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CNN Poll: GOP would bear the brunt of shutdown blame [W:176:468]

What Actually Causes Inflation (and who gains from it) - Forbes

Increased monetary supply doesn't cause inflation. Inflation is caused when producers can get away with charging more for a wide variety of goods, either due to an increase in demand or a reduction/control of supply.


Ridiculous conclusion you have drawn there. The producers "get away with" charging more for good and services because there is surplus money in the system that they can draw from. If a producer charges more than the population can pay then they go out of business.
 
Dependence. :mrgreen:

All modern economies depend on credit. In fact, the use of credit as a means of payment predates that of currency. Are the ramifications from the fluctuations in the availability of credit a static consequence, e.g. many people like to site the monetary policy response from the Federal reserve in the early 2000's as a primary driver in the credit bubble. However, banking system liquidity and interest rates are hundreds of times more favorable now than they were then. And yet earnings multiples and home prices are more fairly priced now.
 
Re: CNN Poll: GOP would bear the brunt of shutdown blame [W:176]

As well as using bribery and changing the tradition from 60% required to 50%.

Ah yes. Reconciliation. That will come back to bite them one day.
 
You're forgetting the need/desire of individuals to fulfill their wants, and that would promote domestic production, thus employment and more consumption of domestically produced goods...

No, i am just not willing to abandon the idea that gains from trade based on comparative advantage (even though we typically do have an absolute advantage) lead to a greater ability to consume outside our national productive capacity.
 
No, i am just not willing to abandon the idea that gains from trade based on comparative advantage (even though we typically do have an absolute advantage) lead to a greater ability to consume outside our national productive capacity.

A country cannot consume in excess of its productivity without incurring debt, hence trade deficits...
 
If only you had any idea how wrong you are. Had the Federal government increased spending to levels necessary to supplement a most expansionary monetary policy initiative, we wouldn't have 7.3% unemployment.

Well I think I do have a handle on what is going on but I don't expect a Keynesian like yourself to begin to see it my way.

We have the Feds buying $85 billion in Treasury bonds and other long-term securities every month (indefinitely) to push down long-term interest rates. Why? Because there is really nothing else the Fed can do to stimulate Obama’s sluggish economy. Massive deficit spending has proven to be massively ineffective and interest rates are so low not even the traditional way of stimulating the economy by lowering interest rates is viable.

Even the great and mighty Bernanke said high unemployment is expected to persist and that “high unemployment has substantial costs, including not only the hardship faced by the unemployed and their families but also the harm done to the vitality and productive potential of our economy as a whole.” He is absolutely correct but what he didn't state correctly is it's President Obama’s economic policies that are at the heart of the problem.
 
A country cannot consume in excess of its productivity without incurring debt, hence trade deficits...

Nope!

The presence of international debt is of no consequence to the gains from trade. Clearly, China consumes outside their productive capacity even with their massive trade surplus. You are basically arguing for the U.S. to adopt a policy of autarky.
 
Nope!

The presence of international debt is of no consequence to the gains from trade. Clearly, China consumes outside their productive capacity even with their massive trade surplus. You are basically arguing for the U.S. to adopt a policy of autarky.

You're fooling yourself if you think there is no connection between productive output and consumption as it relates to trade deficits. We, as a nation, are much better served when we produce more than we consume...
 
Well I think I do have a handle on what is going on but I don't expect a Keynesian like yourself to begin to see it my way.

Understanding that Keynesianism is meant to ensure the survival of capitalism does not negate my point. Deflation is bad, especially in an advanced (debt based) economy with an open immigration policy.

We have the Feds buying $85 billion in Treasury bonds and other long-term securities every month (indefinitely) to push down long-term interest rates.

Not exactly. They conduct asset purchases as a means of both providing liquidity and maintaining (through reverse repo OMO) the level of reserves in the banking system. Rates have been near zero since the end of 2008. Ensuring the stability of asset prices in a period dominated by uncertainty is essential in restoring normal economic growth.


We reside in a world where wealth dictates both power and standard of living.
 
You're fooling yourself if you think there is no connection between productive output and consumption as it relates to trade deficits. We, as a nation, are much better served when we produce more than we consume...

Mercantilism is dead.

I thought you said a nation needs to incur a trade deficit to consume outside its productive capacity?
 
Mercantilism is dead.

If a country is not capable of fully employing its productive capability and supplants the excess desire to consume with direct payments, what do you think happens?
 
Understanding that Keynesianism is meant to ensure the survival of capitalism does not negate my point. Deflation is bad, especially in an advanced (debt based) economy with an open immigration policy.



Not exactly. They conduct asset purchases as a means of both providing liquidity and maintaining (through reverse repo OMO) the level of reserves in the banking system. Rates have been near zero since the end of 2008. Ensuring the stability of asset prices in a period dominated by uncertainty is essential in restoring normal economic growth.



We reside in a world where wealth dictates both power and standard of living.

I noticed that you blatantly left out all my comments about Obama's economic policies being at the heart of this non-recovery. :lamo

But hey, I won't hold it against you....for if I were sitting on the left side of the aisle, I would have avoided them like the plague too. :lol:
 
If a country is not capable of fully employing its productive capability and supplants the excess desire to consume with direct payments, what do you think happens?

IDK, ask Japan why it just didn't work for them. I remember when i was just a lad in 1990, they said Japan would eclipse the U.S. as the worlds largest economy.

Mercantilism is dead.
 
IDK, ask Japan why it just didn't work for them. I remember when i was just a lad in 1990, they said Japan would eclipse the U.S. as the worlds largest economy.

Mercantilism is dead.

Maximizing productive output is never dead. You only need policy to promote it rather than artificially supporting an economy that depends on consumption...
 
I noticed that you blatantly left out all my comments about Obama's economic policies being at the heart of this non-recovery.

Because they are both incoherent and a waste of time.

Given your inability to accurately describe the motivations behind asset purchases, I am not convinced you are in a position to make a case against Keynesianism. What i do know is you will learn something from our exchanges if you give yourself a chance.
 
Because they are both incoherent and a waste of time.

Given your inability to accurately describe the motivations behind asset purchases, I am not convinced you are in a position to make a case against Keynesianism. What i do know is you will learn something from our exchanges if you give yourself a chance.

A bit harsh, but I have been known to be that way as well...
 
Maximizing productive output is never dead.

What you describe is not mercantilism. What about Japan? How does China consume outside its productive capacity without a trade deficit?
 
Because they are both incoherent and a waste of time.

Given your inability to accurately describe the motivations behind asset purchases, I am not convinced you are in a position to make a case against Keynesianism. What i do know is you will learn something from our exchanges if you give yourself a chance.
It's after 8:00 in my neck of the woods. It's wine time. Tomorrow is a new day, and if it is a case against Keynesianism you request, I'll be right on it......tomorrow
Cheers Kushinator, have a good evening.
 
What you describe is not mercantilism. What about Japan? How does China consume outside its productive capacity without a trade deficit?

I never used the term, and if China were consuming outside its productive capacity, it would be running deficits. It has excess capacity, but without the ability for it to consume...
 
It's after 8:00 in my neck of the woods. It's wine time. Tomorrow is a new day, and if it is a case against Keynesianism you request, I'll be right on it......tomorrow
Cheers Kushinator, have a good evening.

I've been dabbing all day. And you want to make winey excuses.

There is nothing you will provide that has not already been posted here at least a dozen times. Do yourself a favor, and review those threads.
 
if China were consuming outside its productive capacity, it would be running deficits. It has excess capacity, but without the ability for it to consume...

Go back to micro 101. Two dimensional production possibility frontiers shouldn't be too hard to comprehend plus the analysis can be applied to nth dimensional PPF.
 
Go back to micro 101. Two dimensional production possibility frontiers shouldn't be too hard to comprehend plus the analysis can be applied to nth dimensional PPF.

We're discussing the macro level, or so I thought...
 
We're discussing the macro level, or so I thought...

Trade theory is developed within a microeconomic framework which sets the foundations for macroeconomic application. Go back and brush up on your foundations ;)
 
Trade theory is developed within a microeconomic framework which sets the foundations for macroeconomic application. Go back and brush up on your foundations ;)

I'm posting reality, not theory...
 
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