joether
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ORIGINAL: DesideriScuri
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ORIGINAL: RottenJohnny
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ORIGINAL: DesideriScuri
So, you want the economy to be as high as possible? Personally, I don't give a shit about how high the economy is. I want it to go smoothly. I don't want booms and busts in our economy.
Can you please explain that a little more? I'm not exactly sure what you mean in describing the economy as "high".
First off, it's not alluding to marijuana, even though I support full legalization... 
You talked about home ownership being the "engine of the economy." I'm sure that has an impact, but, as we learned in 2007/8, housing bubbles can really fuck the economy up.
I want the economy to be as high as it can be naturally, that is, without lots of support from the government. We need more sound money practices, public and private.
Dude, seriously, take a few financial and economics courses. You'll be better off with knowledge. (I dont say this to be an asshole, but trying to help you)
Most financial and economics folks will say a perfect economy is the following: A long, upward, and gradual bull market, economy with a very short, quick, and painless bear market. Obviously that doesn't happen as nearly as would be desired, right?
The economy in the United States from 1998-2008 were 'shaky' at best. Yes, both administrations put lipstick on the pig, and most Americans bought the bullshit. Reality was, the economy was lukewarm during much of Bush'a administration. Most of it was not the administration's fault. The part that is, would serve to create problems down the road. An those problems would increase due to errors and ignorance.
Traditionally a house is a pretty safe investment. Its a long term investment that for eighty years proved to be a benefit to most Americans. The housing market blew apart because Congress allowed a set change of regulations. The GOP/TP pushed to removed regulations across the board. This made for 'scoring political points' in the media and to the public. However, those regulations were there for a set of good reasons. We as a nation would only re-learn those lessons in 2008-2010. One of the regulations allowed people with bad or no credit history to purchase a house. In every instance before 2002, someone with a bad credit history would...NEVER....be able to get a loan for a house. Why? We had federal laws preventing it (i.e. regulations). Because those regulations were removed, it allowed unscrupulous people to take advantage of ignorant people and their money.
Where did it get REALLY unscrupulous? The Housing Commodity Market. Yes, 'Housing Futures' are sold on the open market. Unlike corn or beef, which if you pay for the future, you get the actual material. The 'Housing Future' is you get a portion of the money earned from mortgages that are being paid. So where does the unscrupulous part come in?
The people signing out the mortgages to people with bad or no credit, decided to place 'selling short' orders on those housing futures (these are really bundles of mortgages). At the same time, telling the public those futures were the 'cream of the crop' and would pay the investor handsomely. So what is 'selling short'?
Selling short is the process were you make a profit on an investment that loses money. WTF, eh? How it works is this:
Let's consider this with stocks (the easiest way to explain it).
You borrow stocks held by someone whom has taken a 'long investment' with the stock. They are expecting the stock price to increase and then sell. So they buy at $100 and sell at $120, making $20 profit. Selling short, means you sell the shares at $100, wait for it to sink to $80, then buy those shares. You give the shares back to the person you borrowed them from and keep the $20 in profit. However, if the stock rises, your screwed. If the owner of the stock wants to sell, you have to buy the shares back up and give to them. Its more risk, but sometimes the pay off is huge.
Now, consider an organization that basically tells the public "this stuff is good" when its not (but they dont say that). They sell short on the commodities that will fail in six months times. Often times 'bad credit' means 'poor investing skills'. Add to it, complicated terms and conditions to those new home owners. And its not hard to see how the scam robbed people, and destroyed the housing market.
What is the difference between what you stated, DS, and what I just did? KNOWLEDGE. Gain from studying financial and economic courses.
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ORIGINAL: DesideriScuri
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ORIGINAL: RottenJohnny
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ORIGINAL: DesideriScuri
Giving people incentive to spend will lead to more and more consumption, more and more debt, and more and more boom/bust cycles.
I don't know about you but I don't plan on busting my ass working every day just to go home and not spend some of my hard-earned money on whatever the hell I want. As far as debt is concerned, the biggest issue is that most people don't know how to manage it. Not that the banks will allow anyone to have it. And all the boom/bust cycles I've ever seen didn't have as much to do with people consuming as it did with larger institutions taking advantage of poorly written regulations.
Most of the boom/bust cycles have to do with the Federal Reserve and monetary policy. The S & L crisis? That was due, mostly, to Congress placing a cap on the interest rates they could offer, removing the cap (and increasing what types of lending they could engage in), and then returning the cap, and forcing fire sales (of the new, but no longer allowed loans). Mostly due to Congress, because some S & L's (not all) went apeshit and got greedy. Had Congress grandfathered all the previously barred loans they allowed and then re-barred and let them mature and let attrition remove them from S & L's, there wouldn't have been much of a crisis at all.
Most of the boom/bust cycles have to do with investors, banking institutions, and greed. Greed does a great job of fucking up good plans. Its the number one concept that prevents us from having a perfect economy.
Again, someone that knows how to invest money wisely, does not get blindsided by the government. Most financial houses understand this material as 'the basics'. To most Americans, we might as well be talking astrophysics. That should clue you in on the 'typical American's understanding of money'.
You wish to blame government, eh, DS?
Why not blame your own political party. They are the ones that created the problems in the first place!
But you wont. Easier to blame someone else, since taking your political views to task for allowing that 'craptastic' group of failures in office in the first place is much harder to do. I had to do it with the Democrats in my own state years ago. Its a hellish process. Afterward, you learn to understand the reality and separate the bullshit. But before you get to that level, take the financial an economic course work.
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ORIGINAL: DesideriScuri
"Printing money" policies of The Fed has led to bubbles and busts, too. Bush shouldn't have allowed it, but he did. Obama hasn't stopped it. I think Clinton allowed it, even. How can near-zero interest rates spur any kind of stable fiscal behavior?
Money gets printed through the federal reserve, regardless of whom is in office. That is because 'paper' dollars get destroyed in any number of colorful ways. Metal coinage the same way; most often taking longer to diminish. Likewise, as new technology allows counterfeiting to exploit people's ignorance, the reserve has to use technology to prevent it (thus keeping the integrity of the $1). That is why the $100 bill looks much different then it did thirty years ago.
"How can a near-zero interest rate spur stable fiscal behavior"? Pay me $550, and I'll give you the factual, truthful answer. That's a steal since its a third semester course understanding for finance majors. There is a rational, logical, and quite in-depth answer to it.
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ORIGINAL: DesideriScuri
IMO, we need a lot less consumption in the US. It will help tip the import/export ratio towards our favor. There will be jobs lost, I concede. There will also be a "depression" where prices will drop, but that's really more of a "correction" than it is a negativity.
This does not even sound logical nor based upon human behavior dynamics as it relates to a marketplace. I dont say this to be mean, DS. What your stating is quite the opposite. In some ways, I'm curious how you arrived at this viewpoint.
The United States economy is based upon consumption of goods and services. That someone with more access to goods and services is thought to be rich. As such, people consume things beyond their means, to maintain the image of being rich (failing that, well-to-do). This in effects beats them down financially (may even cost health problems). In our country the desire to appear as something, is much more important, than existing to one's true self. Why do you think the plastic surgery industry is so big in Hollywood?
The amount of jobs to be lost, to 'right' the ship, your talking about is about 22-35 million. I dont think 22-35 million people wish to lose their jobs, houses, cars, investments, and even their health. Just so you can have your viewpoint. Call that a safe economic bet based upon human nature and psychology.
Nor should this nation experience an economic depression for your sole political views. The great depression was...FUCKING TOUGH! Most people in our age generation, DS, do not know what an economic depression means. Folks in Detroit are getting an awful crash course at the local government level. None of them like it!
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ORIGINAL: DesideriScuri
I've had progressives argue with me that the government has to increase spending, during the recession, to increase aggregate demand, so the economy and GDP don't fall. That's a short-sighted viewpoint, and one that can open up a big hairy can o' worms. They have chosen some economic output/GDP as "right" and government needs to keep it there or raise it. I completely disagreed.
Increasing/decreasing spending is a concept that should not be handled lightly. Increasing spending (thus needing ways to enable more revenue to be generated) should be consider when other avenues have been exhausted. Liberals to increasing spending, is like Republicans wanting war: they really do not care about the consequences of miss using limited resources. Economics is the study of handling limited resources in the most efficient manner possible. Handling things at a national level is more 'macro economics' course work.
You wish to blame the Democrats for increasing spending due to the 2007-2010 recession? Better be ready to blame the Republicans. And blame everyone going back to the Great Depression. Stopping a recession is to understand how the recession operates. Most people would give you a very 'bare bones' understanding have how a recession operates. And most of them would get it wrong. Do you think I would get it wrong, based on what you know of me?
Recessions are the opposite of bull markets. A decreasing or low expectations of future events to make profits, forces business entities to close off potential investments as 'to risky'. However, less profit generating activities, results in less profit (sounds logic, eh?). Problem is, when everyone is doing this, the rate of that decline becomes sharper. In the very last recession, the nation had a huge amount of supply, but not real demand. Thus, goods were 'marketable' cost at a lower rate. Even at rates below the good/service's 'break even' cost. Why produce the good or service when the materials are worth more than the finished product?
The US Government has stepped in from time to time, to purchase things when recessions look like the likely 'financial circumstance'. They create an artificial demand for the supply. Thus allowing businesses to re-think the 'turtle in the shell' mentality and strive to take a risk that might generate profit. That was the underlying understanding of how the American Recovery and Reinvestment Act of 2009 would operate. Yes, Americans are just as ignorant about the AR&R as the ACA. A bill/law that was trying to accomplish two things:
1 ) lessen the impact per industry of the recession
2 ) make a moderate impact to allow potential growth within each industry.
Seems things worked out for the best. And your political party tried torpedoing it several times. Since winning political points is more important to the GOP/TP than a good economy.....(old school Republicans would never have done that!)
...I dont like it when the Democrats do it either!
Regardless of the political party, I want a good, gradual, and long term bull market followed by a short, painless, and easy bear market. Followed by another bull market...
This stuff is not easy to learn nor understand, DS. I might make it look easy to understand, because I've been explaining this stuff to people for the past five years. I understand fully that you dislike big government, large budgets, and taxes. Yet, I do wonder if you understand those things, minus the political viewpoints?
Seriously, make the best argument you can for 'big government'. One that you could not easily challenge. Then for a large budget at the federal level. Finally, for taxes and/or taxe increases. The reason for doing this is to challenge your viewpoints and considerations to each of these concepts. Most people will not take up this challenge, DS. They are as afraid of having their political views challenged as much as giving a public speech to an audience. But I think people benefit more, when they do this in the long term. Try it.
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RE: Rand Paul's Tax Plan - 
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