Bailouts = Depression

[Toro]

During a depression, wealth is destroyed. That's why they call it a "depression."

i am not following your logic.

what does depression have to do with destruction ?

depression means decrease in economic activity.

Right. But economic activity supports asset values, which is wealth. Since economic activity declines, so does the value of the assets. A depression always includes a destruction in asset values. Home prices fall. Stocks fall.

 

[neurosport]

economic activity supports asset values, which is wealth. Since economic activity declines, so does the value of the assets. A depression always includes a destruction in asset values. Home prices fall. Stocks fall.

you're talking about PAPER wealth. i am talking about REAL wealth.

read this article:

http://austrianenginomics.com/CanGovernmentsorCentralBanksWillRealWealthintoExistence.pdf

the amount of REAL wealth doesn't change when a housing bubble forms or when it pops.

 

[neurosport]

An idle worker is wealth denied.

Exactly, millions sitting around not working are consuming wealth and not creating it.

a worker at home watching a soap opera is destroying wealth at a much lower rate than he would be on a government job building a bridge to nowhere.

now the same bricks, mortar, equipment, energy that is going to be used on the bridge to nowhere has been reallocated form another part of the economy where it would have been used to create real wealth.

leave the market alone and eventually it will find a job for the person - it may take a year, it may take 5 years - but its going to happen. meanwhile that person should sit tight in a government project building and eat on his food stamps.

by putting him to work on a FAKE job today you are destroying his future REAL job by reallocating resources in a market unjustified manner.

 

[neurosport]

In the SU all projects were make work and unquestionably wealth increased in the SU while it was communist.

well ... they would be putting out the same car model for 20 years there with NO changes.

you could put a car built in 1995 and a car built in 1975 side by side and you wouldn't know which one is which.

so if the car had 70 horsepower carburetor engine in 1975 it would have the same 70 horsepower carburetor engine in 1995.

and of course it would still have no power steering, power brakes, power seats, windows, air conditioning or automatic transmission.

it would be just 4 cylinders, 4 gears ( manual ) and 4 wheels. thats it.

and you would be lucky if you could start it or make it go uphill.

sometimes they would get it right ( AK - 47 ) but most of the time they would get it wrong and never fix it.

with that sort of wealth creation somewhere down the line a car made in USA will be worth less than a bicycle made in China.

and you will need to be a politician in " the party " ( will be 1 party by then ) to even afford a Chinese made bicycle. of course if you actually get caught riding one you will be imprisoned for life - because international trade will have been completely outlawed by Editec to protect domestic manufacturing.

 

[Ravi]

have you heard about the broken window fallacy ?

Parable of the broken window - Wikipedia, the free encyclopedia

when you break windows you destroy wealth ...

Only if you leave them broken. Otherwise, you actually do create wealth.

Not really. Because when one had a window, he had money to buy a new suit, or a new pair of shoes etc. When that window is broken and the owner replaces it with the money that now will not buy something else, all he has is a window and not a window AND a new pair of shoes or a new suit.

If we expand on your supposition, we would rightly say that leveling all the houses in a town to create work for construction companies is actually creating wealth. No?

He still has the want of a new suit and so will work harder until he can afford one.

Then again, if he can't absorb a broken window in his business plan he probably shouldn't be in business to begin with...

 

[editec]

An idle worker is wealth denied.

Exactly, millions sitting around not working are consuming wealth and not creating it.

A stimulus is designed to get folks more into producing wealth by transferring it from capital to productivity when the market isn't doing it for whatever reason, in this case the credit crisis.

Government make work projects are not wealth producers.

That is true. If they are nothing but make work projects, they produce nothing.

However, if the government targets money into worthwhile projects, then that money is better spend thanthan giving additional tax breaks to the wealthy who will invest it OFFSHORE.

What part of THAT confuses you?

What part of trickle down economics has FAILED MISERABLE are you still failing to understand?

Do I think the current plan is going to work?

Of COURSE not.

The current plan is the largest transfer of wealth from a national entity to the PRIVATE sector in human history.

And it would not have mattered WHICH PARTY won this last election.

This sham bailout have happened has McCain been elected. It was CONTRIVED, planned for, prepared in advance by the masters who pull the strings.

WAKE UP!

And the government taking and spending tax dollars from the private sector is not the same as using capital. In fact all the government is doing is lessening the ability of the private sector to produce wealth by confiscating that money via taxes.

You mean the ame private sector (which got enormous tax breaks and invested that money into FREE TRADE?

Tell me how endlessly repaving existing highways produces wealth when all that money taken via taxes to pay for it is taken from people who would have used it to start a new business, or to invest in an existing business, or to buy a home or put an addition on their home, or to buy a new car or motorcycle etc etc.

If ONLY the above were true, I'd agree with you. But the private sector hhad MORE MONEY than they ever had and they did NOT invest it in American industry, did they?

Add to it the certainty that a good percentage of that tax money will be eaten up by the bureaucracy never to reach its intended target where a full 100% of that money, if used by the private sector, would have been utilized for its intended purpose and tell me again how the government creates wealth via taxes.

But that didn't happen did it?

What you imagine they would do, they haven't been doing.

And please, do not turn this into a tax, anti tax argument. I am not advocating no taxes but I am merely stating that the government taking tax dollars from the public and spending them does not produce wealth, it merely lessens the ability of the public to produce wealth there by resulting in a transfer of funds to a less efficient mechanism of use.

They're NOT taking money from the private sector!

They're spending money they don't have and leaving the American taxpayer with a bankrupted treasury.

WAKE UP!

If they were taking money from the private secotor they'd be increasing taxes on the RICH.

Are they?

No, they're giving money to the rich.

Who the **** do you think GETS that 9 TRILLION dollars?

Welfare mothers?

Why do you keep harping on the $740 billion, some of which actually IS going to the 300,000,000 people of the USA, and IGNORING the $9 TRILLION going to -- at best -- a couple hundred thousand people who are already richer than Creoses?

Are you a fool or a tool?

 

[Skull Pilot]

Only if you leave them broken. Otherwise, you actually do create wealth.

Not really. Because when one had a window, he had money to buy a new suit, or a new pair of shoes etc. When that window is broken and the owner replaces it with the money that now will not buy something else, all he has is a window and not a window AND a new pair of shoes or a new suit.

If we expand on your supposition, we would rightly say that leveling all the houses in a town to create work for construction companies is actually creating wealth. No?

He still has the want of a new suit and so will work harder until he can afford one.

Then again, if he can't absorb a broken window in his business plan he probably shouldn't be in business to begin with...

Great counter argument......you convinced me.......NOT

 

[Toro]

economic activity supports asset values, which is wealth. Since economic activity declines, so does the value of the assets. A depression always includes a destruction in asset values. Home prices fall. Stocks fall.

you're talking about PAPER wealth. i am talking about REAL wealth.

read this article:

http://austrianenginomics.com/CanGovernmentsorCentralBanksWillRealWealthintoExistence.pdf

the amount of REAL wealth doesn't change when a housing bubble forms or when it pops.

The argument is irrelevant. Whatever the intrinsic value of the economy, it has no bearing on the actual functioning of the economy at any given time. Its like saying your football team before the season is an 11-win team, but then they actually win 5 games and you arguing they are still an 11-win team.

Its also completely wrong that governments cannot create real wealth. For example, "real wealth" is created by expanding the bounds of technological knowledge. The only way you can do this is through education, and by far the most efficient way to transfer knowledge from one generation to another is through widespread education. And the best way to ensure widespread funding of schools is by the government. This is why almost every single country in the world funds education primarily through the government. So the assumptions on which the paper rests are also wrong.

The argument also makes assumptions about equilibrium. Markets are not always in equilibrium. If markets are frozen - as many credit markets still are - they are not in equilibrium because people are frozen by fear and uncertainty. When funding markets are frozen, "real wealth" cannot be financed because funding is critical to expanding our technological knowledge. Government actions to flood the system with liquidity can help remove the fear and uncertainty, which means that the funding of the creation of "real wealth" can continue.

 

[Skull Pilot]

Exactly, millions sitting around not working are consuming wealth and not creating it.

A stimulus is designed to get folks more into producing wealth by transferring it from capital to productivity when the market isn't doing it for whatever reason, in this case the credit crisis.

That is true. If they are nothing but make work projects, they produce nothing.

However, if the government targets money into worthwhile projects, then that money is better spend thanthan giving additional tax breaks to the wealthy who will invest it OFFSHORE.

Where in my statements did I ever say give tax breaks to the wealthy? And really Ed what "worthwhile" project can the government do that the private sector cannot do better, more efficiently and at less cost?

What part of THAT confuses you?

I am not confused, but your obvious propensity to jump to conclusions that everyone who advocates for smaller less expensive government is somehow a tool of the "rich" is clouding your reasoning.

What part of trickle down economics has FAILED MISERABLE are you still failing to understand?

I do not remember advocating trickle down economics. And how is reducing everyone's tax burden, except for those that already pay little or no taxes, trickle down?

Do I think the current plan is going to work?

Of COURSE not.

You don't seem to think anything will work. So why don't you just rent a gun and buy a bullet?

The current plan is the largest transfer of wealth from a national entity to the PRIVATE sector in human history.

It is also the largest government intrusion into private business. It is also an obvious violation of the Constitution.

And it would not have mattered WHICH PARTY won this last election.

I agree with you. There in no difference between the two parties and until people start thinking and not just following a party line we can look forward to more of the same

This sham bailout have happened has McCain been elected. It was CONTRIVED, planned for, prepared in advance by the masters who pull the strings.

WAKE UP!

And I've been called a conspiracy theorist.

You mean the ame private sector (which got enormous tax breaks and invested that money into FREE TRADE?



If ONLY the above were true, I'd agree with you. But the private sector hhad MORE MONEY than they ever had and they did NOT invest it in American industry, did they?

It does not matter what the private sector did or did not invest in. That's why it's called the private sector. But the government should not be dictating where when and how much people should be investing. You know kind of like it's doing now by buying stock at gunpoint in private institutions.

But that didn't happen did it?

What you imagine they would do, they haven't been doing.

And please, do not turn this into a tax, anti tax argument. I am not advocating no taxes but I am merely stating that the government taking tax dollars from the public and spending them does not produce wealth, it merely lessens the ability of the public to produce wealth there by resulting in a transfer of funds to a less efficient mechanism of use.

They're NOT taking money from the private sector!

They're spending money they don't have and leaving the American taxpayer with a bankrupted treasury.

WAKE UP!

Gee Ed I would prefer the government do nothing right now. At least as far as meddling in the economy is concerned. This is a government failure as much as it is a private sector failure as much as it is millions of personal failures.

And government borrowing and spending is ultimately a tax as it has to be paid for sometime. And technically government is not taking that money from the private sector RIGHT NOW, but rather government is ensuring that that money not be in the private sector in years and for years to come because it has to be paid back sometime. And how will it be paid back? Taxes taken from the people, that's how.

If they were taking money from the private sector they'd be increasing taxes on the RICH.

Are they?

No, they're giving money to the rich.

Who the **** do you think GETS that 9 TRILLION dollars?

IF it's actually given out. And I'll say ed that none of those banks or investment firms should have received a ******* dime, just as no auto maker should. But you don't agree with that do you. So it's OK for one set of rich businessmen to get taxpayer money but not another?

Why do you keep harping on the $740 billion, some of which actually IS going to the 300,000,000 people of the USA, and IGNORING the $9 TRILLION going to -- at best -- a couple hundred thousand people who are already richer than Creoses?

Are you a fool or a tool?

I assume this shouting is not directed at me since I never mentioned a bail out in my post but you do realize it would have been cheaper and more effective for the government to pay off every single mortgage in the country than it is to be doing what it's doing now don't you?

The government is not doing what it's doing "for the people" It is doing what it's doing to expand its own power and influence over the people.

 

[neurosport]

Not really. Because when one had a window, he had money to buy a new suit, or a new pair of shoes etc. When that window is broken and the owner replaces it with the money that now will not buy something else, all he has is a window and not a window AND a new pair of shoes or a new suit.

If we expand on your supposition, we would rightly say that leveling all the houses in a town to create work for construction companies is actually creating wealth. No?

He still has the want of a new suit and so will work harder until he can afford one.

Then again, if he can't absorb a broken window in his business plan he probably shouldn't be in business to begin with...

Great counter argument......you convinced me.......NOT

our Retarded friend Ravi is a big believer in free lunch.

 

[neurosport]

The only way you can do this is through education, and by far the most efficient way to transfer knowledge from one generation to another is through widespread education. And the best way to ensure widespread funding of schools is by the government. This is why almost every single country in the world funds education primarily through the government.

thats a bunch of bullshit ! are you always this dim or is it only because i'm on amphetamines right now ?

how do you get off on being a tool ?

that's what they WANT YOU to think. its nothing but PROPAGANDA and you swallowed it all.

but this is off topic here. i would be happy to argue with you about that in an appropriate part of the forum.

if you're not chicken go ahead and start a new thread, and let me know where it's at.

 

[Toro]

thats a bunch of bullshit ! are you always this dim or is it only because i'm on amphetamines right now ?

how do you get off on being a tool ?

that's what they WANT YOU to think. its nothing but PROPAGANDA and you swallowed it all.

I would say lay off the amphetamines.

 

[editec]

The only way you can do this is through education, and by far the most efficient way to transfer knowledge from one generation to another is through widespread education. And the best way to ensure widespread funding of schools is by the government. This is why almost every single country in the world funds education primarily through the government.

thats a bunch of bullshit ! are you always this dim or is it only because i'm on amphetamines right now ?

how do you get off on being a tool ?

that's what they WANT YOU to think. its nothing but PROPAGANDA and you swallowed it all.

but this is off topic here. i would be happy to argue with you about that in an appropriate part of the forum.

if you're not chicken go ahead and start a new thread, and let me know where it's at.

I certainly cannot blame most of you for hating public education.

It clearly failed most of you.

 

[neurosport]

I certainly cannot blame most of you for hating public education.

It clearly failed most of you.

i told you already, i went to a private university ...

i spent a total of 4 years in the American public education system.

 

[editec]

I certainly cannot blame most of you for hating public education.

It clearly failed most of you.

i told you already, i went to a private university ...

i spent a total of 4 years in the American public education system.

That's nice.

You ought to demand your money back, then.

You was robbbed!

 

[neurosport]

I certainly cannot blame most of you for hating public education.

It clearly failed most of you.

i told you already, i went to a private university ...

i spent a total of 4 years in the American public education system.

That's nice.

You ought to demand your money back, then.

You was robbbed!

full scholarship