View Poll Results: Does governnent spending produce economic growth?

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    241 68.08%
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Thread: Does governnent spending produce economic growth?

  1. #231
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by cpwill View Post
    that is.... not only blatantly incorrect.... it seems almost blatantly stupid.
    It would appear that way to you because you don't understand a simple point. That is an increase in supply the supply of money does not necessarily lead to a decrease in the value of money. So what you have said here is of no surprise. What you have done is to conjure up an imaginary model where there is some conservation of value that is like the conservation of energy and that simply is not so. Sorry, that is what is stupid.

    Quote Originally Posted by cpwill View Post
    If I run a political campaign that succeeds in getting the support of all members of the libertarian party (2%), but loses the support of everyone else (98%), that doesn't mean that the strategy that gained me the libertarian party (effect) support means I will win the election (net effect). The net effects are simply the aggregate of the individual effects ((100-2)<50).

    If I tie you to a tire, and yet you still win a foot race, that doesn't prove that dragging a tire makes you faster. It simply demonstrates that your slower performance is still superior to your unencumbered opponents.
    Look, I understood your stupid examples you gave before and all you have done here is give two more stupid examples that have little in common with the value of money. The value of money depends on people's perceptions. It is not like a foot race. Understand?

    Quote Originally Posted by cpwill View Post
    Similarly, if you increase the supply of dollars, but increasing demand outstrips the effect, that doesn't mean that increasing supply does not represent a reduction in the value of each dollar, it only means that the decreased value in a high demand atmosphere is still net higher than the per-dollar value was previously.


    Damn!!! That is a bunch of conjured up BULLS***!

    Come on man, what the hell is this crap

    it only means that the decreased value in a high demand atmosphere is still net higher

  2. #232
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by imagep View Post
    Aside from subprime mortgages, do you have any evidence (links) to prove this?
    OK. Check this out on small business credit

    ...
    Industry participants, including small business owners, bankers, and regulators have offered differing reasons for the decline in lending. However, recent analysis by the Federal Reserve Bank of Cleveland shows that there is no single explanation, but rather a number of factors driving this trend. Fewer small businesses are interested in borrowing than in years past, and at the same time, small business financials have remained weak, depressing small business loan approval rates. In addition, collateral values have stayed low, as real estate prices have declined, limiting the amount that small business owners can borrow.

    Furthermore, increased regulatory scrutiny has caused banks to boost their lending standards, resulting in a smaller fraction of creditworthy borrowers. Finally, shifts in the banking industry have had an impact. Bank consolidation has reduced the number of banks focused on the small business sector, and small business lending has become relatively less profitable than other types of lending, reducing some bankers' interest in the small business credit market.
    .....
    https://www.clevelandfed.org/en/Comm...Testimony.aspx

    I'm not going to bother looking for a link unless you ask, but I think that with respect to mortgages, creditworthy borrowers could take out a second mortgage for a down payment at one time, in other words you didn't need to have a down payment to buy a house. I don't think that is the case now.

    I bought my house in 2003. At that time I was really amazed at how easy it was. I literally walked into Chase bank, in a few minutes they ran my credit and the loan officer said, "OK how much do you want?" Then she threw out a figure that was way higher than I needed and thought that I could afford. I remember at that time thinking that it was amazing that they would give me so much money to buy a house. Really it was that easy. I don't think it is that easy now. I heard even Bernanke recently saying that he was turned down on trying to refinance his home.

    That said, I honestly don't know about large businesses. That is something I have no experience with. You may know more about that.

  3. #233
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by MildSteel View Post
    It would appear that way to you because you don't understand a simple point. That is an increase in supply the supply of money does not necessarily lead to a decrease in the value of money. So what you have said here is of no surprise. What you have done is to conjure up an imaginary model where there is some conservation of value that is like the conservation of energy and that simply is not so. Sorry, that is what is stupid.

    Look, I understood your stupid examples you gave before and all you have done here is give two more stupid examples that have little in common with the value of money. The value of money depends on people's perceptions. It is not like a foot race. Understand?

    Damn!!! That is a bunch of conjured up BULLS***!
    Come on man, what the hell is this crap
    Right, so, once you descend to ad hominem you become worthless as a debater (which is unfortunate, because you are intelligent), so before you start again with the ageism or sexism as a means of bypassing your inability to overturn a rather simple point with a lamo smiley, I think I'm simply going to reiterate:

    That fact that increasing the supply of X has a negative effect on it's price is not annulled by the fact that increasing the demand for X has a positive effect on its' price. Thus, when you are looking at the ways in which government raises finances, printing money does indeed represent a tax on all the current holders of dollars, as it decreases the value of their wealth from what it otherwise would have been. There Aint No Such Thing As A Free Lunch.

    Enjoy your day

  4. #234
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by imagep View Post
    It's pretty darned immediate. We all either spend/save/invest our money just as fast as we get it.
    ..... I think you could spend some more time studying government finances, if you think it is immediate.

    That being said, the problem remains - government has reallocated money from more productive uses to less productive uses.

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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by cpwill View Post
    Right, so, once you descend to ad hominem you become worthless as a debater (which is unfortunate, because you are intelligent), so before you start again with the ageism or sexism as a means of bypassing your inability to overturn a rather simple point with a lamo smiley, I think I'm simply going to reiterate:

    That fact that increasing the supply of X has a negative effect on it's price is not annulled by the fact that increasing the demand for X has a positive effect on its' price. Thus, when you are looking at the ways in which government raises finances, printing money does indeed represent a tax on all the current holders of dollars, as it decreases the value of their wealth from what it otherwise would have been. There Aint No Such Thing As A Free Lunch.

    Enjoy your day
    OK, I apologize for the insult.

    Seriously though. I understand what you are trying to say. What I honestly think you are ignoring is the important point that the value of money depends on people's perceptions of what that value is. Therefore when you say something like the decreased value in a high demand atmosphere, honestly, that makes no sense whatsoever when we are talking about the value of money. A high demand atmosphere means that the value of money will be high, there is no decreased value. Yes increasing the supply of money CAN in certain circumstances decrease its value. But really don't think that you can prove that is necessarily the case. I say that because the printing of money in itself can cause people's perception of the value of the money to increase because in certain circumstances it can be a signal of optimism for the future.

  6. #236
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by MildSteel View Post
    OK, I apologize for the insult.
    Fair enough.

    Seriously though. I understand what you are trying to say. What I honestly think you are ignoring is the important point that the value of money depends on people's perceptions of what that value is. Therefore when you say something like the decreased value in a high demand atmosphere, honestly, that makes no sense whatsoever when we are talking about the value of money
    See, now, that's interesting, given that you have highlighted multiple reasons why demand for dollars increased in the past few years. Another I would point out is the flight to safety that occurred in 2008/2009, and then again during the (repeated) euro crises.

    A high demand atmosphere means that the value of money will be high, there is no decreased value.
    It means it will be higher than it would be if there was steady demand, it does not mean that increased supply does not decrease price off of that increased baseline.

    Yes increasing the supply of money CAN in certain circumstances decrease its value. But really don't think that you can prove that is necessarily the case. I say that because the printing of money in itself can cause people's perception of the value of the money to increase because in certain circumstances it can be a signal of optimism for the future.
    That is one possible way in which it can do so, yes. But you are continuing to confuse individual effect with net effect. If the demand for dollars were to rise without an increase in supply, then the value of the individual dollar would be even higher than were demand to rise in tandem with an increase in supply. That is (basically) what happened to the Swiss, who then decided to print more money....... to decrease the value of the individual swiss franc.

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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by cpwill View Post
    See, now, that's interesting, given that you have highlighted multiple reasons why demand for dollars increased in the past few years. Another I would point out is the flight to safety that occurred in 2008/2009, and then again during the (repeated) euro crises.
    The flight to safety has indeed been another factor. However, I think where we disagree is that you appear to think that printing money NECESSARILY causes its value to decline. Again, that may be the case under certain circumstances, but that is not necessarily true.

    Quote Originally Posted by cpwill View Post
    It means it will be higher than it would be if there was steady demand, it does not mean that increased supply does not decrease price off of that increased baseline.
    OK. But my response is that it also does not mean that increased supply does decrease price from the higher demand baseline.

    Quote Originally Posted by cpwill View Post
    That is one possible way in which it can do so, yes. But you are continuing to confuse individual effect with net effect. If the demand for dollars were to rise without an increase in supply, then the value of the individual dollar would be even higher than were demand to rise in tandem with an increase in supply. That is (basically) what happened to the Swiss, who then decided to print more money....... to decrease the value of the individual swiss franc.
    I agree that if the demand for dollars rose without an increase in supply then the demand for dollars would indeed be higher IF in addition to that, an increase in supply caused demand to increase as well. No problem with that. But my point is that, because of the fact that an increase in supply can cause the value to rise, it is not NECESSARILY the case that printing money causes its value to decrease. And that it where I perceive that we differ. Now perhaps I have misunderstood what you are saying, but that's how I see it. I understand what you mean by net effect. I understood that when you first put the idea forward. And actually I understood what you where saying when you said all that stuff about high demand atmosphere. But my contention is that it makes no sense because an increase in supply does not necessarily result in a decrease in the value. Now if that were the case, then I would agree with you. But I don't think you can prove that, and that is why I said what I said. I guess I did it in a nasty way tho, and again I apologize for that.

  8. #238
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by MildSteel View Post
    The flight to safety has indeed been another factor. However, I think where we disagree is that you appear to think that printing money NECESSARILY causes its value to decline.
    It does, although the effect may be mitigated and it may not dominate (net).

    OK. But my response is that it also does not mean that increased supply does decrease price from the higher demand baseline.

    I agree that if the demand for dollars rose without an increase in supply then the demand for dollars would indeed be higher IF in addition to that, an increase in supply caused demand to increase as well. No problem with that. But my point is that, because of the fact that an increase in supply can cause the value to rise, it is not NECESSARILY the case that printing money causes its value to decrease.
    This is incorrect. Printing more money does not cause it's value to rise, it is simply possible to occur in tandem with a net rise in valuation. Increases in supply reduce prices, demand remaining equal. Increases in Demand can cause an increase in Supply by increasing the valuation (as happened in Switzerland), but an increase in Supply does not cause an increase in price and an increase in Demand. There remains No Such Thing As A Free Lunch.

    And that it where I perceive that we differ. Now perhaps I have misunderstood what you are saying, but that's how I see it. I understand what you mean by net effect. I understood that when you first put the idea forward. And actually I understood what you where saying when you said all that stuff about high demand atmosphere. But my contention is that it makes no sense because an increase in supply does not necessarily result in a decrease in the value. Now if that were the case, then I would agree with you. But I don't think you can prove that, and that is why I said what I said. I guess I did it in a nasty way tho, and again I apologize for that.
    No worries on the last

  9. #239
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    Re: Does governnent spending produce economic growth?

    Quote Originally Posted by cpwill View Post
    Increases in supply reduce prices, demand remaining equal.
    OK. I see where we are going off base. Yes that is true.

    To be more precise, what I am saying is that an increase is QUANTITY SUPPLIED MEANING MOVEMENT TO THE RIGHT ALONG THE SUPPLY CURVE, can in certain circumstances induce a shift of the DEMAND CURVE to the right, thus resulting in an increase in the value of the dollar. And so that there is no confusion going forward, demand is the demand curve consisting of quantity demanded and value, where value means the purchasing power of the dollar. Supply refers to the supply curve consisting of quantity supplied and value as before.

    Now maybe we can discuss clearly without confusion.

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    Re: Does governnent spending produce economic growth?

    I was thinking, Obama may have saved the dollar with that little stunt the U.S. just pulled in Ukraine. If Putin had been able to unite Europe and Russia it would have certainly meant a decline in the dollar, although it still would have retained some of it's power. Now it may well be that the dollar will retain it's status for years to come simply because of lack of a better alternative. That Eurasian Union thing is off the radar for a good while now. China does not want to subject itself of the burden of hosting the world's reserve currency. As far as the Special Drawing Rights thing goes, I think that, like the EU, it won't work because of competing interests. Looks like the world may be stuck with the dollar for a while now. Perhaps Obama is a hero, for the U.S. Of course he won't get any thanks for it. They will still beat the hell out of him.

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