The proof about Keynes at long last

[cbirch2]

Each solution leads to a less than desirable outcome. We can let the economy fall back into a recession while maintaing a balanced budget (because right now a balanced budget would mean recession), or we can spend more money on growth and go more into debt.

of course that is a perfect liberal lie. When the liberals stop spending like drunkin irresponsible whores we will stop digging ourselves into a deeper hole. When you are $15 trillion in debt you start to pay off the debt, you don't go deeper and deeper into debt to guarantee bankruptcy and collapse.

A child can understand this, just not a liberal.

So what happens when ron paul become president and cuts government spending by 1 trillion in a single year.

What happens???

Recession.

I would point you the simple equation for GDP and then you might feel different....

 

[cbirch2]

.

But the amount of debt doesnt matter one bit when it comes to how fiscal expansion effects the economic condition in the present. That is, if it doesnt raise interest on US debt. And in the US it wouldnt, because some institutions will always buy treasuries...always (see, bank of china).

What the liberal meant to say was that debt would not matter one tiny bit if you did not have to pay it all back!

Of course if irresponsible, idiotic, liberal debt caused growth our economy would be exploding past the sun right now!!

Id be very interested if you found a mechanism other than interest rates by which the federal debt effects the growth of businesses in the short term.

You'd be an economic revolutionary.

 

[CrusaderFrank]

.

But the amount of debt doesnt matter one bit when it comes to how fiscal expansion effects the economic condition in the present. That is, if it doesnt raise interest on US debt. And in the US it wouldnt, because some institutions will always buy treasuries...always (see, bank of china).

What the liberal meant to say was that debt would not matter one tiny bit if you did not have to pay it all back!

Of course if irresponsible, idiotic, liberal debt caused growth our economy would be exploding past the sun right now!!

Id be very interested if you found a mechanism other than interest rates by which the federal debt effects the growth of businesses in the short term.

You'd be an economic revolutionary.

Capital used to buy US Treasuries is capital that is not employed in the "private sector" (Look up the phrase)

 

[cbirch2]

What the liberal meant to say was that debt would not matter one tiny bit if you did not have to pay it all back!

Of course if irresponsible, idiotic, liberal debt caused growth our economy would be exploding past the sun right now!!

Id be very interested if you found a mechanism other than interest rates by which the federal debt effects the growth of businesses in the short term.

You'd be an economic revolutionary.

Capital used to buy US Treasuries is capital that is not employed in the "private sector" (Look up the phrase)

Do you have short term memory?

How many times do i have to disprove crowding out?

Your not even using the argument right. In actual economics crowding out happens when fiscal expansion raises interest rates.

The argument your using doesnt even really have merit. Treasury notes are an integral part of a lot of economic systems. China is always going to buy treasuries, its a main operation of its central bank. A similar thing can be said of our banks. Its money that banks want to sit on for a long time, rather than invest in something else. It doesnt generally crowd out investment, especially in a recession.

 

[CrusaderFrank]

Id be very interested if you found a mechanism other than interest rates by which the federal debt effects the growth of businesses in the short term.

You'd be an economic revolutionary.

Capital used to buy US Treasuries is capital that is not employed in the "private sector" (Look up the phrase)

Do you have short term memory?

How many times do i have to disprove crowding out?

Considering you've never once done it?

 

[cbirch2]

Capital used to buy US Treasuries is capital that is not employed in the "private sector" (Look up the phrase)

Do you have short term memory?

How many times do i have to disprove crowding out?

Considering you've never once done it?

Please go understand the nature of the treasury market.

An argument could be made that at full employment it crowds out investment, but even that is a matter of degree. A bank that buys a treasury note wants it to go to the safest asset possible, to shore up its balance sheet. Thats the opposite of lending out money.

 

[CrusaderFrank]

Do you have short term memory?

How many times do i have to disprove crowding out?

Considering you've never once done it?

Please go understand the nature of the treasury market.

An argument could be made that at full employment it crowds out investment, but even that is a matter of degree. A bank that buys a treasury note wants it to go to the safest asset possible, to shore up its balance sheet. Thats the opposite of lending out money.

So treasuries crowd out private sector investment.

Wow.

 

[cbirch2]

Considering you've never once done it?

Please go understand the nature of the treasury market.

An argument could be made that at full employment it crowds out investment, but even that is a matter of degree. A bank that buys a treasury note wants it to go to the safest asset possible, to shore up its balance sheet. Thats the opposite of lending out money.

So treasuries crowd out private sector investment.

Wow.

Dude what the fuck are you talking about?

People buying treasuries arent willing to buy anything else. They pay negative real interest rates.

Are you too dumb to get this?

 

[CrusaderFrank]

"...that buys a treasury note wants it to go to the safest asset possible, to shore up its balance sheet. Thats the opposite of lending out money."

Did someone hack your account?

Can you reread what you wrote?

Whoever wrote the above said that investing in treasuries is the "opposite of lending out money"

That's the definition of crowding out

 

[cbirch2]

"...that buys a treasury note wants it to go to the safest asset possible, to shore up its balance sheet. Thats the opposite of lending out money."

Did someone hack your account?

Can you reread what you wrote?

Whoever wrote the above said that investing in treasuries is the "opposite of lending out money"

That's the definition of crowding out

No.

A bank has to save some money. Any company or institution does.

So a bank is not saving some money, and then from the rest making investments including treasuries.

In reality, the treasuries are going to be included in how much the bank has saved. If a bank has $150 and saves $100, and then lends the other $50, this isnt changed if it buys treasuries $50 worth bills with some of that $100. It can still have $50 cash, $50 treasuries (plus interest), and lend the same $50.

 

[cbirch2]

The comparison even works on multiple other levels.

Imagine an individual has $10000 and just to simplify the scenario, he just keeps it all in cash originally. He wants to save $7000, and have $3000 left to spend. So he has $3000 to consume and invest.

GDP = consumption + investment + government spending + net exports.

If that person decides to take $4000 of that $7000 hes saved and buy treasury bonds, the amount of money he can spend on consumption and investment hasnt decreased. in fact hes taken $4000 he would have saved and given it to the government who can spend it on investment or consumption. Because treasury notes are one of the most liquid assets in the world, $4000 worth of cash saved is no different than $4000 worth of treasuries saved, and infact increases investment by taking money that would be saved, replacing it with a treasury note, and spending it.

Long run its fairly neutral, short run its undeniably effective

On a macro level that can be visualized through GDP. GDP is, again, consumption + investment + government spending + net exports. that $7000 in savings isnt going to either of those 4 categories (unless its held by banks who cant lend against it but thats more complicated, but then the same thing applied to the banks).

So treasuries replace savings, rather than replacing investment.

 

[CrusaderFrank]

"...that buys a treasury note wants it to go to the safest asset possible, to shore up its balance sheet. Thats the opposite of lending out money."

Did someone hack your account?

Can you reread what you wrote?

Whoever wrote the above said that investing in treasuries is the "opposite of lending out money"

That's the definition of crowding out

No.

A bank has to save some money. Any company or institution does.

So a bank is not saving some money, and then from the rest making investments including treasuries.

In reality, the treasuries are going to be included in how much the bank has saved. If a bank has $150 and saves $100, and then lends the other $50, this isnt changed if it buys treasuries $50 worth bills with some of that $100. It can still have $50 cash, $50 treasuries (plus interest), and lend the same $50.

Its not about banks, Dear. Its about how money invested in treasuries is money that does not go to private capital markets.

Surely, even you see that, right?

 

[cbirch2]

"...that buys a treasury note wants it to go to the safest asset possible, to shore up its balance sheet. Thats the opposite of lending out money."

Did someone hack your account?

Can you reread what you wrote?

Whoever wrote the above said that investing in treasuries is the "opposite of lending out money"

That's the definition of crowding out

No.

A bank has to save some money. Any company or institution does.

So a bank is not saving some money, and then from the rest making investments including treasuries.

In reality, the treasuries are going to be included in how much the bank has saved. If a bank has $150 and saves $100, and then lends the other $50, this isnt changed if it buys treasuries $50 worth bills with some of that $100. It can still have $50 cash, $50 treasuries (plus interest), and lend the same $50.

Its not about banks, Dear. Its about how money invested in treasuries is money that does not go to private capital markets.

Surely, even you see that, right?

How many more ways can i explain it to you?

Money used to buy treasuries is money that would otherwise be saved. If a bank has to have $1 billion in order to lend out $100 million, it can can split that $1 billion into $500 million cash and $500 million treasuries, and still lend out that same $100 dollars.

A person is the same way, it doesnt really matter the scale you look at it.

Because of the nature of the highly liquid treasury market treasuries are generally replacing money that would be saved, rather than replacing money that would be invested.

How dont you get this? Investing in treasuries that yield essentially 0% is no different than holding cash, other than the very slight hedge against inflation. When real interest rates are negative treasuries are not bought as an investment as they would be when yields are high, that would be a stupid investment. But rather there a way to stop the money youve saved from depreciating.

 

[CrusaderFrank]

No.

A bank has to save some money. Any company or institution does.

So a bank is not saving some money, and then from the rest making investments including treasuries.

In reality, the treasuries are going to be included in how much the bank has saved. If a bank has $150 and saves $100, and then lends the other $50, this isnt changed if it buys treasuries $50 worth bills with some of that $100. It can still have $50 cash, $50 treasuries (plus interest), and lend the same $50.

Its not about banks, Dear. Its about how money invested in treasuries is money that does not go to private capital markets.

Surely, even you see that, right?

How many more ways can i explain it to you?

Money used to buy treasuries is money that would otherwise be saved. If a bank has to have $1 billion in order to lend out $100 million, it can can split that $1 billion into $500 million cash and $500 million treasuries, and still lend out that same $100 dollars.

A person is the same way, it doesnt really matter the scale you look at it.

Treasuries are generally replacing money that would be saved, rather than replacing money that would be invested.

How dont you get this? Investing in treasuries that yield essentially 0% is no different than holding cash, other than the very slight hedge against inflation. When real interest rates are negative treasuries are not bought as an investment as they would be when yields are high, that would be a stupid investment. But rather there a way to stop the money youve saved from depreciating.

You played Russian roulette with a 155mm howitzer. Even people who aren't posing as financial literates like yourself, see that your very words

"...buys a treasury note...that's the opposite of lending out money."

Show that money invested in treasuries is defacto crowding out money that could go into private capital markets.

Did you not understand what you wrote?

 

[cbirch2]

Its not about banks, Dear. Its about how money invested in treasuries is money that does not go to private capital markets.

Surely, even you see that, right?

How many more ways can i explain it to you?

Money used to buy treasuries is money that would otherwise be saved. If a bank has to have $1 billion in order to lend out $100 million, it can can split that $1 billion into $500 million cash and $500 million treasuries, and still lend out that same $100 dollars.

A person is the same way, it doesnt really matter the scale you look at it.

Treasuries are generally replacing money that would be saved, rather than replacing money that would be invested.

How dont you get this? Investing in treasuries that yield essentially 0% is no different than holding cash, other than the very slight hedge against inflation. When real interest rates are negative treasuries are not bought as an investment as they would be when yields are high, that would be a stupid investment. But rather there a way to stop the money youve saved from depreciating.

You played Russian roulette with a 155mm howitzer. Even people who aren't posing as financial literates like yourself, see that your very words

"...buys a treasury note...that's the opposite of lending out money."

Show that money invested in treasuries is defacto crowding out money that could go into private capital markets.

Did you not understand what you wrote?

Do you understand what im saying?

Buying a treasury note has absolutely 0 effect on the amount of money a bank can lend because the treasury note is a liquid asset just as good as cash. How many more times do i have to explain this? A bank could lend against $1 million in treasuries just like it does with $1 million in cash.

 

[CrusaderFrank]

How many more ways can i explain it to you?

Money used to buy treasuries is money that would otherwise be saved. If a bank has to have $1 billion in order to lend out $100 million, it can can split that $1 billion into $500 million cash and $500 million treasuries, and still lend out that same $100 dollars.

A person is the same way, it doesnt really matter the scale you look at it.

Treasuries are generally replacing money that would be saved, rather than replacing money that would be invested.

How dont you get this? Investing in treasuries that yield essentially 0% is no different than holding cash, other than the very slight hedge against inflation. When real interest rates are negative treasuries are not bought as an investment as they would be when yields are high, that would be a stupid investment. But rather there a way to stop the money youve saved from depreciating.

You played Russian roulette with a 155mm howitzer. Even people who aren't posing as financial literates like yourself, see that your very words

"...buys a treasury note...that's the opposite of lending out money."

Show that money invested in treasuries is defacto crowding out money that could go into private capital markets.

Did you not understand what you wrote?

Do you understand what im saying?

Buying a treasury note has absolutely 0 effect on the amount of money a bank can lend because the treasury note is a liquid asset just as good as cash. How many more times do i have to explain this? A bank could lend against $1 million in treasuries just like it does with $1 million in cash.

You're trying to save face by limiting your vast trillion dollar error to "banks" but it's better to cut your losses and move on

 

[EdwardBaiamonte]

Id be very interested if you found a mechanism other than interest rates by which the federal debt effects the growth of businesses in the short term.

You'd be an economic revolutionary.

As a liberal you lose every argument, but as a liberal you also lack the ability to learn from the experience.

If we had the Republican Jeffersonian Balanced Budget Amendment that Jefferson and Republicans have wanted for 200 years there would be no Federal debt. The Chinese and Japanese then would have to buy our goods and services rather than our debt. This would effect the growth of business in America.

 

[EdwardBaiamonte]

Do you understand what im saying?

sure you're saying more pure liberal gibberish.

Buying a treasury note has absolutely 0 effect on the amount of money a bank can lend because the treasury note is a liquid asset just as good as cash. How many more times do i have to explain this? A bank could lend against $1 million in treasuries just like it does with $1 million in cash.

•Risk-weighted assets reduce the amount of certain assets designated to be low risk, such as U.S. Treasury securities, other types of government bonds, and residential real estate loans.

Under Basel 1, Tier 2 capital requiremnts put Treasuries in a category with residential real estate, not cash!

 

[cbirch2]

Id be very interested if you found a mechanism other than interest rates by which the federal debt effects the growth of businesses in the short term.

You'd be an economic revolutionary.

As a liberal you lose every argument, but as a liberal you also lack the ability to learn from the experience.

If we had the Republican Jeffersonian Balanced Budget Amendment that Jefferson and Republicans have wanted for 200 years there would be no Federal debt. The Chinese and Japanese then would have to buy our goods and services rather than our debt. This would effect the growth of business in America.

Ok so lets go with ron pauls plan and cut $1 trillion from the budget in a single year.

What do you think will happen after that genius?

 

[cbirch2]

You played Russian roulette with a 155mm howitzer. Even people who aren't posing as financial literates like yourself, see that your very words

"...buys a treasury note...that's the opposite of lending out money."

Show that money invested in treasuries is defacto crowding out money that could go into private capital markets.

Did you not understand what you wrote?

Do you understand what im saying?

Buying a treasury note has absolutely 0 effect on the amount of money a bank can lend because the treasury note is a liquid asset just as good as cash. How many more times do i have to explain this? A bank could lend against $1 million in treasuries just like it does with $1 million in cash.

You're trying to save face by limiting your vast trillion dollar error to "banks" but it's better to cut your losses and move on

When real interest rates are negative

treasuries arent the best investment, and usually arent bought as such.