Musicmystery
Posts: 30259
Joined: 3/14/2005 Status: offline
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quote:
Come back when you have a Masters in Economics. Till then, you wouldnt know the difference between Kool-Aid and real fruit juice. Hey, guess what! It's one of my professional areas. Say Georgie has 100 apples. Each year, he gets 40 more. That's good, because he owes 30 in return for people helping him run the joint, and he uses the other ten to pay back people he borrowed from in the past. In fact, he has that surplus because the previous guy, Billie, set it up for him. 100 + 40 - 30 = 110, -10 to retire debt, = 100. A sustainable system. Now Georgie decides he doesn't want to collect so many apples. So he decides to collect only 20 apples a year now. Shortly thereafter, he decides to start two wars, which means he'll need, in addition to the 30 apples a year he owes to people running the joint, another 10 apples per war to reward the people running those shows. So now he has 50 apples going out each year, but only 20 apples coming in. That means 100 +20 - 50 = 70. Oops. That's what's called structural deficit. That means Georgie has put in place a repeating shortfall. Since he can't pay on the past debt, it starts growing again instead of shrinking. And next year, he starts with 70 apples: 70 + 20 - 50 = 40. Oops. And the year after that, 40 + 20 - 50 = 10. Uh-oh. What's going to happen???? Georgie figured letting apple growers keep more apples would mean they would grow even more! But Georgie skipped Econ 101 the day they talked about marginal utility. Alas, since he doesn't know this, he keeps waiting for everything to get better, by magic! But it doesn't, because he hero, St. Ronnie, quadrupled the national debt in just four years--fucking things up, proving magic money is bullshit. He missed that Billie actually understand economics and helped turn things around. But now Georgie has mucked it up again, and committed us to two wars. What to do? Well, Georgie could devalue the apple with monetary policy. And he does. Yay! But in so doing, interest rates go very low, and since Georgie, who believes in magic money, doesn't do anything about his dismal fiscal policy, he's got nothing. Nowhere left to go. Recession. Ooops. So he begs Congress for a large stimulus, and runs from office, never looking back as Barry surveys the mess and rolls up his sleeves.
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