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Musicmystery -> RE: Why do we fear taxes? (7/21/2012 10:21:20 AM)
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ORIGINAL: BenevolentM
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ORIGINAL: Musicmystery
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ORIGINAL: BenevolentM
Income inequality since that is not also flat, the flatness of your chart Musicmystery show that it is indeed harder for most people to own a home than it used to be.
In 1890?
Do a little research.
The data I turned up went back to the 1970s and so my argument, admittedly, is a little weak there. My argument does not collapse due to this weakness, however.
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ORIGINAL: Musicmystery
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To have or not to have a fractional reserve system
Fiscal policy was responsible for the income gap.
You don't need the Fed to have fractional banking. You just need people loaning against assets--the practice started with goldsmiths in early Renaissance.
I am familiar with the goldsmiths story. Think Goldman-Sachs.
I agree the data is suggestive. It suggests that you are right. It does not entirely dismiss the role of the fractional reserve system, however. It is as the saying goes, figures don't lie, but liars figure. Put in another way, numbers can get you totally misdirected since they are often highly context sensitive, variables that you did not account for could be ruling the numbers. That was the argument I put forth.
The data suggests that you are right, but when the matter is examined more closely, another picture emerges. It could be after all these years what started in the 1970s was never fully understood and it was not fiscal policy per se, but our lack of understanding of the nature of the problem. It appears that Reaganomics was a short term solution, not a long term solution. It seemed to get it right at the time, but when the matter was pursued puritanically is when we got into trouble, when greed too hold of us. In a sense this vindicated Keynesian economics. According to John Maynard Keynes free markets need to be regulated because things will get out of hand if you fail to regulate them. After World War II that is what everyone for the most part accepted. It was not thought of as socialist. It was just a fact. Keynes was proven right. The sticking point is, Keynesian economics is no longer up to the task.
As such I both agree and disagree with you Musicmystery. You are more partisan than I am.
There's nothing partisan about it. It's simple factual history.
Keynesian economics has never been applied as Keynes intended--only expansionary policy (on both political sides, whether tax cuts or government spending).
Fractional reserve money creation exists whether there are banks or central banks or whatnot. The moment someone writes an IOU, or any paper against an asset, real or perceived, money is created.
Reaganomics quadrupled the national debt in just eight years. Pour that much money into the economy, you'll see short term results. But you've created a structural problem.
We started to address this structural problem in the 90s, but immediately reversed course in 2001.
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