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Stimulus Boosted Jobs in 2nd Quarter, CBO Says

Conservative said:
Think that you increase demand by driving up the size of govt. and thus taxes to pay for it?
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You mean, increase demand by increasing government spending. I do not expect the government to be the one to build roads, bridges, tunnels, etc.... Therefore:

In the short run? Yes. In the long run? No. Gains in productivity along with inflation reduce the actual tax burden.

Supply only creates its own demand in a world without money (barter economy).
 
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Goldenboy219 said:
You mean, increase demand by increasing government spending. I do not expect the government to be the one to build roads, bridges, tunnels, etc.... Therefore:

In the short run? Yes. In the long run? No. Gains in productivity along with inflation reduce the actual tax burden.

Supply only creates its own demand in a world without money (barter economy).
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how are roads, bridges, tunnels supposedly funded?

Govt. spending increases inflation in the long run where productivity by the private sector is what keeps it down. Until this Administration promotes the private sector by cutting the size of govt. and providing the proper tax incentive, inflation is going to happen and businesses are not going to increase employment enough to put the 4 million people lost during the Obama term back to work.

People keeping more of their own money needs less govt. thus a smaller govt. not a larger one and when 47% of the people pay zero in income taxes the burden to fund this larger govt. falls on the backs of those already paying most of the taxes and that doesn't bode well for economic growth as they have less spendable income.
 
Conservative said:
how are roads, bridges, tunnels supposedly funded?
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Government spending, just as i stated in a previous post.

Govt. spending increases inflation in the long run where productivity by the private sector is what keeps it down.
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Wrong as usual. Inflation (in the long run) is entirely and everywhere a monetary phenomenon.

Until this Administration promotes the private sector by cutting the size of govt. and providing the proper tax incentive, inflation is going to happen and businesses are not going to increase employment enough to put the 4 million people lost during the Obama term back to work.
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If you cannot make a proper case for crowding out, then your entire "perspective" is garbage. So make the case (although you cannot because it is a bogus argument to be made).

People keeping more of their own money needs less govt. thus a smaller govt. not a larger one and when 47% of the people pay zero in income taxes the burden to fund this larger govt. falls on the backs of those already paying most of the taxes and that doesn't bode well for economic growth as they have less spendable income.
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Are you through ranting?
 
Goldenboy219 said:
Demand drives expansion.... Anyone who tries to argue to the contrary is quite wrong and IMHO a fool.

Some facts on small business for those who are interested.
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Well then here is this fool's opinion: you can't demand all you want, but if you don't have the productive capability it doesn't mean anything. I want a huge house and a Ferrari, but that's not going to happen. You have a ton of demand for that but it's not going to happen. Your economic theories have a terrible grasp of capital formation and that is why when put into action they have always failed to accomplish the goals they predict.

Goldenboy219 said:
You mean, increase demand by increasing government spending. I do not expect the government to be the one to build roads, bridges, tunnels, etc.... Therefore:

In the short run? Yes. In the long run? No. Gains in productivity along with inflation reduce the actual tax burden.
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In the short run sure, but then in the long run artificially inflated demand produced by government spending only causes a bubble because actual purchasing power is lower than perceived purchasing power.

Supply only creates its own demand in a world without money (barter economy).
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Only if you're talking about a bastardized version of Say's Law. If you're creating something that no one demands then of course you're not creating any demand because no one wants your goods. If you're producing something of value, then you'll be able to trade and you'll have the money or goods that you traded for to demand new goods.
 
Goldenboy219 said:
If you cannot make a proper case for crowding out, then your entire "perspective" is garbage. So make the case (although you cannot because it is a bogus argument to be made).
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There's only so much capital available. There isn't much to lend if government holds a huge share of debt.
 
Goldenboy219;1059000531]Government spending, just as i stated in a previous post.
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Govt. spending what? Where does the money come from?

Wrong as usual. Inflation (in the long run) is entirely and everywhere a monetary phenomenon.
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You certainly have a very large ego yet are very short on the facts, logic, and common sense. Govt. employees provide a service and produce absolutely nothing thus creating greater demand for the products out there and that is inflationary.


If you cannot make a proper case for crowding out, then your entire "perspective" is garbage. So make the case (although you cannot because it is a bogus argument to be made).
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That is your opinion, mine is based upon actually running a business and calling my perspective as garbage says a lot about you.



Are you through ranting?
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Normal comment when you cannot refute logic, common sense, and facts.
 
phattonez said:
Well then here is this fool's opinion: you can't demand all you want, but if you don't have the productive capability it doesn't mean anything. I want a huge house and a Ferrari, but that's not going to happen. You have a ton of demand for that but it's not going to happen. Your economic theories have a terrible grasp of capital formation and that is why when put into action they have always failed to accomplish the goals they predict.
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My theories? I am simply using positive analysis to explain the current situation.

If you want a more formal explanation: Demand relative to a person's budgetary constraint.

In the short run sure, but then in the long run artificially inflated demand produced by government spending only causes a bubble because actual purchasing power is lower than perceived purchasing power.
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Come on Tony, you are much to smart to believe such bull****. Bubbles are caused by over speculation... period. It has nothing to do with "perceived purchasing power".

Only if you're talking about a bastardized version of Say's Law. If you're creating something that no one demands then of course you're not creating any demand because no one wants your goods. If you're producing something of value, then you'll be able to trade and you'll have the money or goods that you traded for to demand new goods.
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Nope! Especially in an economy that has money because it can be spent or saved. If all income earned is spent, then yes Say's law holds true in an economy that functions on money. But what if... as in now... if everyone began saving?

Here is a simple example: Capitol Hill Babysitting Co-op - Wikipedia, the free encyclopedia
 
Conservative said:
Govt. spending what? Where does the money come from?
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Taxpayers and creditors of course. You really need to read more!

You certainly have a very large ego yet are very short on the facts, logic, and common sense. Govt. employees provide a service and produce absolutely nothing thus creating greater demand for the products out there and that is inflationary.
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I have a large ego because i understand inflation, when you are merely grasping at straws in an attempt to prove a point? Your anti-intellectualism tells wonders.

That is your opinion, mine is based upon actually running a business and calling my perspective as garbage says a lot about you.
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Then make the case for crowding out. I'll wait.

Normal comment when you cannot refute logic, common sense, and facts.
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Still not through ranting? Carry on!
 
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Goldenboy, You seem pretty smart when it comes to economics, at least from a Keynesian standpoint. Can you tell me if it is a good thing, or a bad thing that our own Treasury is now buying our own debt?


j-mac
 
phattonez said:
There's only so much capital available. There isn't much to lend if government holds a huge share of debt.
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Agreed.

But credit spreads dictate another story; if crowding out was occurring, the cost of private borrowing would greatly exceed the cost of public borrowing. Therefore, crowding out is not occurring. .TEDSP: Ted Spread Summary - Bloomberg

Anything under 100 basis points means the risk of crowding out is virtually nonexistent.
 
j-mac said:
Goldenboy, You seem pretty smart when it comes to economics, at least from a Keynesian standpoint. Can you tell me if it is a good thing, or a bad thing that our own Treasury is now buying our own debt?


j-mac
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That's funny, i am not Keynesian but instead have more of a neoclassical lean. If anything, i have what can be described as a "Sharpeian" lean.

If the treasury were to purchase its own debt (even though it cannot because the Fed controls the money supply), such an action would then cause massive inflation in an almost instantaneous fashion.
 
Goldenboy219 said:
Agreed.

But credit spreads dictate another story; if crowding out was occurring, the cost of private borrowing would greatly exceed the cost of public borrowing. Therefore, crowding out is not occurring. .TEDSP: Ted Spread Summary - Bloomberg

Anything under 100 basis points means the risk of crowding out is virtually nonexistent.
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Doesn't that assume that there is no inflation going on, though?
 
Goldenboy219;1059000574]Taxpayers and creditors of course. You really need to read more!
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Yes, taxpayers everytime they buy a gallon of gasoline or pay an excise tax a simple fact that liberals ignore and believe they come from income taxes.



I have a large ego because i understand inflation, when you are merely grasping at straws in an attempt to prove a point? Your anti-intellectualism is tells wonders.
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I have seen no evidence of that understanding of inflation but I do see a lot of name calling that defeats your argument.


Then make the case for crowding out. I'll wait.
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Crowding out is pretty easy as the govt. just prints money whereas the private sector has to earn it. Competing for loans is like a duck competing against an allegator, the govt. wins all the time thus crowding out the private sector.


Still not through ranting? Carry on!
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All I see from you is theory that doesn't match reality but it does give the indication that you have zero private sector experience and certainly have never run a business, made a payroll, or competed in the private sector. If that is ranting, so be it.
 
Goldenboy219 said:
My theories? I am simply using positive analysis to explain the current situation.

If you want a more formal explanation: Demand relative to a person's budgetary constraint.
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But the analysis lacks any explanation of capital markets and how inflation affects them.

Come on Tony, you are much to smart to believe such bull****. Bubbles are caused by over speculation... period. It has nothing to do with "perceived purchasing power".
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If people believe that they have more purchasing power than they actually have, won't it cause more speculation than they otherwise would have done? Isn't that a great example then over over-speculation?

Nope! Especially in an economy that has money because it can be spent or saved. If all income earned is spent, then yes Say's law holds true in an economy that functions on money. But what if... as in now... if everyone began saving?

Here is a simple example: Capitol Hill Babysitting Co-op - Wikipedia, the free encyclopedia
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It doesn't change if a large proportion of money is saved (we can't go to the extreme example of everything being saved because it's not realistic). There are two possible scenarios: that money sits stagnant in a bank or it is lent.

If it sits stagnant in a bank, then the money is pretty much dead. Businesses operate under the conditions that they perceive and what they perceive is money in circulation. So if money is in the bank, then it is, for price levels, deflationary. This is the money under the mattress scenario. Prices will generally fall, but people will keep producing because they are confident in the value of all of the money that they have. The only problem that would arise is if people took all of their money out of savings and spent it all immediately, but I don't see that happening.

The other case is if it is lent. Well, I don't need to say much about this scenario. In this case, all that money is out in circulation, so it doesn't really need to be explained.
 
Goldenboy219 said:
No, why would it?
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Because if there is inflation going on then even if you are running out of capital you can avoid its immediate realization.
 
Goldenboy219 said:
That's funny, i am not Keynesian but instead have more of a neoclassical lean. If anything, i have what can be described as a "Sharpeian" lean.
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See, you're already smarter than I on these issues....I don't know what
"Sharpeian" even is. :lol:


If the treasury were to purchase its own debt (even though it cannot because the Fed controls the money supply), such an action would then cause massive inflation in an almost instantaneous fashion.
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This sounds completely opposite from:

By JEANNINE AVERSA, AP Economics Writer – Tue Aug 10, 6:02 pm ET
WASHINGTON – As recently as two months ago, the Federal Reserve sounded optimistic about the economic recovery. Now the central bank is taking a new step that shows it is clearly more worried, but economists say it probably won't help much.
The Fed said Tuesday that it would spend a relatively small amount of money — about $10 billion a month, economists estimate — buying government debt. The move is designed to drive interest rates on mortgages and corporate borrowing at least a little lower and help the economy grow faster.

Fed, worried about recovery, will buy US debt - Yahoo! News
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Isn't this a toe in the door to hyper inflation?


"Fed Looks to Spur Growth by Buying Government Debt"

Fed Looks to Spur Growth by Buying Government Debt - Bloomberg

This is ominous to me, what do you think?


j-mac
 
Conservative said:
Yes, taxpayers everytime they buy a gallon of gasoline or pay an excise tax a simple fact that liberals ignore and believe they come from income taxes.
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Your point?

I have seen no evidence of that understanding of inflation but I do see a lot of name calling that defeats your argument.
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How so? I was simply quoting nobel prize winning economist Milton Friedman.

Monetarists believe the most significant factor influencing inflation or deflation is how fast the money supply grows or shrinks. They consider fiscal policy, or government spending and taxation, as ineffective in controlling inflation. According to the famous monetarist economist Milton Friedman, "Inflation is always and everywhere a monetary phenomenon." Some monetarists, however, will qualify this by making an exception for very short-term circumstances.
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source

All you have stated was sheer drivel.

Crowding out is pretty easy as the govt. just prints money
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Do you have a source to back such a ridiculus claim?

whereas the private sector has to earn it. Competing for loans is like a duck competing against an allegator, the govt. wins all the time thus crowding out the private sector.
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Wow, i actually feel like i lost intelligence from reading this post. I mean.... wow.

All I see from you is theory that doesn't match reality but it does give the indication that you have zero private sector experience and certainly have never run a business, made a payroll, or competed in the private sector. If that is ranting, so be it.
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I use theory to analyze reality where as you simply make things up to suit your ideology.

It's sad really.
 
phattonez said:
Because if there is inflation going on then even if you are running out of capital you can avoid its immediate realization.
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Nope! If a particular credit market is running short on liquidity, it will require greater rates of interest to induce investors.
 
j-mac said:
So are you now saying that it wouldn't cause inflation because it's the FED?


j-mac
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Yes. The Fed (not congress or the president) controls the money supply.
 
Goldenboy219;1059000642]Your point?
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Pretty easy, there would be enough money from excise taxes to build bridges, roads, and other infrastructure projects had the Congress not put that money on budget and spent it. Just another example of waste, fraud, and abuse by the Federal govt. that you seem to ignore. We don't need more taxes to fund the ineffecient govt. so allow the people to keep it and they then need less of that so called govt. help.


How so? I was simply quoting nobel prize winning economist Milton Friedman.
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Too many economists keep their noses buried in books versus getting out into the real world to see how it works. Amazing to me how those nobel prize economists seem to ignore non partisan sites that offer actual results. I wouldn't put much faith in the Nobel Prize any more since Obama won the prize simply with his rhetoric. Looks to me like you need to spend more time in the real world as well.

All you have stated was sheer drivel.
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You haven't proven to have any credibility on judging someone else's posts.


Do you have a source to back such a ridiculus claim?
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Prove that the govt. doesn't print money? That the govt. competing against private sector for capital doesn't get the capital? You are kidding?



Wow, i actually feel like i lost intelligence from reading this post. I mean.... wow.
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Cannot lose what you do not have.


I use theory to analyze reality where as you simply make things up to suit your ideology.

It's sad really.
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You are right, bea.gov, bls.gov, and the U.S. Treasury sites all offer theory, LOL. Like a typical liberal, your arrogance is showing as is your lack of logic, common sense, and facts.
 
phattonez said:
But the analysis lacks any explanation of capital markets and how inflation affects them.
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That is because there is no need to explain the effects of inflation within credit markets.

If people believe that they have more purchasing power than they actually have, won't it cause more speculation than they otherwise would have done? Isn't that a great example then over over-speculation?
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No. While one can speculate about relative purchasing power (as you often do), changes in purchasing power do not cause speculation. Irrational profit expectations fuel speculation.

It doesn't change if a large proportion of money is saved (we can't go to the extreme example of everything being saved because it's not realistic). There are two possible scenarios: that money sits stagnant in a bank or it is lent.
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Of course it does. Less money being spent (or a greater demand for money) naturally means less of a demand of goods (fixed supply or not).

If it sits stagnant in a bank, then the money is pretty much dead. Businesses operate under the conditions that they perceive and what they perceive is money in circulation. So if money is in the bank, then it is, for price levels, deflationary. This is the money under the mattress scenario. Prices will generally fall, but people will keep producing because they are confident in the value of all of the money that they have. The only problem that would arise is if people took all of their money out of savings and spent it all immediately, but I don't see that happening.
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This is false. People produce because they believe they will be able to sell their goods at a price that is greater than their cost. In fact, people will hold onto their dollars if they believe the value of them will continue to increase relative to what is being produced.
 
Goldenboy219 said:
Yes. The Fed (not congress or the president) controls the money supply.
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Ok, but who appoints the Fed chairman? Isn't that the President, and Congress approves them?

And regardless of which entity is buying our own debt doesn't the threat of hyper inflation exist with the Fed buying our own debt?

j-mac
 
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