What does a "small government" look like?

I am arguing the plainly evident fact that economic illiterates have been tossing the word "bankruptcy" around without knowing what it means.

 

All the precision of Humpty Dumpty, then. Quite a farce.

You are making me laugh. Your misusage of yet another term was based once more on a fundamental misundesrtanding of its meaning. Your bad...again.

No, nothing would happen. This is more space-cadet claptrap. All trade participants benefit from minimizing risk. The fact that the US economy is the world's largest and deepest makes US dollars the #1 choice for trade.

 

keep laughing toolbox, and keep pretending you know something


http://usnews.nbcnews.com/_news/201...d-happen-if-greenbacks-werent-top-dollar?lite

.

http://www.cnbc.com/id/100461159

 

Whatever they are buying is being sold to them by banks in response to Fed bids for such assets, It is all secondary market transactions. Treasury is not involved in any way. You plainly do not understand the process.

No, it pointedly revealed the nonsensical nature of your dismissive reaction to the Equation of Exchange which is a fundamental in much of Friedman's work. The evidence for assuming your obliviousness when it comes to actual economics continues to mount rapidly.

Strike three. It's an identity. To help you out some here, an identity is an equation of the form A = B, wherein A and B represent variables that produce the same result when the variables are substituted for by actual values. In other words, A = B will be an identity if A and B define the same function. As it happens, MV and PQ are each equal to nominal GDP. Here endeth the lesson.

 

My critique was based on numbers you've never seen -- pre-recession trend data from the OECD and UN. Worthless hacks and propagandists don't like to use such sources. They prefer to make up their own definitions and methodologies instead in order to gin up more partisanly acceptable results. Serious people just sit back and laugh.

No, your sense of urgency is proportional to the number of times holes are punched in your silly posts. Things have gotten pretty urgent, but the end of your troubles here is nowhere in sight.

 

are you being deliberately dense? you think that the fed deliberately targeting treasuries, and the treasury ending up with the printed dollars means no treasury involvement? just because there is a dealer in the middle means there is no connection whatsoever? I don't even know how to answer such foolishness.

So you post some 5th grade math and think it says something profound?

V=PQ/M is a definition because V is not an observable, it is not possible to put in an 'actual value' for V. Your equation is a trivial rearrangement of that definition.

 

my numbers were in response to another poster claiming we had austerity during the recession, so your critique is irrelevant. Serious people don't make the mistakes you are making.

your sense of futility can be measured by the number of LOLs you put out.

 

LOL! I know s-o-o-o-o-o-o much more than you and your high school marching band of orbiting eccentrics and propeller-beanie gloom-and-doomers. The only actual hope for your sorry side is that a major comet impact wipes out a significant chunk of US productive capacity while leaving the capacities of other nations unaffected. Kind of unlikely, but feel free to hold out hope.

Meanwhile, the price of oil will continue to be heavily influenced by the supply of and demand for oil. It doesn't actually matter what currency customers are asked by producers to remit in payment for whatever that price is. Changing the currency from dollars to euros would have few if any long-term effects. The price of oil expressed in euros would remain the same. The price of oil expressed in dollars would remain the same. The horrible downstream effects you dread are not realistic. Let's face it -- barely more than a decade after their introduction, euros have become the second most used trade currency for commodities across the board. Why hasn't the dollar crumbled as the result? You've no idea, do you.

 

This is only getting worse for you. The Fed has been offering to purchase a variety of already existing assets from banks, Treasuries of various maturities being among them. Treasury itself is not involved here in any way and neither are any of your magical "printed dollars". When a bank agrees to sell, it transfers notes to the Fed in exchange for credits to its account at the Fed. This increases bank liquidity and expands the monetary base. End of story.

No, just something that you have utterly failed to understand. Just another part of the whole "you don't know what you are talking about" thing.

So on top of not knowing what an identity is, you admit to not knowing the significance of the Equation of Exchange. Take an Econ course sometime. You might start with Econ 101.

 

Actually, that other poster had complained of weak recovery thanks to Republican induced austerity and constant debt ceiling showdowns. Do you want to try denying such actions and affects? Republicans have been trying to put the kibosh on economic recovery since January 2011, this in the belief that a bad economy would help them at the polls in 2012. Selling tens of millions of Americans down the river for longshot chances at minor House and Senate gains is what the Republican Party is all about.

I haven't made any mistakes. I just keep posting the facts. You on the other hand have continued to reply. Big mistakes there.

Punch-drunk much? You've become the Bayonne Bleeder to my Muhammad Ali.

 

can you read? I can't believe you are an analyst, you didn't understand those simple articles.

 

QE3 is mortgage securities and long term treasuries, not 'a variety'. Now I've lost count of your conceptual errors, let's just say you are incompetent in this department. The dealer bank purchased the treasuries from the treasury, then immediately sell to fed. The money printed at the fed ends up at treasury, but treasury is not involved!. Just cataloging the stupidity...

Your mathematical sophistication is just not there, you can't grasp that V=PQ/M is the definition of an unobservable variable, V. Therefore any algebraic rearrangement is still just a definition so it is true by definition. Absent any other assumptions, it's just circular. I know you lack the firepower to understand, so keep on pretending.

 

Oh, they were simple enough alright. Sort of like Little Red Riding Hood or The Three Pigs. Fictional children's literature that somehow managed to miss the central point that the value of oil is determined independent of any currency and the value of any currency is determined independent of the price of oil. These "articles" might have been a good read for the usual moonbats, wannabes, and whackjobs, but they are pretty much a waste of time for anyone else.

 

Long time ago I learned that self proclaimed experts who are dismissive in your manner are hiding that they don't really know very much. You are not even following the point of the original post, I don't care about the price of oil, neither did the articles. I smell a fraud

 

Well, the economy-wrecking Republicans have tried to slam the door on all sorts of spending. They hate spending and debt. Or at least that's been their claim lately. Ten years ago of course, they were claiming that Reagan had proved that deficits don't matter. But Republicans have no integrity. They just change their minds about this sort of stuff whenever it suits them. Sort of like how they were gung-ho for a health care individual mandate in the 1990's and now they hate that as well. Can you say "pointless government shutdown", by the way?

As for the sequester, your history absolutely sucks. It was Republicans who insisted upon some form of dire consequence that would be so dire that budget negotiators would go to any lengths to avoid it. But they were so slow as to be unable to think up any sort of mechanism to implement their dire consequences, so it was the administration that dredged up the idea of sequesters from back in the days of Gramm-Rudman-Hollings. And then the intransigence of Republicans drove us straight into the very thing that was supposed to be so dire that no one would go near it. Never underestimate the craven stupidity of Republicans.

I think you meant most pseudo-economists. The real ones understand that your arguments have the arrow going quite the wrong way. The US dollar is the world's leading currency because the US economy is the world's largest and most broadly engaged. The currency cannot lose its status unless the economy does first. Back to your praying for a major comet-impact. That's really the only hope you have. .

Wall Street? The whizbangs who drove us straight into the Great Recession? Maybe they should have relied more on people a little sharper than some bunch of freaking quants.

 

Something would have to go.

You have no idea how much can and will go wrong until government is removed from society.

 

I will try to honestly answer this question but first we need to address the prerequisites to establishing the smallest possible government. Large government, to a significant degree, is predicated on the fact that the "prerequisites" are not being met.

First and foremost is that there must be equality of opportunity for all persons in the country. So long as invidious discrimination exists in employment, advancement, and compensation then a truly "free market" (laissez faire) economy cannot exist.

Next we have to address a problem when the "Law of Supply and Demand" is applied to labor. A free market does require that the Law of Supply and Demand must be applied to goods and services where there purchase is voluntary but "employement" is not voluntary for most people. At the bottom end of the economuc ladder individuals are being forced to accept employment where the compensation isn't adequate to provide for the fundamental necessities of life. A business cannot operate at a loss and neither can a person. The government needs to stop subsidizing enterprises that don't pay adequate compensation where their employees require outside assistance to survive and that requires enterprise to ensure that they employees don't require this assistance. Adequate compensation can be provided for either as wages or benefits but combined the compensation must be enough so that the employee doesn't require external assistance just to meet their fundamental and necessary costs of living. Individual welfare = Corporate welfare and we need to end that necessity by requiring employers to provide adequate "compensation" so that their employees don't require welfare assistance.

Next we need to get the government out of economic interventionism that is directed at determining economic outcomes. This means ending interventionism by the Federal Reserve banks in economic interventionism as well as laws and tax codes used to affect economic outcomes.

We need enforcement of contract law. This has two implications. First is the fact that the statutory laws of the United States require the Federal Reserve to redeem Federal Reserve notes in "lawful money" (i.e. American Eagle coins) on demand but this law is not being enforced. In order to do this the
US Congress is actually going to have to revise the Gold Bullion Coin Act of 1985 to "establish the value thereof" of the species coinage of the United States. Under the current "value" there simply isn't enough "lawful money" to redeem Federal Reserve notes. Next is that the current application of the "Law of Supply and Demand" as applied to "labor" violates "contract law" as it introduces coercion in the employment contract where a person can be forced to accept employment where the compensation isn't enough to live on (see above related to compensation).

Next we must address the Right of Property of the Person which does not apply to land or natural resources. We don't create either land or natural resourses with our "labor" and the Right of Property can only be established by the Labor of the Person. Instead of addressing the use of land or natural resources as a "Right of the Person" we need to change our beliefs to understand that use of the land and natrual resources is based upon an "authority to use" so long as that use benefits society and that this use is highly limited. If it doesn't benefit society then we cannot pragmatically authorize the use of either the land or the natural resources that don't belong to any person (and government has no Right of Property whatsoever).

Next we need to end the belief that individuals or industry have Right to Pollute!!! There isn't a Right to Pollute but once again there are pragmatic reasons for society to "authorize" very limited pollution so long as it benefits society while causing minimal harm.

Next we need to understand that regulation of enterprise is based upon the necessity created by enterprise itself. Corporate capiltalism (i.e. where enterprise regulates itself) has been proven to be a failure because enterprises refuse to adequately regulate themselves. We need more regulation to stop the actions of enterprise that harm the individual and not less.

We need to fully fund the authorized expenditures of government. Unless the taxpayers are actually required to pay the full costs of government they will continuously demand more expenditures that they don't have to fund with taxation. Fiscal conservatism, before any other considerations, requires that the "Bills must be Paid" which is where the "Tea Party" arguments fail and why they're not fiscal conservatives. When the authorized expenditures exceed the revenues that isn't a spending problem, that's a revenue problem. By way of analogy if a person has $1 million a year in authorized expenditures it's only a problem if they don't have the income to pay for those expenditures.

In order to pay for the authorized expenditures of government we need to impose equitable taxation which doesn't exist today. Taxation relates to all expenditures of the person paid to fund government from excise taxes (i.e. fuel taxes), to local property taxes (paid directly by the property owner or by a renter), to sales taxes, FICA/Payroll/Self-employment taxes, income taxes, etc. Today the lowest income households have the highest overall tax burden relative to income in the United States and that must be fixed by addressing local, state and federal taxation.

Whenever possible we need to impose "user fees" to fund government as opposed to general taxation. My best example of this was the 2007 budget authorization for highway projects by the federal government. We collect a "fuel tax" for this purpose but in 2007 only $30 billion was collected in federal fuel taxes while $40 billion in expenditures was authorized (and even that wasn't enough to meet the needs for our highway infrastructure). The fuel tax needed to be significantly higher to meet the financial needs of our federal highway expenditures.

We need to establish tax policies that facilitate upward economic mobility for the bottom half of the American People. Today, based upon tax policies and codes designed to effect economic outcomes (previously addressed) most of the surplus income is going to the top 1% of income households that don't require upward mobility. They're already at the top of the economic pyramid and can't really go any higher. 95% of all income derivded from the recovery of the economy since 2009 has gone to the top 1% of income households as opposed to going to the bottom 99% of income earners and the bottom 50% of income earners have actually had the real income reduced with the very top 1% was received a 28% increase in income and that makes no sense. We need to completely overhaul out tax codes (which I've proposed in another thread).

We need to "privatize" Social Security over a 45 year transitional period (i.e. the working career of the person) and this transition comes with a cost. I've estimated that it will require an additional $40 trillion in tax revenues to fund the transition and that tax burden is going to have to be placed upon the top income earners because the lower income earners can't afford more taxation. Of course that $40 trillion (actually more) is going to be spent anyway but to make the transition it will require using current FICA/Payroll/Self-employment taxation be dedicated to personal investment portfolios. I've also made a proposal on how this can be accomplished (and will provide the link on request) where we retain a very limited safety net (for liberals) that would provide more security as well as elliminating any need for Medicare (because private investment will have enough return on investment to fund private health insurance for retirees). In 45 years we could reduce the size of government by about 1/3rd by simply privatizing Social Security (which also eliminates Medicare).

We need to end immigration restrictions completely (except of those that would come to the United States for nefarious criminal purposes). Immigration increases job growth creating more jobs, and higher paying jobs, for Americans. It can also be noted that the US Constitution does not grant the US government any authority to control immigration.

End all social engineering by government. This includes ending the War on Drugs which violates the Right of Liberty of the Person.

We need to limit military spending for the purposes intended which is to defend the United States from attacks and invasions by other countries. End the role of World Cop. Pragmatically we could limit military spending to just twice what any other nation is paying for their military.

One last issue to address. We need to change the criteria for determining if a law or action is Constitutional by replacing the "majority rule" vote of the Supreme Court with a requirement for "unanimous consent" where any challenged law or action that is address would be ruled "unconstitutional" if even one Supreme Court justice voted against it. This would stop "government creep" based upon dubious laws and actions where at least one Supreme Court justice can provide Constitutional argument that the law or action is unconstitutional. It provides the maximum protection of the Rights of the Person under the US Constitution while dramatically reducing the role (and cost) of the government in our lives.

 

The question is, how many times can you be wrong and still prattle on with your drivel?
http://www.politifact.com/georgia/article/2013/feb/22/politifacts-guide-sequestration/

Beside the fact that US share of global GDP is declining, that dollar reserves are declining as a share of world total, I didn't ask if it would happen, I asked what are the consequences

the quants are still in business, funny nobody turned to you for help

 

It is not targeting any one-of-a-kind type of note. Ergo, it IS a variety.

Immediately? Treasuries are sold at periodic auctions. The highest bidders (i.e., the ones who want them most) get them, the rest don't. Successful bidders remit payment to Treasury. At the same time but quite independently, the Fed is working to increase liquidity by offering to purchase a variety of note assets already held by banks. Those who accept the offer (i.e., those who want them least) surrender their note assets in exchange for electronic credits posted to their accounts with the Fed.

The problem here may be reliance on some grade-school model having nothing more elegant than a little box labelled "Banks". That isn't going to be detailed enough to do anything but mislead you. Wake up and smell the coffee.

A reminder that all printing is done by Treasury to begin with. Security auctions meanwhile raise the volume of funds that Treasury cash and debt managers have foreseen as being necessary to finance government operations in the near term. That's all they are doing. QE is an entirely independent operation involving banks and the Fed. No Treasury.

Not much firepower needed. The Equation of Exchange asserts that nominal GDP equals nominal GDP. That's an identity by definition. Get a clue or something. Flopping around like a fish out of water is not impressing anyone.

 

That would suggest your having a much easier time here than what you have been. One clock-cleaning after another doesn't really make for much of a resumé. You are quite plainly the small fish in this pond.

You cared enough about oil to make erroneous and fallacious claims about it. Did you want to back away and apologize for those now?

 

yes immediately, you can't read very well. I said dealers sell immediately, not treasury. The bond markets are open all day 5 days a week, they are not treasury auctions, in fact the fed buys almost daily. Long bonds only does not equal 'variety of assets' that you said previously. Variety implies anything on their books.

Fed money created ex-nihilo ends up at treasury with dealers as middlemen. Interest rates are lowered, benefiting gov't since the fed is about the only buyer who actually wants to pay high prices, since it keeps long rates low. Dealers know this and so don't mind bidding up at auction. I don't care if they are the exact same bonds with exact same serial numbers, the effect is identical.

Rearranging a mathematical definition, then claiming there is something profound since it is always true, is where the silliness is here. you just can't see it

 

empty claims

what claim did I make about oil exactly? you are getting quite stupid now

 

In outlining the resolution of yet another mindless Republican hostage-taking situation, your article confirms everything I said. But it failed to go into the background regarding why it was the administration that had to dredge up the sequester mechanism. Republicans were adamant that there be dire consequences built in, but they didn't know what to do. Their little heads didn't remember all the way back to 20 years ago. A few on the White House side did. Looks like we can add history to economics on the list of things that you don't really know as much about as you pretend to.

 

If a free society cannot help the many who are poor, it cannot save the few who are rich.

John F Kennedy​

Sometimes, it would appear that we have devolved into a salmagundi of anti-socialist snivelers who crave a puny government to accommodate their puny thoughts.