There is no cost. Borrowing $700 billion and handing it to people will cause inflation. Borrowing $700 billion at x% and buying assets that yield x+alpha% does not.
First
Lifer
- Jun 3, 2002
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bamacre, your nonsense has already been debunked before.
For one, providing a link to arguments you don't understand is no replacement for coming up with your own arguments. Rockwell, as usual, gets it wrong, and you couldn't point out otherwise, so your Lew Rockwell link then becomes irrelevant if you can't explain it.
Secondly, we agree with the GAO, long-term this sort of spending isn't sustainable. However, as halik pointed out and as the numbers clearly bear out, we will still quite easily be able to pay for all future entitlements as they stand today by modestly reducing spending. We know we'll likely have a population of 350M-400M people in the coming decades, and that alone is plenty of extra tax revenue to help fund these entitlements (which I didn't agree with in the first place, but they're there nonetheless).
And finally, Austrian economics has been widely debunked and mocked by economists the world round. They were mostly debunked based on their complete lack of quantitative substance and lack of empirical study, specifically by Milton Friedman, Paul Samuelson, and Paul Krugman. Quotes:
"The Hayek-Mises explanation of the business cycle is contradicted by the evidence. It is, I believe, false." - Milton Friedman
"I tremble for the reputation of my subject" after reading the "exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods]." - Paul Samuelson
When you're dismissed by Friedman and Samuelson, you're just not taken seriously, and it's precisely why Austrians won't be taken seriously until they learn to use econometric models. You dismiss mathematics and empirical study for economics, and this dooms your beliefs to not be taken seriously by anyone of any significance.
For one, providing a link to arguments you don't understand is no replacement for coming up with your own arguments. Rockwell, as usual, gets it wrong, and you couldn't point out otherwise, so your Lew Rockwell link then becomes irrelevant if you can't explain it.
Secondly, we agree with the GAO, long-term this sort of spending isn't sustainable. However, as halik pointed out and as the numbers clearly bear out, we will still quite easily be able to pay for all future entitlements as they stand today by modestly reducing spending. We know we'll likely have a population of 350M-400M people in the coming decades, and that alone is plenty of extra tax revenue to help fund these entitlements (which I didn't agree with in the first place, but they're there nonetheless).
And finally, Austrian economics has been widely debunked and mocked by economists the world round. They were mostly debunked based on their complete lack of quantitative substance and lack of empirical study, specifically by Milton Friedman, Paul Samuelson, and Paul Krugman. Quotes:
"The Hayek-Mises explanation of the business cycle is contradicted by the evidence. It is, I believe, false." - Milton Friedman
"I tremble for the reputation of my subject" after reading the "exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods]." - Paul Samuelson
When you're dismissed by Friedman and Samuelson, you're just not taken seriously, and it's precisely why Austrians won't be taken seriously until they learn to use econometric models. You dismiss mathematics and empirical study for economics, and this dooms your beliefs to not be taken seriously by anyone of any significance.
bamacre
Lifer
- Jul 1, 2004
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Evan Lieb, it doesn't matter. We'll continue to have the same monetary system, and you guys can celebrate while the bubbles get big, and bash Ron Paul when they burst. It's fun, isn't it? All along the way we can dance to the socializing of the markets as the government tries to juggle the economy.
bamacre
Lifer
- Jul 1, 2004
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Why change anything? What we have now is working wonderfully. The economy is in great shape and the outlook is even brighter. Who knew the bozos in DC could screw up everything else, but do such a wonderful job of managing the economy? Who needs a natural free market to manage itself when the geniuses we have in DC appointed by brilliant men like George Bush can do a better job of managing it? We're all rich, bitch, I love it. Don't change a thing. And don't even think of taking away Congress's no-limit credit card. They are responsible people damnit.
The problem with our current system is the rampant lying done by everyone from the consumer to the producer to the banker and finally to Wall St. To fix our problems we need to stop the lying and falsifying of documents. Everyone is content to lie if it means they get what they want and have little or no chance of being caught. Well the lying has caught up with us and it has almost broke our entire economy.
Lol, fairly close actually if we assume the creditors give you an unlimited limit. It'll be interesting to see if, after all this, foreigners still want our debt.
http://www.cnbc.com/id/26656750/site/14081545
It's from a couple days ago, but the threat of depression here and in Europe is still there.
It's from a couple days ago, but the threat of depression here and in Europe is still there.
sandorski
No Lifer
- Oct 10, 1999
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The last similar Economic situation was when the Gold Standard was in place. The difference is that things did go to shit then. What's going to happen now remains to be seen. However, what's happening now would probably still be happening if the Gold Standard was in place.
- Oct 10, 2000
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It would be - for some reason RP fools forget the history ever so quickly. Gold standard doesn't prevent deficit funding, yet isn't flexible enough to handle the repercussions thereof. We had the gold standard until 1972, when it fell apart after Nixon's open wallet Vietnam policy.
What the fuck are you talking about, this only shows that the market is UNSTABLE.
Whether it's a week away, or a year away, this system will fail. Our monetary system is a god damn farce, and the founding fathers ran away from this kind of shit with good reason. Anyone who says that our monetary system is sustainable is a fool.
Whether it's a week away, or a year away, this system will fail. Our monetary system is a god damn farce, and the founding fathers ran away from this kind of shit with good reason. Anyone who says that our monetary system is sustainable is a fool.
The founding fathers ran away from a lot. You think that 18th century economic knowledge was the apex? 18th century education? 18th century religion?
Almost all of the founding fathers would disagree with that. They were pragmatic men who realized that the Constitution and the system of government was never meant to be a static system. It was intended to be dynamic, one that adjusted for the times, but maintained the same solid foundation of rights and freedoms.
To say the system should be utterly unyielding to the winds of time and change is to completely ignore why the hell they actually decided to fight for freedom.
As far as the banking system and several founding father's aversion, they had distrust because that was the name of the game during those days. Many had the same problems, if only because of the old abusive systems with poor or little regulation or cohesion.
Even when somebody like Jefferson abhorred debt he was also a slave to it, having lived his whole life in debt. One wonders why he hated it, if he actually used it throughout his life. He died a deadbeat debtor, hundreds of thousands (in those dollars) in debt, Monticello utterly bankrupt, and his heirs ruined.
Perhaps you should actually study history before commenting on it. Otherwise you look like an utter fucking fool.
First
Lifer
- Jun 3, 2002
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Please. The issue with gold is its requirement of fixed exchange rates, which by their nature allow you only 1 of 2 macroeconomic options; free capital flows or independent monetary policy. The United States has both options because they aren't stuck on the ancient gold standard, allowing them to stave off disaster and address emergencies more adequately. Economies that are on a fixed exchange rate can only have one of those two macroeconomic options. It's no coincidence we abandoned gold in the early 70's either (though that was only the initial stage); world economies, particularly China, were becoming far more globalized by that decade, and pegging the dollar to gold just wasn't sustainable knowing that reality.
Bottom line is that every modern economy is fiat because floating exchange rates have proven to be more sensible and superior for increasing output, employment, and stability in an economy. Floating is inflation-friendly rather than deflation-friendly, with deflation the inferior economic alternative if you accept that deflationary environments are harder to overcome with interest rate cuts. Japan is a primary example of what Paulbots want; high savers with little deficit spending (in comparison to many nations), yet they were more or less stagnant for over a decade late in the 20th century. And since you run the risk of pushing interest rates to 0% in a deflationary environment, Japan?s liquidity trap problem in the early 90's was a excellent example for other economies of what not to do.
So when push comes to shove, moderate annual inflation is perfectly fine, and certainly superior to the alternative of deflationary environments like Japan.
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