86M Workers Sustain 148M Benefit Takers

[soccerballtux]

at the end of the day the only money making the system go round is fresh cash spent by he government. What's the next economic pickup going to be fueled by? the middle class is tapped. The only way things will pick up is with fresh business loans...granted for what reason? On what technology? Selling to what middle class? Too risky. Safer to sit on the cash earning interest from the Fed.

 

[werepossum]

at the end of the day the only money making the system go round is fresh cash spent by he government. What's the next economic pickup going to be fueled by? the middle class is tapped. The only way things will pick up is with fresh business loans...granted for what reason? On what technology? Selling to what middle class? Too risky. Safer to sit on the cash earning interest from the Fed.

That's the problem in a nutshell. There are few manufacturing ventures which are not much safer and more profitable in done in foreign countries with lower labor rates and lower tax and regulatory burdens. If we raised our tax revenue on import tariffs, that would not be the case, or at least not to nearly the same degree.

Of course, the corollary to that is that it would be hardest on poor people - although there wouldn't be as many poor people.

 

[Matt1970]

Also from your own tax foundation link: "the Top 1 Percent Paid 35 Percent of All Income Taxes in 2011"

That is totally irrelevant to Jhhnn. It's the rate the enrages him. They don't care that we are progressively shifting the tax burden to them.

 

[Texashiker]

at the end of the day the only money making the system go round is fresh cash spent by he government. What's the next economic pickup going to be fueled by? the middle class is tapped. The only way things will pick up is with fresh business loans...granted for what reason? On what technology? Selling to what middle class? Too risky. Safer to sit on the cash earning interest from the Fed.

Yep, pretty much.

We have the tech fields that are creating jobs, but tech companies are complaining they can not find the talent so companies want to import workers. We develop the technology here, then send it to china to be made. Why not just cut out the middle man, import tech workers straight to china and remove the US from the equation

If companies can not find talent, what are colleges teaching kids? What is India doing that we are not that companies need to import workers?

We need job that are going to support the middle class. Without those jobs there will be no recovery.

The only solution as of right now is to continue to print money and then dump that money into the economy. Printing money is not a long term solution. Germany tried printing money in the 1920s and 1930s, and we all know how that ended.

Sooner or later nations are going to lose faith in the dollar and our failed economic policy. I look for China to become a world economic leader.

If the US is having to print money now, what is going to happen when the number of baby boomers spikes? Then comes Gen X in 15 - 20 years? Just when Gen X starts to retire is when baby boomers are going to be needing long term and very expensive health care.

I honestly think the worst is still a long way off, as in another 15 - 20 years off. Where is the money going to come from for Gen x to retire and baby boomers long term health care?

 

[Jhhnn]

That is totally irrelevant to Jhhnn. It's the rate the enrages him. They don't care that we are progressively shifting the tax burden to them.

Gawd. How are America's most affluent burdened by lower tax rates & much higher share of national income than 35 years ago? How does that compare to the burden of radically reduced income share and regressive consumption taxes that strongly affect median families?

Income tax burden follows income, until we get to the tippytop of the heap, where it simply falls away to the rates that Mitt pays.

Taxes are sacrifice for the common good. That sacrifice is significant at median income levels, because it affects lifestyle rather strongly. It doesn't really matter what form those taxes take, because they all cut into the bottom line just the same.

I've asked the question many times, but the usual shallow thinkers manage to rave around it- What's the difference in lifestyle paying 15% or 50% on incomes measured in tens or hundreds of millions? Billions?

I suggest that there is none. Really. The difference doesn't lie there, but rather somewhere else, in the power relationships of society, the power to run the lives of many, many other people. That's the entire point of enormous wealth, which is really very much at odds with egalitarian democracy in a constitutional republic. It's increasingly at odds with the idea of meritocracy, as well, given that it's heritable & fundamentally oligarchical, conveying enormous advantage to people who haven't earned them at all.

 

[ElFenix]

Yes, the Social Security fund increased massively in Reagan's time in office, because the damned economy was booming.

so he should have lowered the rates back down a bit. SS should never have built up the 'trust fund.'

Where is the money coming from for the QE?

the banks. QE is an asset swap and adds nothing to the money supply.

 

[werepossum]

so he should have lowered the rates back down a bit. SS should never have built up the 'trust fund.'

the banks. QE is an asset swap and adds nothing to the money supply.

Again, look back at the seven year period of losses. Everyone agreed at that time that the Social Security trust fund was quite under-funded.

 

[TurtleCrusher]

This isn't right. Hardworking people are being forced to subsidize others is just wrong. There needs to be some real cuts to the welfare and entitlement programs.

What do you say for the vast majority who paid into the system? Do you actually consider SS an entitlement?

Proof that he's a bot. He never responds to logic.

 

[BoberFett]

the banks. QE is an asset swap and adds nothing to the money supply.

Simply untrue.

 

[Attic]

so he should have lowered the rates back down a bit. SS should never have built up the 'trust fund.'




the banks. QE is an asset swap and adds nothing to the money supply.

Perhaps chicken and the egg depending on viewpoint, but the banks are not allowing for QE, the infinite pool of money the Fed has on tap allows for and is critical to QE. The asset swap involves the creation of money out of thin air by the Fed to swap for debt.

An asset swap is the best way to describe what the Fed is doing in QE, but the creation of money out of thin air is somewhat critical to how they are able to adjust the composition of the money supply in the economy.

The Fed is really just changing the composition of the money supply, but this is done at least in part to increase bank lending which does increase money supply. The Fed's got a quite clear goal to increase money supply, even if not done so directly, by creating money out of thin air with which it swaps in that money for debt.

More off tangent, but in a system where the beast was running out of fuel for which to attack it's prey, QE basically gave steroids to the beast so that it can live a bit longer. Big banks are extremely predatory through the use levying debt in creative and destructive ways onto citizens in this country.

 

[Knowing]

That link a hogwash, because reserves are not loanable funds, by definition.

I don't think you read the article, because it was clearly talking about excess reserves. From wikipedia:

In banking, excess reserves are bank reserves in excess of a reserve requirement set by a central bank. They are reserves of cash more than the required amounts.http://en.wikipedia.org/wiki/Excess_reserves#cite_note-1

Look at this graph, isn't it cool how they skyrocket from 0? Nifty how that happens when you're paid to sit on money at 0 risk.

So if excess reserves are sitting at > 1 trillion dollars and total US M2 money supply is around 11 trillion, then roughly 10% of our money is sitting outside the real economy and banksters are the only ones earning interest on it. Granted, that might be better than the inflation that would probably result if it were dumped on the market.

The rest of your reply suffers from similar misconceptions & distortions, apparently induced by more of the same sort of propaganda.

The rest of my post is also backed up with graphs and links from government or other legitimate sources so of course you'll dismiss it out of hand. If you had any desire to be consistent or find facts you could corroborate them easily.

Tell me that story about how you care about wealth inequality again, I need a laugh after taking another look at what a sad state we're in.

 

[Texashiker]

Look at this graph, isn't it cool how they skyrocket from 0? Nifty how that happens when you're paid to sit on money at 0 risk.

So if excess reserves are sitting at > 1 trillion dollars and total US M2 money supply is around 11 trillion, then roughly 10% of our money is sitting outside the real economy and banksters are the only ones earning interest on it. Granted, that might be better than the inflation that would probably result if it were dumped on the market.

Makes me wonder if the banks are stockpiling cash and the federal reserve is buying mortgages for a specific reason. Why does the fed need to own so much money? Seems to me like a land grab from the great depression.

• Print money out of thin air.
  
• Loan money so people can buy a home. In reality that money is going to speculators buying up family homes to turn into rental property.

I wonder how much money the fed is loaning the banks truly makes it out to the public? $85 billion a month for 2+ years is a lot of money. If that money had been given to the states for construction projects, the economy wold be fixed overnight.

The first bailout in 2008 was not enough? Nor all of the other bailouts?

It seems to me the economy is much worse than the government is letting on.

 

[ElFenix]

Perhaps chicken and the egg depending on viewpoint, but the banks are not allowing for QE, the infinite pool of money the Fed has on tap allows for and is critical to QE. The asset swap involves the creation of money out of thin air by the Fed to swap for debt.

An asset swap is the best way to describe what the Fed is doing in QE, but the creation of money out of thin air is somewhat critical to how they are able to adjust the composition of the money supply in the economy.

The Fed is really just changing the composition of the money supply, but this is done at least in part to increase bank lending which does increase money supply. The Fed's got a quite clear goal to increase money supply, even if not done so directly, by creating money out of thin air with which it swaps in that money for debt.

additional lending could happen, but it didn't.

heck, M3 contracted.

see here:
http://pragcap.com/the-exploding-u-s-money-supply-myth

Makes me wonder if the banks are stockpiling cash and the federal reserve is buying mortgages for a specific reason. Why does the fed need to own so much money? Seems to me like a land grab from the great depression.

for the specific reason of getting toxic assets off the banks' balance sheets. eventually those houses in phoenix are going to be worth something again, and the fed can get rid of the mortgages. meanwhile, the banks can recover from the balance sheet recession they got themselves into. they should probably all be drawn and quartered, but that's a different discussion.

 

[Jaskalas]

But if you agree with me so far, then something radical has to be done.

Part2...

Labor is losing value. Be it from a global market racing to the bottom, where the cheapest labor finds employment, or from automation and advances in technology eliminating jobs... We face a growing legion of poor and unemployed, and I'm working under the assumption that this crisis is only going to get worse as the years pass. I'm assuming our need for Welfare is growing, while our capacity to afford it is decreasing.

Temporarily inflating our capacity through bubbles is not a solution.

So what can we do? I do not believe Capitalism is suited for Welfare. There is no Capitalistic value to these people who are without quality labor, these poor who cannot stand on their own. If we merely claim that a Capitalist based system will provide for them, we will fail in our duty.

I look at the problem before us and find that it lends itself as a solution. Contrary to the simple answer that more is better, I hope that we will discover that less is better. Not for Capitalism, but for Welfare. That you can afford to provide for the poor IF the value of labor has crashed and the price of essential items is floored. Perhaps even free someday.

I'm talking about an economy of abundance where our policies do everything possible to take advantage of cheap labor and floods the market with essential goods. I want the total GDP value of providing Welfare to crash. I want it to become affordable.

In this radical solution Welfare and Capitalism are divorced from each other. Two separate economic systems coexisting, one designed to provide for people without value, another designed to milk them for all their worth.

Clearly such a thing would take a massive chunk of Capital out of the market, but so too would the ruin of our current pyramid schemes, which are destined to fail us one day. If we do not move mountains before the poor hit our streets, then I fear for us all. It is our duty to them, and to our Republic, to find a way of addressing Welfare.

The current economic model is not suited for the task of dropping its value into those without value. So let us find a way to do that without higher prices, without inflation, and without Capitalism involved.

It's time to write a new chapter in the history of economics.

 

[Texashiker]

for the specific reason of getting toxic assets off the banks' balance sheets.

I think there is more to it than just that.

For over 2 years the fed has been dumping either $40 or $45 billion into mortgage backed securities.

Lets use 24 months, but it has been longer than that. And lets use $40 billion because I do not want to look it up.

That is $960 billion the fed has dumped into mortgage backed securities in 2 years. I think it is safe to say over 1 trillion has been given to backs in this swap cash for mortgages.

Banks across the nation had over $1 trillion in bad assets? Holy crap, that is outrageous. What happened to our economy that the banks needed over $1 trillion + the 2008 bailout?

Something in our economy has gone seriously wrong.

Last week there was news the QE is not going to end. There is no recovery in sight, democrats have been instructed not to even say the "R" word in their 2014 mid-term election campaign.

What is the long term outlook? Just keep printing money until the federal reserve owns all the mortgages in the nation? Then what?

Who needs to turn to socialism when the government is buying everything?

Isn't one of the key parts of socialism and communism the government owns everything? Who needs a revolution when the federal reserve will just print enough money for the government to buy the nation?

 

[BoberFett]

Jaskalas,

That's exactly the kind of outside the box thinking that needs to be done, but the right is stuck on preserving the puritanical value of work, while the left has no solution but the continually failed "solution" of increased government spending.

Unfortunately both ideas are destined for failure, and we'll find ourselves forced into a new paradigm eventually, but not without a lot of pain.

 

[Incorruptible]

Proof that he's a bot. He never responds to logic.

Not a bot. I rarely post on the weekend and sometimes I am really busy at work and can't post.

I have been in favor of abolishing these systems AND ensuring the people who paid into the system get their money back.

 

[Jhhnn]

Jaskalas,

That's exactly the kind of outside the box thinking that needs to be done, but the right is stuck on preserving the puritanical value of work, while the left has no solution but the continually failed "solution" of increased government spending.

Unfortunately both ideas are destined for failure, and we'll find ourselves forced into a new paradigm eventually, but not without a lot of pain.

Neither one of you are really thinking outside the box, at all.

You define increased spending as failed when it seemed to work just fine through the Reagan/Bush years, at least according to the pundits of the Right at the time. Debt exploded under their tenures. You attribute that sort of spending exclusively to the "Left", which is obviously not true. It's counter-factual. Repubs have been big spenders in pursuit of their militaristic Neocon ambitions. Big tax cutters, too.

I certainly hope that the new paradigm you suggest hews a little closer to reality than the one you present.

 

[Jaskalas]

You define increased spending as failed when it seemed to work just fine through the Reagan/Bush years, at least according to the pundits of the Right at the time. Debt exploded under their tenures.

Reagan enjoyed something unique. Women were still entering the workforce. So although men were losing the value of their labor and could no longer single handedly support their families, many households were benefiting from twice the labor.

Low and behold, a few decades have passed and now not even couples working together can afford to live. The value of labor continues to decline and we've run out of spouses to sacrifice.

Unless you legalize polygamy tomorrow the farce of our economy is quickly coming to an end.

 

[Jaskalas]

Jaskalas,

That's exactly the kind of outside the box thinking that needs to be done, but the right is stuck on preserving the puritanical value of work, while the left has no solution but the continually failed "solution" of increased government spending.

Unfortunately both ideas are destined for failure, and we'll find ourselves forced into a new paradigm eventually, but not without a lot of pain.

It hit me like a ton of bricks back in Jan or Feb when I worked up the issue at hand, and how it could be used to our benefit. Yet, it wasn't until my recent post that I worked out enough details to formally recognize what I've got.

Apparently I've out-Communist the Communists because instead of wanting to attack or smash Capitalism from the top down, I simply want to give it a nudge and let a new Welfare economy suffer those without Capitalistic value. Never before had I imagined a scenario where two economic systems could co-exist and benefit one another.

Anyone who wants more out of life and finds gainful employment could still enjoy the fruits of their labor. Complete with the success of making it and affording expensive toys. The rest of us however, should be embracing cheap labor and the benefits of low cost living.

I just don't see any other way of positively dealing with the trends we face.

 

[BoberFett]

HURRRRRR!!!!

That's what I thought.

 

[Jhhnn]

That's what I thought.

You certainly weren't thinking when you tried to label "the Left" as the big spenders, when Repubs have been the biggest spenders of all. What did we get for our money other than oodles of cold war military hardware, a very muscular "national security" intelligence apparatus, Iraq, and Afghanistan?

Outside the box, you said? How do you get there when denial mechanisms lock you in?

 

[BoberFett]

You certainly weren't thinking when you tried to label "the Left" as the big spenders, when Repubs have been the biggest spenders of all. What did we get for our money other than oodles of cold war military hardware, a very muscular "national security" intelligence apparatus, Iraq, and Afghanistan?

As long as you're making stupid shit up, why not pin the JFK assassination on me too?

Outside the box, you said? How do you get there when denial mechanisms lock you in?

Just more stupid shit, based on the other stupid shit that pours from your mouth. Please, find me a quote where I defend Republican spending, or even claimed that Republicans weren't spenders.

I'll be waiting, douchebag.

...

...

...

While I'm waiting for this douchebag to find some evidence of the stupid shit he pulled from his ass...


Republicans don't spend money thinking it will end up in the pockets of anyone but their connected buddies. Democrats are stupid enough to believe their own lies about increased government spending trickling down.

Both sides are idiots who continue to play the game the same way they always have, thinking somehow their side will eventually win.

Out of the box thinking is when you consider driving the cost of goods down to nothing as Jaskalas posited, rather than constantly trying to constantly fight the inevitable.

Automation will continue. You can't stop progress now matter how many wooden shoes you and your fellow Luddite "liberals" fling. Rather than fight progress, why not embrace it and figure how to take advantage of a future where economies are no longer based on phony scarcity. Low or no cost renewable or nuclear energy is only the beginning.

 

[soccerballtux]

That's the problem in a nutshell. There are few manufacturing ventures which are not much safer and more profitable in done in foreign countries with lower labor rates and lower tax and regulatory burdens. If we raised our tax revenue on import tariffs, that would not be the case, or at least not to nearly the same degree.

Of course, the corollary to that is that it would be hardest on poor people - although there wouldn't be as many poor people.

At least Walmart is investing 10 billion dollars or 80 billion dollars or whatever it is she in bringing manufacturing back to the United States. But yes, import tariffs would do wonders for us long term. But it would take people off welfare and unemployment so the democrats don't want it, and it would kill corp profits so republicans don't want it.

 

[soccerballtux]

Yep, pretty much.

We have the tech fields that are creating jobs, but tech companies are complaining they can not find the talent so companies want to import workers. We develop the technology here, then send it to china to be made. Why not just cut out the middle man, import tech workers straight to china and remove the US from the equation

If companies can not find talent, what are colleges teaching kids? What is India doing that we are not that companies need to import workers?

We need job that are going to support the middle class. Without those jobs there will be no recovery.

The only solution as of right now is to continue to print money and then dump that money into the economy. Printing money is not a long term solution. Germany tried printing money in the 1920s and 1930s, and we all know how that ended.

Sooner or later nations are going to lose faith in the dollar and our failed economic policy. I look for China to become a world economic leader.

If the US is having to print money now, what is going to happen when the number of baby boomers spikes? Then comes Gen X in 15 - 20 years? Just when Gen X starts to retire is when baby boomers are going to be needing long term and very expensive health care.

I honestly think the worst is still a long way off, as in another 15 - 20 years off. Where is the money going to come from for Gen x to retire and baby boomers long term health care?

China has enough of their own problems to worry about. More than we do to be honest. Read some of Michael Pettis' blog he covers Chinese affairs in depth.

I think we're all headed down the same road together. The dollar is and will remain to large to leave, but will continue to be printed indefinitely. Technically, as long as everyone is on board, we can maintain stability no matter the debt level.