How Kansas and California Debunked the GOP's Tax Cuts Argument

[theeedude]

I won't say you're wrong. All I ask is that you explain why it's more important to spend money than to save money. My dad was a saver, so my parents did very well during the last recession. Their spending was not affected by the recession. Most Americans live on credit, so the entire economy collapsed as soon as there was a credit crunch. Based on that alone, I would say saving is a very important part of a stable economy.

People like me have been expecting a similar disaster to repeat at some point because the country is in the same position as last time. Nobody has any savings. The fed has ensured that nobody wants to save because the interest rates are so low. Now the whole economy runs on debt. Companies are not growing their earnings, so they make stocks go up by borrowing money and using it to buy back shares. Average Americans are broke, so almost all car sales are funded through debt. If that credit slows down just a little, it would cause car sales to fall off a cliff. Telling people to live paycheck to paycheck and have a negative net worth makes the economy extremely unstable.

The "greatest generation" is the one that lived through the depression and fought in WW2. They were young adults with families in the 1950s and 1960s. They had a very high savings rate, and we look back at that period as being America's golden age. We were the world's largest creditors at that time. We were the world's manufacturing base at that time. Now we are the deadbeats of the world, and our economy is contracting.
I'm Jewish, so I always like mentioning this. Why do people hate Jews so much? Why are there so many conspiracy theories about Jews? It's because we're extremely powerful for our size. We (not me personally) dominate banking, we dominate the media, we dominate comedy, we dominate politics, etc, but why do we dominate those things? It's because we own them. We're savers. We have a culture of saving money and investing it rather than spending it, and this makes us very powerful. The same is true on a national level. As the world's largest creditor, America could dictate how the world operates. We're losing that power because we're not the rich guy with the cigar anymore. We're the guy standing in line at the payday loan store on a Friday because we're desperate for cash.

I think candidate Obama said it best - the national debt is unpatriotic and a threat to national security. Money is power. Being flat broke as a nation is why we're not as powerful as we once were. China could basically crash our entire economy any time they want just by dumping all of their US dollars at one time. It would hurt China as well, but it would absolutely destroy us. We should never give other countries that kind of power. That power is entirely caused by us running deficits every year and China being the buyer of that debt. If we were a nation of savers, the tables would be turned, and we would be the ones capable of financially destroying China.

I don't think China would destroy us if they dumped the US dollar. Just the opposite. A weaker dollar is good for America, especially on the export side.

 

[fskimospy]

People are claiming no inflation because so much of what is counted in the CPI are imported products, while basic necessities--which are domestically produced are excluded from cpi calculations. Its fine and dandy as long as the dollar is the reserve currency. You can print money and buy goods without paying for them. But the problem is the same people who are saying theres no inflation put their hands over their ears and sing "lalala" while the BRICS energy alliance grows with the stated intention of reducing dollar reliance and creating a new OPEC.

Their world is going to flip around one day when we can no longer sustain 500 billion a year trade imbalances and have to produce all these goods ourselves. Then no exclusion of items will be able to keep the CPI number low.

This is, yet again, a fundamental misunderstanding of CPI.

It is always sad to see that people, when confronted with information that says their understanding of economics is wrong, instead of revising their understanding of economics decide that the numbers must be a lie.

 

[John Connor]

I stopped at seeing the OP posted from Huff post. http://en.wikipedia.org/wiki/Huffington_post

 

[Spungo]

I don't think China would destroy us if they dumped the US dollar. Just the opposite. A weaker dollar is good for America, especially on the export side.

Oh? Japan is playing with a weaker yen, and it has been an absolute disaster.

http://www.bloomberg.com/news/2014-...o-33-year-high-on-abenomics-japan-credit.html

Japanese Prime Minister Shinzo Abe looks set to drive an indicator of economic hardship to a 33-year high by increasing taxes and prices amid stagnant wages.

Exploding energy costs due to weak currency while wages remain flat causes poverty? Nobody could have seen this coming.