View Poll Results: Does governnent spending produce economic growth?

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  • Yes

    241 68.08%
  • No

    13 3.67%
  • Sometimes

    100 28.25%
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Thread: Does governnent spending produce economic growth?

  1. #211
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by MildSteel View Post
    Actually there are a number of factors which have contributed to the dollar's strength despite the QE and TARP. These include:

    1. Banks hoarding the money
    2. The yen carry trade. Big investors borrow yen at a low rate. They convert it to dollars to buy U.S. Treasuries and profit from the spread. The result is an increase in demand for dollars.
    3. The China carry trade (for lack of a better term). What I mean is that big investors borrow dollars at a low rate and invest in Chinese infrastructure projects and property and profit on the spread. The result is an increase in demand for dollars. The same happens with other emerging markets as well.
    Banks don't " hoard " money.....ridiculous.

    And QE hasn't devalued the value of the dollar becacause over 80 percent of all that new money is sitting stagnant on the books of the FED marked as " Excess reserves ".

    The money never entered the economy because the economy sucks after 6 years of Hope and Change and there's no substantial demand for credit among Middle Class consumers.

  2. #212
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by Fenton View Post
    Banks don't " hoard " money.....ridiculous. And QE hasn't devalued the value of the dollar becacause over 80 percent of all that new money is sitting stagnant on the books of the FED marked as " Excess reserves ". The money never entered the economy because the economy sucks after 6 years of Hope and Change and there's no substantial demand for credit among Middle Class consumers.
    One could certainly call depositing that money with the fed "hording", although I agree that there simply isn't the demand for that money.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

  3. #213
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by imagep View Post
    Obviously there are public sector expenditures, but they are spent into the private sector economy.

    Do you think that government employees only shop at government owned stores?
    What is a public expenditure?

  4. #214
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by MildSteel View Post
    The problem is not with the counter. Although what you have said with respect to the dollar representing value, your implication that an increase in supply will reduce demand
    ....is nonexistent, since that is not what I am saying. I am saying that an increase in supply reduces value, although cost can still rise if demand rises faster.

    Example: a Gallon of Gas is worth $3.50. Then supply increases, and the price falls to $2.00. Then supply decreases, and the price rises to $2.50. The fact that we are still a dollar off of the original price does not mean that the later reduction in supply did not have an upward effect on the price of gas. If you increase the amount of dollars by 20%, but demand for dollars rises by 30%, then a 10% (back of napkin math, I realize) increase in the price of the dollar does not mean that increasing the supply did not reduce it's value - it reduced it from 30% higher to 10% higher. It's a wealth tax.

  5. #215
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by MildSteel View Post
    Actually there are a number of factors which have contributed to the dollar's strength despite the QE and TARP. These include:

    1. Banks hoarding the money
    2. The yen carry trade. Big investors borrow yen at a low rate. They convert it to dollars to buy U.S. Treasuries and profit from the spread. The result is an increase in demand for dollars.
    3. The China carry trade (for lack of a better term). What I mean is that big investors borrow dollars at a low rate and invest in Chinese infrastructure projects and property and profit on the spread. The result is an increase in demand for dollars. The same happens with other emerging markets as well.
    You are simply describing various reasons for demand.

    That's right which goes to show you that printing money does not necessarily result in a decline in value.
    That is incorrect. It does not necessarily result in a net decline in value.

    There are other factors involved.
    Which are capable of having greater effects. Which do not mean that the effect of devaluation is not still present, only that it can be greater or less than others.

  6. #216
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by Fenton View Post
    Banks don't " hoard " money.....ridiculous.
    It may sound ridiculous but it is true. Here's what I am talking about

    JPMorgan Chase has a problem: Itís taking in money faster than it can lend it out.

    As long as this trend continues, the biggest bank in America by assets will drift further away from a commercial bankís core social and economic role of lending.

    At the end of the third quarter, the bank was lending out just 56 cents for every dollar it had in deposits, according to earnings results released on Tuesday.
    JPMorgan Seems Less And Less Interested In Lending Money

    Does governnent spending produce economic growth?-original-jpg

    Quote Originally Posted by Fenton View Post
    And QE hasn't devalued the value of the dollar becacause over 80 percent of all that new money is sitting stagnant on the books of the FED marked as " Excess reserves ".

    The money never entered the economy because the economy sucks after 6 years of Hope and Change and there's no substantial demand for credit among Middle Class consumers.
    You half know what you are talking about here. What you did was prove my point. Banks are hoarding the money. Where you are wrong is that the 80% figure that you referenced is the amount that is in private banks. And that's what I am talking about. Banks are hoarding the money. Thanks for proving my assertion.

  7. #217
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by cpwill View Post
    You are simply describing various reasons for demand.
    That is correct. I did that because in a previous post you pointed out that dollars represent a stores of value that fluctuate with demand.

    Here's what you said back in post #119

    dollars do not have intrinsic value - they are representative stores of value for which demand fluctuates
    Since what we are discussing is the value of money, the point is relevant.

    Quote Originally Posted by cpwill View Post
    That is incorrect. It does not necessarily result in a net decline in value.
    No it is correct. It is correct because the net effect is the result. It's just like when I purchase inventory for my business, a superficial observation would be that I have lost money. But that observation is superficial only because what I have done is to profit from the difference in what I paid for the merchandise and what I sold it for. So what I said is correct and your observation proves my point.

    Quote Originally Posted by cpwill View Post
    Which are capable of having greater effects. Which do not mean that the effect of devaluation is not still present, only that it can be greater or less than others.
    No there is no effect of devaluation when such activity is partly responsible for the greater effects. In other words if the government did not print the money and instead just let the entire economy collapse, which is what Hank Paulson scared the hell out of people with, then the money would have no value at all.

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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by cpwill View Post
    ....is nonexistent, since that is not what I am saying. I am saying that an increase in supply reduces value, although cost can still rise if demand rises faster.
    I see what you are saying, but my point is that you are wrong because the printing of the money in itself CAN be PARTLY responsible for the rise in demand.

  9. #219
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by cpwill View Post
    What is a public expenditure?
    When the government spends money of stuff like the military, roads, etc.

    That money ends up in the private sector.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

  10. #220
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by MildSteel View Post
    It may sound ridiculous but it is true. Here's what I am talking about



    JPMorgan Seems Less And Less Interested In Lending Money

    Does governnent spending produce economic growth?-original-jpg



    You half know what you are talking about here. What you did was prove my point. Banks are hoarding the money. Where you are wrong is that the 80% figure that you referenced is the amount that is in private banks. And that's what I am talking about. Banks are hoarding the money. Thanks for proving my assertion.

    You DON'T know what your'e talking about, at all.

    Banks will LEND when there's a demand for credit. There's no demand because the economy after 6 years STILL SUCKS.

    Over 80 percent of all the new money created by QE is sitting idle on the books of the FEDERAL RESERVE marked as " excess reserves ".

    It hasn't made it out into the economy because despite what the Obama administration says out economy is still on life support.

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