## The Shuffle

For discussions of culture, politics, economics, sociology, law, business and any other topic that falls under the social science remit.

### Re: The Shuffle

Peter Kropotkin wrote:
Otto_West wrote:I'm entitled? I work fifty five hours a week dude.

Who is paying who's social security, Medicaid, and retirement pensions in income taxes?!

Gimme a break!

K: I have been paying into the SS and Medicaid and retirement pensions for decades even
after a decade of anarchism.....I have worked for over 40 years and I have had long stretches
of 50 plus hours of work at different jobs... I now only work at most 32 hours and that
is because my body can't take working any more hours then 32 hours....
and I am certainly not alone... Millions upon millions of boomers have paid into the
SS and Medicaid and other such programs for decades..... a few boomers I know
are retiring but most have to work on and many I know don't have enough saved
up to retired and so many boomers will wind up working up to and perhaps for some,
more then 50 years... I think we have paid our dues....I know a lot of boomers who
have nothing saved up but the equity in their home... basically the only way we are going
to retire is to sell our homes because that is the only thing of value we have...
I too basically have only my condo as my retirement account....
and the only reason that has value is because of the extreme rise in home and condo
prices here in the bay area... the average home around here is worth a million two
and most condo's are over 700,000 and climbing..... a fall in the price of homes and condo's
will destroy the retirement of millions.... and that is a scary prospect....

we have paid into the system for decades and we expect to have something
for us after decades of putting into the system but again, most boomers I know
understand that they will probably won't get their SS and are expecting nothing
from SS....so don't go judging us from a young kids perspective because unless
you have walked in our shoes for decades, you have nothing to compare it to....

Kropotkin

Well, guess what? After your generation has outsourced all the good paying jobs or have them automated the pool of younger people in the working force to pay for your entitlements are not there in any meaningful way. Looking to the future I see a social security and retirement pension crisis along with a currency crisis also. All of you baby boomers better have a plan B...

More likely than not all your years of hard work and paying in the system will be all for nothing. Don't get too comfortable skippy.
Last edited by Otto_West on Wed Jul 19, 2017 10:24 pm, edited 1 time in total.
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### Re: The Shuffle

it is quite true that depending on how the debt is spent on,
it can be a good thing or a bad thing....

think about it in terms of personal finance.... we go into debt
quite willingly if we think the debt will achieve some goal..
buying a new car puts us into debt but the payoff of
having a reliable car that will insure us getting to our
destination is a payoff... most people will take that...
taking on debt for a long term goal....

a good deal of the debt in this country is in pensions
and we have a deal in regards to that.....
a pension is a contract.. we agree to work for you in return
for a pension....to negate a pension is to negate that contract...
that is why pension and social security are contracts that can not
be touch because to touch them is to violate or break the contract
actually know something about history... Bill Clinton left bush Jr.
a very small debt... I recall in fact, how the GOP was very unhappy with
such a small debt and claimed that it was BAD for America to have such
a small debt... (research 1998 and 1999 to see this) the massive expansion
of debt occurred under bush Jr. (a minor side note is that the debt
historical fact, easy to looked up) but the real point is that debt can be
a good thing or a bad thing depending on its uses... going into debt as
a country can be good if we use the debt to work on infrastructure rebuilding
because that actually becomes beneficial.. the return on one dollar spent
on infrastructure spending is $2.34 return for every dollar spent... and the return on a dollar going to a tax cut is .84 cents...(several studies done over the year has concluded this) so going into debt to rebuild actually does have a return on the dollar that is much better then just a tax cut.... so as usual, most stories have more then one aspect to them.... just as there are rarely ever one solution to any given problem... solutions and problems have a multitude of possibilities within them.... that is the problem with solutions and problems.. there is rarely ever one problem with one answer... now do I see the initial problem stated by Carleas as young people unable to move as often as their parents or grandparents being a problem, no, but within that lies other problems as stated, the young don't have the resources to move out and other similar problems..... but I think this tied into a bigger problem as most problems do tie into larger problems..... we have yet to face the question of the value of a human being... a human being has certain inalienable rights and among those rights are life, liberty and the pursuit of happiness.. and we have increased those rights to include an education, to love, medical, treatment, the right to shelter and eating and safety among our certain inalienable rights... rights that are guaranteed by our existence as living human beings...rights that exist for every single living human being.... that is the real problem... we have yet to include human beings, little less ALL living things into our equation of what is valuable... Carleas question is but a small portion of the larger question... as I grow older, I see everything more as a question and not an answer... life is an question and what is the solution? everything is really connected and asking for specific answers to specific questions is to disconnect aspects of answers and questions that need to be asked and answered together, not separately..... Kropotkin "Those who sacrifice liberty for security wind up with neither." "Ben Franklin" Peter Kropotkin ILP Legend Posts: 6617 Joined: Thu Apr 07, 2005 1:47 am Location: blue state ### Re: The Shuffle The only way for the United States to restructure its debt nationally is through bankruptcy, of course this would cause the collapse of the American government and economy however there is no other recourse as all of that is inevitable. Your entire world of fantasy and make believe is doomed, have a nice day. Otto_West Doom Pornographer Posts: 898 Joined: Thu May 04, 2017 7:40 pm Location: Dumbfuckistan- Will Work For Depreciating (FRN) Shekels. ### Re: The Shuffle Carleas wrote:I thought we were talking about debt. Let me rephrase it in your words, if that will help: "If you want to have [] sustainable development," borrowing at 1% and investing at 4% is "fair[], good[], right[], just[], and especially generational[ly] just[]." Debt is just the opposite of generational justice (a.k.a.: intergenerational justice). We should also have in the case of money what we should have in the case of all products and goods coming from nature: Nachhaltigkeit ("sustainable development"). Debt has definetely to do with the future. Nobody can deny that. So if you burden the generations of the future with debts and/or a dirty natural (and probably also social) environment, then you are not fair, not just, not good, not right. Arminius ILP Legend Posts: 5732 Joined: Sat Mar 08, 2014 10:51 pm Location: Saltus Teutoburgiensis ### Re: The Shuffle Carleas wrote:.... I'm not sure if "bankrupt[ing] the [W]est" includes national debt, I don't think the national debt is a bad thing. The US is still credit-worthy, we could borrow significantly more than we already have. That suggests that whatever we've borrowed, our returns are positive, and borrowing to invest in society was a good investment. Our current President's campaign statements aside, we are not likely to default on our debts (or rather, we don't need to, but who knows what we'll actually do). As you most likely know, there’s good debt and bad debt. Good debt is when you borrow to invest in something that will bring in a return; bad debt is when you borrow to pay for something that won’t bring in a return. This is why debt is often separated into private and government debt. The former is often good; the latter is often bad as the government usually needs money just to keep things afloat rather than to invest. If it wasn't for the wars, the U.S. would have crashed ages ago. The perpetual wars are what’s keeping the U.S. going. They’re not just keeping a huge military-industrial complex humming along or gaining access to more oil, but more importantly, the wars are taking out dictators who challenged the U.S. petrodollar. There are several reasons for the never ending wars (which is why lots of interest groups support them) but the one that’s related to the economy/finance/debt is the U.S. petrodollar. The recent turmoil started in the 70’s when Saudi Arabia threatened to use oil as a weapon against the U.S. for its support of the Zionist regime in Israel. The U.S. threatened to bomb Saudi Arabia back to being a desert if they didn't start selling oil again and only trading it for U.S. dollars. They accepted. More recently, Saddam was attacked after he said he’d only accept Euros for his oil. Gaddafi was attacked after he dropped the U.S. petrodollar AND the Euro (notice the British and French largely led that war). Gaddafi went further by beginning to set up a new currency for a United Africa that was outside of the control of the International banking system. My point being that if you stopped the wars, stopped overthrowing countries that wanted to take control of their own financial futures, stopped rigging the system and stopped inflating the value of the U.S. dollar through extreme violence, the U.S. would crash under the weight of their debt. People like you, Carleas, speak about the economy as though everyone's playing the game according to rules. Nothing can be further from the truth. The entire system is rigged from top to bottom. (Sorry if I don't respond further. I have a ton of work to do. Boomers are still booming ) . Chakra Superstar Thinker Posts: 985 Joined: Sat Apr 07, 2012 10:42 am ### Re: The Shuffle Arminius wrote:Every nation or common must guarantee a sustainable development (the German word "Nachhaltigkeit" should better be used here), which includes just fairness, goodness, rightness, justice, especially generational justice; otherwise it will experience the "tragedy of the commons". That would only work if we had governments revolving around sustainable development of all kinds instead we have governments owned by banks and corporations. Until that changes nothing will and probably won't until what has become of our unsustainable societies fully collapse internally. Your entire world of fantasy and make believe is doomed, have a nice day. Otto_West Doom Pornographer Posts: 898 Joined: Thu May 04, 2017 7:40 pm Location: Dumbfuckistan- Will Work For Depreciating (FRN) Shekels. ### Re: The Shuffle The only reason the US can borrow money at 1% for a 30 year bond is because the federal reserve and other reserve banks such as in Japan and Europe are subsidizing that. The Fed Reserve has some 4 trillion dollars of assets on its books, including bonds and securities. The securities aren't a problem so long as the Fed doesn't dump them into the market (sell them) but simply keeps hoarding them, and continues to buy more with more invented money. For the treasury bonds, the Fed is legally obliged to not make a profit, so when bonds come due and the US treasury transfers money to the Fed then at the end of the year the Fed simply transfers it back to the treasury again, minus costs of overhead and paying the dividends to large banks that own stock in the Fed. So it's basically a huge scam. Japan owns more US debt than does China. Japan is also heavily leveraged with its own reserve bank, and is doing the same thing. You notice a pattern: reserve banks around the world are printing or digitizing money out of thin air and using it to buy US treasuries, but why? Because the US is the globe consumer of reliability that keeps the world economy afloat. The world economy keeps going at the cost of the US importing a billion dollars a day from other economies, like those of China and Japan. That's why China and Japan are happy to keep loaning money to the US. How long is that sustainable? We are using borrowed money to over-consume so that foreign economies keep going by selling us their goods and services. And there is no way the US can ever pay back 20 trillion dollars. Although remember that maybe up to half of that is debt held in the US already, by the Fed and by US federal government departments like social security, and also by major banks. The Fed Reserve is legally forbidden from purchasing treasury bonds directly so it does so via the intermediary of the large banks: large banks buy treasury bonds and then sell those to the Fed for a small fee, thus "everybody wins"... except the US taxpayer who is now born into the US owing over$300,000 from the very beginning.

Debt is bad, but a small amount of debt is good if managed well because it allows you more capital to invest in something that produces a rate of return higher than the cost of servicing that debt. But we aren't just taking about the straight 20 trillion in already existing debt, we are also talking about unfounded liabilities in social security, Medicare and welfare that reach up into the quadrillions.

I've heard liberal leftists, always the apologists for big government (when was the last time you heard any democrat even mention the US debt or deficit as being a problem?), say the same thing as Carleas is saying, "don't worry about the debt". Sorry, but some of us have this little thing called common sense. We realize that the US economy, a consumer economy, with more outstanding debt than the size of the entire US yearly GDP and then constant deficits on top of that plus even more unfounded liabilities, in an economy that is basically stagnating and already not working for most Americans, is a bad thing. The US will eventually suffer a loss of its credit rating, it already has with the former crisis over raising the debt ceiling and shutting down the federal government over failure to pass budgets.

The Fed is propping up the housing bubble, which never really popped, with QE 1-4 and is artificially stimulating the market for treasury bonds in the same way. Other nations are in on the game so long as US consumers keep buying the goods and services made by those other nations. But how long can this scam keep going? One cannot print oneself into prosperity, and debt isn't a recipe for success unless the debt is kept to a responsible minimum and that debt is being used wisely. Neither of those are the case anymore.

The US consumer is already crushed with debt, personal debt and car debt and mortgage debt and student loan debt, to the point where the middle class is no longer able to lift the economy back up into a prosperous situation. But people like Carleas are happy to tell you to "not worry about it" and keep on going with business as usual, probably because they are personally not affected by it and don't want to admit the whole house of cards is going to collapse down the road.
Last edited by URUZ on Wed Jul 19, 2017 11:02 pm, edited 1 time in total.
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### Re: The Shuffle

^^^Essentially the BOJ, FED, and ECB are all propping each other up simultaneously. That's how desperate this international financial debt is becoming. What will destroy this last ditch effort of all three central banks of course will be credit rates, treasury bonds, and stagflation which will eventually transfer to a hyperinflationary unprecedented disaster.
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### Re: The Shuffle

Otto_West wrote:^^^Essentially the BOJ, Fed, and ECB are all propping each other up simultaneously. That's how desperate this international financial debt is becoming. What will destroy this last ditch effort of all three banks of course will be credit rates, treasury bonds, and stagflation which will eventually transfer to a hyperinflationary disaster.

Right, and as others have pointed out these central banks are running out of places to stash their made-up money:

Does the Federal Reserve Print Money?

JULY 15, 2014 BY JOHN LAWRENCE

The Federal Reserve is America’s Central Bank

By John Lawrence

The Fed doesn’t actually “print” money in the sense of ink on paper hundred dollar bills. But what it can do is create money with a few keystrokes on a computer.

Money so created is called “fiat money” since it’s not backed by gold or anything else. The Fed currently prints the money to purchase $40 billion in mortgage backed securities and$45 billion in government bonds each month. The rationale for doing this is that it keeps interest rates low which is thought to be necessary to keep the economy humming.

Before the financial crisis of 2008-09, the Fed managed to keep interest rates low by adjusting the interest rate at which banks borrow overnight. But after the financial crisis, the Fed needed a more robust policy which is called Quantitative Easing or QE. This policy is mainly a giveaway to the big Wall Street banks to augment their reserves. The lack of sufficient reserves is thought to have been the problem that caused the financial crisis.

The Fed’s massive QE program was ostensibly designed to lower mortgage interest rates, stimulating the economy. And rates have indeed been lowered – for banks. But the form of QE the Fed has engaged in – creating money on a computer screen and trading it for assets on bank balance sheets – has not delivered money where it needs to go: into the pockets of consumers, who create the demand that drives the real economy.

Low interest rates will certainly stimulate the economy in the sense that they will encourage the sale of cars and houses, both of which are usually done by borrowing money at interest. So the Fed’s policies are all about generating economic activity by creating more debt for average Americans and this results in bigger profits for Wall Street.

The Fed’s QE policy means that the Fed buys government bonds and mortgage-backed securities from private investors – mainly the big Wall Street banks – and then credits the accounts of those banks with the cash. In return the Fed takes possession of the bond or security it has just bought which is just added to the Fed’s balance sheet.

Now if the Fed sells that bond back into the market or redeems it from the government, it would get the cash that it had created back and could just extinguish it by a few more keystrokes on the computer. At that point the money that had previously been created will have been destroyed and would be subtracted from the Fed’s balance sheet. So in that long run scenario the Fed would not have “printed” or created any money at all except on a temporaray basis.

The rub is that the Fed may never remove that money from its balance sheet. It certainly hasn’t done so thus far. The Fed has been buying bonds since early 2009. During that time its balance sheet has increased from $900 billion to over$4 trillion today.

A secondary effect of keeping interest rates low is that it lowers the Federal government’s interest payments on its gargantuan Federal debt.

That tends to neutralize the issue of government spending and deficits as a political issue. The Fed has also been buying the bonds being sold by the US government to finance its deficit. This is considered a Ponzi scheme by some writers as the Fed buys up government deficits and in effect disappears them making sure that bond redeemers always get paid. Bernie Madoff went to jail for doing the same thing except Bernie could not create money with a few keystrokes on a computer like the Fed can.

The negative side of low interest rates is that it hurts savers. Saving accounts produce hardly any interest so there is not much incentive to save. There is, therefore, an incentive to invest in the stock market which has risen dramatically and basically has become a bubble similar to the rapid increase in home values prior to the Great Recession of 2008. When that bubble burst, home values fell precipitously.

The same thing could happen to the stock market if the Fed eases off its policy of QE and interest rates rise. Then the stock market could deflate like a punctured balloon.

So what is the other negative aspect of the Fed’s QE policy? All that money the Fed is creating or printing, if you will, is pooling in the financial system mainly among rich investors. It is not going into the real economy or into the average person’s pocket. If that money were injected into the real economy, it could be used for rebuilding, repairing and building new infrastructure, for example, which would create jobs.

Instead the Fed’s idea of creating jobs is to keep interest rates low so that more cars and houses will be built and sold. The jobs created will be mainly for car salesmen and real estate salespersons as well as construction crews and assembly line workers.

Money pooling in the financial system and not entering the real economy has only an indirect effect on economic growth, and has the primary purpose of making rich people, especially bankers, richer. This is thought to be a good thing in that it shores up bank reserves which were drastically depleted due to the casino operations leading up to the Great Recession when the banks collapsed not essentially because they had little in the way of reserves but primarily because they had run up their gambling debts to excessive levels with nothing to back them up.

So what will the Fed do now? It may never be able to reduce its balance sheet by either redeeming government bonds or selling them into the market because that would raise interest rates and drive up the amount the Federal government would have to pay in interest on its debt. At that point paying interest on the debt might take up the entire or almost the entire Federal budget.

In addition raising interest rates would put a damper on economic activity in the form of discouraging people from purchasing cars, houses and other consumer items. Since consumption is 70% of GDP, this could lead to a recession. This would again place the big banks in jeopardy because, as economic activity diminishes, interest payments to the banks – a big part of their income – will go down, and this will add to the downward spiral which could produce Great Recession, Part 2.

Therefore, the government bonds and mortgage-backed securities that the Fed is taking on its balance sheet via their money printing operations may never be redeemed or sold and may have effectively disappeared into a black hole as the Fed’s balance sheet continues to increase. The Fed may be stuck printing money ad infinitum and subsidizing the banks at the expense of the average American in perpetuity.

The Wall Street banks, it should be pointed out, make money every time the Fed purchases a government bond or mortgage backed security from them. Since the Fed is prohibited by law from buying government bonds from the government directly, Wall Street banks effectively act as middle men and they do so for a price, a price the Fed gladly pays, and for no risk on the part of the banks.

As the Fed continues to subsidize the big banks with money pooling at the upper end of the income spectrum, inequality increases in American society. The Fed policy of QE is a policy designed to increase inequality as the price to be paid to keep the economy rolling. The price of increased economic activity and rising GDP is the further indebtedness of the American people as they buy cars, houses and other consumer items with borrowed money.

The Fed, which is not publicly owned, functions to improve the financial prospects of the Wall Street banks which are its real owners. (They actually own most of the stock in the Federal Reserve.) Is it any wonder then that the Fed’s policies primarily serve the interests of its owners – the big Wall Street banks? A truly public central bank, one owned by the people of the US, could have the same function of increasing the money supply as needed, but it might do so by using the fiat money so created to more directly benefit the American people.

Germany tried “abnormal” money printing in the early 1920s after WW 1 and the result was hyperinflation, collapse of the German economy, and the rise of Hitler. The same might happen in the US if hyperinflation were to start taking place while the Fed is stuck in handing out money to the big banks in order to keep them afloat.

To fight hyperinflation the Fed would have to raise interest rates and this might bring the US economy to a grinding halt. The policy of reducing the amount of QE on a monthly basis is called “tapering.” This doesn’t mean that the Fed is selling off the government bonds or mortgage backed securities on its balance sheet, just buying less of them than they had previously. The Fed will still be adding billions to its balance sheet every month. Inflation is the only thing that will force the Fed to reduce its balance sheet. Otherwise, it could disappear government deficits and bank owned mortgage backed securities into its black hole indefinitely.

If the Fed starts to taper, the big boys at the Big Banks might take this as a signal to short the stock market, and this might cause the stock market bubble to burst as stock values are driven down. The average non sophisticated 401k investor would probably panic and sell on the dip losing the value of his or her retirement savings as the Wall Street guys make a killing.

When the market reaches its lowest ebb, the Big Guys will start buying again driving the market back up. After the market rallies sufficiently, the average guy will work up the courage to get back in with his 401k, having lost a ton of money selling on the dip and buying on the rally, just the opposite of what sophisticated investors do.

Concomitantly, the Fed will probably reintroduce its policy of QE in order to stabilize the economy, and it might have to admit that this policy will continue indefinitely or even ad infinitum. The denouement is that the rich will have gotten richer while the middle class will have been reduced to penury, just the same tendency as happened after the recession of 2008.

This debt-based, Wall Street centric, unstable economy known as US capitalism could be changed by replacing the privately owned Federal Reserve with a publicly owned central bank that created and extinguished fiat money. This would more directly benefit the American people, and serve the needs of the real economy rather than being an effort to stabilize and profit Wall Street banks. Rather than providing jobs indirectly only if more debt for the American people is created, a public central bank could inject money as needed directly into the real economy creating jobs in the process and building wealth for the average American while reducing inequality.

https://sandiegofreepress.org/2014/07/d ... int-money/

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### Re: The Shuffle

Basically things like quantitative easing is where central banks syphon money off the population at large to fund their corporate debt holdings and more importantly keeps their doors open or lights on. This of course is systematic financial parasitism and even more the host these financial parasites or vultures are feeding on is dying where once again this desperate measure of a last ditch effort to keep the west financially solvent will backfire tremendously. The question of course becomes when all of this will occur. For the United States at least there is chatter or rumors by banks and corporations to initiate some kind of QE4 next year as the United States economy has become anemic. There's just one problem, there is no money or pound of flesh to extract left. Next year around April things are going to get very interesting. The western Ptomekin village is dying.
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### Re: The Shuffle

It's sad but true. A massive scam, the largest in history, that has transferred pretty much all of the US, Canadian and European wealth out of the hands of the people and into the hands of elites. A scam perpetrated by traitors and subhuman garbage and defended by pseudo-intellectual, sycophantic useful idiots and hoards of virtue signaling people everywhere, none of whom with even an ounce of reasoning in their brains.
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### Re: The Shuffle

And as others have noted, when the coffers are empty and there is no pound of flesh, the last resort for such a society is to go to war. Indeed, war is coming.
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### Re: The Shuffle

Void_X_Zero wrote:And as others have noted, when the coffers are empty and there is no pound of flesh, the last resort for such a society is to go to war. Indeed, war is coming.

The only problem with that is war requires funding, you can't go to war if your country is bankrupted. If they're going to start a huge new war time is running out for them.
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### Re: The Shuffle

They're already in that war, in the Middle East and trying to wrap Russia in too. But I was talking about civil war.
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### Re: The Shuffle

Otto_West wrote:The only way for the United States to restructure its debt nationally is through bankruptcy, of course this would cause the collapse of the American government and economy however there is no other recourse as all of that is inevitable.

Yes. Historically said: it would have been quite alright, if they had stopped their debt policy in the 1960s (and not later!); but what they did was just the opposite and more, which means even much more accelerated, thus even much more exponentially increasing debts and a bastard economy.

Arminius wrote:
Moreno wrote:
Arminius wrote:Increasingly states, companies and private households reach the point, from which on the credit no longer opens but blocks the future: Growing debt services saps ever larger parts of current income - until the line is exceeded, beyond which older debts only be postponed by a cascade of new debts in a permanently paralyzed tomorrow. This situation deserves to be called "post-historical": It completely fulfills Arnold Gehlen's classic definition of the posthistoire as a state of high "mobility above the stationary bases" - while one would like to replace the word "stationary" by the word "untenable"
The ways to make money that produce nothing are increasing.

Yes, and this has been becoming a dictatorship of inflationism, especially since the 15t of August 1971 when the US president Richard Nixon reversed the gold backing. This is just a bastard economy.
Arminius wrote:
CelineK wrote:

planet broken beyond repair... stable financial system??

If you ask me, then I answer you that the said financial system of Bretton Woods ended 1971, exactly on 15 August 1971 when Nixon relinquished the gold backing of the US Dollar. (And by the way: Keynes said during the Bretton Woods monetary conference that he wanted to relinquish the gold backing, but he meant the gold backing of the British Pound [ ], and had no success, because the USA dominated the Bretton Woods monetary conference, so the gold standard was set at $35.00 an ounce, as you can see it on the table above.) Since the 15th of August 1971 the gold price and a phantom system of expectations of expectations have been exploding. Of course: it is an instable financial system, probably the most instable financial system of all times. Note: The 15th of August is also a Christian holiday, a Christian holy day: Assumption of Mary. Richard Nixon in 1971 (!): Arminius wrote:An example: In the 1950’s and largely also in the 1960’s there was full employment in Europe as well as in the US and in Canada. Then many errors occurred, for example: (1.) the exponentially increasing debts; (2.) the reversing the gold backing of the US Dollar by Richard Nixon in 1971 (which means even much more accelerated, thus even much more exponentially increasing debts and a bastard economy); (3.) the increasing number of unemployed native men, especially the first unemployment of young men (the first youth unemployment started) because of the increasing number of immigrants and female wageworkers. I am not judging here, I am only talking about facts. And if it is right what politicians always and mantra-like claim, namely that full employment, thus the prevention of unemployment, is the main goal, then these said decisions and actions (see: 1., 2., 3.) are very extreme errors. Arminius wrote:Debts over and over again - that is the real meaning of Keynesianism and Neo-Keynesianism, of inflationism. It is not possible to solve all problems by creating money out of the blue, because it is not possible to create something out of nothing. "Von nichts kommt nichts“ is a German saying. You can't make something out of nothing. Thus: You can't make money out of nothing. And if you try it, you will only get: DEBTS. Arminius ILP Legend Posts: 5732 Joined: Sat Mar 08, 2014 10:51 pm Location: Saltus Teutoburgiensis ### Re: The Shuffle Otto_West wrote: Arminius wrote:Every nation or common must guarantee a sustainable development (the German word "Nachhaltigkeit" should better be used here), which includes just fairness, goodness, rightness, justice, especially generational justice; otherwise it will experience the "tragedy of the commons". That would only work if we had governments revolving around sustainable development of all kinds instead we have governments owned by banks and corporations. Until that changes nothing will and probably won't until what has become of our unsustainable societies fully collapse internally. Yes, or they start or let others start a war, so that they can say after that war: "we need to start with a new economy, a new currency, a new law of this and of that" and so on (blablabla - always the same). Arminius ILP Legend Posts: 5732 Joined: Sat Mar 08, 2014 10:51 pm Location: Saltus Teutoburgiensis ### Re: The Shuffle Arminius wrote: Moreno wrote: Arminius wrote:Increasingly states, companies and private households reach the point, from which on the credit no longer opens but blocks the future: Growing debt services saps ever larger parts of current income - until the line is exceeded, beyond which older debts only be postponed by a cascade of new debts in a permanently paralyzed tomorrow. This situation deserves to be called "post-historical": It completely fulfills Arnold Gehlen's classic definition of the posthistoire as a state of high "mobility above the stationary bases" - while one would like to replace the word "stationary" by the word "untenable" The ways to make money that produce nothing are increasing. Yes, and this has been becoming a dictatorship of inflationism, especially since the 15t of August 1971 when the US president Richard Nixon reversed the gold backing. This is just a bastard economy. Arminius wrote: CelineK wrote: planet broken beyond repair... stable financial system?? If you ask me, then I answer you that the said financial system of Bretton Woods ended 1971, exactly on 15 August 1971 when Nixon relinquished the gold backing of the US Dollar. (And by the way: Keynes said during the Bretton Woods monetary conference that he wanted to relinquish the gold backing, but he meant the gold backing of the British Pound [ ], and had no success, because the USA dominated the Bretton Woods monetary conference, so the gold standard was set at$ 35.00 an ounce, as you can see it on the table above.) Since the 15th of August 1971 the gold price and a phantom system of expectations of expectations have been exploding. Of course: it is an instable financial system, probably the most instable financial system of all times.

Note: The 15th of August is also a Christian holiday, a Christian holy day: Assumption of Mary.

Richard Nixon in 1971 (!):
Arminius wrote:An example: In the 1950’s and largely also in the 1960’s there was full employment in Europe as well as in the US and in Canada. Then many errors occurred, for example: (1.) the exponentially increasing debts; (2.) the reversing the gold backing of the US Dollar by Richard Nixon in 1971 (which means even much more accelerated, thus even much more exponentially increasing debts and a bastard economy); (3.) the increasing number of unemployed native men, especially the first unemployment of young men (the first youth unemployment started) because of the increasing number of immigrants and female wageworkers. I am not judging here, I am only talking about facts. And if it is right what politicians always and mantra-like claim, namely that full employment, thus the prevention of unemployment, is the main goal, then these said decisions and actions (see: 1., 2., 3.) are very extreme errors.

Arminius wrote:Debts over and over again - that is the real meaning of Keynesianism and Neo-Keynesianism, of inflationism. It is not possible to solve all problems by creating money out of the blue, because it is not possible to create something out of nothing. "Von nichts kommt nichts“ is a German saying. You can't make something out of nothing. Thus: You can't make money out of nothing. And if you try it, you will only get: DEBTS.
[/quote]

K: I was in fact researching this exact same thing for a post pretty much along
these lines... beat me to it...

Kropotkin
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wind up with neither."
"Ben Franklin"
Peter Kropotkin
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### Re: The Shuffle

The United States started going downhill when the boomers elected Ronald Reagan. Wallstreet loved old Ronnie and the banks did also.
Your entire world of fantasy and make believe is doomed, have a nice day.

Otto_West
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### Re: The Shuffle

*double post*
Your entire world of fantasy and make believe is doomed, have a nice day.

Otto_West
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### Re: The Shuffle

Urwrongx1000 wrote:Oh there are plenty of "solutions" to the problems dominating u.s. and other western countries.

Main problem is, most people, and the baby-boomers too, will not like those solutions, at all.

I'm with Arminius. The national debt needs to be confronted squarely before anything else can be done.

And in spite of the fact that the debt proponents do not like it.

This subject is just too important.

Arminius
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### Re: The Shuffle

True. But here too method and madness brew credibility. Debt and inflation are circular, but never really meet at the middle.

How it goes down as an asset, rather then a debit, is that longer term debt eats itself, because, the longer the term of the debt, the less it really costs and it becomes easier to digest, because, especially if fixed, it looses inflationary value. This is why at the very top of the US real estate bubble, they introduced variable rates, to put a brake on long term fixed effects. Variable adjustment was supposed to slow down the inflation, but it came way too late.

Normally, the need for inflation as an incentive to borrowing is a must, without that incentive a cash only, or a barter type economy would reappear, necessitating a return to the silver and gold standard, which are impossibly unaffordable to most economies, except to those, who manipulate currencies, like the Chinese.
Black Sun
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### Re: The Shuffle

Carleas wrote:There is a problem in the US that fewer people are moving from one state to another. This lack of movement has significant negative repercussions for the economy, in that people are less likely to move to find work, making labor markets less efficient, and that they end up living surrounded by people with little experience of other places and ways of thinking and little tolerance of difference. National culture becomes fragmented, and the possibility of meaningful dialogue goes away. Wealth mobility is also decreased, since assortative mating is exacerbated by people pairing off with people from their immediate surroundings.

In previous generations, exogenous forces have limited how sedentary people could be. Throughout the 20th century, wars repeatedly uprooted people and communities, mixing people from all over the country together, making life barely recognizable for those left at home, and leaving the returning soldiers unmoored and with a community built during their service and distributed around the country. This made moving much less daunting, and assortative mating was greatly decreased following major conflicts where a draft was instituted.

To restore the effects, but without the costs of war, we should implement a program in public schools that would enable students to spend time in other communities. The program would provide free or significantly subsidized travel and room and board, and place students randomly around the country, prioritizing cultural and geographic mixing. Schools could opt in to the program, and students could opt in to participating. Schools would receive as many students in exchange as they send away. Randomization would prevent concentrating these exchanges in 'sexy' locations (e.g. major tourist destinations), and efforts would be made to separate students coming form the same school or even town (though this would be limited by the fact that population centers would be sending more students than relatively sparsely populated areas.

Such a program would give students a chance to get out of their home town, which by itself should significantly increase the likelihood that they will relocate later in life. They will be allowed to build a geographically distributed community, and an appreciation of the life and concerns of others. The mixing would have many subtle social effects, encouraging non-assortative mating, cultural exchanges that will tend to spark innovations, and, over generations, decreases of inequality and political polarization which are fed by increasing social and economic complacency.

I would be in favor of a program like this. A lot of people live the majority of their lives in just a few places. When you spend some time living in another place (not just vacationing/sightseeing) you can't help but gain perspective from the experience. It's cliché, but it really does broaden the horizon of experience. Some colleges have scholarship programs that require students to spend at least one semester abroad. The amount received for scholarship at the student's home university is applied towards the tuition/room/board at the international school of their choice. Course credit earned abroad can be applied toward the student's major program(s) if the course matches up close enough to what is offered at the home university.

Apart from funding, I can't really see a downside to a similar domestic program for young people.

fuse
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### Re: The Shuffle

Otto_West wrote:Are you even familiar with the subject of American financial debt?

By all means, familiarize me. But given that you think that defaulting on US sovereign debt is anything like a good long term policy move, I'm not going to hold my breath.

Peter Kropotkin wrote:now do I see the initial problem stated by
Carleas as young people unable to move as often as their parents or grandparents
being a problem, no, but within that lies other problems as stated,
the young don't have the resources to move out and other similar
problems..... but I think this tied into a bigger problem as most problems
do tie into larger problems..... we have yet to face the question of
the value of a human being

I basically agree with you here, Peter. While I personally value travel, I think as a society we should value it for the other things it ties into, including the willingness to move in response to changes in opportunity and need.

My policy thinking recently has been focused on small changes that are likely to have slow-building fundamental effects. Creating a generation of Americans who have seen significant parts of the country, who have lived and worked with people from different backgrounds and have learned that they can get by outside their comfort zone -- increasing the resiliency and openness and risk-taking of a generation will have many small positive changes that together should significantly improve things.

One of my other motivations for this proposal was the increasing polarization of the country. My thinking was that having people go elsewhere, and having people form elsewhere come to them, will help everyone be more understanding. The progression of this conversation makes me think that an inter-generational exchange program will also be necessary

Arminius, if I borrow $100, and give you both the debt and the$100 in stock, I have not made you worse off. Do you agree?

Chakra Superstar wrote:[government debt] is often bad as the government usually needs money just to keep things afloat rather than to invest.

Sure, but government debt is also often good. The easiest case is if it were to go to a sovereign wealth fund, but it's also true if it goes to infrastructure that benefits the local economy, or to education spending that makes society more productive, or even to military spending if it makes it cheaper and easier to export goods to and from the US. Even "just [] keep[ing] things afloat" can be a good investment, if that means keeping society functioning in a way that produces more tax dividends than the government puts in.

We can argue about what produces returns, but it's ultimately an empirical question not governed by politics or even morality. My point is only that the claim that national debt is prima facie evidence of government wrongdoing and generational injustice is clearly incorrect, and many ways of borrowing and investing are the best way to provide a functioning society for future generations.

Chakra Superstar wrote:People like you, Carleas, speak about the economy as though everyone's playing the game according to rules.

I certainly don't mean to. I just think that, even if true, most of what you say about US "petrodollars" is irrelevant and at odds with the complaints voiced on behalf of millennials in this thread.

And I think that there is a strong economics-based argument that policies like the ones you describe are bad for everyone in the long run, even for the US beneficiaries.

Void, I'm not defending the current situation in the US, I'm defending the use of national debt to invest in a society and produce a net positive sum.

But in response to the claims you present, I think they undervalue liquidity in an economic system. I'm sure you're aware of the parable of the $100 bill that: A stranger comes to a small town one day and stops in at the hotel. He asks if he can see a room before he commits to staying there. The hotel manager says that he needs to put down a$100 deposit. The stranger does, and the manager hands him a key. Once the stranger is upstairs, the manager rushes out to the catering company, and pays them the $100 bill to pay off the hotel's debts for the catering service. The owner of the catering company then goes to the farmer, and pays her$100 to pay of the catering company's debts for the farmer's produce. The farmer then goes to the mechanic, and pays off the farmer's $100 debt for the mechanic's services. The mechanic goes to the prostitute, to pay off his debt for her services. And the prostitute goes to the hotel, and pays off her debt for the use of the hotel's rooms. The hotel now has the same$100 bill it started with, and the stranger comes back down from the room, says it's not to his liking, takes his $100, and leaves. The point of this story is to show that everyone has been made better off, each person has paid of his or her debts, and yet no new money entered the town's economy. But the stranger's money still introduced liquidity, which allowed the townspeople to take the debt off their books. In a similar way, governments lending to each other, and banks being more able to lend to individuals, add liquidity in the market, which produces value. Liquidity tends to lower prices, benefiting consumers. And my understanding of what the Fed is doing isn't trying to put money into peoples hands, but to introduce liquidity into the system. The banks provide a service of distributing the liquidity down through their branches to individuals and businesses that use the credit infusion to become more productive. That seems like a good investment. The other thing I'll say is that, assuming you're right that there's$300,000 of government debt per person (this article puts it around half that, but maybe they're under-counting or it's really changed that much in 2 years), that is a bargain relative to the value of being born an American. Being an American gives near frictionless access to the strongest economy in the world, free public education, incredible cultural capital, amazing infrastructure and legal systems (by global standards). The return on that access is huge, and a lot of it has been purchased by taking on debt. I would argue that the ROI is significantly positive.

fuse wrote:Apart from funding, I can't really see a downside to a similar domestic program for young people.

Even though your post is largely positive, after the discussion of debt I can't help but reading that "apart from funding" as a pretty serious indictment!

[EDIT: misspellings, including someone's name (my apologies, Arminius)]
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Carleas
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### Re: The Shuffle

Carleas, if your parable of the $100 was anything like real life then the debt would be going down as we print (or rather, digitize) more money, and yet it is precisely the opposite. As the article I posted mentions, the new made up money isn't going into the American economy, people aren't getting it to pay off their debts; rather it is going to purchase more debt, as the invented money is used to buy government treasury bonds and mortgage backed securities. Do you know how QE works? And the money that is entering the economy is mostly pooling in the upper echelons of the largest financial institutions, it isn't entering the broader economy, certainly isn't being used so regular people can run around paying off their debts. Also, your parable is stupid because if it didn't magically make the$100 come back to the hotel owner in the end, then it wouldn't have worked, because the hotel owner would have had to cough up his own $100 when the prospective tenant returned and wanted his deposit back. Money is merely a symbolic stand-in for value created. If you make money without having also made value, then that is irrational. You didn't address my comments about the federal reserve. And our comments about how it is literally impossible to pay back$20 trillion of debt, or about how the US is propping up the global economy by being the consumer of last resort which requires an influx of a billion dollars a day into the US from outside (annual trade deficit). These are real problems. They require to be really addressed, beyond quaint parables that obviously aren't how things work in reality.
EIHWAZ PERTHO NAUTHIZ

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URUZ
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### Re: The Shuffle

Scenario:

A couple take out a $600,000 loan on a house. They were duped. The house is actually worth$300,000. The u.s. middle class has been gutted. Higher wages become scarcer and scarcer. The couple must work more hours, for lower wages, to pay off that $600,000 loan. If they ever hope to retire they can get$300,000 max for the house. Nobody will pay higher, anymore. Meanwhile the couple wastes a lifetime, perhaps, paying off the imaginary, fraudulent \$300,000 difference.

Many people, stuck in similar holes, will never climb out of debt. And the national debt does not represent wealth, not when there's fraud and false values. If the assets are worth half of what the loan was made for, then there is no future. Previously you've talked about retaining the value of loans. If a couple cannot pay their loans then the house is repo'd. Bankruptcy becomes the only method of "cancelling" the debt, with many subsequent negative results and consequences.

U.s. wealth is only a fraction of the debt. The real value is less than the perceived value.

Furthermore, using this logic, people are implying that u.s. can or will be, bought and sold to the highest bidders. That when debts default, and they will eventually, that the future of u.s. is at stake. And it is.

Real value is the key. And when you default on loans, cancel debts, then real value can drop even lower when people become desperate.

The banks will reap the leftovers. The u.s. has no future, at this rate. Everything needs to change, and the sooner, the better. I shouldn't even say "better" because that implies a semblance of hope and positivity. The sooner, the less catastrophic.
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