Krugman: personal austerity versus government austerity

[EdwardBaiamonte]

Yep Europe being in a depression is certainly working out very well

If they would try German austerity( Republican fiscal responsibility) their depression would end. Over your head??

Yes doing more of what got them in a depression will end their depression... just like blood lettings cures diseases

you complete idiot liberal !! Europe is socialist and never practiced Republican austerity!!!!

 

[starcraftzzz]

If they would try German austerity( Republican fiscal responsibility) their depression would end. Over your head??

Yes doing more of what got them in a depression will end their depression... just like blood lettings cures diseases

you complete idiot liberal !! Europe is socialist and never practiced Republican austerity!!!!

Earlier you said Germany implemented austerity and is forcing the rest of Europe to do the same, now you're saying it didn't. Plz make up your mind. Also how can you be so dumb that you don't know the difference between austerity and socialism?

 

[EdwardBaiamonte]

Yes doing more of what got them in a depression will end their depression... just like blood lettings cures diseases

you complete idiot liberal !! Europe is socialist and never practiced Republican austerity!!!![except Germany][/QUOTE]

Earlier you said Germany implemented austerity and is forcing the rest of Europe to do the same,

indeed if you read the papers you will see this is 100 correct!!!!! Idiot

Also how can you be so dumb that you don't know the difference between austerity and socialism?

if course if I don't know you would not be so afraid to show the evidence of this. What does your fear tell you??

 

[starcraftzzz]

Yes doing more of what got them in a depression will end their depression... just like blood lettings cures diseases

you complete idiot liberal !! Europe is socialist and never practiced Republican austerity!!!![except Germany]

Given that you dont know what austerity or socialism are how the hell would you know?

Earlier you said Germany implemented austerity and is forcing the rest of Europe to do the same,

indeed if you read the papers you will see this is 100 correct!!!!! Idiot

Jesus you're all over the place first Europe and Germany aren't implementing austerity, now they are.... Make up your mind.

Also how can you be so dumb that you don't know the difference between austerity and socialism?

if course if I don't know you would not be so afraid to show the evidence of this. What does your fear tell you??[/QUOTE]
You response was Europe is socialists therefor they haven't/cant have implemented austerity, but then again according to you Europe is not implementing austerity and implementing austerity at the same time...

 

[ThinkCritically]

Considering you brain is unable to think beyond anything 101 perhaps you should just stick to coloring books

weren't you the guy who didn't understand what a price floor was.

 

[Mr. Jones]

Dude, gold doesn't have intrinsic value. Nothing has intrinsic value. Gold does not add anything useful to money.

Yes Gold is worthless, as it has been shown throughout history to be a worthless
clump of yellowish metal, and every single person and economist in the history of society is stupid for thinking otherwise...

"'they're backed only by the promise and good faith of the country that prints them." is the only thing that gives money value. The "promise to pay" is the extrinsic value, that is it, that is all it ever was. There never was and never will be a "guarantee to pay". It has always been based on good will, a firm handshake, and the strength of one's word. All we have done is taken that and made it a social norm, the money is backed by the full faith and credit of everyone that is part of the economy. You can take US dollars to most every countries and it is backed by the full faith and credit there as well.

Which is why the dollar needs to be backed by something of historical value like gold or precious metals, gems whatever, as the nature of man to keep his word and control his greed is highly questionable at best, and nonexistent at worst.

It doesn't matter if the money is backed by pigs, gold, diamonds, automobiles, capital equipment, or real estate. Oh, in fact it is backed by pigs, gold, diamonds, automobiles, capital equipment, real estate, and in some parts of the US, marijuana, cocaine, amphetamines. Money is already backed by everything that people find of value and are willing to part with for money.

These things are what is able to be purchased by the dollar, however
if that dollar is a worthless piece of paper that is not able to be traded in for anything of face value, would you still be able to purchase these things? How many more dollars are needed to buy or pay for the same goods and services compared to years past? It takes more of them because it is losing its value...Gold is gaining in value along with silver, platinum etc.

The money, whether gold coins, bank notes, or sea shells, is nothing but a tool. It's just an IOU that says someone, somewhere, owes you some stuff and if you walk around a lot, you might just find someone that will trade you some stuff for that money.

In a fiat money system, money is not backed by a physical commodity (i.e.: gold). Instead, the only thing that gives the money value is its relative scarcity and the faith placed in it by the people that use it.
A piece of commodity money – typically, a silver or gold coin – is itself payment because it contains a fixed weight of precious metal. But a unit of fiduciary money – typically, a bank or government-treasury note – is only a contingent and uncertain payment that depends upon the ability or the willingness of the issuer to redeem. And there always exists a temptation for issuers to renege on their promises to redeem.
And pretty soon the entity has trouble fulfilling its "promise" to pay
and has to resort to putting up its roads, parks, and land as backup payment when the purchaser or holder of the notes comes to collect..

Thus, fiduciary money always threatens to become fraudulent money. Not surprisingly, therefore, the history of fiduciary money has been more or less the history of monetary fraud, both economic and political.

Also, the danger of fraud in the issuance of fiduciary money becomes particularly acute in the case of modern “fractional-reserve banking”.

Under fractional-reserve banking, the bank always issues more units of fiduciary money, supposedly “payable on demand”, than it has units of commodity money available for redemption, counting on the unlikelihood that the majority of its customers will ever seek redemption at one time. Thus, modern fractional-reserve banking is inherently fraudulent, ...
For the bank simultaneously to fulfill all its promises to redeem its outstanding notes “on demand” is impossible.
The bank’s managers know that complete redemption “on demand” is impossible, and therefore that the bank’s promises to pay are false. And,
The bank’s customers, by and large, are ignorant of how the fractional-reserve scheme works, and the dangers it poses to them.
So I believe it is doomed to fail just like every other time…
What is the solution? To store your wealth in something that is not being rapidly devalued, such as gold or silver.
http://www.rapidtrends.com/what-does-fiat-money-mean/

In most cases, a fiat monetary system comes into existence as a result of excessive public debt. When the government is unable to repay all its debt in gold or silver, the temptation to remove physical backing rather than to default becomes irresistible.
History of Fiat Money

Now that isn't to say that I am not annoyed by having "an economy that is counting on dept to grow and function".

That the economy depends on this underlying process of growth in order to continue to function also has nothing to do with the extrinsic value of money. Money is just our best manner of representing growth.

In a fiat monetary system, there is no restrain on the amount of money that can be created. This allows unlimited credit creation. Initially, a rapid growth in the availability of credit is often mistaken for economic growth, as spending and business profits grow and frequently there is a rapid growth in equity prices. In the long run, however, the economy tends to suffer much more by the following contraction than it gained from the expansion in credit.
The problem has to do with whether people see opportunities for growth or see the need to consolidate.

What annoys me the most is that it appears as if there is no level of sustainability. If the economy isn't growing sufficiently, then it goes into recession. Like a deflationary spiral, it seems that the aggregate behavior can drive a recessionary spiral.

It is a pyramid scheme that has had to involve a "global economy" to force recruitment and continue it's growth.
The Smithsonian Agreement was passed pegging world currencies to the dollar rather than gold as a fixed exchange rate.

Without the money, the economy simply sucks, it just doesn't function effectively. Money is society's greatest tool, greatest invention. It makes the reallocation of scarce resources highly efficient. But that doesn't mean that with it there is a guarantee that the economy doesn't suck, it just sucks less often.

We need a system of money, but sound money backed up by something of historical value, not the word of a broke US government, and an agency at the helm of the printing press spitting out more and more paper, backed up by false "trust" and hope
Because a fiat money has no direct legal connection to a commodity money (in terms of redemption) and, therefore, no real economic cost to its production, the supply of a fiat money can never be self-limiting; and the value of a fiat money is always largely a matter of public confidence in the economic or political stability of the issuer.
Which is as close to nill as we've ever experienced lately.

And gold isn't going to fix it.

It worked pretty well throughout history. Have you noticed the mess this nation and the world is in since private banks have taken control of the monetary systems and its fractional reserve system of banking?
What we should do is allow a competing currency, and see how well that does, but the Fed and other private central banks will kill it and whoever tries to install one.
Basically they know the pyramid scheme with billions of people forced to be involved, will sustain itself during their lifetimes. When it explodes they're hoping they wont be around to experience it, and kick the can down the road.
Look around you do you not see this happening?

Historically every major fiat money have self-destructed in what is popularly called “hyperinflation” (that is, extreme decreases in purchasing-power) caused by either unlimited increases in the supply of that fiat money by the issuer or accelerating loss of public confidence in the continued value of the money or the economic or political fortunes of its issuer, or both.

Hyper-inflation is the terminal stage of any fiat currency. In hyper-inflation, money looses most of its value practically overnight. Hyper-inflation is often the result of increasing regular inflation to the point where all confidence in money is lost. In a fiat monetary system, the value of money is based on confidence, and once that confidence is gone, money irreversibly becomes worthless, regardless of its scarcity. Gold has replaced every fiat currency for the past 3000 years.
History of Fiat Money

And gold isn't going to fix it.

Staying the course definitely will not.

The problem with all modern reserve banking systems is that the moment the first bank note goes into circulation as the proceed of a loan at interest, more money is owed to the banks than actually exists.
Ten marbles have been put into the tin can, but the bankers see 11 marbles owed back to them. Sooner or later the non-existence of that eleventh marble will create a crisis of faith. People will stop believing in the religion called private central banking, and that crisis of faith will bring the system crashing down, as did the Temple of Baal in ancient times when the Syrians saw through the priests' trickery. This evil magic of creating money out of debt was a fraud all along, as fraudulent and silly as the idea that one can put ten marbles into a tin can, and take out eleven.
In ages to come economists will look back at this failed experiment in debt-based currency, and dump it into the same category of human folly as Tulip mania, The Nation of Poyais, Credit Mobilier, the Great South Seas Company, and Mortgage-Backed Securities.
If we don't blow the world up with nukes and cause our extinction first.

http://whatreallyhappened.com/WRHARTICLES/11thmarble.php

http://www.youtube.com/results?sear...3.9.0.4.4.0.112.932.3j6.9.0...0.0.zOoh_WKx5gw

 

[EdwardBaiamonte]

The problem with all modern reserve banking systems is that the moment the first bank note goes into circulation as the proceed of a loan at interest, more money is owed to the banks than actually exists.

this of course is not a problem at all since GDP is always rising and therefore you need more money to keep prices constant.

 

[Mr. Jones]

The problem with all modern reserve banking systems is that the moment the first bank note goes into circulation as the proceed of a loan at interest, more money is owed to the banks than actually exists.

this of course is not a problem at all since GDP is always rising and therefore you need more money to keep prices constant.

A lot depends on what makes GDP rise. The economy is so bad right now that the government is trying to raise GDP, IE:

Net exports are a relatively small part of GDP and have been stubbornly staying negative. While the net exports improved in 2009 to negative $386 billion from negative $710B in 2008, they worsened in 2010 to negative $516B.

The prospects for private investment are bleaker. A glut of houses still remains on the market so new home construction has rightfully slowed. Manufacturers are at 75% capacity utilization and their profit margins are being squeezed due to rising input costs and poorer customers, so they are less likely to invest in new equipment.

The prospects for consumer spending do not look good because Americans are deep in debt, have little savings, and the equity in their homes has vanished. The headline unemployment number is at 8.8% but U6 unemployment, which includes involuntary part-time workers and short-term discouraged workers, is closer to 16%. If we add long-term discouraged workers it’s above 20%

State and local governments are facing serious budget issues in the wake of decreased tax revenues and rising pension shortfalls. Many states have been force to cut expenses dramatically including laying off workers, and more cuts are likely to come.

That leaves the Federal Government as the only hope of growing GDP.
But government can only spend what it taxes, borrows or prints. Higher taxes would put downward pressure on an already fragile recovery and wouldn’t bring in much more revenue. Borrowing is becoming harder as our lenders realize that real interest rates are negative and that our debt is almost 100% of a GDP bubble. That leaves printing as the only means of growing government spending and thus nominal GDP.

If the Fed stops printing money at the end of QE2, the Federal Government will be forced to borrow at much higher rates which would devastate banks and homeowners with adjustable mortgages, or be forced to cut government spending, the last lifeline for GDP. Thus, the GDP must shrink, which means the stock market has nowhere to go but down. If the Fed continues to print money to keep real interest rates negative by buying up Treasuries, the GDP may rise nominally, but real GDP would fall in inflation adjusted terms and could even precipitate a collapse of the dollar.
Either way you have inflation by printing more money and devaluing the dollar.
It's a vicious circle, caused by an economy that is a ponzi scheme that requires debt and the measure of it, to grow...

If a government prints money faster than the growth of real output it reduces the value of money and this invariably causes inflation. Governments often resort to printing money when they cannot finance their borrowing by selling bonds. This hyperinflation can be extremely damaging to an economy.

It is bad all around and getting worse, and your partisan ass kissing is a failure to realize that the liberals or the so called conservatives have no answer that is going to be an easy and fluid fix.
Why do you think all the police state laws are being passed so quickly and without objection by your lawmakers? Hint..It isn't to protect your brainwashed ass from Alqaeda, its to keep people in line
when the SHTF and it all blows up.

Wise up and vote them the hell out and join the ranks of those that see this mess for what it really is, and help put someone with morals and values in charge to try to salvage this nation.

A Closer Look at the GDP (Hint: It

 

[EdwardBaiamonte]

The problem with all modern reserve banking systems is that the moment the first bank note goes into circulation as the proceed of a loan at interest, more money is owed to the banks than actually exists.

this of course is not a problem at all since GDP is always rising and therefore you need more money to keep prices constant.

A lot depends on what makes GDP rise. The economy is so bad right now that the government is trying to raise GDP, IE:

dear, you were not talking about right now!!! You made a general statement about reserve banking which was absurd. Why change the subject when you lose a debate? You said a reserve system means more is owed than exists. Yes, but so what given rising GDP and expansionary or contractionary monetary policy?

 

[starcraftzzz]

]It worked pretty well throughout history.

If by well you mean massive bouts of inflation/deflation depressions every ten years and longer recessions

Have you noticed the mess this nation and the world is in since private banks have taken control of the monetary systems and its fractional reserve system of banking?

Yep thank you republicans

 

[starcraftzzz]

If the Fed continues to print money to keep real interest rates negative by buying up Treasuries, the GDP may rise nominally, but real GDP would fall in inflation adjusted terms and could even precipitate a collapse of the dollar.

Actually more inflation would improve the economy. Higher inflation lowers debt burdens meaning more inflation would solve the consumer problem. Furthermore inflation would stimulate consumption.

It is bad all around and getting worse, and your partisan ass kissing is a failure to realize that the liberals or the so called conservatives have no answer that is going to be an easy and fluid fix.

Actually Liberals do have a easy fix, its called more government deficit spending

 

[EdwardBaiamonte]

]It worked pretty well throughout history.

If by well you mean massive bouts of inflation/deflation depressions every ten years and longer recessions

Have you noticed the mess this nation and the world is in since private banks have taken control of the monetary systems and its fractional reserve system of banking?

Yep thank you republicans

Actually the Federal Reserve is not a private bank. Its like talking to children.

 

[CrusaderFrank]

If the Fed continues to print money to keep real interest rates negative by buying up Treasuries, the GDP may rise nominally, but real GDP would fall in inflation adjusted terms and could even precipitate a collapse of the dollar.

Actually more inflation would improve the economy. Higher inflation lowers debt burdens meaning more inflation would solve the consumer problem. Furthermore inflation would stimulate consumption.

It is bad all around and getting worse, and your partisan ass kissing is a failure to realize that the liberals or the so called conservatives have no answer that is going to be an easy and fluid fix.

Actually Liberals do have a easy fix, its called more government deficit spending

What a totally ignorant fuckwad. You should get the Krugman Noble Prize for being Wrong in the Trillions Column

 

[starcraftzzz]

If the Fed continues to print money to keep real interest rates negative by buying up Treasuries, the GDP may rise nominally, but real GDP would fall in inflation adjusted terms and could even precipitate a collapse of the dollar.

Actually more inflation would improve the economy. Higher inflation lowers debt burdens meaning more inflation would solve the consumer problem. Furthermore inflation would stimulate consumption.

It is bad all around and getting worse, and your partisan ass kissing is a failure to realize that the liberals or the so called conservatives have no answer that is going to be an easy and fluid fix.

Actually Liberals do have a easy fix, its called more government deficit spending

What a totally ignorant fuckwad. You should get the Krugman Noble Prize for being Wrong in the Trillions Column

Yes stating reality is totally ignorant

 

[EdwardBaiamonte]

Actually more inflation would improve the economy.

perfectly stupid and liberal. If a little will improve it then a little more more will improve it further. At what point is it too much and how to you then deflate? Would libturds care since easy money and infinite welfare is their real goal, not fiscal responsibility? Does a libturd care if a dollar saved by a retired couple stays a dollar when libturds can take a few percent of it every year without them knowing? Theft is the perfect liberal con.

 

[starcraftzzz]

Actually more inflation would improve the economy.

perfectly stupid and liberal. If a little will improve it then a little more more will improve it further. At what point is it too much

Its not to much when lower debt loads aren't beneficial or when the price fluctuations get to large for companies to properly change prices to there real level

and how to you then deflate?

Deflation causes depressions so deflating would be stupid. I think the question you tried to ask but where to illiterate to do so was how do you stop inflation from spiraling out of control. The answer/solution is simple, you seem raise interest rates, cut spending and/or increase production.

Would libturds care since easy money and infinite welfare is their real goal, not fiscal responsibility?

So is it bad that our real goal is to have infinitely high living standards above some theological idea of being "responsible" . Europe is currently trying the "fiscal responsible" route and as a result they are in an economic depression

Does a libturd care if a dollar saved by a retired couple stays a dollar when libturds can take a few percent of it every year without them knowing? Theft is the perfect liberal con.

Investments make less money when they economy is in a recession or not growing.
The problem here is that all you do is say "libturd stupid" you are un able to actually state anything of intellectual value because you are a retard

 

[EdwardBaiamonte]

Actually more inflation would improve the economy.

perfectly stupid and liberal. If a little will improve it then a little more more will improve it further. At what point is it too much[ given libturds have alway wanted more easy more since Cross of Gold speech]

Its not much when lower debt loads aren't beneficial or when the price fluctuations get to large for companies to properly change prices to there real level

its???? what is "its" a pronoun needs a noun!!!

 

[EdwardBaiamonte]

Deflation causes depressions so deflating would be stupid.

actually the Fed cured the Carter inflation with deflation!! Sorry!!
Inflation causes mal-investment just as deflation does so neither is good. Therefore 0% inflation is the Republican target, while easy money has been the liberal policy since Cross of Gold Speech at least. Look it up

 

[EdwardBaiamonte]

So is it bad that our real goal is to have infinitely high living standards above some theological idea of being "responsible" .

too stupid and perfectly liberal. A higher standard of living comes from new inventions not libturd inflation!!!

 

[EdwardBaiamonte]

Europe is currently trying the "fiscal responsible" route and as a result they are in an economic depression

too stupid but perfectly liberal!! Europe is socialist so governments are deep in debt, spending huge % of GDP, and at best have cut rate of growth of tax and spend. This is not responsible at all!!
Germany is exception, has near balanced budgets, no mimimum wage and is urging Republican austerity on the remainder of Europe so Europe can be as prosperous as Germany!! And now another libturd knows his ABC's