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Thread: The recession may be over at last so what now? [edited]

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    Re: The recession may be over at last so what now? [edited]

    Quote Originally Posted by Goldenboy219 View Post
    My choice to use a simple graph should be no surprise, considering the topic. I do not trust you, sorry TD, but that is just how it goes at this point in the debate.

    Price is one aspect of equilibrium in a 2D supply demand graph. We can also go to the nth degree and include other aspects such as unemployment, domestic spending, demographic makeup of spending, etc.... All of which, equilibrium will pertain to a correlation to each individual variable as well as how they impact each other (although they also require assumptions for validity).

    Quick question and think carefully; is revenue dependent on output and/or price?
    Revenue has nothing to do with either. I have to laugh that you would even believe there would be a relationship; unless of course you are going to make up more stuff like a price demand chart to describe the economy.

    So let me ask you something; how many more months of disastrous economic news and activity will it take for people like you who swoon over the false Obamanomics before you admit it was a vast lie and only made the recession worse?

    12% unemployment? 15%? Businesses are going bankrupt all over the US at an alarming rate, consumer spending has all but disappeared, states have raised taxes to levels that are further eroding consumer confidence and let's not forget the other effect on Government; less tax revenue and ever burgeoning deficits.

    I am just curious at what point people like you see how foolish your notions are about how the economy works and how Government never can BUY a recovery and that it only makes the recovery longer.

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    Re: The recession may be over at last so what now? [edited]

    Quote Originally Posted by Truth Detector View Post
    Revenue has nothing to do with either. I have to laugh that you would even believe there would be a relationship; unless of course you are going to make up more stuff like a price demand chart to describe the economy.
    TD; what i described and illustrated was your basic AD-AS model...... From Wiki, just to get the point across.AD-AS model - Wikipedia, the free encyclopedia

    The AD-AS or Aggregate Demand-Aggregate Supply model is a macroeconomic model that explains price level and output through the relationship of aggregate demand and aggregate supply. It was first put forth by John Maynard Keynes in his work The General Theory of Employment, Interest, and Money. It is the foundation for the modern field of macroeconomics, and is accepted by a broad array of economists, from Libertarian, Monetarist supporters of laissez-faire, such as Milton Friedman to Socialist, Post-Keynesian supporters of economic interventionism, such as Joan Robinson.
    Ok, got it? Good.

    So let me ask you something; how many more months of disastrous economic news and activity will it take for people like you who swoon over the false Obamanomics before you admit it was a vast lie and only made the recession worse?
    I have not heard any disastrous economic news since the March lows.

    12% unemployment? 15%? Businesses are going bankrupt all over the US at an alarming rate, consumer spending has all but disappeared, states have raised taxes to levels that are further eroding consumer confidence and let's not forget the other effect on Government; less tax revenue and ever burgeoning deficits.
    If unemployment eclipses 12%, then they will have under shot the full employment gap. Keep in mind that unemployment is a lagging indicator. Personally, i like to keep a close eye on debt markets, either treasuries or corporate, as the flow of money is rather telling IMHO.

    Were their issues with the stimulus project? I would say hell yes; it was far to small in the tune of infrastructure spending. You can check the archives for yourself, i was originally calling for a $1 trillion infrastructure stimulus, as tax cuts (in the short term) combined with a low FFR only magnify the ramifications of a liquidity trap.

    I am just curious at what point people like you see how foolish your notions are about how the economy works and how Government never can BUY a recovery and that it only makes the recovery longer.
    Give me some recent examples TD. I am really hoping you will say something about Japan.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: The recession may be over at last so what now? [edited]

    Revenue is simply output (sold) multiplied by price, as in your basic supply and demand graph. Go ahead, try it out for yourself!
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: The recession may be over at last so what now? [edited]

    Quote Originally Posted by Goldenboy219 View Post
    Revenue is simply output (sold) multiplied by price, as in your basic supply and demand graph. Go ahead, try it out for yourself!
    That's not what revene is. That's funny!

    Revenue is any income that increases a company's equity, be it sales, interest, savings or assets exchange.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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    Re: The recession may be over at last so what now? [edited]

    Quote Originally Posted by apdst View Post
    That's not what revene is. That's funny!

    Revenue is any income that increases a company's equity, be it sales, interest, savings or assets exchange.
    Seriously? Come on APDST, how would one calculate revenue?

    [ame=http://en.wikipedia.org/wiki/Total_revenue]Total revenue - Wikipedia, the free encyclopedia[/ame]

    Total revenue is the total money received from the sale of any given quantity of output.

    The total revenue is calculated by taking the price of the sale times the quantity sold, i.e.

    total revenue = price X quantity.
    Holy ****, never in my life have i seen so many people dispute mathematics via a system of beliefs. If you are going to argue mathematics, you will need proof. Where are the proofs that state the mathematical applications to the field of economics are incorrect?

    BTW, savings is not revenue, it is savings. The interest or return on savings can increase their assets, but for practical purposes (not considering financial service companies or banks), revenue is what has been described.
    Last edited by Kushinator; 11-01-09 at 12:19 PM.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: The recession may be over at last so what now? [edited]

    Quote Originally Posted by Goldenboy219 View Post
    Revenue is simply output (sold) multiplied by price, as in your basic supply and demand graph. Go ahead, try it out for yourself!
    Give me a great big DER; but what has this got to do with anything being discussed. We aren't talking about PRICES dude, we are talking about DEMAND and right now there is no demand in consumer goods due to a complete lack of consumer confidence, a complete lack in demand for houses, a complete lack of demand in credit and a complete lack of demand in commercial real estate.

    We are talking about increasing foreclosures, increasing unemployment, higher taxes which will exacerbate the lack of consumer confidence and a complete lack of GDP.

    No amount of "SUPPLY" or "REVENUE" curves will change those FACTS. The notion that you don't see any disastrous economic news/data out there suggests that you are not really in touch with reality.

    I think we have beat this one into the ground and basically your points are completely lost on me as the FACTS and the REALITY do not seem to have any relevance with you.

    I will close and give you the final word with this: NO government has ever BOUGHT/BORROWED a nation out of a recession or into prosperity EVER.

    If there is one, I would love to see credible examples. The Government cannot CREATE anything; it TAKES from one person and GIVES it to another usually for purely partisan purposes. This is why the multiplier effect on money is so much lower with Government spending versus the private sector.

    You cannot spend a nation into $12 trillion debt, $1.8 trillion deficits without a debate on how and who will be paying for it, we know it will be ALL of us, and think that this will boost consumer confidence and get Americans spending again. It requires a level of willful denial I just cannot comprehend.

    Here is another little tidbit for you and then I will let you have the last word: Revenues to the Government are in a free fall with no end in sight that will make the projections of deficits far worse than they currently are. I recently looked at the budget forecasts and had to laugh at the assumptions being used to promote this disastrous economic agenda that is nothing more than a partisan political effort to ensure Democrat majorities and pander to ignorant Americans with populist divisive class envy rhetoric.

    No one in their right mind, or with an education, can believe that such rhetoric and policies will be good.

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    Re: The recession may be over at last so what now? [edited]

    Quote Originally Posted by Goldenboy219 View Post
    Seriously? Come on APDST, how would one calculate revenue?

    Total revenue - Wikipedia, the free encyclopedia



    Holy ****, never in my life have i seen so many people dispute mathematics via a system of beliefs. If you are going to argue mathematics, you will need proof. Where are the proofs that state the mathematical applications to the field of economics are incorrect?

    BTW, savings is not revenue, it is savings. The interest or return on savings can increase their assets, but for practical purposes (not considering financial service companies or banks), revenue is what has been described.

    Whomever wrote that for Wiki is an idiot, too.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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    Re: The recession may be over at last so what now? [edited]

    Quote Originally Posted by Goldenboy219 View Post
    Aggregate Supply... in the long run... has a slope that is undefined, hence the AD curve is vertical. This is not Keynesian economics, instead this is classical stance, of which is the basis of supply side economics. Hence, in the long run, supply (and not demand) determines output.



    Hopefully you understand the demand curve is downward sloping. No matter where the demand curve intersects a vertical line (AS), it will still lead to a constant amount of output (y) in regards to long run aggregate supply. Go ahead and try it for yourself. Make up any type of demand curve to intersect long run supply, and tell me what happens to the output When you are done, you can either PM me and tell me you are sorry for your mistake, or continue to make yourself look foolish by attempting to dispute simple mathematics. The choice is yours.
    I have been mulling over these graphs the past couple days. The only thing I can positively get from them is that as the total amount of production and resources (LRAS) over a specified period of time is used up, prices increase.

    It kept bugging me that no matter what happens in the scenarios the point on the graph ALWAYS defaults back to the LRAS line, just higher or lower depending on the overall prices (left side of the graph).
    When we define LRAS it makes sense. LRAS is a theoretical number that represents the overall complete amount that COULD be produced in a society. It doesn't represent what is ACTUALLY being produced. So for example we could build a factory and just it's presence would increase LRAS even if it's not being used.
    So increasing LRAS doesn't really support your point since increasing theoretical output doesn't help the economy. Increasing ACTUAL output will.

    Quote Originally Posted by Goldenboy219 View Post
    Ill even help you out.



    Now move the demand curve anywhere on the graph and explain to me in your logic how output is changed (in regards to long run AS).

    You might want to further dislodge your foot from your mouth, as demand (in the long run) is what determines price, not output.
    Now move the supply curve anywhere on the graph and explain to me in your logic how output is changed (in regards to long run AS).

    The same is true with moving the supply curve, it doesn't change output (in regards to long run AS). LRAS is determined by theoretical factors of productivity actual supply and demand do not change it.
    From the ashes.

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    Re: The recession may be over at last so what now? [edited]

    Quote Originally Posted by Truth Detector View Post
    Give me a great big DER; but what has this got to do with anything being discussed.
    Then explain your ridiculous assertion that a supply and demand graph of any kind only determines price. How is output (horizontal axis) suddenly left out of the analysis?

    We aren't talking about PRICES dude, we are talking about DEMAND and right now there is no demand in consumer goods due to a complete lack of consumer confidence, a complete lack in demand for houses, a complete lack of demand in credit and a complete lack of demand in commercial real estate.
    And why is their a lack of demand? Market psychology TD, future income expectations are declining (although at a decreasing rate), and therefore people are beginning to save more. Since the economy is driven by consumption (70%), this will have a very real effect on output.

    We are talking about increasing foreclosures, increasing unemployment, higher taxes which will exacerbate the lack of consumer confidence and a complete lack of GDP.
    In the short run, shifting supply (lowering taxes, regulations) will have very little effect on output. Therefore this is a demand issue. Please show where i stated anywhere, anytime that we need a rightward shift in supply? Never stated it so good luck, although your misrepresentation of my position is another epic failure. Demand can be shifted by increasing income, or by "induced spending".

    Ideally, infrastructure stimulus creates jobs and therefore spending.

    No amount of "SUPPLY" or "REVENUE" curves will change those FACTS. The notion that you don't see any disastrous economic news/data out there suggests that you are not really in touch with reality.
    Again, show me where i stated they did. I made a comment that in the short run, output is determined by demand; although in the long run, it is a aggregate supply determinant as the slope of a long run aggregate supply curve is undefined.

    Lowering taxes, decreasing government spending, loosening regulation is a supply side solution, shifts the supply curve, not the demand curve buddy. The logic is that HOPEFULLY, demand will follow suit as prices will decrease (because business taxes and regulations are decreased).

    I think we have beat this one into the ground and basically your points are completely lost on me as the FACTS and the REALITY do not seem to have any relevance with you.
    You state we have unemployment issues and increasing deficits/debt. No ****. How does balancing the budget (decrease spending) deal with lower demand TD? The only thing you can possible state without sounding totally confused is something pertains to Say's Law, although that undermines your entire "this is a demand issue" rant. If it is a demand issue, induced spending, not savings, increases output in the short term.

    I will close and give you the final word with this: NO government has ever BOUGHT/BORROWED a nation out of a recession or into prosperity EVER.
    What happened in the 1940's TD? Did massive government spending and massive government debt lead to great prosperity following WWII?

    If there is one, I would love to see credible examples. The Government cannot CREATE anything; it TAKES from one person and GIVES it to another usually for purely partisan purposes. This is why the multiplier effect on money is so much lower with Government spending versus the private sector.
    Your analysis does not have any time reference, and therefore is incorrect. Time is a critical component, and you have yet to consider it.

    You cannot spend a nation into $12 trillion debt, $1.8 trillion deficits without a debate on how and who will be paying for it, we know it will be ALL of us, and think that this will boost consumer confidence and get Americans spending again. It requires a level of willful denial I just cannot comprehend.
    First and foremost, Obama did not spend us into $12 trillion of debt, the majority of that figure is held on the shoulders of Mr. Bush II. Second, where was all this disparity when the former president was sending out tax rebate checks in the hundred billions? Are we to believe that spending and increasing deficits is only ok under a republican, and when a democrat takes office, massive borrowing when we are in a severe recession is suddenly "off the table"? GTFO of here dude, you are blindly inconsistent in nearly everything you state in regards to the economy.

    Here is another little tidbit for you and then I will let you have the last word: Revenues to the Government are in a free fall with no end in sight that will make the projections of deficits far worse than they currently are. I recently looked at the budget forecasts and had to laugh at the assumptions being used to promote this disastrous economic agenda that is nothing more than a partisan political effort to ensure Democrat majorities and pander to ignorant Americans with populist divisive class envy rhetoric.


    How did such a high amount of debt (in regards to GDP) get paid down TD, all while the standard of living, incomes, etc... all increased?

    You are so full of ****, you have confused your supply side analysis with that of the Neo-classical prescription. Government can and will shift the demand curve TD, and we are seeing it already with positive GDP numbers. Will there be some bumps in the road? Of course, but you have to admit things are much better than they were one year ago.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: The recession may be over at last so what now? [edited]

    Quote Originally Posted by Phoenix View Post
    I have been mulling over these graphs the past couple days. The only thing I can positively get from them is that as the total amount of production and resources (LRAS) over a specified period of time is used up, prices increase.
    Again, the price is totally demand dependent. Assume that aggregate demand is perfectly elastic (horizontal line).

    It kept bugging me that no matter what happens in the scenarios the point on the graph ALWAYS defaults back to the LRAS line, just higher or lower depending on the overall prices (left side of the graph).
    When we define LRAS it makes sense. LRAS is a theoretical number that represents the overall complete amount that COULD be produced in a society. It doesn't represent what is ACTUALLY being produced. So for example we could build a factory and just it's presence would increase LRAS even if it's not being used. So increasing LRAS doesn't really support your point since increasing theoretical output doesn't help the economy. Increasing ACTUAL output will.
    You are assuming that a factory would run idle, which is not only against reality, but is faulty logic. A factory would only run idle if its revenue = cost (fixed and/or variable) = 0, and because of the tremendous amount of capital required to build a factory, it is just not going to happen. LRAS assumes full employment.

    Now move the supply curve anywhere on the graph and explain to me in your logic how output is changed (in regards to long run AS).
    Let us assume that increasing output corresponds with movement to the right, by moving AS to either the left or right, we will either be decreasing or increasing output.

    The same is true with moving the supply curve, it doesn't change output (in regards to long run AS). LRAS is determined by theoretical factors of productivity actual supply and demand do not change it.
    Yes it does bro; if it is moving to the right, it is increasing, and if it is moving to the left it is decreasing. Assign nominal values and try it yourself

    Regardless, my statement on LRAS was just to tie up any loose ends. TD said i was wrong, and i the graph states otherwise. We are right now concerned about the short run, as in right now, and this graphical representation does not analyze our current situation.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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