idea, should get to keep the good government dollars.

 

So maybe there should be an era of "bad investment reparations".
The government kept records of who got the FED dollars.
So, isn't it time to just say;
"Too bad. I wasn't yours in the first place."

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21 minutes ago, peter45 said:

The economy cannot "grow" out of the borrowing hole that it is in.

 

How do you define economy?

 

If all debts were repaid, not one dollar would exist.

 

Debt is money and all money is loaned into existence which means more money has to be loaned into existence to pay the interest on the previous money, unless the interest rate was negative.

 

Decreasing the debt will cause an immediate shortage of money which will cause defaults which is more destruction of money and the problem quickly goes exponential.

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1 hour ago, Bluenami said:

 

How do you define economy?

 

If all debts were repaid, not one dollar would exist.

 

Debt is money and all money is loaned into existence which means more money has to be loaned into existence to pay the interest on the previous money, unless the interest rate was negative.

 

Decreasing the debt will cause an immediate shortage of money which will cause defaults which is more destruction of money and the problem quickly goes exponential.

The economy is goods and services, not debt.

A society can exist on barter.

Money is a convenience, it is not a necessity.

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45 minutes ago, peter45 said:

The economy is goods and services, not debt.

A society can exist on barter.

Money is a convenience, it is not a necessity.

And,

I apologize for the use of the terms,

but in the "conservative" world of distortion,

money is virtually always referred to as the economy,

which it is not.

This is why concepts such as Social Security,

are so easily distorted by the "conservatives".

Social Security is a barter system.

When you are working, you give away a PERCENTAGE of your productivity.

When you are not working, you receive a PERCENTAGE of other people's productivity.

The whole system could work on an accounting of loaves of bread, or cans of beer, that somebody made at work today.

It would be cumbersome,

but feasible.

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21 hours ago, peter45 said:

Simple arithmetic dictates that an economy cannot grow faster than the population grows, because there isn't anybody available to do the work of making the products, and providing the services.

 

This isn't true for a number of reasons:

 

1. Technology increases productivity.

2. Technology creates new products that have never before existed.

3. Changing global economic conditions (sometimes due to technology) make some resources more valuable than they were previously.

4. Changing global conditions open (or close) markets that didn't previously exist.

5. In particles, war changes the competitiveness if other countries, opening up (or closing) markets.

 

As a species, we continually learn, and we continually change our environment, sometimes (probably often) for the worse. Change means changing needs. Changing needs means people will need to buy stuff, which is economic opportunity. Countries that are good at supplying new economic needs can have their economies grow much faster than their population.

 

Seeing the world and its economies in a static way is an error.

 

21 hours ago, peter45 said:

Simple arithmetic 

 

Is far too simple a model for a national economy inside a global economy.

 

I do agree with you that the United States has too much debt. Our politicians are not responsible enough.

 

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7 hours ago, laripu said:

 

This isn't true for a number of reasons:

 

1. Technology increases productivity.

2. Technology creates new products that have never before existed.

3. Changing global economic conditions (sometimes due to technology) make some resources more valuable than they were previously.

4. Changing global conditions open (or close) markets that didn't previously exist.

5. In particles, war changes the competitiveness if other countries, opening up (or closing) markets.

 

As a species, we continually learn, and we continually change our environment, sometimes (probably often) for the worse. Change means changing needs. Changing needs means people will need to buy stuff, which is economic opportunity. Countries that are good at supplying new economic needs can have their economies grow much faster than their population.

 

Seeing the world and its economies in a static way is an error.

 

 

Is far too simple a model for a national economy inside a global economy.

 

I do agree with you that the United States has too much debt. Our politicians are not responsible enough.

 

To give a simple reply,

I spent 50+ years spending $millions of corporate dollars,

designing and building,

machines, production lines, and new factories.

The result was new products, and increased production productivity manufacturing old products.

I see a cascade of products coming to market, that I was involved in the beginning of developing 50 years ago.

 

Having seen things from the inside,

I don't share your optimism.

 

What you are seeing is the culmination of years of work coming to fruition.

But you are also seeing computers get hacked on a regular basis.

There is a difference between,

what you can do with technology,

and,

what you should do with technology.

We are still at the stage of impressing ourselves with our cleverness.

Kind of like the people who developed the atomic bomb,

before they asked themselves;

"What the heck did we do?"

 

Economically,

to the best of my knowledge,

we have never had an economy,

THAT ABSOLUTELY MUST HAVE MASSIVE GOVERNMENT SPENDING.

It is not a case of too much debt.

The previous capitalist cycle of expansion and contraction has been disrupted by the government throwing dollars at it,

and I just don't see how the country gets out of dependency on continuous government spending.

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More about the economic crisis


Yes,
I have a chip on my shoulder.
Since the election of G. W. Bush,
four former employers or clients,
have laid off about 5,000 legal American employees,
because of financial manipulations.

 

No,
not competition, not falling sales, not anything that is in the textbooks about Capitalism,
but purely financial trickery.

3,500 people's jobs were sent to foriegn countries because of tariffs that protect OLIGARCHS.
No, not Trump tariffs. These occurred long before Trump.
But maybe the unkindest cut,
was the transfer of about 1,500 jobs,
from American citizens, whose citizenship had been genuinely verified,
to competitors, known to employ mostly illegals.

 

The tariffs protect the processors of a raw material that is used in thousands of products.
So, yes, the tariffs nominally protect jobs.
But,
the American companies that use the raw materials,
employ THOUSANDS more employees than the processor companies do.
The 3,500 jobs are only the ones THAT I PERSONALLY WAS INVOLVED WITH.
Other people in the industry, who I personally know, tell me that their companies have shipped thousands of jobs offshore also.

 

But again,
the most annoying,
was the company that was the best example of what American industry COULD BE.
That company had invested in state of the art manufacturing equipment,
had developed a loyal crew of American workers,
and had a factory that ran like a well tuned clock.
AND THEN CAME THE VENTURE CAPITALISTS.

 

No, I didn't have access to the entire financial picture,
but,
I did notice that the company changed ownership quite a few times near the end.
And that buried in the buy outs, was the re-capitalization of the book "value" of the manufacturing equipment assets.
Somehow,
a 30 year old production line became "worth" about 80% of the cost of a new production line,
even though the new line made twice as much product per hour.

 

And uniquely,
with the Federal Reserve handing banks money practically interest free,
the banks were ready, willing, and able to lend those dollars to the Venture Capitalists.

After all, the company had all of that equity in production machinery, to guarantee the loans.

 

Eventually,
the factory was closed.
The people were "laid off".
The assets were sold off for cents on the dollar.
And the production was moved to a red state, in a factory that employs an awful lot of people who certainly give the impression that they aren't legal residents.

 

Can I 'prove" what happened?

Can I prove that the venture capitalists obtained loans, of FED dollars, that flow like water?

After getting into a shouting match with the head of accounting,
and being told that it was "none of my business", because I was a consultant,
probably not.

 

I had known the CEO for years.
He had either "worked his way up",
or,
had become the designated "fall guy".
He was a nice guy, but probably not CEO material.
And,
the vulture capitalists moved on.

 

Hopefully,

people realize that the venture capitalists are paid large fees and bonusses for their services.

But,

they are not required to actually care about the future of the company,

the employees,

or, for that matter,

even the country.

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Sure we can we have before. We solved the Great Depression.  Several things need to be done and it is hard. We need to address the debt. First we can stop using debt money. We are paying interest to people we should be taxing. We need to bypass the Federal reserve and just lend ourselves the money then we can eventually get rid of all the money we pay to service the debt. It has worked before in history and it can work now.

 

We need to begin to MAKE things again. Reagan wanted to make us a service economy and that was a disaster. We need to do the Research and development of the new green technology then manufacture and export those things. We should change our tariff system entirely. Base it instead of on politics on economics. If a product comes in from a country that has no environmental protection that is a specific tarriff. The labor cost should be factored in more tarrifs on countries that pay pennies and less on those from Europe Japan and Korea that pay good wages. If  a country has no worker protections THAT is factored in.  Make it more EXPENSIVE to do business in a country that exploits its workers and environment for money.

 

We need to retool our infrastructure when we invested in America in the 40's and 50's with rural electrification, hydroelectric dams and highways it paid HUGE dividends we must do that again with hi speed mag lev high tech rail and new bridges and dams  modernize the ports and the like. Conservatives say how much they LOVE America but they sure never want to invest in it. While we are talking about investment pay for higher education both trade and technical skills and higher education. The more doctors, engineers and high skilled workers we have the better return to our economy

 

None of this is easy but this IS the direction we need to go

 

This doesnt even address the need for real tax reform it is ridiculous that workers pay a higher rate of taxes on money they make with their labor than rich people do on the money they make with their money but that seems like a different discussion

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Peter45, you ask good honest questions.

First, GWB's tax cuts for the rich didn't create more demand and lift the country out of a recession that was caused by the Clinton years, the big bonanza of dot.com's that was, only an economic bubble, some say.

But the deficits, and the national debt, well, it did go down during the Clinton years, this did happen, it surely is true.

Obama sort of said, well these deficits, aren't that important now - and he was dead on correct for saying such. We were in the middle of losing trillions from a housing boom that was an obvious mortgage bubble, where mortgages were all bundled up and bought and sold on the open market. It was a great recession to be sure, nothing like that financially has occurred world wide since the great depression. 

 

But back to deficits and debt for a second. You have to consider debt in Macro terms as a whole. Today's rate of interest on US debt is low, I'm talking really low, something like the late 1950's or early 1960's. If ever there was a time to invest, and invest wisely (simply because that is something you should always try to pursue), the time is now.

 

Obama wanted to spend a lot more to create demand but could not because the right-wing deficit hawks said no. Those same deficit hawks would not roll back the GWB tax cuts for the rich, which frankly makes no sense at all.

 

Trump and the Republicans gave a new tax cut to Corporations and to rich folks. They said that it would create demand, and it did create some slight demand which boosted the economy, but it did not make large corporations execute investment, it did not even leverage many of these larger Corps to bring back home some of their holdings where they were paying almost zero in tax commitment. This is of course what most economist of any standing had predicted. And so far, it's grown our national debt much higher

 

You could go on this way for a while, higher deficits larger national debt for a while without any horrible effect. But one must take a look at the calamity that might transpire if you do nothing to fight climate change or to mitigate the national emergencies that will occur due to weather change. 

 

You could choose to go along the same old path we have been going down, cut SS, and Medicare, and the public school system which is already underfunded - which in the long-run would be a huge financial mistake that the middle class and the poorest of us all will one day denounce big time...

 

Or you could do what is right. You could utilize real Congressional Oversight that would allow real topic experts who are not sponsored by big Oil or any other special interest lobby to speak about policy measures that would be smart and in the best interest of all Americans. 

 

What you spend, should be construed as an investment towards the future, and in today's world, increasing deficits to spend the right way, makes a heck of a lot of sense.

In essence, spend now, or spend vastly more tomorrow. If you choose the latter, God help us.

 

Peace!

 

 

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On 3/23/2019 at 1:35 PM, peter45 said:

Can we even solve the economic disaster?


Should we claim that Obama did a good job on the economy, or that maybe he should have thrown people in jail?

Even more so, being the first black President, would he have been risking his life if he had cleaned house. With so many goofy right wingers, and so much money available to the crooked "conservatives", it was probably a real possibility.

I see it differently. Obama wasn't the first "Black" President. Obama was 50% Caucasian and culturally White.  Clinton was more "Black" than Obama. 

 

He would have been a target same a JFK and he jailed the oligrachs. 

On 3/23/2019 at 1:35 PM, peter45 said:

 

What really happened?
G. W. Bush started the disaster by putting borrowing and spending into hyperdrive. He wanted to pretend that his tax cuts worked.
Which, caused the crash.

It's way more than Bush.  Bush's borrow and spending played a role but what really did it was the repeal of Glass-Steagal that allowed banks to go virtually unregulated. Because we had a surplus Bush should have been trying to increase it. His wasted war should have been an economic stimulus.

 

On 3/23/2019 at 1:35 PM, peter45 said:


Most of the Federal Reserve really cheap lending went to buy crappy ventures.

The banks were doing predatory lending. The would make a loan and sell the paper to some sucker investor. The banks were off the hook and they made a guaranteed short term profit on loans that they knew were going to fail.

On 3/23/2019 at 1:35 PM, peter45 said:

 

 


These became the "toxic assets".
But then Obama poured more dollars on the mess.

He didn't have much of a choice and neither did Bush. The banksters were extorting the whole country.

On 3/23/2019 at 1:35 PM, peter45 said:

 


Instead of letting the companies just go belly up, and sending the "conservatives" to jail, the Quantative Easing program substituted government backed securities for borrowed government money securities.

The job losses would have been massive had businesses and banks failed. There should have been bailout and there should have been arrests. GM is back to making crappy cars and so is Fiat/Chrysler. Trump is right about GM. Greedy idiots are running GM and Fiat/Chrysler.

On 3/23/2019 at 1:35 PM, peter45 said:

 


And then came Trump.

 

The actual problem is probably not so much making an attempt to pay off the national debt, as the continuing pretense of a "successful" economy.
We are neck deep in an economy which CANNOT continue as is, without continuous government borrowing and spending.
And, we appear to have an electorate who doesn't have a clue that all the "winning" is happening on a credit card.
Trump has told the Federal Reserve that they WILL NOT raise interest rates, and the "pretend to be" independent agency is going to go along with the oligarchs.

 

The economy cannot "grow" out of the borrowing hole that it is in.
Simple arithmetic dictates that an economy cannot grow faster than the population grows, because there isn't anybody available to do the work of making the products, and providing the services.
Even "productivity increases" cannot occur fast enough to pay down the past borrowing.

 

However,
most of the past borrowing has wound up in the bank accounts of billionaires.
Which,
should mean that,
it really is the government's money.
Just because some billionaire borrowed some government dollars to "invest" in a bad idea,
and then Obama's FED came along and bought that bad idea with good government dollars,
doesn't mean the crook who bought the bad idea, should get to keep the good government dollars.

 

So maybe there should be an era of "bad investment reparations".
The government kept records of who got the FED dollars.
So, isn't it time to just say;
"Too bad. I wasn't yours in the first place."

 

See the source image

 

The solution is simple. Get rid of the rich. They either give up their ill-gotten gains or we take it by force. We can't have democracy with so much wealth disparity.  Robespierre would have marched them to the guillotine.

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3 hours ago, BlueDoggL said:

 

 

The solution is simple. Get rid of the rich. They either give up their ill-gotten gains or we take it by force. We can't have democracy with so much wealth disparity.  Robespierre would have marched them to the guillotine.

Inequality for sure is problematic, always was. But get rid of the rich?

The issue at hand is how did the rich get exotically so rich. Therein lies a big part of the problem. BluDoggL, please. You seem to go from one end to the other without making any sense.

This is not about division. This is about qualifying policy measures. You have to stand for something. 

Stop spreading nonsense. 

 

Peace!

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1 minute ago, TheOldBarn said:

Inequality for sure is problematic, always was. But get rid of the rich?

Absolutely get rid of the filthy rich. Money is power. When we have CEOs getting paid 600 times more that the average worker, we have a problem. When 20% owns 80% of the wealth, we have a problem.

1 minute ago, TheOldBarn said:

The issue at hand is how did the rich get exotically so rich.

It's not a issue of how they got filthy rich. They stole it through clever means and they must be forced to return it. If they resist they resist at the own peril. 

1 minute ago, TheOldBarn said:

Therein lies a big part of the problem. BluDoggL, please. You seem to go from one end to the other without making any sense.

I am making perfect sense. When a thief steals from you and the cops refuse to do their job and get your money back to you, you find the thief and get your money back. If the thief resists you do what you have to do to get your money back. Corporate gangsters are thieves. Give a man a gun and he can rob a bank. Give a man a bank, he can rob the world.

1 minute ago, TheOldBarn said:

This is not about division. This is about qualifying policy measures. You have to stand for something. 

Wake up. The rich set the policy. Bernie and Warren will tell you the same thing. The system is rigged and the rich rigged it. What about that don't you comprehend? Do you think the filthy rich and the butt kissers in their orbits are honorable people? I stand for honor and sometimes honor requires beating the crap out of punks.

1 minute ago, TheOldBarn said:

Stop spreading nonsense. 

Stop being naive and don't insult me again.  

 

Explain how there can be economic fairness and parity when the filthy rich who are amoral and immoral own the government and make the rules. The Golden Rule: The guys with the gold make the rules. Is there something about that you don't understand?

 

If you think the oligarchs are suddenly going to play nice and have a come to Jesus moment, I have a bridge in Brooklyn for sale.

 

I'm a New Yorker and we know how to deal with some punk who is out of line. You warn him and if he disrespects you punk him.  The cops in NY knew when to turn a blind eye. Had some punk like Trump gone to my high school we would have broken him if he got own of line. Trump is a natural born punk. There is no nice way to deal with a natural born punk. Had he tried that pussy grabbing stuff on some Italian guy's sister, he'd have gotten his fingers broken. It's called honor and justice. 

 

New Yorkers don't whine about weasels, punks and bullies. We rehabilitate them.  There is none of that well bless your heart crap like in the South.  In the Northeast we let people know where they stand with us. The Irish use Irish diplomacy or a fist to the face and the Italians use a baseball bat. 

 

Truth before harmony. Justice before peace. 

1 minute ago, TheOldBarn said:

 

Peace!

War against the dishonorable!

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We have seen these things before.  We can correct the course but when, historically, have we ever done it without a calamity forcing us to it?

 

The Great Depression?  The United States was in such horrible shape that if things didn't get better anything could have happened.  Targeted social programs and tax changes and important regulations like Glass-Steagall, as well as massive infrastructure spending, got the wheels turning again, which likely helped prevent America from succumbing to any of the Isms du jour at the time, varieties of socialism and fascism and so on.  People were desperate.  We see them embracing the evil Trump cult today and things aren't nearly as bad as they were in 1933, so who knows what might have happened if things had not begun to turn around back then.

 

The recipe is an incremental but still probably disruptive movement to disrupt oligopolies, break apart TBTF companies, protect and/or encourage unions, ensure giant corporations actually pay their taxes.  We have to address our education systems, too.  How do you break up Citigroup, though?  It cannot be done!!!  We've done it before.  We split up Ma Bell way back when, and then just stood aside while the pieces re-consolidated, like that liquid Terminator.  It can be done, though, is the point.

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