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Started By
Message
Posted on 5/19/24 at 9:37 am to SlowFlowPro
quote:
You're bitching about peanuts, FYI.
Posted on 5/19/24 at 9:39 am to Bamajedi
Well you voted for Biden.
Had to, I mean with 81 million votes
Had to, I mean with 81 million votes
Posted on 5/19/24 at 9:40 am to SlowFlowPro
I read a piece yesterday about how completely insane people are gaining prominence in monetary theory. I don't think is going to end well. Most of this is behind a paywall, but here are some gems.
LINK
quote:
Kelton is sure deficits are fake, part of an age-old political fraud that cons the public into believing national debt is the reason politicians don’t pay for social programs. When talking about MMT, Kelton transforms — I mean this as a compliment — into a master persuader in the tradition of Kashpirovsky or the Amazing Kreskin. If Marcia Clark possessed a fraction of Kelton’s self-assurance, O.J. would have died in prison.
Watch in this clip from the film as the penny drops for audience members as Kelton explains that if you turn the graph of government deficits upside down, the story changes. “Just as a six becomes a nine, when we view it from a different angle, a government deficit becomes a financial surplus,” she says. Not only are deficits not bad, they’re good, because every dollar the government owes is someone else’s asset. Therefore, we can change scary headlines about deficits into awesome ones about surpluses:
That was easy, wasn’t it? Or was it? I saw Finding the Money and all I can say is, Run. I spent nearly ten years listening to people who in previous eras would have been wandering pantless in asylums insist the solution to all of earth’s problems could be graphed on a napkin. “Okay, if you put a thousand junk mortgages in a box, shake it up ten times, tap the lid and yell Abracazam!, 23% will be AAA-rated when you open the box again.” Banks sold this dream to pension funds, insurance companies, hedge funds, each other, and finally themselves. When it went kablooey Wall Street ran to the Fed and successfully demanded to be fully compensated for losses caused by its own defective products, arguing society had an obligation to bail out its delusions.
quote:
As Kelton writes in The Deficit Myth:
Once we accept that… federal deficits are actually good for the economy, we can pursue fiscal policies that prioritize human need and public interest. We have nothing to lose but our self-imposed constraints.
When I first read this, I thought: from Greenspan to Marx, in the same generation? No middle option, those are the choices? Importantly, MMT isn’t just meant to be a solution to a finance problem. It talks a lot about increasing government “responsibility” for problems like ending inequality, by fiat if necessary. The post-2008 economy created a deservedly hated quasi-private oligarchy of market-immune greedheads, but MMT wants to replace them with a somehow even scarier Committee of Economic Deciders. Professor Randall Wray from my alma mater, Bard College, says in Finding the Money that MMT doesn’t want to tax the rich because we need money. Rather, “we need to tax the rich people because they’re too rich,” adding: “You have to decide what is too rich, what threatens democracy, and you remove that and then you leave the rest.”
What? Five minutes ago MMT was a fringe theory proposing perhaps-too-optimistic solutions. Now it’s zoomed past finance questions to creating a fully reorganized economy that operates according to arbitrary social priorities, and puts the state in charge of deciding what is “too rich,” because reasons. This casual mindset of total societal overhaul makes Lloyd Blankfein seem like a nickel-and-dimer by contrast, and all of it’s predicated on the idea that endlessly printing money works.
I first started to worry MMT proponents weren’t completely sure of themselves on that front when Kelton gave the TED talk featured in the movie, and said:
Whenever Congress and the president agree to spend more… the Federal Reserve works with the rest of the financial system to get that money into our accounts. Everything’s done electronically, so there’s no physical printing of money involved.
When you argue that MMT or QE or the normal money-creation process isn’t money “printing” because “there’s no physical printing of money involved,” it sets off the same BS alarm as “liquidity.” Whatever you call it, MMT is printing money, and no matter how sure you might think you are that it will work, you aren’t, and can’t be. Sure, our leaders have been doing it, printing $4 trillion through multiple rounds of QE and $5.5 trillion more in the CARES Act, and sure, that last spree only inspired about 20% inflation so far. Still, any economist who says with a straight face he or she is sure this experiment won’t end with your kids using dollars as toilet paper is lying.
LINK
Posted on 5/19/24 at 9:43 am to SlowFlowPro
quote:
We propped up our economy/assets after 2009 with 10 years of QE and ZIRP, to artificially inflate both with trillions of printing/credick liabilities
Boomer meme [engaged]
Posted on 5/19/24 at 9:46 am to Bunk Moreland
Even the theory behind MMT is supposed to respect inflation, but the zealots ignore it.
Posted on 5/19/24 at 9:46 am to Bamajedi
The left wants everyone in large cities that they control where you ride a bike or public transportation to work.
Seriously though, if you think this bad wait until they jack up corporate tax rates and see how far our buying power goes.
Seriously though, if you think this bad wait until they jack up corporate tax rates and see how far our buying power goes.
Posted on 5/19/24 at 9:47 am to wutangfinancial
quote:
Boomer meme [engaged]
So what exactly was the point of QE and ZIRP, if not to inflate asset prices?
We just injected those trillions and cheap credit into the economy for a laugh?
Posted on 5/19/24 at 9:49 am to kciDAtaE
quote:
This says a lot about how little money you have.
Only financially irresponsible people can afford a $60k car in your mind?
That's nearly the yearly median household income in this country.
In 1968, the average new car or truck cost about half of the yearly median household income, and that was usually with one earner.
Posted on 5/19/24 at 9:54 am to SlowFlowPro
QE and “ZIRP” don’t have any direct economic impact on asset prices. You can make a weak argument about market psychology but that’s it.
ZIRP is an observation that only the largest multinationals with monopolistic advantages are receiving loans. The Fed can’t force banks to lend.
We haven’t had cheap credit for decades and QE and ZIRP isn’t an injection of money.
ZIRP is an observation that only the largest multinationals with monopolistic advantages are receiving loans. The Fed can’t force banks to lend.
quote:
We just injected those trillions and cheap credit into the economy for a laugh
We haven’t had cheap credit for decades and QE and ZIRP isn’t an injection of money.
This post was edited on 5/19/24 at 10:02 am
Posted on 5/19/24 at 10:02 am to Bamajedi
Slight correction…the money is broken.
Read “Broken Money” by Lyn Alden
Read “Broken Money” by Lyn Alden
Posted on 5/19/24 at 10:04 am to SlowFlowPro
quote:
That's from a combination of Bush, Obama, Trump, and China.
So Biden had nothing to do with it?
Posted on 5/19/24 at 10:07 am to blueboxer1119
SFP voted for Biden and will again in November. what do you think?
Posted on 5/19/24 at 10:08 am to Bamajedi
Happy with their homes rising in value but unhappy when other stuff is also increasing in price
Posted on 5/19/24 at 10:09 am to Bamajedi
quote:
Economy wrecked going forward.
Obama, Sanders, Pelosi and the rest of the communists are smiling.
Posted on 5/19/24 at 10:14 am to Bamajedi
It’s a tale of 2 economies. Folks in the top 10-20% are doing great, especially if they are able to snag a chunk of the massive government spending, or if they already had a house and could refinance for 2 or 3%.
Posted on 5/19/24 at 10:14 am to fareplay
quote:
Happy with their homes rising in value but unhappy when other stuff is also increasing in price
really stupid point.
Posted on 5/19/24 at 10:16 am to Klark Kent
How is it stupid when the same lever moves both items?
Posted on 5/19/24 at 10:19 am to fallguy_1978
quote:
I have a 2017 crew cab F150 XLT. 7 years ago I paid 32k for it. The same truck is 50k now. That's pretty crazy to me. Damn near 60% increase in 7 years.
Exactly this. I went truck shopping in 2017 and low $30s was the going rate for a new F150 XLT, even with 4x4. They stickered for like $40ish I think but nobody paid sticker. Salesman knocked off $8k before I even asked.
I went truck shopping again in 2021 and the prices were up to the crazy level we see now and dealers were not coming off the sticker. This was during the supply chain problems and inventory was low, so I passed on buying anything.
What’s crazy to me is those nutty 2021 prices apparently still haven’t fallen at all. How tf do people afford these vehicles? And why are they even willing to pay these prices?
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