More demand is not the whole answer

[DSGE]

you miss the whole point, supply creates its own demand

Tell that to the Great Depression.

dear, supply does not create its own demand at all times in all situations

Yes. That's the point. We're claiming that this recession is one of those times, as we've had the largest fall in nominal income since the Great Depression.

 

[EdwardBaiamonte]

Tell that to the Great Depression.

dear, supply does not create its own demand at all times in all situations

Yes. That's the point. We're claiming that this recession is one of those times, as we've had the largest fall in nominal income since the Great Depression.

and would you rather have RGDP growth thanks to common sense Republican supply side structural changes in our economy or a fake temporary bubble thanks to QE3-5

 

[DSGE]

dear, supply does not create its own demand at all times in all situations

Yes. That's the point. We're claiming that this recession is one of those times, as we've had the largest fall in nominal income since the Great Depression.

and would you rather have RGDP growth thanks to common sense Republican supply side structural changes in our economy or a fake temporary bubble thanks to QE3-5

I'd rather deal with the tightest monetary policy since the Depression first to restore growth and employment to trend; then I'd like to implement structural changes to make long term growth faster.

 

[EdwardBaiamonte]

I'd rather deal with the tightest monetary policy since the Depression first to restore growth

its not growth its a bubble when government paper shuffling causes it. Moreover, there is no comparision with the Great Depression when banks failed and people lost their money. Then all you had to do was give them back their money.

Now, you have to restore the housing market by letting it bottom out, which BO wont do.

 

[DSGE]

I'd rather deal with the tightest monetary policy since the Depression first to restore growth

its not growth its a bubble when government paper shuffling causes it. Moreover, there is no comparision with the Great Depression when banks failed and people lost their money. Then all you had to do was give them back their money.

The comparison is the failure of monetary policy to prevent nominal income from falling. In the Depression they let the money supply actually collapse; in this case they've failed to offset a collapse in velocity.

People have lost their incomes, isn't the solution to give their incomes back?

Now, you have to restore the housing market by letting it bottom out, which BO wont do.

You have to make sure NGDP stays on target, and that's it. Let relative prices adjust through market forces.

 

[Widdekind]

The comparison is the failure of monetary policy to prevent nominal income from falling. In the Depression they let the money supply actually collapse; in this case they've failed to offset a collapse in velocity.

low interest-rates mean banks aren't paying people to keep their money in deposits; and banks are making credit "cheap" for borrowers to take out loans & spend. Yet, dis-incentivizing saving; and incentivizing borrowing-and-spending; has not thwarted a fall in velocity (rate of spending) ? Perhaps people expect deflation (so that real interest-rates are positive), or perhaps people are paying down pre-existing debts (and their creditors, whom they pay back, cannot on-lend) ?

 

[Rshermr]

Increased demand is obviously necessary;

why would you say that when increased supply is obviously necessary?????

Stupid, ed. Really stupid.

So, the economy is bad. People are unemployed. And people are not spending at the level that they need to go get the economy moving.

So, what supplier is going to increase supply when he can not sell what he has???
Are you trying to say that by increasing supply, people will, for some reason, want to buy more?
Again, for the 13th time. show me a time, when the economy is poor, that increasing supply has worked. As I have told you, there are times it has been tried, but it has never worked.

Increased supply, or supply side economics, or reaganomics, or what ever you would like to call it, simply makes wealth more wealthy by decreasing their taxes. But it does not stimulate the economyy.

So, come on, someone, lets see where increasing supply (by, of course, decreasing federal income taxes, has stimulated a poor us economy?? Can't do it rationally, can you.

 

[Rshermr]

NGDP level targeting.

This is essentially a stupid liberal concept since an economy progresses from the stone age to here because of supply side innovations, not demand side communist manipulation. The USSR didn't work out too well did it?

Brilliant, ed. No proof again.

 

[itfitzme]

you miss the whole point, supply creates its own demand

Tell that to the Great Depression.

dear, supply does not create its own demand at all times in all situations

 

[uscitizen]

Naah we can't keep on handing out money to keep the economy going.
However moving jobs offshore and lowering the avg wages do not increase demand either.

The only way the economy has grown in recent years is thru govt spending and raising the prices for necessities we already buy.

 

[EdwardBaiamonte]

NGDP level targeting.

This is essentially a stupid liberal concept since an economy progresses from the stone age to here because of supply side innovations, not demand side communist manipulation. The USSR didn't work out too well did it?

Brilliant, ed. No proof again.

if you cant understand the subject how could you understand the proof????

 

[EdwardBaiamonte]

People have lost their incomes, isn't the solution to give their incomes back?

no no no!!! its one thing to give someone back his money that he lost in a money center bank through FDIC insurance and through no real fault of his own in order to restore or maintain his income or economic activity. That restores or maintains RGDP, but just creating artificial liberal velocity for everyone just creates a bubble and inflation that further distorts the free market.

the problem to fix is 1) the housing market, 2) china!!!


you have an obsession with monetary policy that you should have treated

You have to make sure NGDP stays on target, and that's it. Let relative prices adjust through market forces.

dear, GDP cant be on target with the housing market missing in action, China taking more and more jobs, unions bankrupting our cities and states, millions of Mexicans taking our jobs, and corporate taxes pushing companies jobs and profits off shore. You want to create another bubble but don't know it.

 

[DSGE]

People have lost their incomes, isn't the solution to give their incomes back?

no no no!!! its one thing to give someone back his money that he lost in a money center bank through FDIC insurance and through no real fault of his own in order to restore or maintain his income or economic activity. That restores or maintains RGDP, but just creating artificial liberal velocity for everyone just creates a bubble and inflation that further distorts the free market.

the problem to fix is 1) the housing market, 2) china!!!

Hahahahahahahah. Oh my god. So correcting tight money "distorts the free market", but instituting federal deposit insurance creating moral hazard for banks doesn't?

And you're still not making sense. The Fed didn't expand money in the Depression to pay for FDIC. FDIC is payed for through taxation, not newly created money. You still haven't explained why it's okay for the Fed to expand money to stop falling nominal income in the Depression, but it's not okay now.

you have an obsession with monetary policy that you should have treated

Well in the US the problems are mostly monetary. In Australia, where we have semi-competent monetary policy, I'm all about structural reforms.

dear, GDP cant be on target with the housing market missing in action, China taking more and more jobs, unions bankrupting our cities and states, millions of Mexicans taking our jobs, and corporate taxes pushing companies jobs and profits off shore. You want to create another bubble but don't know it.

Yep, this shows you've had absolutely no education in economics. We were going good there for a while, but if you're gonna revert back to this retardese, I'm gonna revert back to ignoring it.

 

[EdwardBaiamonte]

Hahahahahahahah. Oh my god. So correcting tight money "distorts the free market", but instituting federal deposit insurance creating moral hazard for banks doesn't?

1) the banks have suffered plenty for their behavior 2) FDIC creates some moral hazard for big banks but is 100% necessary and obvious for small customers who did nothing really although a little punishment for trusting big banks is in order.

2) tight money is when you cant get your money( Great Depression) or the money you need to borrow, not when you cant get money you don't need because you cant pay it back. Fix the economy then people will need to borrow because they can pay the money back!!

 

[EdwardBaiamonte]

Well in the US the problems are mostly monetary.

the housing crisis is a monetary crisis? China? Unions? 15 million Mexicans? Corporate taxes?? $8000 per capita on health??. What on earth are you talking about. You have a Nazi like zeal for the Fed!!

 

[EdwardBaiamonte]

dear, GDP cant be on target with the housing market missing in action, China taking more and more jobs, unions bankrupting our cities and states, millions of Mexicans taking our jobs, and corporate taxes pushing companies jobs and profits off shore. You want to create another bubble but don't know it.[/quote]

Yep, this shows you've had absolutely no education in economics. We were going good there for a while, but if you're gonna revert back to this retardese, I'm gonna revert back to ignoring it.

well thats good to know. If an earthquake takes out half of America well just use a little NGDP targeting!! You believe in magic but lack the IQ to know it, but its due to age so don't let it get you down.

 

[DSGE]

Hahahahahahahah. Oh my god. So correcting tight money "distorts the free market", but instituting federal deposit insurance creating moral hazard for banks doesn't?

FDIC creates some moral hazard for big banks but is 100% necessary and obvious for small customers who did nothing really

How perfectly liberal and stupid.

tight money is when you cant get your money( Great Depression) or the money you need to borrow, not when you cant get money you don't need because you cant pay it back. Fix the economy then people will need to borrow because they can pay the money back!!

Tight money is when the nominal supply of money is lower than the nominal demand for money resulting in a downward adjustment in nominal income.

 

[EdwardBaiamonte]

Hahahahahahahah. Oh my god. So correcting tight money "distorts the free market", but instituting federal deposit insurance creating moral hazard for banks doesn't?

FDIC creates some moral hazard for big banks but is 100% necessary and obvious for small customers who did nothing really [/QUOTE]

How perfectly liberal and stupid.

so a money center bank that goes bust from selling MBS is the same as a retired school teacher who goes bust from saving in that bank??

 

[EdwardBaiamonte]

Tight money is when the nominal supply of money is lower than the nominal demand for money resulting in a downward adjustment in nominal income.

oh wow it sounds like you got an A+ in your HS business economics course. Tight money can have many causes. Creating velocity to correct the housing crisis does not correct the housing crisis it merely distorts the entire economy further.

 

[DSGE]

Tight money is when the nominal supply of money is lower than the nominal demand for money resulting in a downward adjustment in nominal income.

oh wow it sounds like you got an A+ in your HS business economics course.

Sounds like you got an F if you think monetary theory is "business economics".

Tight money can have many causes. Creating velocity to correct the housing crisis does not correct the housing crisis it merely distorts the entire economy further.

Right, just like how expanding the money supply to correct the 1929 stock bubble would have merely distorted the economy further?