2013 is going to be much worse than 2012 for America - Jim Rogers

Who said stop spending. I'm talking stoping waste. There is a huge difference.

We rely on the Central Banks to bail us out as it is so i dont see your point.

 

That's why we have a central bank.

 

meh.... people will survive, people survived the Great Depression, survived WW1, WW2...maybe not WW3

 

Dan's Dictionary

INSANITY: [liberal]

1. The belief that endlessly borrowing money to pay debts is sound fiscal policy.

2. the belief that you can support people from the cradle to the grave and eventually they will look for a job.

3. The belief that taking away all incentive and self esteem from the poor is "for their own good."

 

4. The belief that endlessly cutting taxes reduces borrowing.

5. The belief that endlessly cutting taxes improves the economy.

6. The belief that corporations will regulate themselves.

 

Of course, Obamanomics would have had four years to derail the nation.


_

 

Output of what?

 

Goods and services.

 

Bob Murphy (and Nick Rowe) has shown this to be wrong. We cannot do anything about past debt - the damage has been done and the cost is on us or the next generation. However, taking on new debt has clear costs to future generations.

He offers the following illustration and table:

There is a great deal of discussion over this, including some very good, though failed, refutations here: http://consultingbyrpm.com/blog

 

7. The belief that raising taxes will lead to reduced borrowing.

8. The belief that bureaucrats are better at directing wealth than those who produce wealth.

9. The belief that corporations are regulated by government in a manner that doesn't benefit the corporations being regulated.

 

This will only hold true as long as we are the largest economy? or consumers?

 

Is growth infinite? Is output always increasing? Can someone in the future outpace our output?

 

Where do central banks get money? All money is created out of thin air.

 

What is wealth, where does it originate?
It is all monopoly money.

 

Money isn't wealth. Wealth is a command or claim on resources. Money is a means to the end, but it is only a medium of exchange when earned in exchange for the creation of wealth, or a measure of wealth when used as a unit of account.

 

But wealth has a value. And the means to get the wealth is money, which has no real value. So how does one value wealth?

 

People were different then. They cared about other people. Most Americans today have been raised with the notion that the government will care for them if anything goes wrong. It's not possible that a people who expect that the government will be there when things go even slightly bad are going to weather a real crisis without riots, crime (heck, people are already looting copper pipes and the economy has nowhere near hit bottom), and since churches have long since given up on providing major charity, many people will starve creating another crisis of diseases spread as people starve to death on the streets. It's not the same as in 1933 -- in 1933, people down on their luck would find a way to earn money, not find ways to game the government for welfare.

If I were an optimist, I'd say we're looking at Russia after the fall of the Soviets, but I'm starting to thing Rome is our fate. We won't be able to maintain a stable government with a bunch of entitled rioters turning looters and bandits. We lack the skills to create new wealth in such a system.

 

Not everyone survived the great depression.
We did not go into another great depression because we had gov't had put a floor in. Now is there waste and abuse of the system sure. But it stemmed an all out depression.
And yes, the gov't was involved in getting us into the position of causing the great recession. But that is another topic thats been run through the ringer.

 

With respect, that is the standard Keynesian justification and there is absolutely no way to prove it.

One can think it, believe it or feel quite certain about it.

But there is no way to know.

 

You cant even keep up with what you are saying can you.....

 

The "government floor" theory will only work so long as the government has the ability to print and spend money. Those days are short, as most countries are starting to dump dollars in favor of other currencies. Secondly, the value of a dollar is going down fast -- if you compared prices in a dollar from 1930 or even 1980, our dollar is not worth very much. And the way that government "creates" money is the printing press -- meaning that the value of dollars will sink even further and be even less desireable as a medium of exchange.

Besides all that, we're quite broke. We've been deficit spending for decades and we have no real plans to change.

 

Banking system != Central Bank

Try to keep up buddy

 

What is broke? We use monopoly money to exchange goods and services. We own the press that prints that money. We are the worlds reserve currency.
Define = what is broke?
Yes inflation means it takes more monopoly money today than 1930 or 1980. That is how the fed res manipulates the money supply.
I've seena and heard plans about reducing the deficit and some plans can have it gone in 5 yrs, others 10 yrs. RP is one, Paul Ryan may be another?

So it's not as dire as the political pugnants would have us believe. Just another thing for them to let us argue and point fingers about.

The Good cop Bad cop scenario.

 

Did you miss the part about other countries starting to dump the dollar for other currencies?

 

Yes, because they already have trillions of our dollars. A little diversification wouldn't hurt them. But seriously what currency is going to replace the dollar? The Euro? The Yen? The Yuan??? Yea right, the Euro is in shambles, no one is going to trust the Chinese or Japanese with anything.

The only potential they have is if they create a bucket of currencies... but that still would provide a much bigger mess than just using the USD.