Newt's a Swinger

[David Newman]

Originally Posted by Twodogs

So let me ask this; does the "house of cards" never collapse, does it collapse slowly, or does it collapse catastrophically.

If run properly, it runs indefinitely and sustains full employment for eternity.

[Twodogs]

Originally Posted by David Newman

If run properly, it runs indefinitely and sustains full employment for eternity.

So, the obvious question is, why are we not running it properly. If it's irrefutable fact, so simple as not to be over anyone's head, and self sustaining, that only leaves a sinister plot, no?

[djv8ga]

Originally Posted by Twodogs

So, the obvious question is, why are we not running it properly. If it's irrefutable fact, so simple as not to be over anyone's head, and self sustaining, that only leaves a sinister plot, no?

Who the Hell want's it to be run properly?
If that were the case, it would be harder for me to make money.

[David Newman]

Originally Posted by Twodogs

So, the obvious question is, why are we not running it properly. If it's irrefutable fact, so simple as not to be over anyone's head, and self sustaining, that only leaves a sinister plot, no?

I'd say it starts with higher education still holding onto economic models from times past. I recently completed my MBA and in the process took two graduate level economics courses. In 6 course hours of economics, we spent exactly 5 minutes with a brief mention of modern monetary theory, yet anyone who tries to challenge MMT has yet to show any faults in the logic, including Keynesians and Classical, neo-classical, austrian schools of thought. The only fault they can find in the model is what they perceive to be a lack of attention to inflation while, in fact, inflation is the number one concern of MMT.

It's difficult because we have generations of economists who have made things unnecessarily complex. I think the simplicity of the model is it's greatest strength and the greatest hurdle to overcome.

Just to be clear, his ideas about how to effectively utilize are monetary system are open to debate, the part that is irrefutable is his description of our monetary system.

[merrylander]

It does not run properly because of entitlements, the big banks entitlement to being bailed out every time they screw up.

[David Newman]

I'd disagree with that. I really don't believe that they understand how our currency system works. If you asked all 535 (?) of them in the legislative branch, to a (wo)man, I bet they say that spending is constrained by borrowing and taxes collected. If they believe that, they don't understand the system.

[Twodogs]

I've had no schooling in anything, especially economics or math, but it seems to me, that the US government (being the worlds largest employer) is so costly to run, that we have to either print or borrow money every second of every day. That tells me that America can't afford to operate the government. What worries me, is when China can't afford to run it either. Hyper-inflation has to figure into things when we run the money presses 24/7.


As for the big banks getting bailed out, what happened with Lehman Bros.? That cost me about 10k and a good friend of mine much much more.

[David Newman]

Inflation is the concern, but inflation isn't created by simply "printing" money in our system like it would if we had a commodity backed currency. In our system, inflation is based on consumer prices and prices won't go up until demand pushes them up. As you can probably imagine, there is no such thing as demand pull inflation when you aren't approaching full employment and especially so when you are at 8%+.

The money that China invests in T-Bills comes from their reserve account at the Federal Reserve. The money got there by selling things to us. They don't "own" us, they traded real goods for a bank statement. If we decided to pay them off tomorrow, we'd simply move their money back into their Checking account + interest. We do it everyday.

[Bigerik]

So Dave, what is China using to pay for their own rapid economic expansion, if their money is sitting here? Or are they just printing it like we do.

[merrylander]

Originally Posted by Twodogs

As for the big banks getting bailed out, what happened with Lehman Bros.? That cost me about 10k and a good friend of mine much much more.

Because Dubya decided that they would not bail out Lehman Bros. and that is when the excrement collided with the air moving device.

Nonetheless the big banks now do feel that they are "entitled" to bail outs - and they did not even pay into the scheme.