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chellovek
Joined: 29 Feb 2008
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 Posted: Wed Mar 24, 2010 2:48 am Post subject: |
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What's all this about Keynes dying?
Perhaps it's been addressed elsewhere, but I was under the impression that a consensus had emerged that to do nothing, as in the 1930s, was a surefire road to disaster, and so another road had to be tried.
I also believe Keynesian economics was intended to work in more closed economies, and the effects of stimulus spending are much dissipated by the globalisation, hence the repeated calls and speeches, particularly at the beginning of the problems, for a co-ordinated response in the measures used and timing of measures to combat recession. Co-ordination would help to reduce this dissipation.
To be honest I think the disaster would unfurl either way, by following swivel-eyed free-maketerrism or state spending. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Wed Mar 24, 2010 3:57 am Post subject: |
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This deserves a thread of its own as well as belonging here.
THE Most Important Chart of the CENTURY
This is a very simple chart. It takes the change in GDP and divides it by the change in Debt. What it shows is how much productivity is gained by infusing $1 of debt into our debt backed money system.
Back in the early 1960s a dollar of new debt added almost a dollar to the nation�s output of goods and services. As more debt enters the system the productivity gained by new debt diminishes. This produced a path that was following a diminishing line targeting ZERO in the year 2015. This meant that we could expect that each new dollar of debt added in the year 2015 would add NOTHING to our productivity.
Then a funny thing happened along the way. Macroeconomic DEBT SATURATION occurred causing a phase transition with our debt relationship. This is because total income can no longer support total debt. In the third quarter of 2009 each dollar of debt added produced NEGATIVE 15 cents of productivity, and at the end of 2009, each dollar of new debt now SUBTRACTS 45 cents from GDP!
This is mathematical PROOF that debt saturation has occurred. Continuing to add debt into a saturated system, where all money is debt, leads only to future defaults and to higher unemployment.
This is the dilemma created by our top down debt backed money structure. Because all money is backed by a liability, and carries interest, it guarantees mathematically that there will be losers and that the system will eventually reach the natural limits, the ability of incomes to service debt.
actual chart and source data at link |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Mar 24, 2010 7:44 am Post subject: |
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| Perhaps it's been addressed elsewhere, but I was under the impression that a consensus had emerged that to do nothing, as in the 1930s, was a surefire road to disaster, and so another road had to be tried. |
Doing something does not equal following Japan's lost decades. At the peak point in the crisis there was an opportunity to fix the system but the stimulus + extend and pretend is not an appropriate course of action.
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| To be honest I think the disaster would unfurl either way, by following swivel-eyed free-maketerrism or state spending. |
Swivel-eyed free-marketeerism did not cause the crisis. The crisis was a result of low interest rates, crappy underwriting standards, useless bond/asset ratings, even more usless audit reports and corruption. Stimulus and even lower interest rates will not fix what is eating the American economy.
As an example of how stimulus and extend and pretend don't work:
http://news.bbc.co.uk/2/hi/business/8585568.stm
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| Sales of new homes in the US fell to their lowest level on record in February... |
Though the BBC continues on with that sentence and blames the weather:
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| ...as the cold weather discouraged buyers, figures have shown. |
Which is incorrect. The housing bust will continue now (unless more stimulus and extend and pretend are applied to delay the inevitable) for a simple structural reason:
http://www.brokencredit.com/wp-content/uploads/2007/10/IMFresets.jpg
The homebuyer tax credit is exhausted and the resets are setting in. |
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caniff
Joined: 03 Feb 2004
Location: All over the map
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| Posted: Wed Mar 24, 2010 8:08 am Post subject: |
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| mises wrote: |
Swivel-eyed free-marketeerism did not cause the crisis. The crisis was a result of low interest rates, crappy underwriting standards, useless bond/asset ratings, even more usless audit reports and corruption. Stimulus and even lower interest rates will not fix what is eating the American economy. |
I quoted this part and I did it for free, suckas.
http://www.youtube.com/watch?v=dDlu2TL1W5w&feature=related
(replace "Cyrus" with "mises" as far as this thread is concerned - except hopefully mises doesn't get wasted by The Punks before The Riffs take them out.)
(I have so many questions about our respective prospective haircuts that I don't know where to start. I'll get back to you all later after I can once again digest my food.) |
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mises
Joined: 05 Nov 2007
Location: retired
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caniff
Joined: 03 Feb 2004
Location: All over the map
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| Posted: Wed Mar 31, 2010 8:06 am Post subject: |
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| If anybody needs a white poolboy I'm fairly svelte and mostly potty-trained. |
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mises
Joined: 05 Nov 2007
Location: retired
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caniff
Joined: 03 Feb 2004
Location: All over the map
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| Posted: Wed Mar 31, 2010 8:13 am Post subject: |
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Ouch. |
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The Happy Warrior
Joined: 10 Feb 2010
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| Posted: Fri Apr 02, 2010 6:28 am Post subject: |
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Most data from the Obama Coalition
Unemployment is at an all time high, twice as high last month as it was last month of last year. That's using the official stats.
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| For most of the past decade, the number of people out of work for 27 weeks or more fluctuated from a low of 649,000 in 2000 to a high of 1,936,000 in 2003. In February 2008, there were 1.3 people unemployed for at least half a year. In February 2009, the number [of jobless] shot up to 3 million, and by February, 2010, it had multiplied to 6.1 million � a 469 percent increase in two years. |
Meanwhile, Medicare is failing and looks to cut further into gov't discretionary spending.
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| [T]he Senate is scheduled in April to determine how to prevent a devastating 21 percent cut in Medicare payments to doctors, a cut which is required under current law. If no action is taken, the number of doctors refusing to take Medicare patients is likely to explode, creating a major political problem for members of Congress. Should Congress step in and prevent the cuts, it will cost the government roughly $200 billion over the next ten years. |
By the way, Social Security has fallen into deficit earlier than expected.
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. . . payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program's revenue has fallen sharply, because there are fewer paychecks to tax."
According to the CBO report from which that article is drawn, the deficit will persist until around 2014, at which point it will go temporarily back into surplus before returning permanently to the red in 2018. |
Autoworkers are no longer the face of unions. The new face of unions are gov't employees.
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[L]ast year, for the first time, public sector union members outnumbered those in the private sector. The consequences of this shift are profound. A majority of the American labor movement is now directly dependent on tax dollars. In terms of political orientation, these workers can now be described as tax consumers as well as tax payers. For these workers, a tax increase may result in a slightly smaller paycheck but, more importantly, the hike means more money is available to pay for raises and new benefits.
[P]ublic sector pay is growing 35.6 percent faster than private sector pay. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Fri Apr 02, 2010 6:42 am Post subject: |
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I am curious where these public sector union employees are. I know they're out there, but I don't come across them. I also wonder how many of those public union workers work for state and local gov't and how many are in the federal government.
And yes, I have to say I'm a little embarrassed that federal employees got a pay raise this year (around 2% I think). There wasn't a need for that. |
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mises
Joined: 05 Nov 2007
Location: retired
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Fri Apr 02, 2010 7:22 am Post subject: |
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| Sorry, I should have elaborated. I know about the cops, firemen, teachers, prison guards, and public transportation. I was more curious about office workers (besides ones that work for those services). |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Apr 02, 2010 7:26 am Post subject: |
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Can you imagine? Cops earning 225? Even with overtime.. That's absurd.
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| By the way, Social Security has fallen into deficit earlier than expected. |
The state is going broke before our eyes. Incredible. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Apr 02, 2010 7:27 pm Post subject: |
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The employment numbers were out @ +162k. The Obama propagandists are out touting the recovery.
48k are census workers.
81k is a statistical adjustment to the labour pool (aka birth/death model).
So, +33k. Not so bad. Right?
U6 increased to 16.9%.
These numbers are meaningless. In New York state this month 47,000 people will see their unemployment benefits run out. At that point they are removed from the unemployment data. They are no longer unemployed for statistical reasons.
I question Obama's intelligence now. Propaganda will not cover up the slow moving catastrophe that is the economy. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Apr 08, 2010 5:47 am Post subject: |
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It's that time of the week again:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGFac_uXX5NM&pos=1
April 8th
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(Bloomberg) -- More Americans unexpectedly filed initial claims for jobless benefits last week, in part reflecting difficulty in seasonally adjusting the data ahead of the Easter holiday.
Initial jobless applications increased by 18,000 to 460,000 in the week ended April 3, Labor Department figures showed today in Washington. The week leading up to Easter and the two weeks that follow are traditionally a �volatile time� for claims, a Labor Department analyst said, making it difficult to discern the underlying trend in applications.
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