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LA Times: Obama stimulus spending: $246,436 per new job

phattonez said:
I'd rather have no suffering and avoid it by abolishing fractional-reserve banking.
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How does one make any bank loans without fractional-reserve banking?
 
phattonez said:
I'd rather have no suffering and avoid it by abolishing fractional-reserve banking.
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Fractional reserve banking does not induce recessions. They have been cyclical in nature for hundreds, if not thousands of years. Only a small fringe group of "so called" economists believe this idea; and the most relevant economic theory from that group (to date) revels in socialism.

However, without intervention like we're seeing now and in the 30's, most recessions last 2 years or less. I'd like to go back to that system of correction.
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Most corrections were never this severe (in terms of wealth evaporation). Laissez faire never existed Tony. Government has been intervening in the economy since the days of Washington.
 
phattonez said:
Full-reserve banking - Wikipedia, the free encyclopedia

Read. Learn.
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Full reserve leads to stagnated growth.

The critisism is longer than the article;)

The most common criticism of full-reserve banking, and by contrast, argument for fractional reserve banking, is the need for financial intermediation. Small savers often cannot lend or invest their meager savings, for want of knowledge and sufficient capital to make a loan. Likewise, without financial intermediaries, borrowers must seek out someone who can loan them the exact amount they need, instead of being able to draw on several loans from different small savers. Savers also face significant risk as individual investors, since if they lend to a single firm or individual, that entity can collapse, leaving the saver penniless. Furthermore, if they act as individual lenders, savers must wait for their loans to mature before recouping their money; a bank can make their deposits available at any time. There are also significant economies of scale in banks making investment and lending decisions, as they have access to knowledge and expertise which individual investors or lenders generally do not. Under full-reserve banking, a great deal of money would sit idle, as savers stored up their money, while entrepreneurs went without much-needed capital.[28]

Among criticisms of a full-reserve banking system is the argument that full-reserve banking implicitly means that there is no government-controlled "monetary policy" at all. Critics might also argue that a full-reserve system leaves us with an inelastic currency. Proponents would likely argue that the lack of a government-manipulated currency (the lack of a "monetary policy") and the presence of a sound currency (as opposed to an "elastic" one) are advantages to a full-reserve system. More subtly, since full-reserve banking means that during periods of high demand for money, the prices of other goods must fall, the broader real economy may bear adjustment costs that are (in principle) no different from those it would bear during periods of moderate inflation (that is, if the cost of adjusting to absolute prices is low or negligible, moderate inflation should be no more problematic than moderate deflation).[29] However, this subsequent deflationary effect is likely to have deleterious consequences if some prices are stickier than others; in particular, wages are often significantly stickier than other prices. Most economists, including prominent Austrian Murray Rothbard, believe that given wage stickiness, the adjustment costs of deflation are significantly higher than an equivalent inflation.[30]

Pascal Salin, former professor at the Université Paris-Dauphine and former Mont Pelerin Society president, opposes such regulation of banking and disputes Murray Rothbard's characterization of fractional-reserve banking as a simple form of recursive embezzlement. He argues that a situation of perfect certainty doesn't exist even in a full-reserve banking system. He also argues that in a perfectly free banking system any customer must be free to choose the kind of notes and the system of payments for services he prefers since optimality cannot be defined independent of the wants of the individual.[31]

Advocates of full-reserve banking do not necessarily advocate that the government lay down regulations stipulating a full-reserve system. In fact, some economists, such as Murray Rothbard (of the Austrian School) believe that government intervention sustains fractional-reserve banking, as governments have formalized the practice by making it legal and supporting it through the creation of central banks. Murray Rothbard argues that in doing this they have prevented periodic bank runs and other natural checks that would otherwise be placed on banks by astute customers, anti-fractional-reserve consumer groups, and other such organizations. Rothbard expresses this concern, and argues the case for 100% gold or silver-backed money, in his book What Has Government Done to Our Money? and other prominent published works.[32] Austrian monetary theorist George Selgin disputes the Rothbardian account, arguing: "Those self-styled Austrian economists, mostly followers of Murray Rothbard, who insist on its fraudulent nature or inherent instability are, frankly, making poor arguments. I don't think the evidence supports their view, and that they overlook overwhelming proof of the benefits that fractional reserve banking has brought in the way of economic development by fostering investment."[33]
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phattonez said:
Full-reserve banking - Wikipedia, the free encyclopedia

Read. Learn.
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I honestly couldn't find any place in this article that explained how you loan out cash when you have to keep 100% of cash in reserve. How is that possible? Perhaps you could point it out or explain it yourself or find another link.

I did find this quote though:

Proposals for the restoration of full-reserve banking have been made, but are generally ignored or dismissed by mainstream economists, who believe that the costs of such a change would outweigh any benefits.
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misterman said:
I dont' think so, but let's see.



Your error is saying you have to raise taxes. No you don't. When the economy improves, tax revenue goes up at the same tax rates. More jobs and better paying jobs = more income tax revenue without raising taxes.

That's what Reagan tried (but failed) to do, and Clinton succeeded in doing, bringing us the first government surplus in decades. (How's that for partisan! ;) )
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Pretty partisan, and some falsehoods to boot. First, your assertion that the boom economy was due to some mythical surplus that Clinton mastered is wholly a lie by Clinton. Clinton's supposed surplus was a paper tiger that never materialized. It was amortized over a decade and used a flawed methodology to arrive at the conclusion that any surplus was achieved.

Time and time again, anyone reading the mainstream news or reading articles on the Internet will read the claim that President Clinton not only balanced the budget, but had a surplus. This is then used as an argument to further highlight the fiscal irresponsibility of the federal government under the Bush administration.

The claim is generally made that Clinton had a surplus of $69 billion in FY1998, $123 billion in FY1999 and $230 billion in FY2000 . In that same link, Clinton claimed that the national debt had been reduced by $360 billion in the last three years, presumably FY1998, FY1999, and FY2000--though, interestingly, $360 billion is not the sum of the alleged surpluses of the three years in question ($69B + $123B + $230B = $422B, not $360B).

While not defending the increase of the federal debt under President Bush, it's curious to see Clinton's record promoted as having generated a surplus. It never happened. There was never a surplus and the facts support that position. In fact, far from a $360 billion reduction in the national debt in FY1998-FY2000, there was an increase of $281 billion.

Verifying this is as simple as accessing the U.S. Treasury (see note about this link below) website where the national debt is updated daily and a history of the debt since January 1993 can be obtained. Considering the government's fiscal year ends on the last day of September each year, and considering Clinton's budget proposal in 1993 took effect in October 1993 and concluded September 1994 (FY1994), here's the national debt at the end of each year of Clinton Budgets.

The Myth of the Clinton Surplus
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Your second fallacy is that you, using the same flawed thinking as Clinton, you assume that everything remains static. It doesn't. So while you wait for an economy to improve that our current President seems intent on destroying totally, is a dream that may never happen. And in the mean time you have Intrest alone on a debt that is equal to approximately 1/8 of our GDP annually.

to say that your thinking on this measure would seem flawed is to be kind.


j-mac
 
Goldenboy219 said:
Fractional reserve banking does not induce recessions. They have been cyclical in nature for hundreds, if not thousands of years. Only a small fringe group of "so called" economists believe this idea; and the most relevant economic theory from that group (to date) revels in socialism.
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What a strawman! And an appeal to popularity! A boat load of logical fallacies. :2razz:

Most corrections were never this severe (in terms of wealth evaporation). Laissez faire never existed Tony. Government has been intervening in the economy since the days of Washington.
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It has been intervening, but before, they used to cut taxes and spending. Now they like to increase spending. Why did we switch from a plan that worked so well for so many years?
 
Goldenboy219 said:
Full reserve leads to stagnated growth.

The critisism is longer than the article;)
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So tell me. With fractional-reserve, you get a boom and bust and you have to average the two to get your growth. Without it, you get gradual growth and no busts. Which is better?
 
j-mac said:
Pretty partisan, and some falsehoods to boot. First, your assertion that the boom economy was due to some mythical surplus that Clinton mastered is wholly a lie by Clinton. Clinton's supposed surplus was a paper tiger that never materialized. It was amortized over a decade and used a flawed methodology to arrive at the conclusion that any surplus was achieved.
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I knew I shouldn't have distracted you with that.

Clinton's surplus was 100% real. But let's take that to another thread if you want to discuss it.

Your second fallacy is that you, using the same flawed thinking as Clinton, you assume that everything remains static. It doesn't.
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Huh?

Government spending jump-starts the economy, producing new tax revenue to pay off the debt. Simple concept. No different than Reagan's argument for tax cuts - debt in the short-term will pay for itself through growth later.
 
misterman said:
I honestly couldn't find any place in this article that explained how you loan out cash when you have to keep 100% of cash in reserve. How is that possible? Perhaps you could point it out or explain it yourself or find another link.

I did find this quote though:
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Is there any way to have more than 100% of your reserves?
 
phattonez said:
Why did we switch from a plan that worked so well for so many years?
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Cloward and Piven became the strategy of the liberal Marxist in this country.


I submit to you they understand the consequences. For many it is simply a practical matter of eliciting votes from a targeted constituency at taxpayer expense; we lose a little, they gain a lot, and the politician keeps his job. But for others, the goal is more malevolent - the failure is deliberate. Don't laugh. This method not only has its proponents, it has a name: the Cloward-Piven Strategy. It describes their agenda, tactics, and long-term strategy.

The Strategy was first elucidated in the May 2, 1966 issue of The Nation magazine by a pair of radical socialist Columbia University professors, Richard Andrew Cloward and Frances Fox Piven.

American Thinker: Barack Obama and the Strategy of Manufactured Crisis
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j-mac
 
phattonez said:
What a strawman! And an appeal to popularity! A boat load of logical fallacies. :2razz:
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You know what? Enough with the "appeal to authority" thing. Bringing up economists simply means that people have spent alot more time studying and documenting and calculating this stuff than any of us, so you can't just dismiss it without checking that out. We are a bunch of amateurs arguing about stuff we don't fully understand, and we are smart to keep that in mind.
 
phattonez said:
Is there any way to have more than 100% of your reserves?
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Huh? I can't think of one. You're smart, tell me. How does a bank that must keep all its cash in reserve make loans?
 
misterman said:
I knew I shouldn't have distracted you with that.

Clinton's surplus was 100% real. But let's take that to another thread if you want to discuss it.
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Sure, point me to it, but just be forewarned that denial is not a river. IOW, you don't get off as easy as to just simply say that the mythical surplus was "100% real" and then jump off. :2wave:


Government spending jump-starts the economy, producing new tax revenue to pay off the debt. Simple concept. No different than Reagan's argument for tax cuts - debt in the short-term will pay for itself through growth later.
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Really? If that is indeed the case, then considering all of Obama's claims of Creating jobs, Saving jobs and Stimulus working better than they had hoped, then tell me sir, Why are we in double digit unemployment? Why are the revenues to the government down? And most importantly why would a seemingly smart guy like yourself, someone that obviously should know more about economics than a mere truck driver like myself, be so duped as to choke down every word that the current liar n chief says?


j-mac
 
phattonez said:
What a strawman! And an appeal to popularity! A boat load of logical fallacies. :2razz:
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Nothing to do with popularity, only merit. Name something credible they have published in the last 25 years?

It has been intervening, but before, they used to cut taxes and spending. Now they like to increase spending.
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Again, an absolutist attitude and policy is harmful. During periods of increasing inflation and unemployment, tax reductions are the better solution (supply side). There is no such thing as a silver bullet.

Why did we switch from a plan that worked so well for so many years?
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Oh do bring us the full reserve success rate:2razz:
 
misterman said:
No, not at all, but in a way that's basically how the whole economy works, dude. In a much bigger circle, but that's how it works. You buy, someone else gets paid. They buy, and someone else gets paid. And so on. Value is added along the way. The government is simply buying, and starting that process again.
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The government can't create wealth. The government can't make money. I don't care how much buying the government does, all that will take place, is takingthe money from one hand, putting it in another, then returning back to the original hand it came from. It's not going to work. But, hey, don't take my word for it; wait till the economy still hasn't recovered by 2012 and your boy is packing his **** to go back to Chicago.
 
misterman said:
No, it's because tax cuts go mostly to the wealthy, who are less likely to spend the money immediately. They will stash it away. We need spending, now.
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So, the Libbos's strategy to stimulate spending, "now", is to scare the **** out of businesses and consumers alike with crazy ass taxes? That's brilliant!
 
apdst said:
The government can't create wealth.
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Sure it can. Why not?

I don't care how much buying the government does, all that will take place, is takingthe money from one hand, putting it in another, then returning back to the original hand it came from.
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That's absurd.

The government spends money on a road. People get paid, and a road is built.

How is that any different from any other wealth creation?
 
apdst said:
So, the Libbos's strategy to stimulate spending, "now", is to scare the **** out of businesses and consumers alike with crazy ass taxes? That's brilliant!
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Where the hell do you get this stuff?
 
misterman said:
You know what? Enough with the "appeal to authority" thing. Bringing up economists simply means that people have spent alot more time studying and documenting and calculating this stuff than any of us, so you can't just dismiss it without checking that out. We are a bunch of amateurs arguing about stuff we don't fully understand, and we are smart to keep that in mind.
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Are you aware that not all economists agree on everything? A consensus does not mean that you have reached truth.
 
misterman said:
Huh? I can't think of one. You're smart, tell me. How does a bank that must keep all its cash in reserve make loans?
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Obviously to start, you have to be a little loose with your 100% reserve requirement so that you can at some point get above 100% and lend those excess reserves.

Right now though, we have FDIC, the Federal Reserve, and a federal (I think) reserve ratio requirement. All of this serves to get a reserve ratio much lower than we would have with free banking.
 
misterman said:
Sure it can. Why not?
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How does government make money?



That's absurd.

The government spends money on a road. People get paid, and a road is built.

How is that any different from any other wealth creation?
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You're not going to get the unemployment rate back to 5% again by building a few roads.
 
Goldenboy219 said:
Nothing to do with popularity, only merit. Name something credible they have published in the last 25 years?
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Just again an appeal to populatiry.

Again, an absolutist attitude and policy is harmful. During periods of increasing inflation and unemployment, tax reductions are the better solution (supply side). There is no such thing as a silver bullet.
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I have no problem with decreasing taxes since this would decrease the burden of government. However, if you increase government spending while doing this then you haven't really accomplished anything.

Oh do bring us the full reserve success rate:2razz:
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We would have that or something very close to it with free banking since people would lose confidence in those banks that did not have it.
 
misterman said:
Where the hell do you get this stuff?
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Well, I just happen to live in the real world. I run my own business. Do you actually think I'm going to borrow money and hire more people in this economic environment, get slapped with idiotic health care taxes just so I can get a $3,000 tax credit? No, I'm not and neither is anyone else.

Besides, I have a oilfield service business. Last time I checked, PBO isn't bailing out oilfield companies. He's doing more to run us out of business than anything else.
 
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