MMT ( Modern Monetary Theory)

late · Jun 14, 2018

jaeger19 said:
Nope. it is BOTH a micro and macro environment. Heck.. even Wonka's post detailed "what he could have done with loan forgiveness " etc.

You didn't evince a familiarity with the macroeconomic environment.

The usual diagnosis is the guy hasn't looked at macroeconomics.

jaeger19 · Jun 14, 2018

late said:
You didn't evince a familiarity with the macroeconomic environment.

The usual diagnosis is the guy hasn't looked at macroeconomics.

:doh

Enough said.

Moderate Right · Jun 14, 2018

MrWonka said:
Not remotely. And even if it does as we said, that can just as easily be undone.

You pay it off for them by printing money.

This is precisely the problem. What I suggested would absolutely have worked, and your argument does nothing to refute that. It would have gotten us out of the recession faster, and there would be no other negative consequences besides the fact that someone like you would have been all pissy.

What people like you need to understand is that often times the mistakes of others can have consequences for ourselves. Cushioning others from the entire fallout of their mistakes is in our own best interest and contrary to popular belief it does not motivate people to make more of the same mistakes.

Furthermore, we did bail out the banks who recklessly partook in predatory lending. They were as much to blame if not more to blame for the situation than any of those people who borrowed money in the first place. We still bailed them out knowing full well it was in the best interest of the country as a whole.

To me, this is like saying, "Why did that idiot who wrecked his motorcycle get medical care. I was responsible and didn't get hurt in the first place. Why don't I get to go to the doctor?"

But you don't need to go to the doctor. The guy may not have made the best decision, but he wasn't trying to get himself seriously hurt, and leaving him there to die isn't doing anybody any good.

"Oh, so he just gets to have all the fun of riding a motorcycle without consequences? That's bull****!"

Well no, there are consequences. He didn't know he'd be saved, and he's in a lot of pain. Even if the doctors can save his life that doesn't mean he won't have other long-term injuries.

Furthermore, you don't know the circumstances. Most people with student loans(particularly last decade) were kids when they made the decision to go to college, and they were told by their parent's generation that they were a great investment(and they generally are). It's not their fault that the economy collapsed the same year they graduated college.

Contrary to popular belief most people with credit card debt are in it because they had little choice. When you live paycheck to paycheck and your car breaks down sometimes you have no choice, but to put some things on a card.

This is the problem with conservatives. You can't separate your anger and emotions from math. Whether it would make you angry or not has nothing to do with whether or not it would work.

People like yourself need to learn that you can't go back in time and undo mistakes by forcing people to suffer more after they make them.

If we could have quickly and easily got the entire country out of the economic mess it was in back in 2007 and the only problem associated with it is that a whole bunch of poor struggling people who've made some questionable decisions wouldn't have had to suffer as much as you think they should have it is ridiculous to say we shouldn't do that. When the house is on fire you don't worry about who started it, you just get the **** out.

Now if you'd like to improve financial regulations to make sure millions of people can't get themselves into such a mess again in the future I'm all for that, but to not save them just because you think they deserve to suffer more than you is idiotic.

The problem with liberals is that everything they do and think is based on nothing but emotion.

late · Jun 14, 2018

jaeger19 said:
Enough said.

Indeed.

JohnfrmClevelan · Jun 14, 2018

jaeger19 said:
Yep.. no imagine how you would have felt that when those folks were taking out 2nd mortgages, making massive improvements, and buying mulitiple homes... and instead of those neighbors "getting wiped out"... your tax dollars were used to pay off their debts.

so they ended up owning free and clear, those multiple homes and improvements.

While you were still in your more modest house. Because you didn't go out and buy a whole load of stuff.

How would that fly with you.?

What do you think would happen in the future after people learned that if they borrowed a lot.. they would get bailed out.

Would you be angry if our government offered free college in the future, because you had to pay for your education way back when?

Things change. Good jobs were much easier to come by 40 years ago. A college education was a no brainer - and, it was cheaper. Today (and for a number of years now), college doesn't work out for everyone, and that debt is a huge drag on consumption. Forgiving student loans (the government would pick up the tab) would be great for the economy, and great for young people.

JohnfrmClevelan · Jun 14, 2018

jaeger19 said:
That's pretty much BS. Look.. I understand poor people well. Most of what gets said by right wing republicans about poor people is not true at all. BUT people ARE buying lots of things that they cannot really afford.. and bigger and more expensive things.. merely because they can get a loan for it and make payments.. rather than buying something more modest when they have the cash for it. now.. that's all walks of life.. but the poor don't have the cushion to get away with it.

Yet another area of Jaeger expertise.

https://www.huffingtonpost.com/simple-thrifty-living/top-10-reasons-people-go-_b_6887642.html

How Obamacare Helped Slash Personal Bankruptcy by 50% | Money

JohnfrmClevelan · Jun 14, 2018

OscarLevant said:
I believe MMT says QE doesn't cause inflation. That doesn't square with how most mainstream economists view it, right?

Many mainstream economists predicted tons of inflation, because MB went way up. It didn't happen. The MMT crowd knew it wouldn't going in. Your source (below), instead of admitting his mistake, is making excuses, saying that crazy inflation is going to happen sometime in the future. (It's not.)

OscarLevant said:
MMT says deficits do not matter, because the gov is a currency issuer, and therefore, can deal with it via fiat currency creation, right?

I tried to explain this earlier. Deficits in and of themselves do not matter; despite the negative connotation that the word carries, it is just a description of the net flows of whatever is being measured. Federal deficit = private sector surplus. Trade deficit = imported goods surplus. The government, if it knows what it is doing, can adjust its spending to counteract deficits, and it can adjust taxation to counteract surpluses.

OscarLevant said:
If MMT says trade deficits are not really that big of a problem, that I agree with.

They can be. It depends on what the government spends in response. Trade deficits, like saving, are a loss of income, which is a loss of (potential) domestic demand. When income is lost to saving, or trade deficits, it is not available to spend on consuming domestic production, and that gap needs to be filled.

OscarLevant said:
What else do you want to lay on my that my simple layman's mind can handle, hmmm?

I'm sure you can handle it, if you give it a fair chance.

JohnfrmClevelan · Jun 14, 2018

OscarLevant said:
Also, what part of this essay, is not true?

Devaluation of the Dollar | SurlyTrader

Inflation is the hidden tax on the American citizen. Even though we currently face a stagnant or slightly deflationary environment, it is important to remember that inflation will come back and it will strike with a vengeance once all of Bernanke’s printed dollars hit the pavement and the economy reverts to some sort of positive growth. Congratulations to you for your participation in one of the largest wealth transfer heists ever orchestrated.

Click to expand...

Well, for one, Bernanke's printed dollars will never "hit the pavement." QE was an asset swap, where the Fed bought assets in return for reserves and account balances. Reserves don't matter; they sit on bank's balance sheets as an asset, but they don't get loaned out. Nor are they a limiting factor for loans, and they never were. The only thing that QE did was replace some risky assets (like MBSs) with account balances, and erstwhile investors in such assets simply look for other investment vehicles. Any inflation caused by QE was limited to asset prices and stocks, and that's exactly what QE was designed to do - keep asset prices from tanking so the banks wouldn't be undercapitalized. So your source doesn't appear to understand how dollars "hit the pavement" at all.

The wealth transfer was unfortunate, but it was the result of people losing their homes, which ended up in the hands of banks and people rich enough to buy them up. That's not the Fed's doing. As Wonka said, a better solution would have been to bail out the little guys, allowing most of them to keep their homes, and also allowing those funds to trickle up through the economy. But that's not America. Jaeger would have been all upset.

OscarLevant said:
When I got out of high school, my first one bedroom apartment was $100 per month. Now such an apartment in San Diego costs nearly $2000.

If you look at the L.A want ads in the L.A. Times in 1969, the average secretary's salary was about $500 per month. That equals about $3500 per month adjusting for inflation. But what are secretaries paid today? $3500, so wages at lower rungs have remained pretty much the same, except for minimum wage. In L.A, though fed minimum was lower, all low skilled jobs paid $2 an hour in 1969, which is $14 in today's dollar, but today, most low skilled jobs pay the CA minimum, which is $10, so minimum wages are getting the shaft on pay, and on rents. What about the CEO and corporate fat cats? They are making out like bandits. But, mortgages and rents are now consuming far more of lower class incomes, so disposable income is way down due to real estate prices. Okay, I believe that fiat currency printing ( faster than GNP ) is the culprit, as is demand on a limited resource ( land ).

You're talking about the LA-San Diego real estate market, and blaming that on fiat currency? Come to Cleveland, where it can take six months to a year to sell your house.

CEOs, and ownership in general, are making out largely because the labor market stinks. Surely you have seen the charts showing how the top 1-5-10% (whatever it is) have captured all of the gains in income over the past 40 years? That's because when the demand for labor is low, they have zero leverage to demand a larger share of the income pie. That, also, has nothing to do with fiat currency.

OscarLevant said:
So, what is the MMT solution? I would like to hear it.

The MMT solution is for the government to use their powers of money creation and taxation to guarantee jobs for everybody who wants to work. That would theoretically solve poverty, stabilize a lot of lives that now live from paycheck to paycheck, and tighten up the labor market, too, leading to higher wages across the board.

OscarLevant · Jun 15, 2018

JohnfrmClevelan said:
Many mainstream economists predicted tons of inflation, because MB went way up. It didn't happen. The MMT crowd knew it wouldn't going in. Your source (below), instead of admitting his mistake, is making excuses, saying that crazy inflation is going to happen sometime in the future. (It's not.)

MMTers point to a slice of time when it didn't happen and claim QE doesn't affect inflation. But, if you go back many decades, it shows that it does. If money isn't circulated, even if it is printed, it wont' cause inflation, so, there may have been some reason that during that period MMTers like to point to as "proof" that QE doesn't cause inflation, but if you look at a much larger period of time, there is a correlation. I never mentioned "crazy inflation".

I tried to explain this earlier. Deficits in and of themselves do not matter; despite the negative connotation that the word carries, it is just a description of the net flows of whatever is being measured. Federal deficit = private sector surplus. Trade deficit = imported goods surplus. The government, if it knows what it is doing, can adjust its spending to counteract deficits, and it can adjust taxation to counteract surpluses.

They don't matter if you believe QE doesn't cause inflation. It does over timei, therefore, QE to pay for the deficit (money spent not offset by taxes collected and bonds sold), does matter.

That's how I understand it.

They can be. It depends on what the government spends in response. Trade deficits, like saving, are a loss of income, which is a loss of (potential) domestic demand. When income is lost to saving, or trade deficits, it is not available to spend on consuming domestic production, and that gap needs to be filled.

I'm sure you can handle it, if you give it a fair chance.

I dont see how trade deficits are a loss of anything.

If I have 100 widgets (worth $1 each), and $100 cash, and you have 100 wodgets (worth $1 each), and $100 cash,the starting balance sheet totals $200 on both sides, inventory and cash.

Okay, You purchase 10 widgets from me. I have $10 more, you now have $10 less. I now have $110 cash and $90 worth of inventory = $200

You now have $90 cash and $110 in inventory = $200.

I purchase 50 wodgets from you. I know have $50 less ($60 cash remaining) plus $140 worth of inventory = $200

Even though there was a trade deficit of $30, the balance sheet is the same.

The point is, we should look at it from a balance sheet perspective, not a cash perspective.

If you need more money, you just earn it. The wealth of money is not the paper, digital or otherwise, it's labor, it's production. Wealth comes from labor and production, it doesn't come from the printing press or the stroke of a keyboard.

Another point is you and I purchase what we need, you can't force two parties to a transaction to purchase equal amounts of goods and services, it's not the natural order of things, and, in fact, it seems to me to be an insane objective.

MrWonka · Jun 15, 2018

jaeger19 said:
merely because they can get a loan for it and make payments.

Loans are not the same as credit cards. A car loan or a home loan has relatively low interest and there's generally nothing reckless or irresponsible about borrowing money for things like that. The same is true of student loans. But credit cards tend to get used out of desperation. You're living paycheck to paycheck and all of a sudden your car breaks down. Some people certainly do use them and abuse them, but not everyone. In fact, I would argue that the people who use them and abuse them are mostly middle-class white women who think they need a new dress every other week.

jaeger19 said:
the answer is not encouraging more borrowing because "I will get bailed out if it goes bad"...

We're not. I was talking about a one time fix to an economic catastrophe, not something that anybody could regularly plan for.

But for the record...if you charge up to $5G in CC debt, and then just stop making payments. You'll get a lot of angry phone calls from debt collectors, and your credit will take a hit, but they won't take you to court. Eventually, they'll just write it off.

jaeger19 said:
If the population does not accept your solution.. then your solution will not work. It's just reality.

No, it's not. Math doesn't care about your feelings.

jaeger19 said:
And people like yourself need to learn that you cannot keep reinforcing the same behavior and then expect a different response next time.

We're not. You need to understand that there is a very big difference between rewarding someone, and not punishing them as much as you could.

jaeger19 said:
Where do you think all that money was going to go after you forgave that debt? into the hands of the rich. Many of them the predatory lenders that you complain about.

Right, but because it went there by way of the people who owed money it would have eliminated the problems of the poor AND gotten money into the hands of the banks(which is what TARP did anyway), but the predatory lenders would have gotten their money back with significantly less interest earned on it.

TARP didn't work as well as it should have because it was based upon idiotic trickle-down thinking. Give money to wealthy banks, and hope they lend it out. They didn't lend it out though. My solution is a trickle-up solution. It would have helped get average Americans back on their feet again and in doing so returned money to the banks to make them whole again as well.

MrWonka · Jun 15, 2018

Moderate Right said:
The problem with liberals is that everything they do and think is based on nothing but emotion.

HAHAHAHA!!!

Are you following this thread at all? I just gave a logical proof of why a tickle-up liberal solution to the banking crisis would have worked better, and the comeback from Jaeger was to point out how my solution would have made a lot of conservatives angry. Not that my solution wouldn't work, just that it would have pissed a lot of people off.

Moderate Right · Jun 15, 2018

MrWonka said:
HAHAHAHA!!!

Are you following this thread at all? I just gave a logical proof of why a tickle-up liberal solution to the banking crisis would have worked better, and the comeback from Jaeger was to point out how my solution would have made a lot of conservatives angry. Not that my solution wouldn't work, just that it would have pissed a lot of people off.

I've seen Jaegar's posting on here for a long time. He's actually quite intelligent, very experienced with actual hands on experience, very versed in this stuff, and not partisan or biased to either side. So, I'll put a lot more weight on what he says over someone who has a very obvious liberal bias, such as yourself. And, I know liberals very well. They have big hearts, those hearts are in the right place, they are genuinely concerned about their fellow man and those less fortunate.

Unfortunately, every decision and thought they make or have is based on emotion and when they implement their policies, those policies don't work or backfire and make things worse. Then their always response is that they didn't do enough of whatever policy they had that failed and want to double down on it. Whenever they implement a policy to screw the rich, the rich make a counter move and liberals are left with their jaws hanging wide open in astonishment that the rich countered liberal policy. Liberals believe that whenever they implement a policy to screw the rich that the rich should just stand there doing nothing and let themselves be raped. Reality doesn't work like that. Liberals live in a fantasy land.

MrWonka · Jun 15, 2018

Moderate Right said:
And, I know liberals very well.

No, you don't.

Moderate Right said:
They have big hearts,

Yes, unlike Conservatives it is true that we have them.

Moderate Right said:
those hearts are in the right place, they are genuinely concerned about their fellow man and those less fortunate.

Unfortunately, every decision and thought they make or have is based on emotion and when they implement their policies, those policies don't work or backfire and make things worse.

Nope, you just don't understand them. I realize most conservatives have very short attention spans and can't follow most complex liberal arguments in detail, but there is a reason that the vast vast vast majority of scientists in the world back liberal policies. It's not because of emotion. It's because the facts, the math, the evidence, and the data are all on our side whether you are capable of grasping that reality or not.

Moderate Right · Jun 15, 2018

MrWonka said:
No, you don't.

Yes, unlike Conservatives it is true that we have them.

Nope, you just don't understand them. I realize most conservatives have very short attention spans and can't follow most complex liberal arguments in detail, but there is a reason that the vast vast vast majority of scientists in the world back liberal policies. It's not because of emotion. It's because the facts, the math, the evidence, and the data are all on our side whether you are capable of grasping that reality or not.

Scientists? OOps, I thought we were talking about MMT. Now you have moved the whole football field to the environment.

jaeger19 · Jun 15, 2018

JohnfrmClevelan said:
Would you be angry if our government offered free college in the future, because you had to pay for your education way back when?

Things change. Good jobs were much easier to come by 40 years ago. A college education was a no brainer - and, it was cheaper. Today (and for a number of years now), college doesn't work out for everyone, and that debt is a huge drag on consumption. Forgiving student loans (the government would pick up the tab) would be great for the economy, and great for young people.

Hmmm.. nope.. because my parents benefited from free college and that benefited me and is one of the reasons that I am as successful as I am. It makes sense to invest in public college educations.. just as it makes sense to invest in public highschool education. Educating the public has dividends for the rest of society and the economy... far more than my taxdollars going to forgive the loan a person took out on his jetskis.

That's seems pretty common sense to me.

Today (and for a number of years now), college doesn't work out for everyone, and that debt is a huge drag on consumption. Forgiving student loans (the government would pick up the tab) would be great for the economy, and great for young people

And that is a different thing. Giving free education for qualified college students makes sense going forward (particularly if constructed in a way that increases needed fields) as that education is a multiplier for the economy. Not to mention other benefits from having more doctors, and nurses, and teachers and scientists etc.

Now.. forgiving existing loans.. simply to see "more consumption".., that benefit is tremendously less. the education has already occurred and the major benefits of that education available. simply spending a ton of money for loan forgiveness would have limited effect on the economy. And could possibly perpetuate or increase the problems with higher education cost.

jaeger19 · Jun 15, 2018

JohnfrmClevelan said:
Yet another area of Jaeger expertise.

https://www.huffingtonpost.com/simple-thrifty-living/top-10-reasons-people-go-_b_6887642.html

How Obamacare Helped Slash Personal Bankruptcy by 50% | Money

Actually yes.

jaeger19 · Jun 15, 2018

MrWonka said:
Loans are not the same as credit cards. A car loan or a home loan has relatively low interest and there's generally nothing reckless or irresponsible about borrowing money for things like that.

Yeah.. that makes no sense.. particularly in light of our last economic crisis. There is irresponsibility when you purchase way more car than you need or house than you need, and that puts you at risk financially. The same for credit cards for other things as well.

The same for taking loans out for a more expensive private education that will not benefit you anymore than the same degree at a cheaper public college.. its irresponsible to put yourself at needless risk.

But credit cards tend to get used out of desperation

Sure.. and part of the desperation is usually because of the spending habits of people when they are not in immediate desperation. Not always.. but more often than not.

In fact, I would argue that the people who use them and abuse them are mostly middle-class white women who think they need a new dress every other week.

And you would be wrong. And that's not because middle class white woman are more responsible than poor minorities.. its because the cushion that middle class people have before credit card use becomes "abuse" is much larger than someone who is making just over minimum wage.

We're not. I was talking about a one time fix to an economic catastrophe, not something that anybody could regularly plan for.

As if that's a reality of the "one time fix". that's not just viable. how many one time fixes have we done for the bank industry? How about the car industry?

No, it's not. Math doesn't care about your feelings.

Except math doesn't make nor follow laws, nor does it elect officials. People and how they feel do.

We're not. You need to understand that there is a very big difference between rewarding someone, and not punishing them as much as you could

I understand that difference. You don't seem to. Loan FORGIVENESS is a reward. Not forgiving a loan some has taken out.. is not "punishing them as much as you could".

how you arrive at the idea that if I don't give my money to someone that has taken out a loan.. it means I am "punishing them"... :doh

TARP didn't work as well as it should have because it was based upon idiotic trickle-down thinking. Give money to wealthy banks, and hope they lend it out.

On that we agree.

My solution is a trickle-up solution. It would have helped get average Americans back on their feet again and in doing so returned money to the banks to make them whole again as well.

No.. it would not have. It would have made the problem worse, and in would have made the problem worse going forward.. because now people.. expecting a bail out if they got into trouble would be more willing to take out a predatory loan.

late · Jun 15, 2018

Moderate Right said:
The problem with liberals is that everything they do and think is based on nothing but emotion.

That may be the strongest projection I have ever seen.

Yeow.

Get some self awareness.

jaeger19 · Jun 15, 2018

late said:
That may be the strongest projection I have ever seen.

Yeow.

Get some self awareness.

Yeah.. you might want to spread that around equally

JohnfromCleveland said:
I realize most conservatives have very short attention spans and can't follow most complex liberal arguments in detail, but there is a reason that the vast vast vast majority of scientists in the world back liberal policies. It's not because of emotion. It's because the facts, the math, the evidence, and the data are all on our side whether you are capable of grasping that reality or not.

JohnfrmClevelan · Jun 15, 2018

jaeger19 said:
Hmmm.. nope.. because my parents benefited from free college and that benefited me and is one of the reasons that I am as successful as I am. It makes sense to invest in public college educations.. just as it makes sense to invest in public highschool education. Educating the public has dividends for the rest of society and the economy... far more than my taxdollars going to forgive the loan a person took out on his jetskis.

That's seems pretty common sense to me.

And that is a different thing. Giving free education for qualified college students makes sense going forward (particularly if constructed in a way that increases needed fields) as that education is a multiplier for the economy. Not to mention other benefits from having more doctors, and nurses, and teachers and scientists etc.

Now.. forgiving existing loans.. simply to see "more consumption".., that benefit is tremendously less. the education has already occurred and the major benefits of that education available. simply spending a ton of money for loan forgiveness would have limited effect on the economy. And could possibly perpetuate or increase the problems with higher education cost.

It's the EXACT SAME THING as the government paying for college in the first place. Just a bit delayed. You see it as different because you don't like the way "loan forgiveness" sounds, but the end result is exactly the same in both scenarios.

JohnfrmClevelan · Jun 15, 2018

OscarLevant said:
MMTers point to a slice of time when it didn't happen and claim QE doesn't affect inflation. But, if you go back many decades, it shows that it does. If money isn't circulated, even if it is printed, it wont' cause inflation, so, there may have been some reason that during that period MMTers like to point to as "proof" that QE doesn't cause inflation, but if you look at a much larger period of time, there is a correlation. I never mentioned "crazy inflation".

Are you talking about the growth of both the money supply and inflation over many, many years? First, correlation =/= causation. Second, everything grows - population, production, quality, etc. If the money supply doesn't grow as well, money becomes a (limiting) commodity, which only holds back commerce. If the same $1000 is used over and over while production and consumption rise, you necessarily get deflation, and a real incentive to hold onto your dollars while the value rises, even when they are not being used productively. Third, the part of the "money supply" that the government creates is a small part of the broad money supply that we actually use for transactions. And the government has little control over that. Banks create money as the economy grows, as people and businesses use credit to produce more. The money supply is exactly where demand thinks it should be.

OscarLevant said:
I dont see how trade deficits are a loss of anything.

If I have 100 widgets (worth $1 each), and $100 cash, and you have 100 wodgets (worth $1 each), and $100 cash,the starting balance sheet totals $200 on both sides, inventory and cash.

Okay, You purchase 10 widgets from me. I have $10 more, you now have $10 less. I now have $110 cash and $90 worth of inventory = $200

You now have $90 cash and $110 in inventory = $200.

I purchase 50 wodgets from you. I know have $50 less ($60 cash remaining) plus $140 worth of inventory = $200

Even though there was a trade deficit of $30, the balance sheet is the same.

The point is, we should look at it from a balance sheet perspective, not a cash perspective.

If you have a trade deficit of $30, what are you going to pay your employees with? Now, instead of $100, you only have $70. Your national income has gone down from $100/year to $70/year. People are rioting in the streets, because they can't eat those imported widgets.

OscarLevant said:
If you need more money, you just earn it. The wealth of money is not the paper, digital or otherwise, it's labor, it's production. Wealth comes from labor and production, it doesn't come from the printing press or the stroke of a keyboard.

Just earn it??? That's not how money is created. Money is debt. If you need more money for the economy, businesses and consumers have to get bank loans, and then they have to repay those debts. Which is much harder when your national income is going down every year and people are buying less.

Go back and read my older post, about demand (money) leakages and injections.

OscarLevant said:
Another point is you and I purchase what we need, you can't force two parties to a transaction to purchase equal amounts of goods and services, it's not the natural order of things, and, in fact, it seems to me to be an insane objective.

Who is forcing two parties to purchase equal amounts of goods??? If you think that's my argument, then you have misread everything I have been saying.

You seem to be leaving money out of your arguments, or somehow cancelling out money and looking at everything as a barter transaction. That doesn't work.

The "natural order of things," if there is such a thing in economics, is for trade to be somewhat equal. You have apples, I have oranges, and we trade. Maybe not 1:1, for various reasons, but whatever the ratio is, your 5 apples will buy 3 of my oranges at the time, and we are finished. But money changes that, for better or worse. We have debts, we have stores of value, we have claims on future production, etc. China accepts our dollars in exchange for goods because those dollars can buy something in the future, or be used to manipulate the value of their currency, or they simply want to increase their own productive capacity while ours weakens. It is far more complicated than exchanging widgets for wodgets from a static pile of cash.

JohnfrmClevelan · Jun 15, 2018

Moderate Right said:
I've seen Jaegar's posting on here for a long time. He's actually quite intelligent, very experienced with actual hands on experience, very versed in this stuff, and not partisan or biased to either side. So, I'll put a lot more weight on what he says over someone who has a very obvious liberal bias, such as yourself. And, I know liberals very well. They have big hearts, those hearts are in the right place, they are genuinely concerned about their fellow man and those less fortunate.

Unfortunately, every decision and thought they make or have is based on emotion and when they implement their policies, those policies don't work or backfire and make things worse. Then their always response is that they didn't do enough of whatever policy they had that failed and want to double down on it. Whenever they implement a policy to screw the rich, the rich make a counter move and liberals are left with their jaws hanging wide open in astonishment that the rich countered liberal policy. Liberals believe that whenever they implement a policy to screw the rich that the rich should just stand there doing nothing and let themselves be raped. Reality doesn't work like that. Liberals live in a fantasy land.

You judge arguments on whether or not they seem "partisan" to you because you don't (can't?) understand the arguments themselves.

Go find a political thread to rant on, please. Leave economics to the big boys.

JohnfrmClevelan · Jun 15, 2018

jaeger19 said:
Actually yes.

All of those sources say that you are wrong about bankruptcy.

JohnfrmClevelan · Jun 15, 2018

jaeger19 said:
Yeah.. that makes no sense.. particularly in light of our last economic crisis. There is irresponsibility when you purchase way more car than you need or house than you need, and that puts you at risk financially. The same for credit cards for other things as well.
.......
No.. it would not have. It would have made the problem worse, and in would have made the problem worse going forward.. because now people.. expecting a bail out if they got into trouble would be more willing to take out a predatory loan.

Do you see how you are blaming the consumer, but letting the bank off the hook here?

*The bank is supposed to vet your mortgage loan. They (normally) check out home values, features, neighborhoods, they even have the home inspected - as they should. So who is really at fault when that doesn't happen, and the bank gives out a mortgage anyway? Who hasn't done their job?

*Who granted the credit card to a consumer? Did they vet that consumer to minimize the chance of them defaulting on their debt, or did they make a cold calculation that they would probably profit from the bad debt anyway?

*Why do legal conditions that allow predatory lending exist in the first place? Is it consumers lobbying Congress, or is it banks?

*Who has lobbied to make bankruptcy more difficult to declare, so more money goes to creditors? Is it consumers, or, again, banks?

You are backing the wrong team here, Jaeger.

JohnfrmClevelan · Jun 15, 2018

jaeger19 said:
Yeah.. you might want to spread that around equally

Speaking of short attention spans, you misattributed that quote to me.

MMT ( Modern Monetary Theory)

Gadfly Extraordinaire